EXHIBIT 1

REPORT TO SHAREHOLDERS
3RD QUARTER 2002
(U.S. DOLLARS)

         The third quarter of fiscal 2002, was a very active quarter for
International Uranium Corporation ("IUC" or the "Company"). The White Mesa Mill
(the "Mill") began processing the Ashland 1 FUSRAP (Formerly Utilized Site
Remedial Action Program) material. The Mill has been on stand-by since January
2000. By the end of the quarter the Mill had processed 7,400 tons of Ashland 1
material and as of August 19, 2002 the Mill had processed over 40,000 tons of
material. Currently the Mill has additional stockpiles of over 200,000 tons of
material, which will be processed during this mill run. The Company is
aggressively evaluating and looking for additional feeds, which would lengthen
the mill run. To this end, the Company has a contract with Molycorp, Inc. for
receipt and processing of approximately 10,000 tons of uranium-bearing material.
This material may begin arriving at the Mill in mid-September, pending
resolution of a regulatory hearing. In addition to the traditional alternate
feed materials, the Company is continuing to evaluate two opportunities that
would involve processing tantalum residues to recover tantalum as well as
uranium.

         The precious and base metal exploration program initiated in Mongolia,
through the Company's Mongolian entity, International Uranium Company (Mongolia)
Ltd., continues to gain momentum. A total of 55 exploration license applications
have been filed on new target areas, which have been selected based on analysis
and interpretation of geologic, metallogenic, geophysical, and satellite imagery
data. When final processing of the license applications is complete in the next
few months, the Company will be one of the largest exploration land holders in
Mongolia.

         Important new ore discoveries are continuing to be reported out of
Mongolia, which confirms the country's high exploration favorability. The
Company initiated its field campaign in April. Under the direction of Global
Mine Discovery Partnership, LLC, geologic mapping and sampling programs are
underway. Several highly prospective target areas have been identified, and
these are being characterized and evaluated for possible exploration license
acquisition.

         The early stage work has identified a number of prospective target
areas that warrant follow-up detail mapping, sampling and geophysical surveys.
In one target area, a major shear zone hosting mesothermal quartz veins with
anomalous gold values has been identified; the zone extends for tens of
kilometers and is over 200 meters wide in many locations. Sediment samples with
assays as high as 1.6 ppm gold have been recovered; in addition, pathfinder
elements, such as arsenic and tin, are present in highly anomalous
concentrations. Additional detail work will be conducted in this area. Early
stage exploration work has also focused on a target area with a large intrusive
system hosting known gold and copper occurrences. The district-size target has
very favorable geologic parameters (alteration patterns, pervasive veining,
numerous gold placers, widespread gold and copper anomalies, etc). Sampling of
specific targets is in progress; initial results from initial rock chip sampling
are encouraging with gold assays ranging from hundreds of parts per billion up
to 1.7 ppm, numerous copper assays in the range of 1% to 5%, silver assays as
high as 300 ppm, and corresponding elevated levels of related metals and
pathfinders such as arsenic, barium, lead, zinc, tin, and titanium. Company
activity is continuing in this area, and future work may involve acquisition of
selected areas of pre-existing licensed property.

         Work plans for the fourth quarter are to visit as many target areas as
possible to support the exploration licensing effort. As the field season winds
down in the fourth quarter, the volumes of broad regional and specific target
data that have been assembled will be evaluated to prioritize future target
areas. The Company will also evaluate possible acquisition or joint venture
opportunities on properties held by small Mongolian entities that are seeking
Western expertise and support.

         Work also continues on the Moab tailings project in the U.S. A study,
by the National Academy of Sciences ("NAS"), on the Moab tailings project was
completed and released in June. NAS was commissioned by U.S. Congress to study
the Moab tailings project with a mandate to evaluate the social and scientific
aspects





that would be relevant to a decision whether to move or to cap-in-place the Moab
tailings pile. The study indicated that in the short term, additional work is
required at the Moab site in order to make an informed decision. However, the
study suggests that relocation of the Moab tailings pile may be the preferred
alternative, in the longer term. The recommendations of this study are being
considered by the U.S. Department of Energy ("DOE"). The Company, and its
teaming partner the Washington Group, continue to remain optimistic on the
merits of relocating the Moab tailings pile to the Mill and that our approach
will be properly evaluated. However, the timing of the project is uncertain and
may be drawn out given the need to satisfy the additional work requirements
identified by the NAS.

         IUC recorded a net loss of $1,762,646 ($0.03 per share) for the third
quarter of fiscal 2002, and a loss for the first nine months of fiscal 2002 of
$4,042,118 ($0.06 per share) as compared with a net loss of $1,274,500 ($0.02
per share) for the third quarter of fiscal 2001 and a loss for the first nine
months of fiscal 2001 of $3,020,492 ($0.05 per share). The primary reasons for
the larger loss for the second quarter of fiscal 2002 and fiscal year to date,
as compared to fiscal 2001, are the restart the Mill, increased insurance costs,
the efforts on the Moab tailings project, the initiation of the Mongolian
exploration program, the Company's vigorous pursuit of other alternate feed
opportunities, and finally the decrease in interest income due to the
significant decline in interest rates. The Company's cash and short-term
investment position was $12,034,367 as of June 30, 2002, as compared to
$14,052,552 at September 30, 2001.

MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion and analysis of the financial condition and
results of operations for the Company for the period ended June 30, 2002 should
be read in conjunction with the consolidated financial statements and
accompanying notes. The consolidated financial statements are prepared in
accordance with generally accepted accounting principles in Canada.

OVERVIEW

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

REVENUES

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





         Revenues for the third quarter and first nine months of fiscal 2002 of
$607,091 and $869,334 respectively, consisted of process milling fees generated
under the Company's alternate feed processing agreements. Revenues for the third
quarter and first nine months of fiscal 2002 represent an increase of $453,944
and $194,587 as compared to $153,147 and $674,747 for the third quarter and
first nine months of fiscal 2001. These increases were due primarily to the
commencement of the alternate feed mill run, which began on June 13, 2002. These
increases were offset in part by a lower volume of material received at the Mill
during the first nine months of fiscal 2002 as compared to the first nine months
of fiscal 2001. During the first nine months of fiscal 2002, the Company
received 34,514 tons of Ashland 1, Linde and Heritage materials as compared to
72,079 during the first nine months of fiscal 2001. The decrease of 37,565 tons
or 52% was due to the completion of the Ashland 1 project and a reduction in
government funding for the Linde project.

         Due to the continued weak markets for vanadium, the Company elected not
to sell any of its vanadium inventories. The Company continues to hold
approximately 424,000 pounds of vanadium, as black flake, that it intends to
sell as vanadium prices strengthen, and approximately 144,000 pounds of
vanadium, as vanadium pregnant liquor. Vanadium prices have improved but
continue to be in the lower range of their historical values, and are currently
trading in the range of $1.50 to $2.20 per pound V2O5.

COST OF PRODUCTS AND SERVICES SOLD

         Alternate feed processing activities for the third quarter and first
nine months of fiscal 2002 consisted primarily of the receipt, sampling and
analysis of the Ashland 1, Linde and Heritage materials. In addition, the Mill
processed approximately 7,400 tons of Ashland 1 material during June 2002.
Process milling expenditures for the third quarter and first nine months of
fiscal 2002 of $369,759 and $643,484 respectively, increased $216,612 and
$82,975 as compared to $153,147 and $560,509 for the comparable periods in
fiscal 2001. These increases were due primarily to the start-up of the Mill.

         In addition to FUSRAP (Formerly Utilized Sites Remedial Action Program)
materials, the Company continues to receive deliveries of alternate feeds from
another uranium producer under a long-term arrangement. While the Company will
not receive a processing fee for this particular alternate feed it will produce
uranium from these materials, which will then be sold. These materials will not
be processed until the price of uranium strengthens above current levels. As of
June 30, 2002, there were approximately 4,700 tons of these materials at the
Mill. Materials received from other uranium producers or private industry
sources tend to be relatively high in uranium content but relatively small in
volume as compared to FUSRAP materials.

MILL STAND-BY

         Mill stand-by expenses consist primarily of payroll and related
expenses for personnel, parts and supplies, contract services and other overhead
expenditures required to maintain the Mill on stand-by status until a sufficient
stockpile of alternate feed material has been accumulated to justify an
efficient mill run. Mill stand-by expenses for the third quarter and first nine
months of fiscal 2002 of $914,151 and $2,291,723 respectively, increased
$260,534 or 40% and $300,636 or 15% as compared to $653,617 and $1,991,087 for
the comparable periods in fiscal 2001. These increases were due to ramping up
the number of personnel and additional expenditures preparing for the mill run,
which began during June 2002. Mill stand-by expenses were also affected by a
write-down of chemical reagents due to the extended duration of mill stand-by of
$155,334.





SELLING, GENERAL AND ADMINISTRATIVE

         Selling, general and administrative expenses consist primarily of
payroll and related expenses for personnel, legal, contract services and other
overhead expenditures. Selling, general and administrative expenses for the
third quarter and first nine months of fiscal 2002 were $986,160 and $2,439,789
respectively. This represents an increase of $500,728 or 103% and $867,064 or
55% as compared to expenditure levels of $485,432 and $1,572,725 for the
comparable periods in fiscal 2001. These increases resulted primarily from
increased expenditures for labor and professional services, insurance, and other
related costs associated with the Company's involvement in the Moab tailings
project and continuing efforts to expand its alternate feed, uranium-bearing
waste recycling business.

EXPLORATION

         During this fiscal year, the Company began a gold and base metal
exploration program in Mongolia. To date, activities have included land and data
acquisition, geophysical and geochemical analysis and an extensive field
program. Exploration expenditures for the third quarter and first nine months of
fiscal 2002 were $227,284 and $259,108, respectively.

OTHER INCOME AND EXPENSE

         Net interest and other income for the third quarter and first nine
months of fiscal 2002 was $141,479 and $776,744 respectively, as compared to
$341,918 and $1,018,928 for the comparable periods in fiscal 2001. The decrease
of $242,184 during the comparable nine month periods was primarily the result of
a $337,284 gain on the sale of short-term investments offset by a decrease of
$583,961 in interest income due to significantly lower interest rates paid on
short-term investments and a decrease in average cash balances available for
investment.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has a strong cash position. At June 30, 2002, the Company
had cash and short-term investments of $12,034,367 as compared to cash and
short-term investments of $14,052,552 at September 30, 2001. At June 30, 2002
the Company had a working capital deficit of $3,360,468 as compared to working
capital of $5,073,981 at September 30, 2001. The decrease of $8,434,449 in
working capital was largely due to the Company's current plan to process its
stockpile of alternate feed materials over the next nine to ten months. As a
result of this plan, deferred revenue of $16,700,162 was accounted for as a
current liability, which results in a working capital deficit. As the material
is processed, the deferred revenue will be recorded as revenue, which in turn
will assist in the elimination of the Company's working capital deficit and a
return to a positive working capital position.

         Net cash used in operating activities was $1,872,905 for the first nine
months of fiscal 2002 and consisted primarily of the loss from continuing
operations of $4,042,118 and a gain on the sale of short-term investments of
$337,284 offset by decreases in trade receivables of $1,217,950 and non-cash
items of depreciation and amortization of $607,019. The majority of the decrease
in trade receivables was due to the Shaw Group Inc. ("Shaw") completing its
acquisition of substantially all of the assets and the assumption of certain
liabilities of IT Corporation ("IT'). IT, the prime contractor for the Ashland 1
and Linde projects, filed for protection under Chapter 11 of the United States
Bankruptcy Code on January 16, 2002. As part of this acquisition, Shaw has paid
all past due amounts.

         Net cash provided by investment activities was $6,805,660 for the nine
months ended June 30, 2002 and consisted primarily of proceeds from the sale of
short-term investments of $9,688,953 offset by increases in restricted
investments of $2,027,443. The majority of the increase in restricted
investments was due to the Company depositing an additional $680,000 on December
31, 2001 to secure its reclamation bonds and $1,000,000 to secure the financial
surety behind the uranium concentrate sale and put option agreement entered





into on September 13, 1999. The transaction was accounted for as a deferred
credit and the value of the inventory that could be put to the Company upon
exercise of the put option was reclassified as an other asset.

         Net cash provided by financing activities for the nine months ended
June 30, 2002 totaled $1,638,229 and consisted primarily of an increase in
deferred revenues of $1,634,047. Deferred revenues represent processing proceeds
received or receivable on delivery of alternate feed materials but in advance of
the required processing activity. As the Ashland 1, Linde and Heritage materials
are processed over the next nine to ten months, the deferred revenue will be
reclassified as revenue. The cost of processing these materials will be recorded
as process milling expenditures and the Company's cash position will decrease by
the cost of processing.

ENVIRONMENTAL RESPONSIBILITY

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

         The Company has posted bonds as security for these liabilities and has
deposited cash, cash equivalents and fixed income securities as collateral
against these bonds. At June 30, 2002, the amount of these restricted
investments collateralizing the Company's reclamation obligations was
$11,552,516. The increase of $1,027,443, as compared to September 30, 2001, was
primarily due to accrued interest of $347,443 and the Company depositing an
additional $680,000. This brings the collateral to approximately 100% of the
bonded amounts as required by the bonding company.

         The Company has detected some chloroform contamination at the Mill site
that appears to have resulted from the operation of a temporary laboratory
facility that was located at the Mill site. The source and extent of this
contamination are currently under investigation, and a corrective action plan,
if necessary, is yet to be devised. Although the investigations to date indicate
that this contamination appears to be contained in a manageable area, the scope
and costs of remediation have not yet been determined and could be significant.

RESEARCH AND DEVELOPMENT

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

TREND INFORMATION

         During the period 1997 through 2000, the Company saw a deterioration in
both uranium and vanadium prices, from $11.00 per pound of 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 mining and exploration activities in
1999, and has shutdown all of its mines and its Mongolian uranium joint venture,
pending any significant increases in commodity prices. Also as a result of these
market events, the Company marshaled its resources to concentrate its operations
on the continuing development of the alternate feed, uranium-bearing waste
recycling business. Although uranium prices have increased to $9.85 per pound
U3O8 as of August 16, 2002, the vanadium price remains at depressed levels.





         The Mill's tailings system currently has capacity to process all of the
alternate feed materials under contract with the Company. In order to provide
additional tailings capacity, the Company will have to repair the 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. This expenditure for
Cell No. 4A will depend on the Company's success in entering into contracts for
the processing of additional feed materials.

OUTLOOK FOR 2002

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

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

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

         Based on current projections, processing of alternate feed material at
the Mill is scheduled to continue into the third quarter of fiscal 2003. The
current backlog of material allows for approximately eight additional months of
processing. The duration of the mill run will depend in large part on the
schedule for deliveries of materials to the Mill under the Company's existing
alternate feed contracts.

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

RISKS AND UNCERTAINTIES

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






CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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