<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>2
<FILENAME>o15602exv1.txt
<DESCRIPTION>ANNUAL REPORT YEAR ENDED SEPTEMBER 30, 2004
<TEXT>
<PAGE>



                                                           INTERNATIONAL URANIUM
                                                           CORPORATION

                                                           ANNUAL REPORT
                                                           2004

                                [PHOTO OMITTED]

<PAGE>
TO OUR SHAREHOLDERS

         Over the past year, International Uranium Corporation ("IUC" or the
"Company") has seen a number of changes and firsts in almost every area of its
business. This past year has been very exciting and the future looks bright for
your Company. Over the past year, IUC:

    o    signed an option agreement with JNR Resources Inc. ("JNR") to earn a
         75% interest in the Moore Lake uranium project in the Athabasca Basin
         region of Saskatchewan Canada, the first time IUC has explored in
         Canada;
    o    completed very encouraging winter and summer exploration programs on
         the Moore Lake property, with intersections grading up to 19.96%
         U(3)O(8);
    o    re-initiated uranium exploration activities on its Mongolian uranium
         joint venture, which was put on standby in 2000;
    o    has seen the transfer of regulatory authority of its White Mesa Mill
         from the U.S. Nuclear Regulatory Commission to the State of Utah;
    o    began studying the re-commencement of U.S. mining operations, which
         last operated in 1999; and,
    o    sold its Mongolian copper and gold exploration properties to Fortress
         Minerals Corp. ("Fortress") for a majority equity position in
         Fortress.

         All of these activities have been against a back drop of continuing
increases in the price of uranium and above all, a significant improvement in
long term uranium market fundamentals.

         As of January 31, 2005, uranium prices are at a twenty year high with
the spot price at U.S. $21.00 per pound U(3)O(8). The spot uranium price
reflects near-term market conditions (usually involving delivery within 12
months or less). The term uranium price, which reflects long term uranium
contracts with deliveries over a three to five year period, has undergone an
even more pronounced increase over the past two years, rising from just under
US$11.00 per pound U(3)O(8), reaching US$26.00 per pound U(3)O(8) by the end of
January, 2005. Because the term market constitutes 90% of the uranium market
activity, the term market is the best indicator of uranium market activity. For
this reason, the dramatic increases in the term uranium price are of utmost
importance to the Company's business.

         As one might expect, there are several reasons for this increasing
price trend but it all comes down to an imbalance in demand and supply factors.
In fact, over the next five to seven years there are strong indications of
uranium supply uncertainties with the possibility of potential shortages of
natural uranium concentrates. In addition, the uranium market is finally
transitioning from being inventory-driven, where past production costs have had
little bearing on selling prices, to a market more influenced by primary
production and its cost structure. These factors have caused many market
analysts to project a uranium market with continued increases in the uranium
price over the near-term and a better longer term picture. Many market analysts
are now predicting that a term uranium price at or above US$30.00 per pound
U(3)O(8) within the next six months is not unreasonable


                                       1
<PAGE>

and that longer term prices should remain high enough to justify sufficient
production to fill any gap between demand and supply.

CANADIAN URANIUM EXPLORATION

     In October 2003, the Company signed an agreement with JNR to earn a 75%
interest in its Moore Lake project in the Athabasca Basin region of
Saskatchewan, Canada. Since then, the Company has completed 20,000 meters of
drilling on the property, with very encouraging results.

     During the previous winter drilling campaign, which ran from mid-December
2003 to mid-April 2004, a total of 6,747 meters were completed in 19 diamond
drill holes. The results not only expanded the extent of the known high grade
uranium Maverick Zone but also significantly expanded the extent of the
mineralizing system associated with that zone. The summer program started in
mid-June and was completed in late October, 2004 and consisted of 33 holes,
totaling 12,437 meters. Phase 1 of the summer program focused on better defining
the grade and extent of the main mineralized lens at the Maverick zone. The
results included a number of high-grade intersections: 4.03% eU(3)O(8) over 10.0
meters (including 19.96% U(3)O(8) over 1.4 meters in ML-61); 5.14% U(3)O(8) over
6.2 meters (ML-55) and 4.01% eU(3)O(8) over 4.7 meters (ML-48). Phase 2 of the
summer program was largely focused on the Maverick structural corridor, to the
northeast and southwest of the main zone. The Company is very encouraged with
both the winter and summer drilling program results. To date, the drill program
continues to support the potential of the Moore Lake project.

     The 2005 winter program, which will run until mid-April, has begun with
some 300 kilometers of line cutting and grid re-establishment, followed by a
combination of ground geophysical surveys. Currently, two drills are operating
on regional grids outside of the Maverick zone where they are testing targets
identified by previous drilling and boulder sampling, and refined by the ongoing
geophysical program. Over the Maverick target area, an extensive 3D seismic
survey will be carried out and subsequently a third drill rig will then be
mobilized to continue exploration along this zone. The application of seismic
technology to uranium deposits in the Athabasca Basin is relatively new, and the
Company is looking forward to the results, which will aid in further defining
future drill programs.

     A summer program will follow, beginning mid-June, 2005. Based on current
expenditure forecasts, the Company will have earned its 75% interest in the
project by the end of the winter program.

     While the focus of the Canadian exploration program has been on the Moore
Lake project, the Company has increased its land position to over 408,000
hectares in the highly prospective eastern portion of the Athabasca Basin. In
addition to option properties with JNR, the Company also has an option with
Phelps Dodge and a significant land package which is owned solely by the
Company. This land package was largely put together with the expertise of IUC's
uranium advisory committee. We are currently evaluating the historical data on
these properties in order to lay out our 2005 exploration programs.



                                       2
<PAGE>

     At the present time, IUC has one of the largest exploration programs
underway and is one of the largest land holders in the Athabasca Basin region.

MONGOLIAN URANIUM EXPLORATION

     In late summer 2004, the Company resumed uranium exploration for the
Gurvan-Saihan Joint Venture, in which the Company holds a 70% interest along
with the Mongolian Government and Geologorazvedka, a Russian uranium exploration
concern. The exploration program involved acquiring new exploration licenses in
known prospective areas and conducting geologic data acquisition and review, as
well as field reconnaissance. Currently the Joint Venture holds a total of 16
exploration licenses, encompassing about 1.8 million hectares. In addition to
the Joint Venture activities, IUC also established a Mongolian business entity
to conduct uranium exploration, solely for the benefit of the Company, in new
prospective areas of Mongolia. International Uranium Mongolia, XXK currently
controls 607,700 hectares and has applications pending on additional license
areas. Geological reconnaissance programs were also carried out during the 2004
program on these licenses.

     The focus of the Company's exploration programs in Mongolia has been on
uranium deposits that can be exploited by In Situ Leach technology. The proposed
2005 exploration program on both the Joint Venture and Company licenses, which
will begin in mid-April, will include over 35,000 meters of drilling, auto-gamma
surveys, as well as continued geological reconnaissance field programs to
identify new areas.

U.S. URANIUM ASSETS

     As a result of the increases in uranium prices, the Company is preparing to
begin an alternate feed processing campaign at the White Mesa Mill in the spring
of 2005 to process an alternate feed stream which contains over 485,000 pounds
of U(3)O(8). In addition to this stream, the Mill will also process at least
three other alternate feed materials. This processing campaign will last
approximately 12 to 18 months. The Company considers the alternate feed program
to be an integral part of its operations and intends to continue to aggressively
pursue additional alternate feed materials for the Mill.

     In August, 2004 the primary regulatory authority for the White Mesa Mill
was transferred from the U.S. Nuclear Regulatory Commission to the State of
Utah, Department of Environmental Quality. The Company has had a good and
productive working relationship with the Nuclear Regulatory Commission and the
Company is looking forward to continuing its good working relationship with the
State of Utah as the primary regulator of the Mill.

     Personnel at the Mill have now worked over three years without a lost time
accident. We would like to thank the employees for their continued attention to
worker health and safety in this accomplishment.



                                       3
<PAGE>

     The Company's U.S. uranium mining operations have been on stand-by since
1999. During the past year, the Company began a study to evaluate
re-commencement of certain of its U.S. mining activities. This preliminary study
was positive, and the Company is now preparing a more detailed operating plan
and anticipates making a production decision in 2005, assuming uranium prices
continue to increase.

OTHER U.S. PROJECTS

     The Moab uranium tailings pile, which is now under the control of the U.S.
Department of Energy ("DOE"), is located adjacent to the Colorado River and
environmentally sensitive wetlands. The ongoing contamination of groundwater and
seepage of pollutants into the river has lead DOE to investigate several
alternatives for final remediation of the pile. DOE is currently evaluating
alternatives for relocating the pile to another site, including relocating the
pile to the Mill using a slurry pipeline, as well as remediating the tailings
on-site through the use of engineered rock armor cover.

     The Company believes that relocation of the Moab tailings to the White Mesa
Mill has many economic, technical, and environmental advantages over in-place
final closure or relocation to a new, unproven disposal site. Although the White
Mesa option is currently estimated by DOE to be the highest cost option, there
are a number of factors that require further consideration by DOE, including the
long term use of the pipeline, which the Company believes should make the White
Mesa option competitive with the other options being considered by DOE.

     In November, 2004, DOE published a draft Environmental Impact Statement
("EIS") for public comment. The draft EIS will remain open for comment until
February 18, 2005. Contrary to original expectations, the draft EIS did not
state a recommended or preferred option. The Company is continuing to
aggressively pursue this project.

     With respect to Urizon, the joint venture with Nuclear Fuel Services, Inc.,
the DOE is in the process of determining the contractor who will manage the
disposition of the material that would be the feedstock for the Urizon program.
The Company currently expects that a decision will be made by DOE in fiscal 2005
and that the Urizon program will be an option that will be considered. The
Company is optimistic that the Urizon program, which involves recycling the
material for its uranium content, should be an attractive option to DOE, in
light of the significant increase in the uranium price.

MONGOLIAN PRECIOUS & BASE METALS EXPLORATION

     On June 23, 2004, the Company sold its Mongolian precious and base metals
assets to Fortress, a public company listed on the Toronto Venture Exchange, for
a majority share ownership interest in Fortress. As a result of this sale, the
Company's management can now focus on developing its extensive uranium asset
portfolio and Fortress' management can focus on its precious and base metals
assets, while you as shareholders of IUC can benefit from Fortress' potential
exploration successes.



                                       4
<PAGE>

     During fiscal 2004, the Company and Fortress spent a total of $2.0 million
on the precious and base metals exploration program, including a 1,900 meter
drill program and field campaigns of geologic mapping, geophysical surveys,
sampling and data analysis. Fortress' priority project is the Burleg River gold
project located in the Huvs Region of northern Mongolia. Fortress has two
further properties, Teltin (gold-copper) and Oyuut Uul (gold), which are
scheduled for drilling in 2005, as well as a number of other properties.
Fortress' land holdings for the precious and base metals exploration program
totals 4.5 million hectares and is one of the largest land holding positions in
Mongolia.

OUTLOOK

     Without the White Mesa Mill's innovative alternate feed program, it is
doubtful that the Company would have been able to maintain its uranium
production infrastructure and be here today to see the improved conditions in
the uranium market. The alternate feed program will continue to generate cash
flow for the Mill in the short term and through continued efforts in years to
come. Now, in an exciting new uranium environment, we have focused our efforts
on positioning the Company to take advantage of long term improvements in
uranium market fundamentals. As a result, in addition to the alternate feed
program, the Company now has a solid base of exploration and mining projects at
varying stages: in the near term, the U.S. mines; in the mid-term, the Mongolian
in-situ leach project; and, in the longer term the exploration programs in the
Athabasca Basin. The Company intends to move each of these projects forward
throughout 2005, as well as continue to evaluate acquisition opportunities that
would enhance our asset portfolio.

     We are in a very exciting time in the uranium industry and we believe that
the Company is well positioned to take full advantage of the opportunities that
are available to it.

     On behalf of the Board, the management and the employees of IUC, I would
like to thank you, our shareholders, for your continued support.


                                /s/ Ron F. Hochstein
                                --------------------
                                    Ron F. Hochstein
                                    President and Chief Executive Officer




                                        5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
PREPARED AS OF FEBRUARY 10, 2005


The following discussion and analysis of the financial condition and results of
operations for International Uranium Corporation ("IUC" or the "Company") for
the fiscal year ended September 30, 2004 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. Note 17 of the consolidated financial
statements provides a discussion of the differences between Canadian and United
States accounting principles and practices affecting the Company.

OVERVIEW

IUC is incorporated under the Business Corporations Act (Ontario). The Company
is engaged primarily in uranium exploration and is also 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"). The
Company sells uranium recovered from conventional production and from alternate
feed processing, as well as vanadium and other metals that can be produced as a
co-product with uranium. The Company owns several uranium and uranium/vanadium
mines in the U.S. that have been shut down since 1999, due to low commodity
prices at the time. The Company is evaluating re-commencement of mining
operations given recent improvements in commodity prices. The Company is engaged
in uranium exploration activity in the Athabasca Basin region of Saskatchewan,
Canada and in Mongolia. In addition, the Company is engaged in precious and base
metals exploration in Mongolia through its majority owned subsidiary, Fortress
Minerals Corp.

Due to deterioration in commodity prices and other factors, the Company ceased
its uranium mining and exploration activities in 1999/2000, and shut down all of
its mines and its Mongolian uranium joint venture. During that time period, the
Company focused its resources primarily on the continuing development of the
alternate feed, uranium-bearing waste recycling business, and the Company
initiated a precious and base metals exploration program in Mongolia. However,
uranium spot prices have risen significantly from $12.50 per pound U(3)O(8) on
September 30, 2003 to $21.00 per pound U(3)O(8) by mid-January, 2005. As a
result of these increases in uranium prices and improved market fundamentals,
the Company acquired uranium exploration properties in the Athabasca Basin
region of Saskatchewan, Canada, and commenced an exploration program on certain
of those properties in early fiscal 2004. In addition, the Company has resumed
uranium exploration work in Mongolia during the fourth quarter of fiscal 2004
and is currently evaluating the possibility of recommencing certain of its U.S.
mining activities. The Company is also actively seeking other opportunities to
increase its portfolio of uranium properties and assets.


                                       6
<PAGE>
In addition to its exploration and mining programs, the Company intends to
devote significant resources to the ongoing development of the alternate feed,
uranium-bearing waste recycling business. The Company continues to expect that
the recycling of uranium-bearing materials can continue to help offset Mill and
mine standby costs, and, potentially, result in sustained profitable operations
for the Company. While the Company has had considerable success to date in this
initiative, the Company has not to date developed a sufficient backlog of
alternate feed business to result in sustained profitable operations for the
Company solely from this business. Developing this backlog will continue to be a
focus of the Company.

In the first quarter of fiscal 2003, the Company entered into a joint venture
with Nuclear Fuel Services, Inc. ("NFS") for the pursuit of an alternate feed
program for the Company's Mill. The joint venture is carried out through Urizon
Recovery Systems, LLC ("Urizon"), a 50/50 joint venture company. In April of
2003, NFS submitted an unsolicited proposal to the U.S. Department of Energy
("DOE") to fund the Urizon program. In January 2004, NFS was notified that the
DOE would not fund the program at that time due to other higher priority needs.
The DOE is in the process of choosing a contractor who will manage the
disposition of the materials that would be the feedstock for the Urizon program,
in conjunction with the closure of an existing DOE site. The joint venture
currently expects that a decision will be made by the DOE in fiscal 2005 as to
how it intends to proceed on this matter, and that the joint venture will have
an opportunity to propose the Urizon Program as a suitable disposition option
for this feedstock.

In June 2004, the Company sold its Mongolian precious and base metals
exploration program to Fortress Minerals Corp. in exchange for cash and a
majority share ownership position in that company. Fortress is a public Canadian
company whose shares are traded on the TSX-Venture Exchange. As at September 30,
2004, the Company held 58.24% of the issued and outstanding shares of Fortress.
The financial results for Fortress are included in the Company's financial
statements on a consolidated basis.

SELECTED ANNUAL FINANCIAL INFORMATION
<TABLE>
<CAPTION>
($000, except per share amounts)                  2004        2003       2002
-----------------------------------------------------------------------------
<S>                                            <C>          <C>        <C>
Revenues                                         2,424      12,550      6,830
Net (loss) income for the year                 (2,187)       5,533        185
Basic (loss) income per share                   (0.03)        0.08          -
Total assets                                    39,388      25,616     32,379
Total long-term liabilities                     16,296      14,630     12,365
</TABLE>


                                       7
<PAGE>
RESULTS OF OPERATIONS

FISCAL 2004 VERSUS FISCAL 2003

IUC recorded a net loss of $2,186,679 ($0.03 per share) for the year ended
September 30, 2004, compared with net income of $5,533,152 (0.08 per share) for
2003, reflecting primarily the fact that the Mill was operating in fiscal 2003
but has been on standby throughout fiscal 2004. Results for 2004 included, a
gain on change of percentage interest in Fortress of $548,549, representing the
Company's proportionate share of the increase in Fortress' net assets resulting
from the issuance of equity by Fortress during the period, and minority interest
of $134,219, representing the minority interest's proportionate share of
Fortress' loss for the period since acquisition. In addition, the Company
recorded a gain of $585,133 for the recovery of future income taxes, which
relates to 2.0 million flow-through shares the Company issued on November 30,
2003 and a foreign exchange gain of $242,059. For 2003, results included mineral
property write-downs of $118,081, a $579,926 gain on the sale of short-term
investments, a $210,603 gain on the sale of land and equipment, and a $79,000
gain on the disposition of the "other asset" (see Fiscal 2003 versus Fiscal
2002).

REVENUES

Revenues for fiscal 2004 of $2,424,456 consisted of revenues from vanadium
sales, process milling fees generated under the Company's alternate feed
processing agreements, and fees from engineering services. Revenues for fiscal
2004 decreased $10,125,562 or 81% as compared to $12,550,018 in fiscal 2003. The
decrease was due to the fact that the Mill was on stand-by during fiscal 2004.

During the second quarter of fiscal 2004 the Company sold its inventory of
vanadium black flake, which was produced during the 1999 conventional ore mill
run, leaving an ending inventory of approximately 65,000 pounds of vanadium, as
vanadium pregnant liquor. The Company is evaluating opportunities to sell this
inventory.

As the Mill is currently on stand-by, alternate feed processing activities
during fiscal 2004 consisted primarily of the receipt of material from the Linde
site and from another commercial metals producer. The Company receives a
recycling fee for a majority of its alternate feed materials once they are
delivered to the Mill. A portion of the fees for the Linde materials, 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. With respect to the
materials from the commercial metals producer, the Company received a materials
receipt fee on receipt of the materials, representing approximately 22% of the
total fees from that producer, which is recorded as revenue, and a recycling
fee, representing the remaining 78% of the fees from that producer, which is
recorded as deferred revenue until the material is processed, at which time it
becomes revenue. Revenue recognized from receiving alternate feed material
during fiscal 2004 was $420,646. In addition to the material receipt and
recycling fees, the Company will retain any uranium recovered from these
materials, which can be sold in subsequent periods, at which time the revenue
from the sales will be recorded.

                                       8
<PAGE>

Revenue from engineering services of $421,182 during fiscal 2004 is for services
the Company provided, on a cost plus basis to a related company, which was
reclaiming a mine site in the U.S.

In addition to the foregoing alternate feed materials, 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 September 30, 2004, there were
approximately 7,200 tons of these materials at the Mill, containing
approximately 485,800 lbs of uranium. Revenues will be recognized as recovered
uranium is sold. 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 materials from the Linde project.

SELECTED QUARTERLY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                   2004
($000, except per share amounts)           1st Qtr     2nd Qtr     3rd Qtr       4th Qtr    Full Year
-----------------------------------------------------------------------------------------------------
<S>                                         <C>          <C>        <C>             <C>        <C>
Vanadium sales                                  --       1,583          --            --        1,583
Process milling revenue                         31          --          --           390          421
Engineering services revenue                   359          62          --            --          421
Total revenue                                  390       1,645          --           390        2,425
Net income (loss)                           (1,166)       (455)     (1,198)(1)       632       (2,187)
Basic and diluted income (loss) per share    (0.02)      (0.01)      (0.02)         0.01        (0.03)
</TABLE>

(1)  In preparing the financial statements for the year ended September 30,
     2004, the Company determined that the transfer of mineral properties to
     Fortress should be accounted for at book value. In the 3rd quarter 2004
     interim financial statements, the Company had incorrectly recorded a loss
     on the transaction of $478,839. This summary table reflects the corrected
     net loss for the third quarter of fiscal 2004.

<TABLE>
<CAPTION>
                                                                 2003
($000, except per share amounts)           1st Qtr    2nd Qtr    3rd Qtr    4th Qtr   Full Year
-----------------------------------------------------------------------------------------------
<S>                                          <C>        <C>        <C>        <C>        <C>
Process milling revenue                      4,274      4,818      3,281         42      12,415
Engineering services revenue                    --         --         --        135         135
Total revenue                                4,274      4,818      3,281        177      12,550
Net income (loss)                            2,266      2,545      1,126       (404)      5,533
Basic and diluted income (loss) per share     0.03       0.04       0.02      (0.01)       0.08
</TABLE>

IUC recorded net income of $632,242 ($0.01 per share) for the three months ended
September 30, 2004, compared with a net loss of $403,373 (0.01 per share) for
same period in fiscal 2003. Results for the three months ended September 30,
2004 included a gain on change of percentage interest in


                                       9
<PAGE>

Fortress of $548,549, representing the Company's proportionate share of the
increase in Fortress' net assets resulting from the issuance of equity by
Fortress during the period, and minority interest of $94,327, representing the
minority interest's proportionate share of Fortress' loss for the period. In
addition, the Company recorded a gain of $585,133 for the recovery of future
income taxes, which relates to 2.0 million flow-through shares issued by the
Company on November 30, 2003 and a foreign exchange gain of $336,525. For the
three months ended September 30, 2003, results included mineral property
write-downs of $118,081, a $579,926 gain on the sale of short-term investments,
a $127,510 gain on the sale of land and equipment, and a $79,000 gain on the
disposition of the "other asset" (see Fiscal 2003 versus Fiscal 2002).

COST OF PRODUCTS AND SERVICES SOLD

During fiscal 2004, cost of goods sold of $706,274 was recognized as a result of
the sale of the Company's vanadium black flake inventory.

Process milling expenditures during fiscal 2004 of $139,793 represent
expenditures incurred receiving alternate feed materials. The expenditures
decreased by $4,531,406 or 97% as compared to process milling expenditures of
$4,671,199 during fiscal 2003. The decrease is due to the fact that the Mill was
on stand-by during fiscal 2004. During fiscal 2004, the Company received 3,440
tons of alternate feed material from the Linde site and an additional 5,409 tons
of material from another commercial metals producer. As of September 30, 2004,
approximately 44,600 tons of material remained in stockpile waiting to be
processed during the next mill run. The next mill run is currently scheduled to
commence in the second or third quarter of fiscal 2005, at which time all
alternate feed materials currently stockpiled at the Mill are expected to be
processed.

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 or other ores have been accumulated to justify an
efficient mill run. Mill stand-by expenditures were $2,330,554 for fiscal 2004
as compared to $738,730 for fiscal 2003. The increase of $1,591,824 was
primarily due to twelve months of stand-by in fiscal 2004 versus approximately
four months in fiscal 2003. At September 30, 2004 sixteen management and
maintenance personnel remained at the Mill. During the most recent mill run,
which was completed in fiscal 2003, the Mill maintained an average of 64
employees to process its stockpile of alternate feed material.

                                       10
<PAGE>
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 fiscal 2004 were
$3,218,295 as compared to $2,655,341 for fiscal 2003. This change, an increase
of $562,954, was the result of decreases in Urizon and other alternate feed
expenditures of $893,467, offset by increases of $1,454,798 in other selling,
general and administrative ("SGA") expenditures. These increases are
attributable to the engineering services that the Company provided, increased
audit/accounting fees, legal fees associated with the acquisition of the
Canadian uranium exploration properties, increased investor relation
expenditures and the Company's consolidation of Fortress' SGA. For fiscal 2004,
Fortress' SGA was $302,709.

EXPLORATION

Uranium Exploration

In the first quarter of fiscal 2004, the Company acquired interests in uranium
exploration properties in the Athabasca Basin region of Saskatchewan, Canada and
commenced an exploration program on certain of those properties. During fiscal
2004, the Company continued to increase its land position in the Athabasca Basin
region through acquisition and land staking. Total gross program expenditures,
including capitalized exploration expenditures, for fiscal 2004 were $2,326,265.
Expenditures to date have primarily been on the Moore Lake project where the
Company has an extensive drilling program augmented by geophysical and
geological field programs. IUC has an option to earn up to a 75% interest in the
Moore Lake property from JNR Resources Inc. through aggregate expenditures and
investments of Cdn $4.4 million over a period of 4 years. Fiscal 2004
expenditures on the Moore Lake Project were $1,766,485. The remaining
expenditures were for geological field programs and airborne geophysical surveys
on a number of other projects in the Athabasca region.

The Company also has a 70% interest in the Gurvan-Saihan Joint Venture in
Mongolia. The other parties to the joint venture are the Mongolian government as
to 15% and Geologorazvedka, a Russian geological concern, as to 15%. With
continued upward pressure on world uranium prices throughout fiscal 2004, the
joint venture recommenced its uranium exploration program in Mongolia.
Additional exploration licenses were acquired by the joint venture in areas
known to be prospective based on past joint venture reconnaissance. In addition,
the Company formed a new Mongolian business entity in fiscal 2004 to conduct
uranium exploration, 100% for the Company's account, in frontier areas in
Mongolia. Total gross program expenditures for the joint venture and for the
Company's own account, including capitalized exploration expenditures, for
fiscal 2004 of $213,548 increased by $8,269 as compared to $205,279 spent in
fiscal 2003.

                                       11
<PAGE>
Precious and Base Metals Exploration

During the second quarter of fiscal 2002, the Company initiated a precious and
base metals exploration program in Mongolia. This program was funded 100% by the
Company until the second quarter of fiscal 2004. During the second quarter, the
Company entered into a Purchase Agreement with Fortress for the sale of 100% of
the exploration licenses held by the Company, in consideration for cash and a
majority equity interest in Fortress. The Company maintains a position on the
Board of Directors of Fortress but no longer manages the Mongolian precious and
base metals exploration program.

Fortress continued the active exploration program in 2004, including additional
drilling on the Shiveen Gol project in western Mongolia. A number of additional
projects were explored in detail in 2004 and are ready for initial drilling in
2005. Total gross program expenditures, including capitalized exploration
expenditures, for fiscal 2004 of $2,032,027 increased by $671,887 as compared to
$1,360,140 in fiscal 2003. Increased program expenditures in fiscal 2004 were
attributable to implementation of detailed geophysical and geochemical programs
on the Teltiin Gol prospect in the Erdenet area and a large regional gold
geochemical survey in the Huvsgol region. Based on the work in the Huvsgol
region, approximately 40 new exploration licenses were obtained, which also
contributed to the increase in program expenditures.

MINORITY INTEREST

The minority interest share of Fortress' post acquisition loss for fiscal 2004
was $134,219. On June 23, 2004 the Company completed the sale of its Mongolian
base and precious metals exploration properties held by its Bermuda subsidiary
to Fortress and began recording the minority interest's share of the losses. The
Company had expended $3,088,201 on these properties through June 23, 2004. In
consideration for transferring these properties to Fortress, the Company
received 28 million common shares of Fortress' capital stock, which gave the
Company a 63.14% interest in Fortress and cash of $656,580 for reimbursement of
costs incurred on the properties from the time of agreement to the transfer
date. No gain or loss has been recognized on the transaction. On September 1,
2004 Fortress completed a private placement of 4,987,500 common shares at Cdn
$0.40 per share. The Company purchased 732,500 of the common shares, which
resulted in the Company owning a 58.24% interest in Fortress as of September 30,
2004. The Company's percentage ownership in Fortress decreased from 63.14% to
58.24% as a result of this private placement and the Company recorded a gain on
dilution of $548,549.

OTHER INCOME AND EXPENSE

Net interest and other income (excluding gain on dilution and minority interest)
for fiscal 2004 was $796,101 as compared to $1,375,738 for fiscal 2003. The
decrease of $579,637 was primarily the result of a decrease in gains of $617,972
on the sale of short-term investments and a decrease in income from the sale of
land and equipment of $151,673. These decreases were offset by an increase in
foreign exchange gains of $242,059.

                                       12
<PAGE>
RESULTS OF OPERATIONS

FISCAL 2003 VERSUS FISCAL 2002

IUC recorded net income of $5,533,152 ($0.08 per share) for the year ended
September 30, 2003, compared with net income of $184,990 (nil per share) for
2002. Results for 2003 included, mineral property write-downs of $118,081, a
$579,926 gain on the sale of short-term investments, a $210,603 gain on the sale
of land and equipment, and a $79,000 gain on the disposition of the "other
asset". For 2002, results included asset write-downs of $155,334, a $288,409
gain on the sale of short-term investments, a gain of $29,174 from a decrease in
Mill reclamation obligations, and an increase in the carrying value of the
"other asset" of $261,000 to reflect then current uranium prices. The "other
asset" and the offsetting deferred credit represent a put option entered into in
fiscal 1999, which granted a third party the option to put up to 400,000 pounds
of uranium back to the Company at a price of $10.55 per pound, at any one time
during the period of October 1, 2001 to March 31, 2003. On December 20, 2002,
the third party exercised the put option. The Company negotiated a settlement
and termination of the put option agreement for a payment of $280,000, which was
equal to the value of the put option based on then current market conditions.

REVENUES

Revenues for fiscal 2003 of $12,550,018 consisted primarily of process milling
fees generated under the Company's alternate feed processing agreements.
Revenues for fiscal 2003 increased $5,719,881 or 84% as compared to $6,830,137
in fiscal 2002. The increase was primarily due to the alternate feed mill run,
which began during the third quarter of fiscal 2002, and was completed on May
23, 2003. Alternate feed processing activities in fiscal 2003 consisted of the
receipt, sampling, analysis and processing of Ashland 1, Linde, Heritage and
Molycorp materials.

COST OF PRODUCTS AND SERVICES SOLD

Process milling expenditures for fiscal 2003 of $4,671,199, which represent
expenditures incurred receiving and processing alternate feed materials,
increased $2,623,408 as compared to process milling expenditures of $2,047,791
for fiscal 2002. The increase was due to approximately eight months of mill
processing during fiscal 2003 versus approximately four months during fiscal
2002.

Approximately 51,200 tons of material was received during the fiscal year
bringing the total received as of September 20, 2003 to over 302,400 tons from
the Ashland 1, Linde, Heritage and Molycorp sites. As of September 30, 2003,
approximately 35,700 tons of material remained in stockpile waiting to be
processed during the next mill run.

                                       13
<PAGE>
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 expenditures were $738,730 for fiscal 2003 as compared to
$2,136,389 for fiscal 2002. The decrease of $1,397,659 or 65% was primarily due
to approximately four months of stand-by in fiscal 2003 versus eight months in
fiscal 2002. Significant staff reductions at the end of the third quarter also
contributed to the decrease in mill stand-by costs.

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 fiscal 2003 were
$2,655,341 as compared to $3,449,651 for fiscal 2002. The decrease of $794,310
or 23% was the result of decreased expenditures of $878,218 for legal fees
associated with regulatory actions, and other related overhead cost decreases,
offset by increases in Urizon expenditures of $113,504.

EXPLORATION

During the second quarter of fiscal 2002, the Company initiated a precious and
base metals exploration effort in Mongolia. This program was funded 100% by the
Company. As of September 30, 2003, the Company controlled 68 exploration
licenses totaling 2.5 million hectares, 46 of these licenses are held 100% by
the Company and 22 licenses are under a purchase option. Detailed field programs
were initiated in the 2003 field season, including geologic mapping, geochemical
sampling, and geophysical surveys. In addition, the Company drilled
approximately 3,100 meters on its Shiveen Gol project area in western Mongolia.

Total gross program expenditures, including capitalized exploration
expenditures, for fiscal 2003 of $1,360,140 increased by $821,243 as compared to
$538,897 in fiscal 2002. The increase was due to extensive exploration,
including the drilling program on specific targets.

The Company also has a 70% interest in the Gurvan-Saihan Joint Venture in
Mongolia. The other parties to the joint venture are the Mongolian government as
to 15% and Geologorazvedka, a Russian geological concern, as to 15%. As of
September 30, 2003, the joint venture holds 5 exploration licenses totaling 1
million hectares. This in-situ leach uranium project remained on stand-by during
fiscal 2003. Total stand-by expenditures for fiscal 2003 of $205,279 increased
by $142,343 as compared to $62,936 in fiscal 2002.

                                       14
<PAGE>
OTHER INCOME AND EXPENSE

Net interest and other income for fiscal 2003 was $1,375,738 as compared to
$916,780 for fiscal 2002. The increase of $458,958 was primarily the result of
an increase in gains on the sale of short-term investments of $291,517 and an
increase in income from the sale of land and equipment of $206,017. In addition,
interest income decreased $99,154 due to a decrease in the average cash balances
available for investment.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2004, the Company had cash and short-term investments of
$13,134,915 and working capital of $15,467,462 as compared to cash and
short-term investments of $4,729,039 and working capital of $7,294,884 at
September 30, 2003. The increase of $8,172,578 in working capital was in part
due to the receipt of net proceeds of $12.4 million from private placements of
9.95 million common shares, offset by exploration expenditures of $4.2 million.

Net cash used in operating activities was $922,143 for the fiscal year ended
September 30, 2004 and consisted primarily of the net loss from continuing
operations of $2,186,679, adjusted for non-cash items of depreciation and
amortization of $543,054, a gain of $583,133 for the recovery of future income
taxes, a gain on dilution of $548,549, and a decrease in working capital of
$181,375. Working capital changes primarily include increases in receivables of
$291,038 and a decrease in inventories of $571,977. The decrease in inventory is
the result of the sale of the Company's vanadium black flake inventory during
the second quarter of fiscal 2004. In addition, deferred revenue increased by
$1,397,654 primarily as the result of proceeds received or receivable on
delivery of alternate feed materials but in advance of the required processing
activity.

Net cash used in investment activities was $4,821,793 for the fiscal year ended
September 30, 2004 and consisted primarily of capitalized exploration
expenditures of $4,186,908. Restricted investments increased by $380,119 as a
result of interest income, the Company invested $892,221 in marketable
securities, and the Company received cash of $977,094 on acquisition of
Fortress.

Net cash provided by financing activities during the fiscal year ended September
30, 2004 totaled $14,149,812 and consisted primarily of proceeds from the
issuance of 9.95 million common shares by the Company and proceeds from the
issuance of 4.99 million common shares by Fortress.

The Company believes that existing funds and cash flow from operations should be
sufficient to satisfy its working capital requirements, commitments under the
Urizon Joint Venture, and capital expenditures for the next twelve months.
Additional funding through issuance of common shares may be required to fund the
Company's exploration activities.

                                       15
<PAGE>
CRITICAL ACCOUNTING ESTIMATES

The preparation of the Company's consolidated financial statements in conformity
with accounting principles in Canada and the United States requires management
to make estimates and assumptions regarding future events. These estimates and
assumptions affect the reported amounts of certain assets and liabilities, and
disclosure of contingent liabilities.

Significant areas requiring the use of management estimates include the
determination of impairment of intangibles and plant and equipment and mineral
property interests, reclamation obligations, rates for depreciation and
amortization, and variables used in determining stock based compensation. These
estimates are based on management's best judgment. Factors that could affect
these estimates include: changes in the price of uranium and other market
conditions, risks inherent in mineral exploration and development, changes in
reclamation requirements and other laws, changes in government policy and
changes in foreign exchange rates.

On an ongoing basis, management re-evaluates its estimates and assumptions.
However actual amounts could differ from those based on such estimates and
assumptions.

CONTRACTUAL OBLIGATIONS

The Company has a reclamation obligation of $12,603,595, the timing of which
will depend upon the Company's business objectives. While this reclamation
obligation was valued on the assumption that the Company must be able to fund
reclamation of the White Mesa Mill and U.S. mining operations at any time, the
Company currently has no intention of placing the Mill or U.S. mines into
reclamation in the foreseeable future.

The Company also has operating lease obligations of $105,000 for fiscal 2005 and
$240,000 for the following two fiscal years.

ENVIRONMENTAL RESPONSIBILITY

Each year, 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 applicable regulatory authorities. The Mill and mine reclamation
estimates at September 30, 2004 are $12,603,595, which are currently expected to
be sufficient to cover the projected future costs for reclamation of the Mill
and mine operations. 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. For fiscal 2004 and 2003, the amount of these restricted investments
collateralizing the Company's reclamation obligations


                                       16
<PAGE>

was $12,487,066 and $12,106,947, respectively. The increase of $380,119 was due
to interest income from these investments.

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 from septic drain fields that
were used for laboratory and sanitary wastes prior to construction of the Mill's
tailings cells. In April 2003, the Company commenced 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 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 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 shutdown all of its uranium and
uranium/vanadium mines and its Mongolian Gurvan-Saihan Joint Venture, pending
improvements in commodity prices. Also as a result of these market events, the
Company decided to marshal its resources and to concentrate its operations
primarily on the continuing development of the alternate feed, uranium-bearing
waste recycling business. Since then, commodity prices have improved
dramatically. During fiscal 2004, uranium prices increased 65%, from $12.20 per
pound on October 1, 2003, to $20.00 per pound by September 30, 2004. As of
January 31, 2005, the uranium spot price had increased to $21.00 per pound.
Vanadium prices have also increased throughout the past 18 months and are
currently trading in the range of $9.00 to $9.50 per pound V2O5. As a result of
the increase in uranium price, the Company acquired and staked uranium
exploration properties in Canada in fiscal 2004 and has commenced an aggressive
exploration program on certain of those properties. In addition, the Company has
recommenced its uranium exploration program in Mongolia and is currently
evaluating the possibility of recommencing certain of its U.S. mining
activities.


                                       17
<PAGE>
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 or if the Company decides to recommence U.S. mining
operations. 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 2005

The Company will be expanding its uranium exploration programs in both Canada
and Mongolia in 2005. In Canada, the Company along with its joint venture
partner, JNR Resources Inc. is planning a 15,000 meter winter drilling program,
as well as ground geophysics and a 3D seismic program at the Moore Lake project.
In addition to the program at Moore Lake, the Company will also have a winter
geophysical and drilling program at its 100% owned Key Lake South project.
During the summer, the Company will continue to expand its Moore Lake project
exploration program and will initiate additional programs on its 100% staked
land, as well as the Phelps-Dodge and JNR option properties. In Mongolia, the
Company is planning a 35,000-meter drill program and gamma surveys, which will
investigate a number of targets on its current land position. The Company will
continue to evaluate other potential exploration projects, as well as more
advanced project acquisitions.

At the beginning of fiscal 2005, the uranium spot price was $20.00 per pound and
the long-term price was $23.00 per pound. As of January 31, 2005, the spot price
had increased to $21.00 per pound and the long-term price had increased $3.00
per pound to $26.00 per pound. A number of market projections predict a
continued increase in both spot and long-term uranium prices; however, these
projections indicate that the rate of increase will likely be lower than that
seen in 2004.

With the forecasted continued improvement in commodity prices, the Company has
begun studying the viability of restarting certain U.S. mining operations. These
operations are higher cost than the current uranium producers due to the lower
grade of the ore bodies. Assuming that the price continues to rise and given
that a majority of the U.S. mines are fully permitted and can be put back into
production within a four to six month period, the Company is encouraged that a
production decision will be made in 2005.

In addition to the potential restart of the U.S. mining operations, the Company
will be restarting the White Mesa Mill late in the second quarter or early third
quarter of fiscal 2005 to process an alternate feed material that contains over
485,000 pounds of uranium. The processing of this material is anticipated to
take about twelve months to complete, at which time the Company will process the
remaining alternate feed materials at the Mill site. With respect to the Urizon
project, the Company and its joint venture partner, Nuclear Fuel Services, Inc.,
are awaiting a decision by the


                                       18
<PAGE>

U.S. Department of Energy (DOE) on the path forward for the handling of the
Urizon feed stock. This decision was anticipated in the first quarter of fiscal
2005, but has been delayed.

RISKS AND UNCERTAINTIES

Exploration for and development of mineral properties involves significant
financial risks, which even a combination of careful evaluation, experience and
knowledge may not eliminate. While discovery of an ore body may result in
substantial rewards, few properties, which are explored, are ultimately
developed into producing mines. Major expenditures may be required to establish
reserves by drilling, constructing mining and process facilities at a site,
developing metallurgical processes and extracting uranium and other metals from
ore. It is impossible to ensure that the current exploration programs of the
Company will result in profitable commercial mining operations.

Under the United States Nuclear Regulatory Commission'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 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 Annual 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, risks inherent in mineral exploration activities and other operating
and development risks, 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).

                                       19
<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING


The accompanying consolidated financial statements of the Company have been
prepared by and are the responsibility of the Board of Directors and Management
of the Company. The financial statements have been prepared in accordance with
accounting principles generally accepted in Canada which have been reconciled to
accounting principles generally accepted in the United States as set out in Note
17, and where appropriate, reflect management's best estimates and judgments
based on currently available information.

The Audit Committee of the Board of Directors, consisting of 3 members, meets
periodically with management and the Company's auditors to review the scope and
results of the annual audit and to review the consolidated financial statements
and related financial reporting matters prior to submitting the consolidated
financial statements to the Board for approval.

The Company has developed and maintains a system of control to provide
reasonable assurance that financial information is accurate and reliable.

The Company's independent auditors, PricewaterhouseCoopers LLP, are appointed by
the shareholders to conduct an audit in accordance with Canadian and United
States generally accepted auditing standards, and their report follows.


/s/ Ron F. Hochstein                             /s/ David C. Frydenlund
--------------------                             -----------------------
    Ron F. Hochstein                                 David C. Frydenlund
    President and                                    Vice President and
    Chief Executive Officer                          Chief Financial Officer


February 10, 2005



                                       20
<PAGE>


AUDITORS' REPORT


TO THE SHAREHOLDERS OF
INTERNATIONAL URANIUM CORPORATION

We have audited the consolidated balance sheets of International Uranium
Corporation as at September 30, 2004 and 2003 and the consolidated statements of
loss and deficit, cash flows and shareholders' equity for the years ended
September 30, 2004, 2003 and 2002. These 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 Canadian generally accepted auditing
standards and the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the 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.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the company as at September 30,
2004 and 2003 and the results of its operations and its cash flows for the years
ended September 30, 2004, 2003 and 2002 in accordance with Canadian generally
accepted accounting principles.


/s/ PricewaterhouseCoopers LLP
------------------------------
    PricewaterhouseCoopers LLP
    Chartered Accountants
    Vancouver, B.C., Canada
    February 10, 2005



                                       21




<PAGE>
                        INTERNATIONAL URANIUM CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                             (UNITED STATES DOLLARS)



<TABLE>
<CAPTION>
                                                       SEPTEMBER 30, 2004   SEPTEMBER 30, 2003
                                                       ------------------   ------------------
<S>                                                         <C>             <C>
ASSETS
 Current assets:
 Cash and cash equivalents                                   $ 12,044,955    $  3,639,079
 Short-term investments                                         1,089,960       1,089,960
 Trade and other receivables                                    1,630,591         833,038
 Inventories (Note 3)                                           1,189,391       1,761,368
 Prepaid expenses and other                                       408,038         382,488
 Due from Urizon Joint Venture (Note 4)                                --         451,152
                                                             ------------    ------------
                                                               16,362,935       8,157,085

 Plant and equipment, net (Note 5)                              2,786,570       2,825,238
 Mineral properties (Note 6)                                    6,171,263       1,776,982
 Marketable securities (Note 7)                                   892,221              --
 Intangible assets, net (Note 4)                                  687,500         750,000
 Restricted investments (Note 8)                               12,487,066      12,106,947
                                                             ------------    ------------
                                                             $ 39,387,555    $ 25,616,252
                                                             ============    ============

LIABILITIES
 Current liabilities:
 Accounts payable and accrued liabilities                    $    879,994    $    847,729
 Notes payable                                                     15,479          14,472
                                                             ------------    ------------
                                                                  895,473         862,201

 Notes payable, net of current portion                             35,573          51,052
 Reclamation obligations (Note 9)                              12,603,595      12,320,983
 Deferred revenue                                               3,556,592       2,158,938
 Other long-term liability (Note 4)                                99,593          98,582
 Minority interest (Note 10)                                    1,664,247              --
                                                             ------------    ------------
                                                               18,855,073      15,491,756
                                                             ------------    ------------

SHAREHOLDERS' EQUITY
 Share capital (Note 11)
 Issued and outstanding (79,635,066 and 68,970,066 shares)     50,305,480      37,935,533
 Value assigned to stock options                                  224,718            --
 Deficit                                                      (29,997,716)    (27,811,037)
                                                             ------------    ------------
                                                               20,532,482      10,124,496
                                                             ------------    ------------
                                                             $ 39,387,555    $ 25,616,252
                                                             ============    ============
</TABLE>

 Contingency (Note 15)



ON BEHALF OF THE BOARD




/s/ Ron F. Hochstein, Director              /s/ Lukas H. Lundin, Director
------------------------------              -----------------------------
    Ron F. Hochstein, Director                  Lukas H. Lundin, Director



                                       22
<PAGE>

                        INTERNATIONAL URANIUM CORPORATION
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
                             (UNITED STATES DOLLARS)


<TABLE>
<CAPTION>
                                                                         YEARS ENDED SEPTEMBER 30,
                                                                2004                 2003                2002
                                                            ------------        ------------        ------------
<S>                                                        <C>                 <C>                 <C>
OPERATIONS
Revenue
  Vanadium                                                  $  1,582,628        $         --          $       --
  Process milling                                                420,646          12,415,001           6,830,137
  Engineering services (Note 14c.)                               421,182             135,017                  --
                                                            ------------        ------------        ------------
   Total revenue                                               2,424,456          12,550,018           6,830,137
                                                            ------------        ------------        ------------
Costs and expenses
  Vanadium cost of sales                                         706,274                  --                  --
  Process milling expenditures                                   139,793           4,671,199           2,047,791
  Mill stand-by expenditures                                   2,330,554             738,730           2,136,389
  Selling, general and administrative                          3,218,295           2,655,341           3,449,651
  Stock based compensation                                       224,718                  --                  --
  Exploration general                                             55,503             209,253              62,936
  Write-down of inventories                                           --                  --             155,334
  Write-down of mineral properties                                    --             118,081                  --
  Change in market value of other asset                               --                  --            (261,000)
  Change in reclamation obligations                                   --                  --             (29,174)
                                                            ------------        ------------        ------------
                                                               6,675,137           8,392,604           7,561,927
                                                            ------------        ------------        ------------

(Loss) income before the under noted items                    (4,250,681)          4,157,414            (731,790)

  Gain on disposal of other asset                                     --              79,000                  --
  Gain on sale of land and equipment                              58,930             210,603               4,586
  Gain (loss) on sale of short-term investments                  (38,046)            579,926             288,409
  Foreign exchange gain                                          242,059              11,826                  --
  Net interest and other income                                  533,158             494,383             623,785
  Dilution gain (Note 10)                                        548,549                  --                  --
  Minority interest                                              134,219                  --                  --
                                                            ------------        ------------        ------------
Net (loss) income for the year before taxes                   (2,771,812)          5,533,152             184,990

  Recovery of future income tax asset                            585,133                  --                  --
                                                            ------------        ------------        ------------
Net income (loss) for the year                              $ (2,186,679)       $  5,533,152        $    184,990
                                                            ============        ============        ============

Basic and diluted (loss) income per share (Note 11)         $      (0.03)       $       0.08        $         --
                                                            ============        ============        ============

Basic weighted average number of shares outstanding           76,306,520          67,011,765          65,652,998

DEFICIT
Deficit, beginning of year                                   (27,811,037)        (33,344,189)        (33,529,179)
  Net (loss) income for the year                              (2,186,679)          5,533,152             184,990
                                                            ------------        ------------        ------------
DEFICIT, END OF YEAR                                        $(29,997,716)       $(27,811,037)       $(33,344,189)
                                                            ============        ============        ============
</TABLE>


                                       23
<PAGE>


                        INTERNATIONAL URANIUM CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
                                                                                     YEARS ENDED SEPTEMBER 30,
                                                                      ----------------------------------------------------
                                                                          2004                2003               2002
                                                                      ------------        ------------        ------------
<S>                                                                  <C>                 <C>                 <C>
CASH PROVIDED BY (USED IN)

OPERATING ACTIVITIES

Net (loss) income for the period                                      $ (2,186,679)       $  5,533,152        $    184,990
Items not affecting cash
  Depreciation                                                             480,554             617,554             813,050
  Amortization                                                              62,500                  --                  --
  Gain on sale of land and equipment                                       (58,930)           (210,603)             (4,586)
  Gain on sale of short-term investments                                   (38,046)           (579,926)           (288,409)
  Write-down of inventories                                                     --                  --             155,334
  Gain on disposition of other asset                                            --             (79,000)                 --
  Gain in market value of other asset                                           --                  --            (261,000)
  Decrease in reclamation obligations                                           --                  --             (29,174)
  Write-down of mineral properties                                              --             118,081                  --
  Forgiveness of note receivable                                                                    --             200,000
  Recovery of future income tax asset                                     (585,133)                 --                  --
  Minority interest                                                       (134,219)                 --                  --
  Stock based compensation                                                 224,718                  --                  --
    Dilution gain                                                         (548,549)                 --                  --
Changes in non-cash working capital items
  (Increase) decrease in trade and other receivables                      (742,190)           (733,188)          1,450,388
  Decrease (increase) in due from Urizon Joint Venture                     451,152            (451,152)                 --
  Decrease (increase) in inventories                                       571,977             (40,416)             10,269
  Increase in other current assets                                         (25,550)            (14,053)           (162,525)
  (Decrease) increase in accounts payable and accrued liabilities          (74,014)            183,428             355,493
Increase in reclamation obligations                                        282,612                  --                  --
Increase (decrease) in deferred revenue                                  1,397,654          (8,740,256)         (4,166,921)
                                                                      ------------        ------------        ------------
NET CASH (USED IN) OPERATIONS                                             (922,143)         (4,396,379)         (1,743,091)
                                                                      ------------        ------------        ------------

INVESTING ACTIVITIES

Purchase plant and equipment                                              (441,824)            (74,616)           (215,554)
Cash received on acquisition of Fortress                                   977,094                  --                  --
Mineral properties                                                      (4,186,908)         (1,356,166)           (538,897)
Purchase of intangible asset                                                    --            (750,000)                 --
Proceeds from sale of surplus land and equipment                            64,139             230,100              40,964
Purchase of marketable securities                                         (892,221)           (996,675)           (752,626)
Proceeds from sale of short-term investments                                38,046           3,559,403           9,679,079
(Increase) decrease in restricted investments                             (380,119)            536,392          (2,141,864)
                                                                      ------------        ------------        ------------
NET CASH (USED IN) PROVIDED BY INVESTMENT ACTIVITIES                    (4,821,793)          1,148,438           6,071,102
                                                                      ------------        ------------        ------------

FINANCING ACTIVITIES

(Decrease) increase in notes payable                                       (14,472)            (12,686)                 31
Settlement of other asset                                                       --            (280,000)                 --
Issuance of common shares                                               12,408,969                  --                  --
Fortress private placement                                               1,209,204                  --                  --
Exercise of stock options                                                  546,111             468,924              17,396
                                                                      ------------        ------------        ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                               14,149,812             176,238              17,427
                                                                      ------------        ------------        ------------

Increase (decrease) in cash and cash equivalents                         8,405,876          (3,071,703)          4,345,438
Cash and cash equivalents, beginning of year                             3,639,079           6,710,782           2,365,344
                                                                      ------------        ------------        ------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                $ 12,044,955        $  3,639,079        $  6,710,782
                                                                      ============        ============        ============
</TABLE>


                                       24



<PAGE>
INTERNATIONAL URANIUM CORPORATION
Notes to Consolidated Financial Statements
September 30, 2004, 2003 and 2002
(United States Dollars)

1.   Organization and Nature of Operations

     International Uranium Corporation ("IUC" or the "Company") is incorporated
     under the Business Corporations Act (Ontario). The Company is engaged
     primarily in uranium exploration and is also 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"). In addition, the Company sells uranium recovered from conventional
     mine production and from alternate feed processing, as well as vanadium and
     other metals that can be produced as a co-product with uranium. The Company
     owns several uranium and uranium/vanadium mines in the U.S. that have been
     shut down since 1999, due to low commodity prices at the time, but which
     are currently being evaluated for re-commencement of mining operations
     given recent increases in the price of uranium and vanadium. The Company is
     engaged in uranium exploration in the Athabasca Basin region of
     Saskatchewan, Canada and in Mongolia. In addition, the Company is engaged
     in precious and base metals exploration in Mongolia through its subsidiary,
     Fortress Minerals Corp.

     In addition to the company's primary focus on uranium exploration and
     mining, the Company intends to continue to devote significant resources to
     the development of the alternate feed, uranium-bearing waste recycling
     business. The Company expects that the recycling of uranium-bearing
     materials can continue to help offset Mill and mine standby costs, and,
     potentially, result in sustained profitable operations for the Company.
     While the Company has had considerable success to date in this initiative,
     the Company has not to date developed a sufficient backlog of alternate
     feed business to result in sustained profitable operations for the Company
     solely from this business. Developing this backlog will continue to be a
     major focus of the Company.


     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.

     During the third quarter of fiscal 2004, the Company completed the sale of
     its precious and base metals exploration properties in Mongolia to Fortress
     Minerals Corp to concentrate on the Company's uranium activities.

2.   Significant Accounting Policies

     These consolidated financial statements have been prepared in accordance
     with accounting principles generally accepted in Canada. Differences from
     United States generally accepted accounting principles, which would have a
     significant impact on these financial statements, are disclosed in Note 17.

     a.       Basis of consolidation

     The consolidated financial statements include the accounts of the Company's
     wholly owned subsidiaries, International Uranium (Sask) Corporation,
     International Uranium Holdings Corporation, International Uranium (Bermuda
     I) Ltd., International Uranium Company (Mongolia) Ltd., and International
     Uranium (USA) Corporation and it's majority owned subsidiary Fortress
     Minerals Corp., and on a proportionate consolidation basis, Urizon Recovery
     Systems, LLC. The Company's interest in the Gurvan Saihan Joint Venture is
     accounted for on a consolidated basis, since the Company exercises control.

                                       25
<PAGE>

     b.       Use of estimates

     The preparation of consolidated financial statements in conformity with
     generally accepted accounting principles requires the Company's management
     to make estimates and assumptions that affect the amounts reported in these
     financial statements and notes thereto. Significant estimates include the
     amount of the Company's reclamation obligations, the recoverability of
     capitalized mineral property costs, the useful life of intangibles and
     plant and equipment, and the variables used in determining stock based
     compensation. Actual results could differ from those estimated.

     c.       Cash and cash equivalents

     Cash and cash equivalents consist of cash on deposit and short term money
     market instruments with maturities at the date of purchase of three months
     or less.

     d.       Income taxes

     The Company follows the liability method of accounting for income taxes.
     Under this method, future income taxes are recognized for the future income
     tax consequences attributable to differences between the financial
     statement carrying values and the respective income tax basis of assets and
     liabilities (temporary differences). The resulting changes in the net
     future tax asset or liability are included in income. Future tax assets and
     liabilities are measured using enacted or substantively enacted tax rates
     expected to apply to taxable income in the years in which temporary
     differences are expected to be recovered or settled. The effect on future
     income tax assets and liabilities of a change in tax rates is included in
     income in the period that includes the substantive enactment date. Future
     income tax assets are evaluated and if realization is not considered to be
     "more likely than not," a valuation allowance is provided.

     e.       Investments

     The Company holds short term investments, marketable securities and
     restricted investments. The short term investments and marketable
     securities are carried at the lower of cost and market value. Restricted
     investments are held to maturity and are recorded at amortized cost.

     Investments in joint ventures, in which the Company does not exercise
     control, are accounted for using the proportionate consolidation method.
     Under this method, the Company's proportionate share of joint venture
     revenues, expenses, assets and liabilities is included in the accounts.

     f.       Inventories

     In-process inventories, which consist of partially processed uranium and
     vanadium bearing ores, and uranium and vanadium concentrates are valued at
     the lower of cost and net realizable value using the first-in, first-out
     method. Consumable parts and supplies are valued at the lower of weighted
     average cost and replacement cost.

     g.       Plant and equipment

     Plant and equipment are recorded at the lower of cost and net recoverable
     amount. Plant and equipment are depreciated on a straight-line basis over
     their estimated useful lives from three to fifteen years. Plant and
     equipment placed on stand-by are depreciated over their remaining lives.
     Plant and equipment held for resale are recorded at the lower of cost and
     net realizable value. Gains or losses from normal sales or retirements of
     assets are included in other income or expense.



                                       26
<PAGE>

     h.       Exploration properties

     Mineral exploration costs are capitalized as incurred, except for costs
     that are not directly associated with a project. When it is determined that
     a mineral property can be economically developed, the cost of the property
     and the related exploration expenditures are amortized using the
     unit-of-production method over the estimated life of the ore body. When a
     project is determined to be unsuccessful, the mining property and the
     related exploration expenditures are written down to their net recoverable
     amount.

     i.       Asset impairment

     Effective October 1, 2003, the Company adopted the new standard of the
     Canadian Institute of Chartered Accountants ("CICA") relating to impairment
     of long lived assets. Prior to this adoption, impairment charges were
     determined using non-discounted estimated net recoverable amounts. There
     was no impact on the financial statements resulting from the implementation
     of this new standard.

     The Company reviews and evaluates its long-lived assets for impairment when
     events or changes in circumstances indicate that the related carrying
     amounts may not be recoverable. An impairment loss is recognized when the
     asset-carrying value exceeds net recoverable amount. Net recoverable amount
     is generally determined using estimated undiscounted future cash flows. An
     impairment is considered to exist if total estimated future cash flows on
     an undiscounted basis are less than the carrying amount of the asset. An
     impairment loss is measured and recorded based on the estimated fair value
     of the assets. Assumptions underlying future cash flow estimates are
     subject to risks and uncertainties. Any differences between significant
     assumptions used and actual market conditions and/or the Company's
     performance could have a material effect on the Company's financial
     position and results of operations.

     j.       Environmental protection and reclamation costs

     Effective October 1, 2002, the Company adopted the new standard of the CICA
     relating to asset retirement obligations. Under this new standard, asset
     retirement obligations are recognized when incurred and recorded as
     liabilities at fair value. Under the standard, the liability is accreted
     over time through periodic charges to earnings.

     The implementation of this standard was not material to the Company.

     k.       Foreign currency translation

     These consolidated financial statements are denominated in United States
     dollars, the Company's functional currency. A majority of the Company's
     assets and operations are located in the United States, with the exception
     of the mineral exploration properties in Canada and Mongolia. The majority
     of its costs are denominated in United States dollars.

     Amounts denominated in foreign currencies are translated into United States
     dollars as follows:

          a.   monetary assets and liabilities at the rates of exchange in
               effect at balance sheet dates;

          b.   non-monetary assets at historical rates;

          c.   revenue and expense items at the average rates for the period,
               except for depreciation and amortization which are based on
               historical rates.

     The net effect of the foreign currency translation is included in the
     statement of earnings.



                                       27
<PAGE>

     l.       Basic and diluted earnings per share

     Earnings or loss per share are presented for basic and diluted net income
     (loss). Basic earnings per share are computed by dividing net income or
     loss by the weighted average number of outstanding common shares for the
     year. The Company follows the "treasury stock" method in the calculation of
     diluted earnings per share. Under this method, dilution is calculated based
     upon the net number of common shares issued should "in the money" options
     be exercised and the proceeds used to repurchase common shares at the
     weighted average market price in the period.

     m.       Revenue recognition

     Vanadium sales are recorded in the period that title passes to the customer
     along with the risks and rewards of ownership.

     Process milling fees are recognized as the applicable material is
     processed, in accordance with the specifics of the applicable processing
     agreement.

     Engineering services are recognized as the services are provided in
     accordance with customer agreements.

     Revenues are recognized only to the extent they are reasonably considered
     to be collectible.

     Deferred revenues represent processing proceeds received or receivable on
     delivery of materials but in advance of the required processing activity.

     n.       Stock options

     The Company has a stock option plan, which is described in Note 11(c).

     Effective October 1, 2002, the Company adopted the new CICA accounting
     standard for stock-based compensation. The new standard covers the
     recognition, measurement and disclosure of stock-based compensation and
     other stock-based payments made in exchange for goods and services provided
     by employees and non-employees. The standard sets out a fair value-based
     method of accounting that is required for certain, but not all, stock-based
     transactions. The fair value method must be applied to all stock-based
     payments to non-employees. However, the new standard permits the Company to
     continue its existing policy that no compensation cost is recorded on the
     granting of stock options to employees and directors as the exercise price
     is equal to or greater than the market price at the date of the grant.
     Consideration paid on exercise of the stock options is credited to capital
     stock. The standard also requires additional disclosures for options
     granted to employees and directors, including disclosure of pro forma
     earnings and pro forma earnings per share as if the fair value-based
     accounting method had been used to account for employee stock options (Note
     11c).

     o.       Intangible Assets

     Intangible assets consist of technological licenses held in the Urizon
     Joint Venture (Note 4) and are being amortized over the estimated useful
     life of the license of 12 years.

3.  Inventories

    <TABLE>
    <CAPTION>
                                                                              2004                          2003
                                                               -------------------------------------------------
   <S>                                                                  <C>                           <C>
    Vanadium concentrates                                                 $144,854                      $838,474
    In process                                                             202,414                        70,242
    Parts and supplies                                                     842,123                       852,652
                                                               -------------------------------------------------
                                                                        $1,189,391                    $1,761,368
                                                               =================================================
    </TABLE>



                                       28
<PAGE>

4.   Urizon Joint Venture

     On October 18, 2002, the Company entered into a joint venture with Nuclear
     Fuel Services, Inc ("NFS"). for the pursuit of an alternate feed program
     for the Company's Mill. The joint venture is carried out through Urizon
     Recovery Systems, LLC ("Urizon"), a 50/50 joint venture company. The
     Company contributed $1,500,000 in cash together with its technology
     license. NFS contributed its technology license.

     Pursuant to the Urizon operating agreement, each member must provide
     services as specified therein and charge Urizon for such services.
     Depending upon the type of services provided by the members, Urizon
     reimburses such services to the members either currently when charged or in
     the future out of available distributable cash after certain profit and
     funding conditions have been satisfied. The intangible asset is
     intellectual property and represents the Company's 50% interest in Urizon's
     technology.

     The results of Urizon have been included in the consolidated accounts of
     the Company on a proportionate basis from the date of formation.

     Following are condensed balance sheet and income statements reflecting
     IUC's interest in the Urizon joint venture.

    <TABLE>
    <CAPTION>
                                                                              2004                          2003
                                                               -------------------------------------------------
   <S>                                                                   <C>                          <C>
    Current assets                                                         $20,588                      $710,836
    Intangible asset                                                      $687,500                      $750,000

    Current liabilities                                                         $-                      $237,982
    Long term debt                                                         $99,593                       $98,582

    Operating loss                                                       ($64,224)                    ($827,282)
    Cash flows from operating activities                                        $-                     ($39,242)
    </TABLE>

     The joint venture has no cash flows arising from investing or financing
     activities.

     Intangible asset

    <TABLE>
    <CAPTION>
                                                                               Accumulated                  2004
                                                                 Cost         Amortization                   Net
                                                        --------------------------------------------------------
   <S>                                                      <C>                   <C>                  <C>
    Technology licenses                                      $750,000              $62,500              $687,500
    </TABLE>

5.  Plant and Equipment

    <TABLE>
    <CAPTION>
                                                                               Accumulated                  2004
                                                                 Cost         Depreciation                   Net
                                                        --------------------------------------------------------
   <S>                                                    <C>                  <C>                   <C>
    Mill buildings and equipment                           $7,303,851           $4,938,585            $2,365,266
    Other machinery and equipment                           1,102,124              680,820               421,304
                                                        --------------------------------------------------------
                                                           $8,405,975           $5,619,405            $2,786,570
                                                        ========================================================
    </TABLE>

    <TABLE>
    <CAPTION>
                                                                               Accumulated                  2003
                                                                 Cost         Depreciation                   Net
                                                        --------------------------------------------------------
   <S>                                                    <C>                  <C>                   <C>
    Mill buildings and equipment                           $6,965,816           $4,546,437            $2,419,379
    Other machinery and equipment                           1,072,879              667,020               405,859
                                                        --------------------------------------------------------
                                                           $8,038,695           $5,213,457            $2,825,238
                                                        ========================================================
    </TABLE>



                                       29
<PAGE>

     During fiscal 1999 the Company placed its mining operations on stand-by. At
     September 30, 2004 and September 30, 2003, capital assets include other
     machinery and equipment held for resale with an aggregate net book value
     (being the estimated net realizable value) of $349,969 and $376,285,
     respectively. These surplus assets are expected to be sold over time as
     opportunities for sale arise, and the actual proceeds to be realized on the
     sale of the surplus assets could vary from the carrying value.

6.   Mineral Properties

     a.       Mongolia precious and base metal properties

     The Company's Mongolian precious and base metals properties were
     transferred to Fortress Minerals Corp. in June 2004 in exchange for cash
     and a controlling interest in Fortress (Note 10). Amounts capitalized, by
     project, include costs related to acquisition of land interests, recording
     fees, geological field programs, geochemical surveys, ground geophysical
     programs, drilling and lab analysis are shown below:

    <TABLE>
    <CAPTION>
                                                                2003                  2004                  2004
                                                                 Net          Expenditures                   Net
                                                        --------------------------------------------------------
   <S>                                                    <C>                   <C>                   <C>
    Shiveen Gol                                             $991,438              $786,452            $1,777,890
    Tsagaan Tologoi                                          213,232               384,549               597,781
    Erdenet                                                  222,207               498,276               720,483
    Tsagaan Gozgor                                                 -                29,688                29,688
    Huvsgol                                                  151,106               188,358               339,464
    Satyr Khudag                                              56,559                61,766               118,325
    Davaa                                                          -                31,764                31,764
    Burkheer Khar                                             88,742                21,703               110,445
    Ulzit                                                     53,698                29,471                83,169
                                                        --------------------------------------------------------
                                                          $1,776,982            $2,032,027            $3,809,009
                                                        ========================================================
    </TABLE>

     b.       Canada uranium properties

     In the first quarter of fiscal 2004, the Company acquired interests in and
     staked uranium exploration properties in the Athabasca Basin region of
     Saskatchewan, Canada and commenced exploration on certain properties.
     Amounts capitalized, by project, include costs related to acquisition of
     land interests, staking costs, recording fees, geological field programs,
     airborne and ground geophysical programs, drilling and lab analysis are
     shown below:

    <TABLE>
    <CAPTION>
                                                                2003                  2004                  2004
                                                                 Net          Expenditures                   Net
                                                        --------------------------------------------------------
   <S>                                                          <C>           <C>                   <C>
    Moore Lake                                                    $-            $1,766,485            $1,766,485
    Lazy Edwards                                                   -                27,884                27,884
    Pendleton Lake                                                 -               101,087               101,087
    South Cigar Lake                                               -                69,391                69,391
    Crawford Lake                                                  -                    54                    54
    Ford Lake                                                      -                 3,157                 3,157
    Perpete Lake                                                   -                 1,409                 1,409
    Key Lake South                                                 -                78,350                78,350
    Johnstone Lake                                                 -                 9,826                 9,826
    Other Exploration Costs                                        -               251,535               251,535
                                                        --------------------------------------------------------
                                                                  $-            $2,309,178            $2,309,178
                                                        ========================================================
    </TABLE>

     c.       Mongolia uranium properties

     Mongolian mineral properties are currently made up of the Company's
     interest in the Gurvan-Saihan Joint Venture ("GSJV") as well as properties
     held, solely for the account of the Company, through its subsidiary
     International


                                       30
<PAGE>
    Uranium Mongolia, XXK. Amounts capitalized, by project,
    include costs related to licensing of land interests, review of geological
    data and satellite imagery, and geological field programs are shown below:
    <TABLE>
    <CAPTION>
                                                                2003                  2004                  2004
                                                                 Net          Expenditures                   Net
                                                        --------------------------------------------------------
   <S>                                                           <C>               <C>                   <C>
    Huh Tologoi                                                   $-                $8,583                $8,583
    Deren                                                          -                   385                   385
    Ikh Hongor Uul                                                 -                 1,588                 1,588
    Navtgar                                                        -                 6,000                 6,000
    Oshinuur                                                       -                13,972                13,972
    Ulaan Toiron                                                   -                   162                   162
    Other Exploration Costs                                        -                22,386                22,386
                                                        --------------------------------------------------------
                                                                  $-               $53,076               $53,076
                                                        ========================================================
    </TABLE>

7.   Marketable securities

     The Company has invested $723,226 in shares of JNR Resources Inc. and
     $168,995 in shares of Goodfellow Resources Ltd., for a total investment of
     $892,221. As of September 30, 2004, the market value of these securities
     exceeded the cost by $3,204,347.

8.   Restricted Investments

     The Company has placed cash and fixed income securities on deposit to
     secure its reclamation bonds and certain other obligations (Note 9).

    <TABLE>
    <CAPTION>
                                                                              2004                          2003
                                                        --------------------------------------------------------
   <S>                                                                 <C>                           <C>
    Cash and cash equivalents                                           $1,883,073                    $2,177,688
    Fixed income securities                                             10,603,993                     9,929,259
                                                        --------------------------------------------------------
                                                                       $12,487,066                   $12,106,947
                                                        ========================================================
    </TABLE>

9.   Provisions for Reclamation

     Estimated future decommissioning and reclamation costs of the Mill and
     mining properties have been determined based on engineering estimates of
     the costs of reclamation, in accordance with legal and regulatory
     requirements. These cost estimates are reviewed periodically by applicable
     regulatory authorities, and, in the case of the Mill, are reviewed and
     adjusted annually by the State of Utah Department of Environmental Quality
     as appropriate, to accurately reflect the estimated costs of reclamation.

     The Company has posted bonds (collateralized by cash and fixed income
     securities) in favor of the State of Utah and the applicable state
     regulatory agencies in Colorado and Arizona as partial collateral for these
     liabilities and has deposited fixed income securities on account of these
     obligations (Note 8).

     Since September 30, 2003, the Mill's reclamation estimate and bonding
     requirement increased from $10,336,283 to $10,618,895. There have been no
     changes to the reclamation cost estimate of $1,984,700 for the Company's
     mining properties, or mine bonding requirement during the fiscal year.

     Applicable regulations require the Company to estimate reclamation costs on
     the assumption that the reclamation would be performed at any time by a
     third party contractor and the reclamation cost estimate required by
     regulatory authorities is calculated on an undiscounted basis. Management
     estimates that, once a decision is made to commence reclamation activities,
     substantially all the reclamation activities could be completed in
     approximately 24 - 30 months.



                                       31
<PAGE>

     Elements of uncertainty in estimating reclamation and decommissioning costs
     include potential changes in regulatory requirements, decommissioning and
     reclamation alternatives. Actual costs may differ from those estimated and
     such differences may be material.

10.  Acquisition of Fortress Minerals Corp.

     On June 23, 2004, the Company sold its Mongolian precious and base metals
     exploration properties to Fortress Minerals Corp. in exchange for
     28,000,000 common shares or 63.14% of Fortress and $656,580 in cash for
     reimbursement of costs incurred on the properties from the time of the
     agreement to the transfer date. The net book value of the assets and
     liabilities transferred was $3,088,201.

     The transfer was accounted for as a non-monetary transaction that does not
     represent the culmination of the earnings process. Accordingly, no gain or
     loss has been recognized on the transaction. The assets and liabilities
     assumed on June 23, 2004 consist of the following:

    <TABLE>
    <CAPTION>
   <S>                                                                                                <C>
    Cash received from Fortress                                                                         $656,580
    Cash and cash equivalents                                                                            320,514
    Other current assets                                                                                  55,363
    Plant and equipment, net                                                                               5,271
    Mineral Properties                                                                                 3,295,574
                                                                                        -------------------------
                                                                                                      $4,333,302
                                                                                        -------------------------

    Accounts payable and accrued liabilities                                                             107,290
    Minority interest                                                                                  1,137,811
                                                                                        -------------------------
                                                                                                       1,245,101
                                                                                        -------------------------
    Net assets assumed                                                                                $3,088,201
                                                                                        =========================
    </TABLE>

     On September 1, 2004, Fortress completed a private placement of 4,987,500
     common shares of which the Company acquired 732,500 common shares. As a
     result of this private placement, the Company's interest was diluted from
     63.14% to 58.24%, while it's proportionate share of Fortress' net assets
     increased by $548,549. This gain on dilution has been recognized in the
     consolidated statements of operations and deficit in accordance with
     Canadian GAAP.

11.  Share Capital

     a.       Authorized - unlimited number of common shares.

     b.       Issued and outstanding

     Shares
    <TABLE>
    <CAPTION>
                                                                 2004                 2003                  2002
                                                 ----------------------------------------------------------------
    <S>                                                   <C>                  <C>                   <C>
         Beginning of year                                 68,970,066           65,735,066            65,600,066
         Employee stock options exercised                     715,000            3,235,000               135,000
         Private placements                                 9,950,000                    -                     -
                                                 ----------------------------------------------------------------
         End of year                                       79,635,066           68,970,066            65,735,066
                                                 ================================================================
     </TABLE>




                                       32
<PAGE>

     Amount
    <TABLE>
    <CAPTION>
                                                                 2004                 2003                  2002
                                                 ----------------------------------------------------------------
    <S>                                                  <C>                  <C>                   <C>
         Beginning of year                                $37,935,533          $37,466,609           $37,449,213
         Employee stock options exercised                     546,111              468,924                17,396
         Private placements                                12,408,969                    -                     -
         Renounced flow through share
         expenditures                                       (585,133)                    -                     -
                                                 ----------------------------------------------------------------
         End of year                                      $50,305,480          $37,935,533           $37,466,609
                                                 ================================================================
     </TABLE>

     c.  Stock options

         The Company has adopted a stock option plan under which the Board of
         Directors may from time to time grant to directors, officers, key
         employees and consultants of the Company, options to purchase shares of
         the Company's common stock. These options are intended to advance the
         interests of the Company by providing eligible persons with the
         opportunity, through share options, to acquire an increased proprietary
         interest in the Company. Options granted under the share option plan
         have an exercise price equal to the fair market value of such shares on
         the date of grant. All outstanding options granted to date vest
         immediately and expire three years from the date of the grant of the
         option.

     Stock option transactions were as follows:

    <TABLE>
    <CAPTION>
                                                                 2004                 2003                  2002
                                                 ----------------------------------------------------------------
    <S>                                                    <C>                <C>                   <C>
         Beginning of year                                    670,000            4,055,000             4,370,000
         Granted                                            1,985,000              250,000               495,000
         Exercised                                          (715,000)          (3,235,000)             (135,000)
         Expired                                                    -            (400,000)             (675,000)
                                                 ----------------------------------------------------------------
         End of year                                        1,940,000              670,000             4,055,000
                                                 ================================================================
     </TABLE>

     Weighted average exercise prices per share were as follows:

    <TABLE>
    <CAPTION>
                                                                 2004                 2003                  2002
                                                 ----------------------------------------------------------------
    <S>                                                    <C>                  <C>                   <C>
         Beginning of year                                  Cdn $0.32            Cdn $0.25             Cdn $0.32
         Granted                                            Cdn $1.08            Cdn $0.31             Cdn $0.32
         Exercised                                          Cdn $1.01            Cdn $0.20             Cdn $0.20
         Expired                                                    -            Cdn $0.57             Cdn $0.75
                                                 ----------------------------------------------------------------
         End of year                                        Cdn $0.85            Cdn $0.32             Cdn $0.25
                                                 ================================================================
     </TABLE>

     Stock options outstanding and exercisable as of September 30, 2004 were as
follows:

    <TABLE>
    <CAPTION>
                                         Options Outstanding and Exercisable
    -------------------------------------------------------------------------------------------------------------
             Number Outstanding             Average Remaining Contractual              Weighted Average
                                                     Life (Years)                  Exercise Price Per Share
    -------------------------------------------------------------------------------------------------------------
   <S>                          <C>                     <C>                                  <C>
                                 200,000                 0.29                             Cdn $0.30
                                 250,000                 1.03                             Cdn $0.31
                               1,490,000                 2.16                             Cdn $1.01
    -------------------------------------------------------------------------------------------------------------
                               1,940,000                 1.82                             Cdn $0.85
    =============================================================================================================
    </TABLE>


                                       33
<PAGE>
     Outstanding options expire between January 2005 and November 2006.

     Effective October 1, 2002, the Company adopted the new CICA accounting
     standard for stock based compensation. For income statement purposes, the
     Company has elected not to follow the fair value method of accounting for
     stock options granted to employees and directors. Accordingly, no
     compensation expense is recorded on the grant of stock options to employees
     and directors, as the exercise price is equal to the market price at the
     date of grant. Had the Company followed the fair value method of
     accounting, the Company would have recorded a compensation expense of
     $737,904 in fiscal 2004 and $35,751 in fiscal 2003, with respect to its
     employee and director stock options. Pro forma earnings information
     determined under the fair value method of accounting for stock options is
     as follows:
<TABLE>
<CAPTION>
                                                       Year Ended                Year Ended
                                                   September 30, 2004        September 30, 2003
                                               ------------------------------------------------
<S>                                                       <C>                        <C>
    Net loss as reported                                  ($2,186,679)               $5,533,152
    Compensation expense                                    ($737,904)                 ($35,751)
    Pro forma                                             ($2,924,583)               $5,497,401

    Basic and diluted earnings per share:
    As reported                                                ($0.04)                    $0.08
    Pro forma                                                  ($0.04)                    $0.08
</TABLE>

     The fair values of options included in the pro forma amounts presented
     above, have been estimated using an option-pricing model. Assumptions used
     in the pricing model are as follows:

<TABLE>
<CAPTION>
                                                              2004                2003
                                                  ------------------------------------
<S>                                                        <C>                 <C>
    Dividend yield                                              0%                  0%
    Average risk free interest rate                          2.81%               4.04%
    Expected volatility                                        93%                 65%
    Expected life of options                               3 years             3 years
</TABLE>

     Net income or loss per share was calculated on the basis of the weighted
     average number of shares outstanding for the year. The weighted average
     number of shares outstanding at September 30 for 2004, 2003 and 2002 was
     76,305,520, 67,011,765 and 65,652,998, respectively.

     Diluted net income per share reflects only the dilutive effect of the
     exercise of stock options outstanding as of year-end. The number of shares
     for the diluted net income or loss per share calculation at September 30,
     2004, 2003 and 2002 was 76,305,520, 67,634,897 and 66,926,114,
     respectively.

12.  Income Taxes
<TABLE>
<CAPTION>
                                                           2004             2003            2002
                                                 ------------------------------------------------
<S>                                                  <C>               <C>               <C>
    Reconciliation
       Combined basic rate                                   40%              40%             40%
       Income (loss) from operations                 (2,186,679)       5,533,152         184,990
                                                 ------------------------------------------------
       Income tax recovery at basic rate               (874,672)       2,213,261          73,996

       Change in valuation allowance                     28,793       (2,448,966)          6,228
       Other                                            260,746          235,705         (80,224)
                                                 ------------------------------------------------
       Tax recovery per consolidated
       financial statements                            (585,133)              --              --
                                                 ================================================
</TABLE>

                                       34
<PAGE>
<TABLE>
<S>                                                <C>           <C>            <C>
    Future income tax assets
         Tax losses carried forward                  5,412,595     5,283,133     4,667,921
         Inventory                                     382,169       382,169       413,769
         Mineral properties                          1,224,421     1,124,872     1,472,807
         Deferred revenue                            1,442,637       863,575     3,149,145
                                                -------------------------------------------
                                                     8,461,822     7,653,749     9,703,642
    Future income tax liability
         Capital assets                            (1,994,567)   (1,215,287)     (881,176)
         Valuation allowance                       (6,467,255)   (6,438,462)   (8,822,466)
                                                -------------------------------------------
         Net future income taxes                           --            --            --
                                                ===========================================
</TABLE>

     Non-capital loss carry forwards for Canadian tax purposes of approximately
     $2,665,000 began to expire in 2004. For U.S. income tax purposes, loss
     carry forwards of approximately $11,212,000 expire between 2015 and 2024
     unless utilized.

13.  Segmented Information

     a.  Geographic information

<TABLE>
<CAPTION>
                                                     2004           2003          2002
                                          --------------------------------------------
<S>                                          <C>             <C>            <C>
    Revenue
         United States                         $2,424,456    $12,550,018    $6,830,137
                                          --------------------------------------------
                                               $2,424,456    $12,550,018    $6,830,137
                                          ============================================
    Net loss
         Canada                                 ($105,756)     ($174,372)    ($192,922)
         United States                         (2,446,602)     6,065,195       446,697
         Mongolia                                 365,679       (357,671)      (68,785)
                                          ---------------------------------------------
                                              ($2,186,679)    $5,533,152      $184,990
                                          =============================================
    Total assets
         Canada                               $13,288,701       $465,510       $71,657
         United States                         20,769,794     23,047,594    31,656,351
         Mongolia                               5,329,060      2,103,148       651,262
                                          ---------------------------------------------
                                              $39,387,555    $25,616,252   $32,379,270
                                          =============================================
</TABLE>

     b.  Major Customers

         The Company's business is such that, at any given time, it sells its
         uranium and vanadium concentrates to and enters into process milling
         arrangements with a relatively small number of customers. During fiscal
         2004, a vanadium customer accounted for approximately 65% of total
         revenues. During fiscal 2003 and 2002, a process milling customer
         accounted for approximately 89% and 100% of total revenues,
         respectively. Accounts receivable from any individual customer will
         exceed 10% of total accounts receivable on a regular basis.


                                       35
<PAGE>
14.  Related Party Transactions

     a.  During the year ended September 30, 2004, the Company incurred legal
         fees of $169,026 with a law firm of which a partner is a director of
         the Company. Legal fees incurred with this law firm were $45,847 for
         the year ended September 30, 2003 and $10,960 for the year ended
         September 30, 2002.

     b.  During the year ended September 30, 2004, the Company incurred
         management and administrative service fees of $136,335 with a company
         owned by the Chairman of the Company, which provides investor
         relations, office premises, secretarial and other services in
         Vancouver. Management and administrative service fees incurred with
         this company were $90,000 for each of the years ended September 30,
         2003 and 2002. Amounts due to this company were nil as of September 30,
         2004 and 2003.

     c.  During the year ended September 30, 2004, the Company provided mine
         reclamation management and engineering support services of $421,182 on
         a cost plus basis to a company with common directors. Amounts due from
         this company were $64,801 as of September 30, 2004.

15.  Contingency and Commitments

     The Company has 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 of the Mill's tailings cells. In
     April 2003, the Company commenced 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 final remediation have not yet been determined and could be
     significant.

     The Company is required to comply with environmental protection laws and
     regulations and permitting requirements, and the Company anticipates that
     it will be required to continue to do so in the future. Although the
     Company believes that its operations are in compliance, in all material
     respects, with all relevant permits, licenses and regulations involving
     worker health and safety as well as the environment, the historical trend
     toward stricter environmental regulation may continue. The uranium industry
     is subject to not only the worker health and safety and environmental risks
     associated with all mining businesses, but also to additional risks
     uniquely associated with uranium mining and milling. The possibility of
     more stringent regulations exists in the area of worker health and safety,
     the disposition of wastes, the decommissioning and reclamation of mining
     and milling sites, and other environmental matters, each of which could
     have a material adverse effect on the costs of reclamation or the viability
     of the operations.

     In the first quarter of fiscal 2004, the Company received a demand and
     threat of pursuit of litigation in respect of alleged preferential payments
     by a former customer, in the amount of approximately $1.2 million, that
     were paid pursuant to certain contracts with the Company. The former
     customer filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code
     in January 2002. That company subsequently sold substantially all of its
     assets to The Shaw Group, Inc. ("Shaw"), who was believed to have assumed
     the contracts in question and has subsequently performed the contracts with
     the Company. In May 2004 the Company received a formal Complaint in the
     bankruptcy proceeding seeking the recovery of approximately $1.7 million as
     an alleged preferential payment. The Company has answered the complaint,
     disputing the claim, asserting, among other defenses that there is no
     liability on account that the Company's contract was assumed and assigned
     to Shaw and as a result there is no preference liability. The Company has
     sought summary judgment in its favor. The Court has not yet ruled on the
     Company's request.


                                       36
<PAGE>
     The Company has committed to payments under operating leases for the rental
     of office space and office equipment. The current lease at the Denver
     office expires on May 31, 2008. The future minimum lease payments are as
     follows:
<TABLE>
<CAPTION>
    Fiscal Year Ending
<S>                                                         <C>
             2005                                           $104,937
             2006                                           $ 92,561
             2007                                           $ 97,025
             2008                                           $ 50,733
</TABLE>

16.  Financial Instruments

     a.  Credit risk

         Financial instruments that potentially subject the Company to a
         concentration of credit risk consist of cash and cash equivalents,
         accounts receivable, amounts due from the Urizon Joint Venture, and
         restricted fixed income securities. The Company deposits cash and cash
         equivalents with financial institutions it believes to be creditworthy,
         principally in money market funds, which may at certain times, exceed
         federally insured levels. The Company's restricted investments consist
         of investments in U.S. government bonds, commercial paper and
         high-grade corporate bonds with maturities extending beyond 90 days.
         The Company's accounts receivable are derived from customers primarily
         located in the United States. The Company performs ongoing credit
         evaluation of its customers' financial condition and, in most cases,
         requires no collateral from its customers. The Company will maintain an
         allowance for doubtful accounts receivable in those cases where the
         expected collectability of accounts receivable is in question.

         At September 30, 2004, one processing milling customer accounted for
         86% of accounts receivable. At September 30, 2003, a different
         processing milling customer accounted for 44% of accounts receivable.

     b.  Fair values

         At September 30, 2004, the fair values of cash and cash equivalents and
         trade and other receivables approximate their carrying values because
         of the short-term nature of these instruments.

         The fair value of the Company's short-term investments will fluctuate
         with market prices. At September 30, 2004, market value of these
         securities exceeded cost by $1,699,059.

         The fair value of the Company's marketable securities will fluctuate
         with market prices. At September 30, 2004, the market value of these
         securities exceeded the cost by $3,204,347.

         The fair values of the Company's restricted investments in cash and
         cash equivalents, U.S. government bonds, commercial paper and corporate
         bonds, approximate carrying values.

17.  Differences Between Canadian and United States Accounting Principles

     The consolidated financial statements have been prepared in accordance with
     accounting principles generally accepted in Canada ("Canadian GAAP") which
     differ in certain respects from those principles that the Company would
     have followed had its consolidated financial statements been prepared in
     accordance with accounting principles generally accepted in the United
     States ("U.S. GAAP"). The tables below only address measurement differences
     between Canadian and U.S. GAAP.

                                       37
<PAGE>
Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                               2004             2003
                                                                   ---------------------------------
<S>                                                                    <C>             <C>
Short-term investments and marketable securities
     Canadian basis                                                      $1,982,181      $1,089,960
     Unrealized gain on available for sale securities (d)                 4,903,406         929,275
                                                                   ---------------------------------
     U.S. basis                                                          $6,885,587      $2,019,235
                                                                   =================================
Plant and equipment, net
     Canadian basis                                                      $2,786,570      $2,825,238
     Accumulated depreciation of assets held for resale (a)                 332,482         432,775
                                                                   ---------------------------------
     U.S. basis                                                          $3,119,052      $3,258,013
                                                                   =================================
Mineral properties
     Canadian basis                                                      $6,171,263      $1,776,982
     Exploration expenditures (b)                                        (6,171,263)     (1,776,982)
                                                                   ---------------------------------
     U.S. basis                                                                  --              --
                                                                   =================================
Share capital
     Canadian basis                                                     $50,305,480     $37,935,533
     Flow through shares (g)                                                271,349              --
     Amalgamation (c)                                                      (615,970)       (615,970)
                                                                   ---------------------------------
     U.S. basis                                                         $49,960,859     $37,319,563
                                                                   =================================
Deficit
     Canadian basis                                                    ($29,997,716)   ($27,811,037)
     Amalgamation (c)                                                       615,970         615,970
     Exploration expenditures (b)                                        (6,171,263)     (1,776,982)
     Dilution gain (f)                                                     (548,549)             --
     Flow through shares (g)                                               (271,349)             --
     Accumulated depreciation of assets held for resale (a)                 332,482         432,775
                                                                   ---------------------------------
     U.S. basis                                                        ($36,040,425)   ($28,539,274)
                                                                   =================================
Additional Paid-in Capital - U.S. basis
     Dilution gain (f)                                                      548,549              --
                                                                   =================================
Other Comprehensive Income - U.S. basis
     Unrealized gain on available for sale securities (d)                $4,903,406        $929,275
                                                                   =================================
</TABLE>


                                       38
<PAGE>

    Consolidated Statements of Earnings
<TABLE>
<CAPTION>
                                                             2004             2003             2002
                                                   -------------------------------------------------
<S>                                                   <C>               <C>                <C>
    Net income (loss) under Canadian GAAP             ($2,186,679)      $5,533,152         $184,990
    Exploration expenditures (b)                       (4,394,281)      (1,238,085)        (538,897)
    Dilution gain (f)                                    (548,549)              --               --
    Flow through shares (g)                              (271,349)              --               --
                                                   -------------------------------------------------
    Net income (loss) under U.S. GAAP                  (7,400,858)       4,295,067         (353,907)
    Unrealized gain on available for sale
    securities (d)                                      3,974,131          929,275               --
                                                   =================================================
    Comprehensive income (loss) under U.S. GAAP       ($3,426,727)      $5,224,342        ($353,907)
                                                   =================================================
    Basic and diluted net income (loss) per
    share, U.S. GAAP                                       ($0.10)           $0.06           ($0.01)
                                                   =================================================
</TABLE>


     Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                           2004             2003              2002
                                                 --------------------------------------------------
<S>                                                 <C>              <C>               <C>
    Cash (used in) provided by operations             ($922,143)     ($4,396,379)      ($1,743,091)
    under Canadian GAAP
    Exploration expenditures (b)                     (4,186,908)      (1,238,085)         (538,897)
                                                 ---------------------------------------------------
    Cash (used in) provided by operations
    under U.S. GAAP                                 ($5,109,051)     ($5,634,464)      ($2,281,988)
                                                 ===================================================
    Cash (used in) provided by investing
    activities under Canadian GAAP                  ($4,821,793)       $1,148,438        $6,071,102
    Exploration expenditures (b)                       4,186,908        1,238,085           538,897
                                                 ---------------------------------------------------
    Cash (used in) provided by investing
    activities under U.S. GAAP                        ($634,885)       $2,386,523        $6,609,999
                                                 ===================================================
</TABLE>

     a.  Under Canadian GAAP, the Company's surplus assets were depreciated to
         an amount less than net realizable value. Under U.S. GAAP, assets held
         for resale are recorded at the lower of cost or net realizable value
         and are not depreciated.

     b.  Mineral property exploration expenditures are accounted for in
         accordance with Canadian GAAP as disclosed in Note 2h. For U.S. GAAP
         purposes the Company expenses, as incurred, exploration expenditures
         relating to mineral properties that do not have proven and probable
         reserves associated with the property. When proven and probable
         reserves are determined for a property, subsequent development costs of
         the property are capitalized. The capitalized costs of such properties
         would then be assessed periodically to ensure that the carrying value
         can be recovered on an undiscounted cash flow basis. If the carrying
         value cannot be recovered on this basis, the mineral properties would
         be written down to fair value.

     c.  Under Canadian GAAP, the amalgamation of the Company with Thornbury
         Capital Corporation in 1997 has been accounted for as an acquisition of
         Thornbury resulting in the recording of goodwill. Under U.S. GAAP, the
         transaction has been accounted for as a recapitalization whereby the
         net monetary assets of Thornbury would be recorded at fair value,
         except that no goodwill or other intangibles would be recorded. The
         goodwill recorded under Canadian GAAP has subsequently been written
         off. As a result, the deficit and share capital of the Company are both
         reduced under U.S. GAAP.

     d.  Under U.S. GAAP, securities that are available for sale are recorded at
         fair value and unrealized gains or losses are excluded from earnings
         and recorded as a separate component of shareholders' equity. Under
         Canadian GAAP, investments in available for sale securities are carried
         at the lower of cost and estimated fair market value.

                                       39
<PAGE>

     e.  Canadian GAAP provides for investments in jointly controlled entities
         to be accounted for using proportionate consolidation. Under U.S. GAAP,
         investments in incorporated joint ventures are to be accounted for
         using the equity method. Under an accommodation of the United States
         Securities and Exchange Commission, the accounting for joint ventures
         need not be reconciled from Canadian to U.S. GAAP. The different
         accounting treatment affects only the display and classification of
         financial statement items and not net income or shareholders' equity.

     f.  Under Canadian GAAP gains on dilution of interests in a subsidiary are
         recognized in income in the period in which they occur. Under U.S. GAAP
         the gain on dilution is not recognized if it results from the sale of
         securities by a subsidiary in the exploration stage and instead is
         accounted for as a capital transaction.

     g.  Under U.S. GAAP, the sale of flow-through shares results in a liability
         being recognized for the excess of the purchase price paid by the
         investors over the fair value of common shares without the flow-through
         feature. The fair value of the shares is recorded as equity. When the
         tax deductibility of the expenditures is renounced, the liability is
         reversed and a future income tax liability is recorded for the amount
         of the benefits renounced to third parties, resulting in an income tax
         expense.


                                       40
<PAGE>
INTERNATIONAL URANIUM CORPORATION
CORPORATE DIRECTORY


<TABLE>
<CAPTION>
<S>                                       <C>                                        <C>
EXECUTIVE OFFICERS                        EXECUTIVE OFFICE                           INVESTOR RELATIONS
RON F. HOCHSTEIN                          International Uranium Corporation          International Uranium Corporation
President and                             885 West Georgia St., Suite 2101           885 West Georgia St., Suite 2101
Chief Executive Officer                   Vancouver, BC, Canada V6C 3E8              Vancouver, BC, Canada V6C 3E8
                                          Tel:   604.689.7842                        Tel:    604.689.7842
DAVID C. FRYDENLUND                       Fax:   604.689.4250                        Fax:    604.689.4250
Vice President, General Counsel, Chief                                               Email:  intluranium@namdo.com
Financial Officer, and                    UNITED STATES OFFICE                       www.intluranium.com
Corporate Secretary                       International Uranium (USA) Corporation
                                          1050 Seventeenth Street, Suite 950         BANKERS
BOARD OF DIRECTORS                        Denver, Colorado, USA 80265                Canadian Imperial Bank of Commerce
JOHN H. CRAIG                             Tel:   303.628.7798                        Vancouver, BC, Canada
Audit Committee                           Fax:   303.389.4126
Compensation Committee                    www.intluranium.com                        Wells Fargo Bank
Corporate Governance and                                                             Denver, Colorado, USA
   Nominating Committee                   MONGOLIA OFFICE
Environment, Health, and Safety           International Uranium Mongolia, XXK        AUDITORS
   Committee                              Str. Olympia 8, Shuren Building            PricewaterhouseCoopers LLP
Toronto, Ontario, Canada                  Sukhbaatar District                        Vancouver, BC, Canada
                                          Ulaanbaatar 13, Mongolia
DAVID C. FRYDENLUND                                                                  TRANSFER AGENT
Environment, Health, and Safety           WHITE MESA MILL OFFICE                     Computershare Trust Company
   Committee                              International Uranium (USA) Corporation    of Canada
Denver, Colorado, USA                     6425 S. Highway 191                        Toronto, Ontario, Canada
                                          PO Box 809                                 Vancouver, BC, Canada
RON F. HOCHSTEIN                          Blanding, Utah, USA 84511
Vancouver, BC, Canada                                                                SHARE CAPITAL
                                          REGISTERED & RECORDS OFFICE                Authorized:  unlimited common shares
LUKAS H. LUNDIN                           Cassels Brock & Blackwell LLP              Issued and Outstanding:
Chairman                                  Scotia Plaza, Suite 2100                   79,635,066 (as at September 30, 2004)
Audit Committee                           40 King Street West
Corporate Governance and                  Toronto, Ontario, Canada M5H 3C2           STOCK EXCHANGE LISTING
   Nominating Committee                                                              Toronto Stock Exchange
Environment, Health, and Safety           LEGAL COUNSEL                              Trading Symbol:  IUC
   Committee                              Cassels Brock & Blackwell LLP
Compensation Committee                    Scotia Plaza, Suite 2100                   The Annual & Special Meeting will be held
Vancouver, BC,  Canada                    40 King Street West                        at the Corporation's executive office,
                                          Toronto, Ontario, Canada M5H 3C2           Suite 2101, 885 West Georgia Street,
WILLIAM A. RAND                                                                      Vancouver, BC, Canada on Tuesday, March
Audit Committee                           Parsons Behle & Latimer                    22, 2005, at the hour of 10:00 a.m.
Compensation Committee                    One Utah Center, Suite 1800                (Vancouver time).
Corporate Governance and                  201 South Main Street
   Nominating Committee                   Salt Lake City, Utah, USA  84145
Vancouver, BC, Canada
</TABLE>
<PAGE>
                                    [PHOTO]



                          [INTERNATIONAL URANIUM LOGO]


                       INTERNATIONAL URANIUM CORPORATION
                      885 West Georgia Street, Suite 2101
                         Vancouver, BC, Canada V6C 3E8


                                 T 604 689 7842
                                 F 604 689 4250
                             intluranium@namdo.com
                              www.intluranium.com
</TEXT>
</DOCUMENT>
