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<DESCRIPTION>3RD QUARTER 2003 REPORT
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REPORT TO SHAREHOLDERS
3RD QUARTER 2003
(U.S. DOLLARS)

         For the first nine months of fiscal 2003, International Uranium
Corporation ("IUC" or the "Company") recorded a profit of $5,936,525 ($0.09 per
share) on revenues of $12,372,505, as compared with a net loss of $4,042,118
($0.06 per share) for the first nine months of fiscal 2002. The recently
completed processing campaign at the Company's White Mesa Mill enabled the
Company to recognize previously recorded deferred revenue as revenue when the
materials were processed. This mill run also enabled the Company to eliminate
its working capital deficit and to move to a positive working capital position
of approximately $7.6 million by the end of the third quarter of fiscal 2003.

         During the quarter, the Company completed processing substantially its
entire inventory of alternate feed materials from the Ashland 1, Linde,
Heritage, and Molycorp sites. Over the entire eleven month campaign, the Company
processed approximately 266,700 tons of material. Uranium produced from the mill
run is currently being held in circuit and will be further processed to produce
salable yellowcake product during the next fiscal year. As of May 24, 2003, the
Mill was placed on stand-by, and while on standby the Mill will continue to
receive material from the Linde project, as well as some additional material
from the Ashland 1 site. The timing of the next mill run will depend on a number
of factors such as the uranium price, and the amount of materials that will have
been received on site. The Company continues to aggressively pursue other
alternate feed opportunities.

         Earlier this fiscal year, the Company formed a 50/50 joint venture,
Urizon Recovery Systems, LLC ("Urizon"), with Nuclear Fuel Services, Inc.
("NFS"). Urizon is pursuing a program to reprocess and recycle U.S. Department
of Energy ("DOE") surplus uranium-bearing materials. At the end of the second
quarter of fiscal 2003, NFS submitted a proposal to the DOE for funding the
Urizon program, and in particular, for funding the design, licensing,
construction and operation of a blending facility at NFS' Erwin, Tennessee site.
DOE materials will be blended at that facility into a form of alternate feed
material that will be suitable for processing at the Company's White Mesa Mill.
If successful, the program is expected to result in the production, by Urizon,
of two to three million pounds per year of yellowcake for a number of years.
Urizon continues to monitor the progress of the DOE proposal through the
evaluation process, and the Company anticipates a response from the DOE in the
first quarter of fiscal 2004. Urizon's other significant effort is the
preparation of a license amendment application for processing the blended
material at the Company's White Mesa Mill. The Company intends to make its
initial submissions to the State of Utah and U.S. Nuclear Regulatory Commission
("NRC") during the fourth quarter of this fiscal year in connection with the
license amendment application. Based on current estimates, the license amendment
process is anticipated to take six to twelve months to complete.

         On the regulatory front, the Company is in discussions with the State
of Utah on regulatory matters regarding its transition to becoming an Agreement
State for Uranium Mills, which would mean that the State of Utah would take over
from the NRC as the prime regulator for the Mill's activities. Based on the
State's current projections, the transition is anticipated to take place in the

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second quarter of fiscal 2004. The Company does not anticipate any issues with
the transfer of regulatory authority from the NRC to the State of Utah.

         During this quarter, the Company significantly ramped up activities on
its Mongolian precious and base metals exploration program. Efforts were
primarily focused on the Company's Tsagaan Tolgoi project in western Mongolia.
An option agreement was signed with Datsan Trading Company in the third quarter
and the deal was closed within the past couple of weeks. Acquisition of the
Datsan properties, combined with the Company's adjoining properties, now gives
the Company complete exploration rights to the large Shiveen Gol alkaline
igneous complex, within the Tsagaan Tolgoi area. An extensive field program
began in April of this year, which included geologic mapping, ground magnetic
surveys, ground radiometric surveys, ground IP/resistivity surveys, and
extensive systematic geochemical surveys over the western portion of the
intrusive complex. These efforts have generated four potential
copper/gold/silver targets, and the Company plans to drill two of these targets
next quarter. In addition to the work on the Tsagaan Tolgoi project area, the
Company has also carried out a number of field programs on its other areas,
which have generated additional targets that will be investigated further during
the remainder of this field season. The Company continues to have discussions
with a number of companies regarding potential joint venture opportunities on
specific areas of the Company's precious and base metals exploration program.

         With regard to the Moab Tailings Project, the Company, along with
Pipeline Systems Inc., prepared a preliminary cost estimate for the
transportation of the Moab tailings via pipeline to the Company's White Mesa
Mill for disposal. This estimate was presented to the DOE in the third quarter
of fiscal 2003. Based on discussions to date, the DOE remains on schedule to
produce a draft EIS by January of 2004, with the final EIS expected to be
published by August 2004.

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 June 30, 2003 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). As
outlined in our 2002 Annual Report, the Company has redefined the focus of its
business activities and is now primarily engaged in the business of recycling
uranium-bearing waste materials, 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
materials. 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 Company's White Mesa uranium mill (the "Mill"). While the
Company has had considerable 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

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Company. Developing this backlog will be a prerequisite if the Company is to
remain profitable and continue with its pursuit of this business in the future.
In addition, the Company is engaged in the selling of uranium recovered from
these operations in the international nuclear fuel market and sells vanadium and
other metals that can be produced as a co-product with uranium.

         The Company owns several uranium and uranium/vanadium mines and
exploration properties that have been shut down until uranium and vanadium
prices rise to levels to justify reactivation. The Company is seeking potential
purchasers for these mining properties and associated mining equipment.

         In the first quarter of fiscal 2003, the Company entered into a joint
venture with Nuclear Fuel Services, Inc. ("NFS") for the pursuit of a long-term
alternate feed program for the Company's Mill. The joint venture is carried out
through Urizon Recovery Systems, LLC, a 50/50 joint venture company. Prior to
this quarter, the Company treated its investment in Urizon as a long-term
investment. As of this quarter, the Company began consolidating Urizon, on a
proportionate basis, into the Company's financial statements.

         In fiscal 2002, the Company initiated a precious and base metals
exploration program in Mongolia. The Company is also evaluating other
exploration and development opportunities to expand its project portfolio beyond
uranium and vanadium.

REVENUES

         Alternate feed processing activities during the first nine months of
fiscal 2003 consisted of the receipt, sampling, analysis and processing of
Ashland 1, Linde, Heritage and Molycorp materials. Revenues for the third
quarter and first nine months of fiscal 2003 of $3,280,601 and $12,372,505
respectively, increased $2,673,510 and $11,503,171 as compared to $607,091 and
$869,334 for the comparable periods in fiscal 2002. These increases were due to
the alternate feed mill run, which began during the third quarter of fiscal
2002, and was completed on May 23, 2003. 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 at which time they
are recorded as revenue. In addition to the recycling fees, the Company will
retain the uranium recovered from these materials, which can be sold in
subsequent periods.

         Approximately 39,800 tons of material was received during the first
nine months of fiscal 2003 bringing the total received as of June 30, 2003 to
over 290,900 tons from the Ashland 1, Linde, Heritage and Molycorp sites. The
receipt of material from the Molycorp and Heritage sites is complete. During the
remainder of the fiscal year, the Company anticipates continuing to receive
material from the Linde site at the current rates, as well as potential
additional quantities of material from the Ashland 1 site.

         Tons processed during the first nine months of fiscal 2003 are
estimated to be 178,352. As of June 30, 2003, tons processed during this mill
run totaled 266,690, leaving approximately 24,300 tons to be processed during
the next mill run. The timing of the next mill run will depend on a number of
factors such as the uranium price, and the amount of materials that will have
been received on site.

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         The Company continues to hold approximately 424,000 pounds of vanadium,
as black flake, and approximately 144,000 pounds of vanadium, as vanadium
pregnant liquor. Over the past six months, vanadium prices have improved and are
currently trading in the range of $1.90 to $2.00 per pound V2O5. The Company is
evaluating opportunities to sell its inventory upon further strengthening of the
vanadium price.

COST OF PRODUCTS AND SERVICES SOLD

         Process milling expenditures for the third quarter and first nine
months of fiscal 2003 of $1,016,566 and $4,511,587, respectively, which
represent the costs incurred receiving and processing alternate feed materials,
increased $646,807 and $3,868,103 as compared to $369,759 and $643,484 for the
comparable periods in fiscal 2002. These increases were primarily due to
approximately eight months of mill processing during the first nine months of
fiscal 2003 versus approximately one month during the first nine months of
fiscal 2002.

         In addition to FUSRAP (Formerly Utilized Sites Remedial Action Program)
material from the Linde and Ashland 1 sites, the Company continues to receive
deliveries of alternate feed materials from another uranium producer under a
long-term arrangement. While the Company will not receive a processing fee for
this particular alternate feed material, it will produce uranium from these
materials, which will then be sold. As of June 30, 2003, there were
approximately 5,680 tons of these materials at the Mill, containing
approximately 385,000 lbs of U3O8. 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. Mill stand-by expenses for the first nine months of fiscal
2003 were $250,443 as compared to $2,291,723 for the first nine months of fiscal
2002. The decrease of $2,041,280 was due to approximately one month of stand-by
during the first nine months of fiscal 2003 versus approximately eight months
during the first nine months 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
third quarter and first nine months of fiscal 2003 were $926,625 and $2,136,478
respectively. This represents a decrease of $96,452 or 9% and $303,311 or 12% as
compared to expenditure levels of $1,023,077 and $2,439,789 for the comparable
periods in

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fiscal 2002. The decrease of $303,311 for the comparable nine-month periods was
the result of decreased expenditures of $637,741 for legal fees associated with
regulatory actions, and other related cost decreases, offset by increases in
Urizon expenditures of $334,430.

EXPLORATION

         During the second quarter of fiscal 2002, the Company initiated a
precious and base metals exploration effort in Mongolia. This program is being
funded 100% by the Company, and the Company holds a 100% interest in the lands
that have been licensed for exploration. As of June 30, 2003, the Company had
acquired 49 exploration licenses totaling 3.3 million hectares. Detailed field
programs were initiated in the 2003 field season. Activities include geologic
mapping, geochemical sampling, and conducting geophysical surveys. Exploration
property holdings are being refined as fieldwork results become available. Total
program expenditures, including capitalized exploration expenditures, for the
third quarter and first nine months of fiscal 2003 of $329,903 and $656,990,
respectively, increased by $139,536 and $397,882 as compared to $190,367 and
$259,108 for the comparable periods in fiscal 2002. These increases were due to
the continuation of the exploration program, which involved more extensive
exploration work on specific targets.

OTHER INCOME AND EXPENSE

         Net interest and other income for the third quarter and first nine
months of fiscal 2003 was $159,083 and $601,475 respectively, as compared to
$141,479 and $776,744 for the third quarter and first nine months of fiscal
2002. The decrease of $175,269 during the comparable nine-month periods was the
result of a decrease in gains on the sale of short-term investments of $208,276
offset by increases in income from equipment sales of $69,425. In addition,
interest income decreased $41,232 during the first nine months of fiscal 2003
due to a decrease in the average cash balances available for investment.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2003, the Company had cash and short-term investments of
$5,536,086 and working capital of $7,640,784 as compared to cash and short-term
investments of $9,759,946 and a working capital deficit of $82,136 at September
30, 2002. The increase of $7,722,920 in working capital was primarily the result
of the Company's processing of alternate feed materials. As the alternate feed
materials were processed, deferred revenue was recorded as revenue, which
reduced current liabilities and assisted in the elimination of the Company's
working capital deficit during the first nine months of fiscal 2003. Deferred
revenue of $1,493,931, which is associated with approximately 24,300 tons of
alternate feed material that remained in stockpile after completion of the
current mill run and is not expected to be processed during the next 12 months,
was accounted for as a long-term liability. The Company must continue to
generate new sources of alternate feed material to maintain a positive working
capital position in future periods.


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         Net cash provided by operating activities was $5,441,499 for the first
nine months of fiscal 2003 and consisted primarily of net income from continuing
operations of $5,936,525, adjusted for non-cash items of depreciation of
$491,718, offset by an increase in trade and other receivables of $958,091
reflecting higher receipts of alternate feed material as well as amounts due
from Urizon, and increases in accounts payable and accrued liabilities of
$229,595.

         Net cash provided by investment activities was $853,789 for the nine
months ended June 30, 2003 and consisted of proceeds from the sale of short-term
investments of $2,373,935, offset by purchases of short-term investments of
$996,675. Restricted investments decreased by $654,948, primarily reflecting the
settlement and termination of the uranium concentrates sale and put option
agreement entered into with a third party. A $1,000,000 bond that secured a
portion of this transaction was released on January 15, 2003, which resulted in
an equal reduction in restricted investments. This reduction in bonding was
offset by interest income from restricted investments of $345,052. Exploration
expenditures on mineral properties in Mongolia that were capitalized totaled
$464,321 during the first nine months of fiscal 2003, and investment in
intellectual property from Urizon was $750,000. Intellectual property represents
the Company's 50% interest in Urizon's technology.

         Net cash used in financing activities for the nine months ended June
30, 2003 totaled $9,263,694 and consisted primarily of a decrease in deferred
revenues of $9,405,263, offset by cash received from share options exercised of
$430,786. Deferred revenues represent proceeds received or receivable on
delivery of alternate feed materials but in advance of the required processing
activity. As the Ashland 1, Linde, Heritage and Molycorp materials were
processed; the deferred revenue was reclassified as revenue. The cost of
processing these materials was recorded as process milling expenditures and the
Company's cash position was decreased by the cost of processing.

ENVIRONMENTAL RESPONSIBILITY

         The Company reviews the anticipated costs of decommissioning and
reclaiming its 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
$12,320,983 is 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 June 30, 2003, the amount of these restricted
investments collateralizing the Company's reclamation obligations was
$12,011,989.

         As mentioned in previous reports, the Company had detected some
chloroform contamination at the Mill site that appeared 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, and septic drain
fields that were used for laboratory and sanitary wastes prior to construction

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of the Mill's tailings cells. In April 2003, the Company reached agreement with
its regulatory authorities on the classification of the chloroform
contamination. As a result, the Company was able to commence an interim remedial
program of pumping the chloroform-contaminated water from the groundwater to the
Mill's tailings cells. This will enable the Company to begin clean up of the
contaminated areas and to take a further step towards resolution of this
outstanding issue. Although the investigations to 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 processing alternate
feed materials are included as a cost of processing. Process development efforts
expended in evaluating 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 U3O8 and $4.10 per
pound of V2O5 in October 1997 to $7.40 per pound of U3O8 and $1.70 per pound of
V2O5 at the end of September, 2000. As a result of these decreases in commodity
prices, the Company decided to cease its uranium and uranium/vanadium mining and
exploration activities in 1999, and has shutdown all of its uranium and
uranium/vanadium mines and its Mongolian Gurvan-Saihan Joint Venture pending
significant improvements in commodity prices. Also as a result of these market
events, the Company decided to marshal its resources to concentrate its
operations primarily on the continuing development of the alternate feed,
uranium-bearing waste recycling business. Although uranium prices have increased
to $11.20 per pound U3O8 as of July 31, 2003, and vanadium is currently trading
in the range of $1.90 to $2.00 per pound V2O5, prices are still too low to
justify the operation of the Company's mines or development of its Gurvan-Saihan
Joint Venture.

         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 to $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.

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OUTLOOK FOR 2003

         With the formation of the Urizon joint venture with NFS the Company
will focus on the license amendment approval process for that project, which is
anticipated to be initiated in the fourth quarter of fiscal 2003. During the
third quarter, NFS submitted a proposal to the U.S. Department of Energy ("DOE")
for funding of the Urizon project. The Company does not expect to know the
outcome of the proposal until the first quarter of fiscal 2004.

         The Company continues to monitor the preparation of and provide input
into DOE's Environmental Impact Statement for the Moab Tailings Project.

         The current processing campaign at the White Mesa Mill was completed on
May 23, 2003, and the Mill was placed on stand-by. While on standby, the Mill
will continue to receive material from the Linde project, as well as potential
additional quantities from the Ashland 1 site. The timing of the next mill run
will depend on a number of factors such as the uranium price, and the amount of
materials that will have been received on site. The Company continues to
aggressively pursue other alternate feed opportunities.

         Due to depressed uranium and vanadium markets, the Company suspended
all of its U.S. uranium and uranium/vanadium mining activities in 1999. The
Company intends to keep those properties, as well as the Gurvan-Saihan Joint
Venture, in a shutdown status indefinitely, pending any significant improvements
in commodity prices. The Company also continues to seek potential purchasers for
its uranium and uranium/vanadium mining properties and associated mining
equipment.

         For the 2003 exploration season in Mongolia, the Company is conducting
field exploration programs on the Company's extensive base and precious metals
licenses. Exploration work consists of detailed mapping, geochemistry and
geophysics, to elevate the Company's best prospects to drill targets. The
exploration program is currently being funded 100% by the Company. The Company's
plan to form a new subsidiary that will hold the Mongolian precious and base
metals exploration properties as well as the Company's 70% interest in the
Gurvan-Saihan Joint Venture has been placed on hold pending improvements in
market conditions.

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, although none of such challenges has 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 feed materials, in
certain circumstances, may be adversely affected, which could have a significant
impact on the Company.


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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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