FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of February, 2004
International Uranium Corporation
(Translation of registrant's name into English)
Independence Plaza, Suite 950, 1050 Seventeenth Street, Denver, CO 80265
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
------- -------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
------- ------
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________________.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
International Uranium Corporation
(Registrant)
Date: February 17, 2004 By: /s/ Ron F. Hochstein
---------------------
Ron F. Hochstein, President
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
1 Press Release dated February 5, 2004
2 Notice of Annual Meeting of Shareholders
3 Management Proxy Circular
4 Proxy and Notes
5 Request for Financial Statements
6 2003 Annual Report
Exhibit 1
INTERNATIONAL URANIUM CORPORATION
CONTACT: SOPHIA SHANE 2101, 885 WEST GEORGIA STREET
Corporate Development Vancouver, British Columbia
Tel: (604) 689-7842 Canada V6C 3E8
Fax: (604) 689-4250 www.intluranium.com
PRESS RELEASE
TOP URANIUM INDUSTRY EXPERTS JOIN IUC
ADVISORY COMMITTEE
FEBRUARY 5, 2004 (IUC - TSX)... INTERNATIONAL URANIUM CORPORATION (the "Company"
or "IUC") is pleased to announce the formation of a uranium advisory committee
comprised of leading uranium and mining experts. The committee's mandate is to
assist and advise IUC on its various exploration programs underway in the
Athabasca Basin and on the acquisition of prospective uranium exploration
properties with a focus primarily in Canada, as well as to advise on the
development of the Company's existing large uranium resources in Mongolia and
the U.S.
Heading the committee is Dr. Klaus Lehnert-Thiel, P.Eng., P.Geo., an exploration
geoscientist with over 30 years of progressive operations and management
experience on uranium, gold, diamond and base metals projects predominantly in
Canada. Considered an expert in the uranium field, Dr. Lehnert-Thiel began his
work in the Athabasca Basin of northern Saskatchewan in the late 1960's where he
was in charge of large exploration crews conducting integrated exploration
programs during the uranium exploration boom in the area following the discovery
of the Rabbit Lake mine. In the early 1970's, Dr. Lehnert-Thiel joined Uranerz
Exploration and Mining Limited and was part of the Key Lake discovery team (the
Key Lake mine produced over 200 million pounds of U3O8 during its mine life).
Dr. Lehnert-Thiel was also responsible for the start up of a number of new
projects, one of which led to the discovery of the Maurice Bay uranium deposit
in 1977. At Uranerz, Dr. Lehnert-Thiel headed the exploration development
operations at the Key Lake and Maurice Bay deposits, supervising a technical
staff of 60 geologists and other professionals and was subsequently responsible
for all exploration activities in Canada. Since 1993, Dr. Lehnert-Thiel has had
a successful consulting practice to junior and senior North American mining
companies, predominantly uranium and gold exploration in Saskatchewan.
Mr. Ron Netolitzky, B.Sc., M.Sc., another key member of the advisory committee,
brings years of successful exploration experience and technical expertise. Mr.
Netolitzky is most notable for his role on the team responsible for the
discovery of Eskay Creek, one of Canada's highest grade and most profitable gold
mines as well as the discovery and development of the Snip gold mine. However,
prior to his gold exploration activities, Mr. Netolitzky was involved in the
acquisition and exploration of uranium prospects since the mid 1960's. This
activity was primarily focused in Saskatchewan and the Thelon-Dubawnt region of
the Northwest Territories (now Nunavut). In addition to developing uranium
exploration targets for numerous clients, Mr. Netolitzky, through the company he
founded, Taiga Consultants, pioneered regional compilation studies of the
Athabasca Basin in Saskatchewan and the Thelon Basin in Nunavut for multiple
clients.
Mr. Richard Bailes, B.Sc., M.Sc., the third member of the team, has over 30
years experience in the mining industry. Mr. Bailes has a solid background in
the evaluation and development of mineral projects and has published a number of
papers on economic geology. Mr. Bailes is currently President of Canadian Gold
Hunter Corp. Prior to joining Gold Hunter, Mr. Bailes was Exploration Manager at
Abermin Corporation and a geologist with Kennco Exploration Ltd. and Amax
Exploration Inc.
The President of International Uranium Corporation, Mr. Ron Hochstein,
commented: "We are very pleased to have such an expert and well-respected panel
as our advisory committee, which will assist IUC in developing its projects and
its building of a portfolio of top uranium assets."
IUC is engaged in uranium exploration and production. It holds significant
uranium deposits in Mongolia and in the U.S. including a fully permitted 2,000
ton per day uranium mill near Blanding, Utah (one of only two operating uranium
mills in the U.S.), as well as uranium exploration properties in the Athabasca
Region in Canada. The Company also processes and recycles uranium-bearing waste
materials as an environmentally superior alternative to direct disposal.
Statements contained in this news release which are not historical facts are
forward-looking statements that involve risks, uncertainties and other factors
that could cause actual results to differ materially from those expressed or
implied by such forward-looking statements. Factors that could cause such
differences, without limiting the generality of the following, include:
volatility and sensitivity to market prices for uranium; the impact of the sales
volume of uranium; competition; the impact of change in foreign currency
exchange rates and interest rates; imprecision in reserve estimates;
environmental and safety risks including increased regulatory burdens;
unexpected geological or hydrological conditions; political risks arising from
operating in certain developing countries; a possible deterioration in political
support for nuclear energy; changes in government regulations and policies,
including trade laws and policies; demand for nuclear power; replacement of
production and failure to obtain necessary permits and approvals from government
authorities; weather and other natural phenomena; ability to maintain and
further improve positive labour relations; operating performance of the
facilities; success of planned development projects; and other development and
operating risks. Although IUC believes that the assumptions inherent in the
forward-looking statements are reasonable, undue reliance should not be placed
on these statements, which only apply as of the date of this report. IUC
disclaims any intention or obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
ON BEHALF OF THE BOARD
Ron F. Hochstein
President
Exhibit 2
INTERNATIONAL URANIUM CORPORATION
(INCORPORATED UNDER THE LAWS OF ONTARIO)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual meeting (the "Meeting") of the
shareholders of INTERNATIONAL URANIUM CORPORATION (the "Corporation") will be
held at the Vancouver offices of the Corporation at Suite 2101, 885 West Georgia
Street, Vancouver, British Columbia, on Tuesday, March 23, 2004 at the hour of
10:00 a.m. (Vancouver time) for the following purposes:
1. to receive the consolidated financial statements of the Corporation for the
year ended September 30, 2003 together with the report of the auditors
thereon.
2. to appoint auditors to hold office until the next annual meeting, at a
remuneration to be fixed by the board of directors of the Corporation;
3. to elect directors to hold office until the next annual meeting of the
Corporation;
4. to consider amendments to or variations of any matter identified in this
Notice of Meeting; and
5. to transact such further and other business as may properly come before the
Meeting or any and all adjournments thereof.
Accompanying this Notice of Meeting are: (i) a copy of the 2003 Annual Report,
inclusive of the consolidated financial statements of the Corporation for the
year ended September 30, 2003; (ii) a Management Proxy Circular (the
"Circular"); (iii) an Instrument of Proxy and Notes thereto; and (iv) a reply
card for use by shareholders who wish to receive the Corporation's interim
financial statements. Reference is made to the Circular for details of the
matters to be considered at the Meeting.
If you are a registered shareholder of the Corporation and are unable to attend
the Meeting in person, please complete, sign, date and return the enclosed form
of Proxy either in the addressed envelope enclosed to Proxy Department,
Computershare Trust Company of Canada, 9th Floor, 100 University Avenue,
Toronto, Ontario, M5J 2Y1, or by fax to 1-866-249-7775. Proxies must be received
not less than 48 hours (excluding Saturdays, Sundays and holidays) prior to the
Meeting or any adjournment thereof.
If you are a non-registered shareholder of the Corporation and receive these
materials through your broker or through another intermediary, please complete
and return the materials in accordance with the instructions provided to you by
your broker or such other intermediary. IF YOU ARE A NON-REGISTERED SHAREHOLDER
AND DO NOT COMPLETE AND RETURN THE MATERIALS IN ACCORDANCE WITH SUCH
INSTRUCTIONS, YOU MAY LOSE THE RIGHT TO VOTE AT THE MEETING, EITHER IN PERSON OR
BY PROXY.
If you have any questions about the procedures required to qualify to vote at
the Meeting or about obtaining, completing and depositing the required form of
Proxy, you should contact Computershare Trust Company of Canada by telephone
(toll free) at 1-800-663-9097 or by e-mail at caregistryinfo@computershare.com.
BY ORDER OF THE BOARD
(signed) David C. Frydenlund,
Corporate Secretary
Denver, Colorado
February 12, 2004
INTERNATIONAL URANIUM CORPORATION
2101-885 West Georgia Street
Vancouver, B.C. V6C 3E8
Telephone: (604) 689-7842
Fax: (604) 689-4250
Exhibit 3
2004
Notice of annual meeting and
Management proxy circular
INTERNATIONAL URANIUM CORPORATION
INTERNATIONAL URANIUM CORPORATION
(INCORPORATED UNDER THE LAWS OF ONTARIO)
MANAGEMENT PROXY CIRCULAR
All dollar amounts in this Management Proxy Circular refer to United States
currency, unless otherwise noted.
SOLICITATION OF PROXIES
This circular is furnished in connection with the solicitation by the management
of International Uranium Corporation (the "Corporation") of proxies to be used
at the annual meeting of the shareholders of the Corporation to be held at the
Vancouver offices of the Corporation at Suite 2101, 885 West Georgia Street,
Vancouver, British Columbia, on Tuesday, March 23, 2004, at the hour of 10:00
o'clock in the forenoon (Vancouver time) and at any adjournments thereof. It is
not intended to use the accompanying proxy for the purposes of voting on the
consolidated financial statements of the Corporation and its subsidiaries
prepared for the fiscal year ended September 30, 2003 and the reports of
management and the auditors.
THIS SOLICITATION IS MADE BY THE MANAGEMENT OF THE CORPORATION. It is expected
that the solicitation will be primarily by mail. Proxies may also be solicited
personally or by telephone by officers, directors and regular employees of the
Corporation without special compensation. No solicitation will be made by
specifically engaged employees or soliciting agents. The cost of solicitation
will be borne by the Corporation. Except as otherwise stated, the information
contained herein is given as of February 12, 2004.
APPOINTMENT, REVOCATION AND VOTING OF PROXIES
THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY ARE DIRECTORS OR OFFICERS OF THE
CORPORATION. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON TO REPRESENT
THE SHAREHOLDER AT THE MEETING OR ANY ADJOURNMENT THEREOF MAY DO SO EITHER BY
INSERTING THE PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE FORM OF PROXY OR
BY COMPLETING ANOTHER PROPER FORM OF PROXY AND, IN EITHER CASE, DEPOSITING THE
COMPLETED PROXY AT THE OFFICE OF COMPUTERSHARE TRUST COMPANY OF CANADA AT THE
ADDRESS SPECIFIED IN THE PROXY NOT LESS THAN FORTY-EIGHT (48) HOURS (EXCLUDING
SATURDAYS AND HOLIDAYS) BEFORE THE TIME OF THE MEETING OR ANY ADJOURNMENT
THEREOF, OR WITH THE CHAIRMAN OF THE MEETING PRIOR TO THE COMMENCEMENT OF THE
MEETING OR ANY ADJOURNMENT THEREOF.
The form of proxy affords the shareholder an opportunity to specify that the
shares registered in the shareholder's name shall be voted or withheld from
voting in respect of the election of each of management's nominees for directors
as set out in this circular as directors of the Corporation and the
reappointment of PricewaterhouseCoopers LLP as auditors of the Corporation at a
remuneration to be fixed by the board of directors of the Corporation (the
"Board").
On any ballot that may be called for, the shares represented by proxies in
favour of management nominees will be voted or withheld from voting in respect
of the election of each of management's nominees for directors as set out in
this circular as directors of the Corporation and the reappointment of
PricewaterhouseCoopers LLP as auditors at a remuneration to be fixed by the
Board, in each case in accordance with the specifications made by shareholders
in the manner referred to above.
IN RESPECT OF PROXIES IN WHICH THE SHAREHOLDERS HAVE NOT SPECIFIED THAT THE
PROXY NOMINEES ARE REQUIRED TO VOTE OR WITHHOLD FROM VOTING IN RESPECT OF THE
ELECTION OF EACH OF MANAGEMENT'S NOMINEES FOR DIRECTORS AS SET OUT IN THIS
CIRCULAR AS DIRECTORS OF THE CORPORATION AND THE REAPPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS AUDITORS AT A REMUNERATION TO BE FIXED BY THE
BOARD, THE SHARES REPRESENTED BY PROXIES IN FAVOUR OF MANAGEMENT NOMINEES WILL
BE VOTED IN FAVOUR OF THE ELECTION OF EACH OF MANAGEMENT'S NOMINEES FOR
DIRECTORS AS SET OUT IN THIS CIRCULAR AS DIRECTORS OF THE CORPORATION AND IN
FAVOUR OF THE REAPPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS AUDITORS AT A
REMUNERATION TO BE FIXED BY THE BOARD.
THE ENCLOSED FORM OF PROXY CONFERS DISCRETIONARY AUTHORITY ON THE PERSONS NAMED
IN IT WITH RESPECT TO AMENDMENTS OR VARIATIONS TO MATTERS IDENTIFIED IN THE
NOTICE OF MEETING OR OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF. At the time of printing of this circular the management
of the Corporation knows of no other matters to come before the meeting other
than the matters referred to in the notice of meeting. However, if any other
matters which are not now known to management should properly come before the
meeting or any adjournment thereof, the shares represented by
1
proxies in favour of management nominees will be voted on such matters in
accordance with the best judgment of the proxy nominee.
INFORMATION FOR NON-REGISTERED HOLDERS
ONLY REGISTERED SHAREHOLDERS OR DULY APPOINTED PROXYHOLDERS ARE PERMITTED TO
VOTE AT THE MEETING. SOME SHAREHOLDERS OF THE COMPANY ARE "NON-REGISTERED"
SHAREHOLDERS BECAUSE THE SHARES THEY OWN ARE NOT REGISTERED IN THEIR NAMES BUT
ARE INSTEAD REGISTERED IN THE NAME OF THE BROKERAGE FIRM, BANK OR TRUST COMPANY
THROUGH WHICH THEY PURCHASED THE SHARES. More particularly, a person is not a
registered shareholder in respect of Shares which are held on behalf of that
person (the "Non-Registered Holder") but which are registered either: (a) in the
name of an intermediary (an "Intermediary") that the Non-Registered Holder deals
with in respect of the Shares (Intermediaries include, among others, banks,
trust companies, securities dealers or brokers and trustees or administrators of
self-administered RRSP's, RRIFs, RESPs and similar plans); or (b) in the name of
a clearing agency (such as The Canadian Depository for Securities Limited
("CDS")) of which the Intermediary is a participant. In accordance with the
requirements of National Instrument 54-101 of the Canadian Securities
Administrators, the Corporation has distributed copies of the Notice of Meeting,
this Circular and the Proxy (collectively, the "Meeting Materials") to the
clearing agencies and Intermediaries for onward distribution to Non-Registered
Holders. Intermediaries are required to forward the Meeting Materials to
Non-Registered Holders unless a Non-Registered Holder has waived the right to
receive them. Very often, Intermediaries will use service companies to forward
the Meeting Materials to Non-Registered Holders. Generally, Non-Registered
Holders who have not waived the right to receive Meeting Materials will either:
(a) be given a form of proxy which has already been signed by the Intermediary
(typically by a facsimile, stamped signature), which is restricted as to
the number of shares beneficially owned by the Non-Registered Holder but
which is otherwise not completed. Since the Intermediary has already signed
the form of proxy, this form of proxy is not required to be signed by the
Non-Registered Holder when submitting the proxy. In this case, the
Non-Registered Holder who wishes to submit a proxy should otherwise
properly complete the form of proxy and DELIVER IT TO COMPUTERSHARE TRUST
COMPANY OF CANADA as provided below; or
(b) more typically, be given a voting instruction form which is not signed by
the Intermediary, and which, when properly completed and signed by the
Non-Registered Holder and RETURNED TO THE INTERMEDIARY OR ITS SERVICE
COMPANY, will constitute voting instructions (often called a "proxy
authorization form") which the Intermediary must follow. Typically, the
proxy authorization form will consist of a one page pre-printed form.
Sometimes, instead of the one page pre-printed form, the proxy
authorization form will consist of a regular printed proxy form accompanied
by a page of instructions which contains a removable label containing a
bar-code and other information. In order for the form of proxy to validly
constitute a proxy authorization form, the Non-Registered Holder must
remove the label from the instructions and affix it to the form of proxy,
properly complete and sign the form of proxy and return it to the
Intermediary or its service company in accordance with the instructions of
the Intermediary or its service company.
In either case, the purpose of this procedure is to permit Non-Registered
Holders to direct the voting of the Shares which they beneficially own. Should a
Non-Registered Holder who receives one of the above forms wish to vote at the
Meeting in person, the Non-Registered Holder should strike out the names of the
Management Proxyholders and insert the Non-Registered Holder's name in the blank
space provided. IN EITHER CASE, NON-REGISTERED HOLDERS SHOULD CAREFULLY FOLLOW
THE INSTRUCTIONS OF THEIR INTERMEDIARY, INCLUDING THOSE REGARDING WHEN AND WHERE
THE PROXY OR PROXY AUTHORIZATION FORM IS TO BE DELIVERED.
REVOCATION OF PROXIES
A proxy given by a shareholder for use at the meeting or any adjournment thereof
may be revoked at any time prior to its use. In addition to revocation in any
other manner permitted by law, a proxy may be revoked by an instrument in
writing executed by the shareholder or by the shareholder's attorney authorized
in writing or, if the shareholder is a corporation, under its corporate seal or
by an officer or attorney thereof duly authorized, and deposited at the
registered office of the Corporation at any time up to and including the last
business day preceding the day of the meeting, or any adjournment thereof, at
which the proxy is to be used, or with the Chairman of the meeting on the day of
the meeting, or any adjournment thereof, and upon either of such deposits the
proxy is revoked. The registered office of the Corporation is located at: Scotia
Plaza, Suite 2100, 40 King St. West, Toronto, Ontario, Canada, M5H 3C2. ONLY
REGISTERED SHAREHOLDERS HAVE THE RIGHT TO REVOKE A PROXY. NON-REGISTERED HOLDERS
WHO WISH TO CHANGE THEIR VOTE MUST, AT LEAST 7 DAYS BEFORE THE MEETING, ARRANGE
FOR THEIR RESPECTIVE INTERMEDIARIES TO REVOKE THE PROXY ON THEIR BEHALF.
2
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
As at the date hereof, there are 77,770,066 common shares of the Corporation
outstanding. Each shareholder is entitled to one vote for each common share
shown as registered in the shareholder's name on the record date. The directors
have fixed the close of business on February 13, 2004, as the record date for
the meeting. Only shareholders of record as at the close of business on February
13, 2004, are entitled to receive notice of and to attend and vote at the
meeting except to the extent that a person has transferred the ownership of any
such shares after that date and the transferee requests not later than 10 days
before the meeting that its name be included in the list of shareholders
entitled to vote at the meeting, in which case the transferee is entitled to
vote its shares at the meeting.
THERE ARE NO PERSONS WHO, TO THE KNOWLEDGE OF THE DIRECTORS AND OFFICERS OF THE
CORPORATION, BENEFICIALLY OWN OR EXERCISE CONTROL OR DIRECTION OVER SHARES
CARRYING MORE THAN 10% OF THE VOTING RIGHTS ATTACHED TO ALL SHARES OF THE
CORPORATION.
ELECTION OF DIRECTORS
The Board currently consists of five (5) directors who are to be elected
annually. Accordingly, five (5) directors will be elected at the Meeting. Each
director will hold office until the next annual meeting of shareholders or until
his successor is duly elected unless his office is earlier vacated in accordance
with the by-laws of the Corporation. It is intended that on any ballot that may
be called for relating to the election of directors, the shares represented by
proxies in favour of management nominees will be voted in favour of the election
of each of such persons as directors of the Corporation, unless a shareholder
has specified in its proxy that the shareholder's shares are to be withheld from
voting in the election of directors.
In the following table and notes is stated the name of each person proposed to
be nominated by management for election as a director, all other positions and
offices with the Corporation and any significant affiliate now held by him, if
any, his principal occupation or employment, the period or periods of service as
a director of the Corporation and the approximate number of shares of the
Corporation beneficially owned by him directly or indirectly or over which he
exercises control or direction.
COMMON SHARES OF
THE CORPORATION
BENEFICIALLY OWNED,
DIRECTLY OR
INDIRECTLY, OR
NAME AND MUNICIPALITY OF PERIOD OF SERVICE CONTROLLED OR PRESENT PRINCIPAL OCCUPATION AND POSITION WITH THE
RESIDENCE AS A DIRECTOR DIRECTED CORPORATION
-------------------------------- ------------------- --------------------- -------------------------------------------------------
JOHN H. CRAIG May 9, 1997 to 110,000 Lawyer, partner of Cassels Brock & Blackwell LLP
Toronto, ON present
-------------------------------- ------------------- --------------------- -------------------------------------------------------
DAVID C. FRYDENLUND May 9, 1997 to 243,000 Vice President, General Counsel, Chief Financial
Lone Tree, CO present Officer and Corporate Secretary of the Corporation.
-------------------------------- ------------------- --------------------- -------------------------------------------------------
RON F. HOCHSTEIN April 6, 2000 to 343,000 President and Chief Executive Officer of the
Lakewood, CO present Corporation since April 6, 2000; from January 31,
2000 to April 6, 2000, Vice President and Chief Operating
Officer of the Corporation.
-------------------------------- ------------------- --------------------- -------------------------------------------------------
LUKAS H. LUNDIN May 9, 1997 to 558,500 Chairman of the Board of the Corporation; director
Vancouver, BC present and officer of a number of publicly-traded natural
resource companies, including: Lundin Petroleum AB,
Atacama Minerals Corp., Valkyries Petroleum Corp.,
Canadian Gold Hunter Corp., Tenke Mining Corp.,
Tanganyika Oil Company Ltd. and South Atlantic
Resources Ltd.
-------------------------------- ------------------- --------------------- -------------------------------------------------------
WILLIAM A. RAND May 9, 1997 to 75,000 Self-employed businessman.
Vancouver, BC present
-------------------------------- ------------------- --------------------- -------------------------------------------------------
Each of the above nominees was elected to his present term of office at the
annual meeting of shareholders of the Corporation held on March 21, 2003.
The information as to shares beneficially owned or over which the directors
exercise control or direction, not being within the knowledge of the
Corporation, has been furnished by each of the proposed management nominees.
3
All of the above-named nominees have held their present positions or other
executive positions with the same or associated firms or organizations during
the past five years, except as follows:
- Mr. Ron Hochstein was Vice President, Corporate Development of the
Corporation from October 11, 1999 to January 30, 2000, and was an
engineering consultant with the AGRA-Simons Mining Group, an engineering
and consulting firm, from July 1995 to October 1999.
If any of the above-named nominees is for any reason unavailable to serve as a
director, proxies in favour of management will be voted for another nominee in
their discretion unless the shareholder has specified in the proxy that its
shares are to be withheld from voting in the election of directors.
The Board does not have an executive committee. There are presently four
committees of the Board; namely, the Audit Committee, the Compensation
Committee, the Corporate Governance and Nominating Committee and the
Environment, Health and Safety Committee. The following table sets out the
members of such Committees:
CORPORATE GOVERNANCE ENVIRONMENT, HEALTH AND
AUDIT COMMITTEE COMPENSATION COMMITTEE AND NOMINATING COMMITTEE SAFETY COMMITTEE
--------------------------------- ------------------------------ ------------------------------- ---------------------------------
William A. Rand Lukas H. Lundin Lukas H. Lundin Lukas H. Lundin
John H. Craig William A. Rand William A. Rand David C. Frydenlund
Lukas H. Lundin John H. Craig John H. Craig John H. Craig
--------------------------------- ------------------------------ ------------------------------- ---------------------------------
APPOINTMENT AND REMUNERATION OF AUDITORS
In the past, the Board has negotiated with the auditors of the Corporation on an
arm's length basis in determining the fees to be paid to the auditors. Such fees
have been based upon the complexity of the matters in question and the time
incurred by the auditors. Management believes that the fees negotiated in the
past with the auditors were reasonable in the circumstances and would be
comparable to fees charged by auditors providing similar services.
PricewaterhouseCoopers LLP was first appointed as auditors of the Corporation on
May 9, 1997. Unless otherwise instructed, the proxies given pursuant to this
solicitation will be voted in favour of the reappointment of
PricewaterhouseCoopers LLP, Chartered Accountants, as auditors of the
Corporation to hold office until the close of the next annual meeting of the
Corporation, at a remuneration to be determined by the Board.
EXECUTIVE COMPENSATION
The following table summarizes the compensation of each of the named executive
officers of the Corporation for the fiscal year ended September 30, 2003, as
well as the fiscal periods ended September 30, 2002 and September 30, 2001.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------- -----------------------------------------
AWARDS PAYOUTS
------------------------------ ----------
OTHER RESTRICTED
ANNUAL SECURITIES SHARES OR
NAME AND COMPEN- UNDER OPTIONS/ RESTRICTED ALL OTHER
PRINCIPAL SALARY SATION SARS SHARE LTIP COMPENSATION
POSITION YEAR (US$)(1) BONUS(US$) (US$) GRANTED(7)(#) UNITS(US$) PAYOUTS(US$) (US$)
(A) (B) (C) (D) (E) (F) (G) (H) (I)
----------------------------- ------- ------------ --------- ---------- ---------------- ------------- ---------- ------------
Ron F. Hochstein 2003 160,000 Nil Nil 250,000 Nil Nil Nil
President and Chief Executive 2002 160,000 Nil Nil Nil Nil Nil Nil
Officer(2) 2001 160,000 Nil Nil Nil Nil Nil Nil
----------------------------- ------- ------------ --------- --------------------------- ------------- ---------- -------------
David C. Frydenlund, 2003 158,400 Nil Nil Nil Nil Nil Nil
Vice President, General 2002 158,400 Nil 209,000(3) 200,000 Nil Nil Nil
Counsel, Chief Financial 2001 158,400 20,000 9,000(4) Nil Nil Nil Nil
Officer, and Corporate
Secretary(2)
----------------------------- ------- ------------ --------- --------------------------- ------------- ---------- -------------
Harold R. Roberts, 2003 140,000 Nil 3,000(5) Nil Nil Nil
Vice President, Corporate 2002 140,000 Nil 3,000(5) Nil Nil Nil Nil
Development of the 2001 51,154 Nil 1,510(5) 200,000 Nil Nil Nil
Corporation's subsidiary,
International Uranium (USA)
Corporation(2)(6)
----------------------------- ------- ------------ --------- --------------------------- ------------- ---------- -------------
4
NOTES TO SUMMARY COMPENSATION TABLE
(1) The Corporation's currency for disclosure purposes is US dollars which are
the functional currency of the Corporation's operations.
(2) Each of Messrs. Ron F. Hochstein and David C. Frydenlund currently have,
and, as of September 30, 2003, Harold R. Roberts had contracts of
employment with the Company's subsidiary, International Uranium (USA)
Corporation. There are no compensatory plans or arrangements provided in
such contracts in respect of resignation, retirement, termination, change
in control of the Company or responsibilities. The expiry date of the
employment contracts for Messrs Hochstein and Frydenlund is September 30,
2004, and the expiry date for Mr. Roberts' employment contract was May 31,
2004. As a result of a downsizing of the Company's head office, Mr. Roberts
resigned from his position of Vice President Corporate Development October
31, 2003, and has been retained on a consulting basis since then. Mr.
Roberts received a severance payment of $35,000.
(3) Other annual compensation is $209,000, being the value of a relocation loan
in the amount of $200,000 provided to Mr. Frydenlund in 1997, which was
forgiven by the Corporation on September 30, 2002, together with $9,000 of
imputed interest benefits from that loan.
(4) Other annual compensation is $9,000, being the dollar value of imputed
interest benefits from the relocation loan provided to Mr. Frydenlund as
described in (3) above.
(5) Amounts represent 401K matching contributions made to the named executive's
retirement account per the Corporation's 401K Benefit Plan available to all
eligible employees.
(6) Mr. Roberts recommenced employment with the Company on May 14, 2001. Mr.
Roberts was Vice President Operations of the Company from May 1997 to
January 31, 2000. Mr. Roberts rejoined the Company on May 14, 2001 as Vice
President Corporate Development of the Company's subsidiary International
Uranium (USA) Corporation, which position he held until October 31, 2003 at
which time he resigned from that position due to a downsizing of the
Company's head office.
(7) Subsequent to the recently-completed financial year, each of Messrs.
Hochstein and Frydenlund were granted incentive stock options to purchase
up to 400,000 and 250,000 common shares of the Corporation, respectively.
These options are exercisable at any time up to November 26, 2006 at an
exercise price of C$1.01 per share.
There were no long-term incentive plan awards made to any of the named executive
officers of the Corporation during the most recently completed financial year.
In addition, there are no plans in place with respect to any of the named
individuals for termination of employment or change in responsibilities under
employment contracts, apart from those separately disclosed herein.
No stock appreciation rights are outstanding and it is currently intended that
none be issued.
STOCK OPTIONS
The Corporation's current stock option plan (the "Stock Option Plan") was
established by the Board and approved by shareholders on February 14, 1997 and
amended as approved by shareholders on March 23, 1998. The Stock Option Plan
complies with the rules set forth for such plans by The Toronto Stock Exchange
(the "TSX").
The major features of the Corporation's stock option plan (the "Stock Option
Plan") can be summarized as follows:
Under the Stock Option Plan the Board, or a committee appointed for such
purposes, may from time to time grant to directors, officers, eligible employees
of, or consultants to, the Corporation or its subsidiaries, or to employees of
management companies providing services to the Corporation (collectively, the
"Eligible Personnel") options to acquire Common Shares in such numbers, for such
terms and at such exercise prices as may be determined by the Board or such
committee. The purpose of the Stock Option Plan is to advance the interests of
the Corporation by providing Eligible Personnel with a financial incentive for
the continued improvement of the Corporation's performance and encouragement to
stay with the Corporation.
The maximum number of Common Shares that may be reserved for issuance for all
purposes under the Stock Option Plan is 6,700,000 Common Shares and the maximum
number of Common Shares which may be reserved for issuance to any one insider
pursuant to share options and under any other share compensation arrangement may
not exceed 5% of the Common Shares
5
outstanding at the time of grant (on a non-diluted basis). Any Common Shares
subject to a share option which for any reason is cancelled or terminated
without having been exercised will again be available for grant under the Stock
Option Plan.
The maximum number of Common Shares that may be reserved for issuance to
insiders of the Corporation under the Stock Option Plan and under any other
share compensation arrangement is limited to 10% of the Common Shares
outstanding at the time of grant (on a non-diluted basis).
The Board has the authority under the Stock Option Plan to establish the option
price at the time each share option is granted. The option price may not be
lower than the market price of the Common Shares at the time of grant.
Options granted under the Stock Option Plan must be exercised no later than 10
years after the date of grant, and options are not transferable other than by
will or the laws of dissent and distribution. If an optionee ceases to be an
Eligible Person for any reason whatsoever other than death, each option held by
such optionee will cease to be exercisable 30 days following the termination
date (being the date on which such optionee ceases to be an Eligible Person). If
an optionee dies, the legal representative of the optionee may exercise the
optionee's options within one year after the date of the optionee's death but
only up to and including the original option expiry date.
The Corporation provides no financial assistance to facilitate the purchase of
Common Shares to directors, officers or employees who hold options granted under
the Stock Option Plan.
OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR
MARKET VALUE
OF SECURITIES
SECURITIES % OF TOTAL EXERCISE UNDERLYING
UNDER OPTIONS/ OPTIONS/SARS OR OPTIONS/SARS
SARS GRANTED TO BASE PRICE ON THE DATE OF
GRANTED EMPLOYEES IN (CDN$/ GRANT (CDN$/ EXPIRATION
NAME (#) FINANCIAL YEAR SECURITY) SECURITY) DATE
(A) (B) (C) (D) (E) (F)
------------------------------------------------------------------------------------------------------------------------------
Ron F. Hochstein 250,000 100% $0.31 $0.31 Oct 10/2005
------------------------------------------------------------------------------------------------------------------------------
David C. Frydenlund Nil - - - -
------------------------------------------------------------------------------------------------------------------------------
Harold R. Roberts Nil - - - -
------------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTIONS/SAR EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES
VALUE OF
UNEXERCISED
IN-THE-MONEY
OPTIONS/SARS AT
UNEXERCISED OPTIONS/SARS AT FISCAL YEAR
FISCAL YEAR END END (2)
SECURITIES ACQUIRED AGGREGATE (#) EXERCISABLE/
ON EXERCISE VALUE REALIZED EXERCISABLE/ UNEXERCISABLE
NAME (#) (CDN$)(1) UNEXERCISABLE (CDN$)
(A) (B) (C) (D) (E)
------------------------------------------------------------------------------------------------------------------------------
Ron F. Hochstein 1,000,000 $100,000 250,000 $40,000
------------------------------------------------------------------------------------------------------------------------------
David C. Frydenlund 700,000 $70,000 200,000 $34,000
------------------------------------------------------------------------------------------------------------------------------
Harold R. Roberts 200,000 $82,000 Nil -
------------------------------------------------------------------------------------------------------------------------------
(1) Based on the difference between the closing price of the Corporation's
common shares as traded on the TSX Exchange on the date of exercise and the
exercise price of the related options, i.e. C$0.20 per share.
(2) Based on the closing price of the common shares of the Corporation on TSX
Exchange on September 30, 2003 of Cdn$0.47.
6
The Corporation does not have any defined benefit or actuarial plans. In
addition, there are no compensatory plans or arrangements in place, including
payments to be received from the Corporation or its subsidiaries, with respect
to any of the above-named executive officers herein, which would result from the
resignation, retirement or any other termination of employment of such person's
employment with the Corporation and its subsidiaries or from a change of control
of the Corporation or any subsidiary of the Corporation or a change in the named
executive officer's responsibilities following a change in control, apart from
those separately disclosed.
COMPENSATION COMMITTEE
The Corporation's Compensation Committee is comprised of three unrelated
directors; namely, Messrs. Lukas H. Lundin, William A. Rand and John H. Craig.
The duties and responsibilities of the Compensation Committee are set out in
this Circular under the heading "Corporate Governance - Board Committees". The
Committee meets at least annually to receive information on and determine
matters regarding executive compensation, in accordance with policies approved
by the Board.
REPORT OF THE COMPENSATION COMMITTEE
The Corporation's compensation philosophy for executives continues to follow
three underlying principles; namely, (i) to provide a compensation package that
encourages and motivates performance; (ii) to be competitive with other
companies of similar size and scope of operations so as to attract and retain
talented executives; and (iii) to align the interests of its executive officers
with the long-term interests of the Corporation and its shareholders through
stock-related programs.
When determining both compensation policies and programs and individual
compensation levels for executive officers, the Committee takes into
consideration a variety of factors. These factors include overall financial and
operating performance of the Corporation, the Committee and the Board's overall
assessment of each executive's individual performance and contribution towards
meeting corporate objectives, levels of responsibility, length of service and
industry comparables.
Executive compensation is comprised primarily of a base salary and participation
in the Corporation's incentive stock option and 401K plans, and may also consist
of bonuses and other perquisites which are awarded on an occasional basis.
The salary for each executive officer's position is primarily determined having
regard for the incumbent's responsibilities, individual performance factors,
overall corporate performance, and the assessment of such individuals as
presented by management to the Board and the Compensation Committee. On February
12, 2004 the Compensation Committee reviewed the compensation of the
Corporation's executive officers and determined that the current salary levels
of such individuals be maintained for fiscal 2004, with minor adjustments to
compensate for any relocation expenses and related currency and tax adjustments
that may occur during the year.
The second component of the executive officer's compensation is stock options.
The Compensation Committee or the Board, subject to approval by regulatory
authorities, may from time to time grant stock options to executive officers
under the Corporation's Stock Option Plan. Grants of stock options are intended
to emphasize the executive officers' commitment to the Corporation's growth and
the enhancement of share value. The grant of stock options also enables the
Corporation to attract and retain qualified executives. Options are generally
reviewed annually and are granted to newly hired executive officers at the time
of their initial employment. During the recently-completed financial year, the
Committee and the Board considered and approved the grant of 250,000 options to
the CEO to replace an equal number of options that expired unexercised during
the year, in an effort to maintain his existing compensation package.
The third component of the executive officers' compensation is the ability to
participate in the Corporation's 401K Benefit Plan. The Corporation matches
contributions made by participating executive officers to their respective
retirement accounts in accordance with provisions of the 401K Benefit Plan
available to all eligible employees of the Corporation.
No cash bonuses were paid to any executive officers during the
recently-completed financial year. A severance payment of $35,000 was made to
Mr. Harold R. Roberts upon his resignation as Vice-President, Corporate
Development of the Corporation's subsidiary, International Uranium (USA)
Corporation on October 31, 2003.
7
SUBMITTED ON BEHALF OF THE COMPENSATION COMMITTEE
William A. Rand
Lukas H. Lundin
John H. Craig
PERFORMANCE GRAPH
The following graph compares the Corporation's cumulative total shareholder
return with the cumulative total return of the S&P/TSX Composite Index
(formerly, the TSE 300 Index), assuming a Cdn$100 investment in common shares on
September 30, 1998 and reinvestment of dividends, and the TSE Metals and
Minerals Index, during the period. All currency references in the graph are to
Canadian dollars.
[PERFORMANCE GRAPH]
30 SEP. 98 30 SEP. 99 30 SEP. 00 30 SEP 01 30 SEP 02 30 SEP 03
----------------------- -------------- ------------- -------------- -------------- -------------- --------------
IUC 100.00 60.00 73.33 66.66 75.55 104.44
----------------------- -------------- ------------- -------------- -------------- -------------- --------------
S&P/TSX 100.00 123.93 184.85 121.81 110.09 132.19
----------------------- -------------- ------------- -------------- -------------- -------------- --------------
TSE METALS & MINING 100.00 135.66 120.091 124.39 119.03 169.62
----------------------- -------------- ------------- -------------- -------------- -------------- --------------
Because the TSX has discontinued reporting its Metals and Minerals Index, the
Corporation intends to not include a comparison to this index in Performance
Graphs contained in Management Proxy Circulars for subsequent years.
COMPENSATION OF DIRECTORS
A. Standard Compensation Arrangements
None of the directors of the Corporation were compensated by the Corporation and
its subsidiaries during the most recently completed financial year for their
services in their capacity as directors, nor were any amounts paid to directors
for committee participation or special assignments. All expenses incurred by
directors in respect of their duties are reimbursed by the Corporation.
B. Other Arrangements
None of the directors of the Corporation were compensated in their capacity as
director by the Corporation and its subsidiaries during the most recently
completed financial year pursuant to any other arrangement or in lieu of any
standard arrangement.
The Company has a formalized stock option plan (the "Stock Option Plan") for the
granting of incentive stock options to the directors, officers, employees and
persons providing ongoing management or consulting services to the Corporation
(reference is made to the subheading "Stock Options" under the heading entitled
"Executive Compensation" herein, for a summary of the major features of the
Stock Option Plan). There were no individual grants of options to purchase
securities of the Corporation made during the most recently completed financial
year to non-executive directors of the Corporation. Subsequent to the fiscal
year
8
ended September 30, 2003, incentive stock options to purchase, in the aggregate
600,000 common shares of the Corporation at a price of C$1.01 per share at any
time up to November 26, 2006, were granted to the non-executive directors of the
Corporation.
The following table sets out the details of incentive stock options exercised by
the non-executive directors of the Corporation during the recently-completed
financial year.
9
AGGREGATED OPTIONS/SAR EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION/SAR VALUES
VALUE OF
UNEXERCISED
IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR END FISCAL YEAR
(#) END
SECURITIES ACQUIRED AGGREGATE EXERCISABLE/ EXERCISABLE/
ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE
NAME (#) (CDN$)(1) (d) (CDN$)
(a) (b) (c) (e)
------------------------------------------------------------------------------------------------------------------------------
Lukas H. Lundin 500,000 $30,000 Nil Nil
------------------------------------------------------------------------------------------------------------------------------
William A. Rand 75,000 $7,500 Nil Nil
------------------------------------------------------------------------------------------------------------------------------
John H. Craig 75,000 $7,500 Nil Nil
------------------------------------------------------------------------------------------------------------------------------
(1) Based on the difference between the closing price of the Corporation's
common shares as traded on the TSX Exchange on the date of exercise and the
exercise price of the related options, i.e. C$0.20 per share.
C. Compensation for Services
Since the commencement of the recently completed financial year, the law firm of
Cassels Brock & Blackwell LLP of which Mr. John H. Craig is a partner, was paid
$45,847 for legal services rendered as solicitors for the Corporation.
Pursuant to the terms of a services agreement between the Corporation and Namdo
Management Services Ltd., a private corporation owned by Mr. Lukas H. Lundin, a
director of the Corporation, the Corporation pays Namdo the sum of US$7,500 per
month for certain corporate and administrative services. Namdo has approximately
12 employees and provides administrative and financial services to a number of
public companies. Accordingly, there is no basis for allocating the amounts paid
by Namdo to Mr. Lundin in respect of services provided to the Corporation by Mr.
Lundin.
No other director was compensated either directly or indirectly by the
Corporation and its subsidiaries during the most recently completed financial
year for services as consultants or experts.
STATEMENT OF CORPORATE GOVERNANCE PRACTICE
The Toronto Stock Exchange (the "TSX") has adopted a series of guidelines (the
"Governance Guidelines") for what it considers effective corporate governance.
The Governance Guidelines deal with matters such as the constitution and
independence of corporate boards, their functions, the effectiveness and
education of board members and other means of ensuring sound corporate
governance.
In accordance with the Governance Guidelines, the Corporation has chosen to
disclose its system of corporate governance in its Management Proxy Circular.
The following text sets forth the steps taken by the Corporation in order to
comply with the Governance Guidelines and its system of corporate governance.
MANDATE OF THE BOARD
In February 1998, the Board adopted a mandate which acknowledged its stewardship
responsibilities. The Board's principal responsibilities are to supervise and
evaluate management, to oversee the conduct of the Corporation's business, to
set policies appropriate for the business of the Corporation and to approve
corporate strategies and goals. The Board is to carry out its mandate in a
manner consistent with the fundamental objective of enhancing shareholder value.
In discharging its stewardship over the Corporation, the Board expressly
undertakes the following specific duties and responsibilities: (i) approving,
supervising and providing guidance to management on the Corporation's strategic
planning process; (ii) identifying the principal risks of the Corporation's
business and ensuring management's implementation and
10
assessment of appropriate risk management systems; (iii) ensuring that the
Corporation has highly qualified management and adequate and effective
succession plans for senior management; (iv) overseeing the Corporation's
communications policy with its shareholders and with the public generally; (v)
assessing directly and through its Audit Committee, the integrity of the
Corporation's internal control and management information systems; and (vi)
providing for the independent functioning of the Board.
COMPOSITION OF THE BOARD
The Board has considered the relationship and status of each director. The Board
currently consists of five directors, three of whom, William A. Rand, Lukas H.
Lundin and John H. Craig, qualify as unrelated directors who are independent of
management and free from any interest or business which could materially
interfere with their ability to act in the best interests of the Corporation.
Ron F. Hochstein and David C. Frydenlund are related directors due to their
management positions with the Corporation. John H. Craig periodically provides
legal services to the Corporation. He is, however, not considered to be related
because of the size of his fees for such services relative to the overall fee
income of his practice. William A. Rand does not have any material business
relationships with the Corporation.
The Board has considered its size with a view to the impact of size upon its
effectiveness and continues to actively search for a suitable candidate as a
sixth director who can fulfill the role of financial expert on the Board's Audit
Committee, and if successful will increase the size of the Board from five (5)
to six (6) directors during the ensuing year.
The Corporation does not presently have a significant shareholder with the
ability to vote a majority of the outstanding shares of the Corporation for the
election of directors.
BOARD INDEPENDENCE
The Chairman does not take an active role in the day to day operations of the
Corporation and is therefore separate from management. The President and CEO and
the Vice President and CFO are active and central members of management of the
Corporation.
The Board believes that adequate structures and processes are in place to
facilitate the functioning of the Board independently of management. Each of the
Audit Committee, the Compensation Committee and the Corporate Governance and
Nominating Committee are entirely composed of directors who are unrelated to the
Corporation's management. The Environment, Health and Safety Committee is
composed of a majority of directors who are unrelated. In addition, it is common
practice for the Chairman and CEO to delegate the chair to an unrelated director
during Board meetings.
The Board has not met without management present but is fully mandated to do so
from time to time, if appropriate. The mandates of the Board and the Corporate
Governance and Nominating Committee require procedures be implemented at such
times as are desirable or necessary to enable the Board to function
independently of management. Furthermore, individual directors may, in
appropriate circumstances and with the authorization of the applicable committee
of the Board or the Chairman, engage independent advisors at the expense of the
Corporation.
The Board encourages senior management to participate in appropriate
professional and personal development activities, courses and programs, and
supports management's commitment to the training and development of all
permanent employees.
BOARD COMMITTEES
The Board has established four committees: the Audit Committee, the Compensation
Committee, the Corporate Governance and Nominating Committee and the
Environment, Health and Safety Committee.
The Audit Committee is composed of three directors, Messrs. William A. Rand,
John H. Craig and Lukas H. Lundin, all of whom are unrelated directors. Each of
these directors are considered by the Corporation to be financially literate as
they each have many years of experience reviewing and relying on financial
statements for public companies such as the Corporation. Messrs. Craig and Rand
are considered by the Corporation to have financial expertise due to the fact
that they have been actively involved as audit committee members for many years
on a number of public companies, although they do not technically qualify as
"financial experts" within the meaning of recent US Securities & Exchange
Commission regulations. The Corporation is in the process of searching for a
financial expert with these formal qualifications and that has the requisite
knowledge and experience in the
11
Corporation's business, to be added to the Board and to serve as the financial
expert on the Audit Committee. The Audit Committee oversees the financial
reporting process of the Corporation on behalf of the Board. All auditing
services and non-audit services to be provided to the Corporation by the
Corporation's auditors are pre-approved by the Audit Committee. The Committee
reviews, on a continuous basis, any reports prepared by the Corporation's
external auditors relating to the Corporation's accounting policies and
procedures, as well as internal control procedures and systems. The Committee is
also responsible for examining all financial information, including annual and
quarterly financial statements, prepared for securities commissions and similar
regulatory bodies prior to filing or delivery of the same. The Audit Committee
also oversees the annual audit process, the Corporation's internal accounting
controls, the Code of Ethics for Senior Officers and the resolution of issues
identified by the Corporation's external auditors, and recommends to the Board
the firm of independent auditors to be nominated for appointment by the
shareholders. The Audit Committee meets a minimum of four times a year.
The Compensation Committee is comprised of three directors, all of whom are
unrelated directors. The Compensation Committee establishes executive and senior
officer compensation, determines the general compensation structure, policies
and programs of the Corporation, including the extent and level of participation
in incentive programs in conjunction with the Board, and delivers an annual
report to shareholders on executive compensation. The Compensation Committee has
also been mandated to review the adequacy and form of the compensation of
directors and to ensure that such compensation realistically reflects the
responsibilities and risk involved in being an effective director. The
Compensation Committee meets at least annually.
The Environment, Health and Safety Committee consists of three directors, the
majority of whom are unrelated. The Chairman of the Environment, Health and
Safety Committee, John H. Craig, is an unrelated director. Due to the complexity
of the uranium and radioactive waste recycle/disposal industry, the Board
determined that it was appropriate that a member of management sit on the
Environment, Health and Safety Committee to ensure that technical expertise is
properly brought before the Committee. Accordingly, David C. Frydenlund, Vice
President, and General Counsel, is a member of the Committee. The mining and
milling industry, by its very nature, can have a significant impact on the
natural environment. As a result, environmental planning and compliance must
play an ever-increasing part in the operations of any company engaged in these
activities. The Corporation takes these issues very seriously and has
established the Environment, Health and Safety Committee to oversee the
Corporation's efforts to act in a responsible and concerned manner with respect
to matters affecting the environment, health and safety. The Corporation's
Environment, Health and Safety Committee meets at least four times a year.
The Corporate Governance and Nominating Committee consists of three directors,
all of whom are unrelated. The Corporate Governance and Nominating Committee is
responsible for developing and monitoring the Corporation's approach to
corporate governance issues. The Committee oversees the effective functioning of
the Board, oversees the relationship between the Board and management, ensures
that the Board can function independently of management at such times as is
desirable or necessary, identifies possible nominees for the Board and, with the
assistance of the Board and where necessary, develops an orientation and
education program for new recruits to the Board. The Corporate Governance and
Nominating Committee also annually reviews and makes recommendations to the
Board with respect to: (i) the size and composition of the Board; (ii) the
appropriateness of the committees of the Board; and (iii) the contribution of
individual directors. In addition, the Committee delivers an annual statement on
corporate governance to the Board for inclusion in either the Corporation's
annual report or management proxy circular.
REVIEW OF ADEQUACY AND FORM OF COMPENSATION OF DIRECTORS
While no member of the Board is compensated by the Corporation directly for his
participation on the Board or committees of the Board, Board members participate
in the Corporation's incentive stock option plan. The extent and level of
participation in this Plan is determined by the Board, as a whole, after
considering the recommendations of the Compensation Committee, which has been
mandated to review the adequacy and form of the compensation of directors and to
ensure that such compensation realistically reflects the responsibilities and
risk involved in being an effective director.
POSITION DESCRIPTIONS OF MANAGEMENT AND THE BOARD
The Board, together with the Corporation's Chief Executive Officer, has
developed position descriptions for the Board and for the Chief Executive
Officer, involving the definition of the limits to management's
responsibilities. Under these position descriptions, the Board has delegated the
day-to-day management of the business and affairs of the Corporation to
executive officers of the Corporation, subject to the extent and limits defined
by the Board. Generally, operations in the ordinary course or that are not in
the ordinary course and do not exceed material levels of expenditures or
commitment on the part of the Corporation have been delegated to management.
Decisions relating to matters that are not in the ordinary course and that
involve material expenditures
12
or commitments on the part of the Corporation generally require prior approval
of the Board. As the Board has plenary power, any responsibility which is not
delegated to management or a Board committee remains with the Board. The Chief
Executive Officer reviews corporate objectives with the Board on a quarterly
basis. In this manner, the Board approves or develops the corporate objectives
which the Chief Executive Officer is responsible for meeting.
SHAREHOLDER COMMUNICATIONS
The Board has put structures in place to ensure effective communication between
the Corporation, its shareholders and the public. The Corporation has
established an investor relations and corporate development procedure where
shareholder concerns are dealt with on an individual basis, usually by providing
requested information. Significant shareholder concerns are brought to the
attention of management or the Board. Shareholders are informed of developments
in the Corporation by the issuance of timely press releases which are
concurrently posted to the Corporation's website.
Under its mandate, the Board is required to oversee the Corporation's
communications policy. The Board monitors the policies and procedures that are
in place to provide for effective communication by the Corporation with its
shareholders and with the public generally, including effective means to enable
shareholders to communicate with senior management and the Board. The Board also
monitors the policies and procedures that are in place to ensure a strong,
cohesive, sustained and positive image of the Corporation with shareholders,
governments and the public generally.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
There was no indebtedness of directors, executive officers or senior officers of
the Corporation, proposed nominees for directors, or associates or affiliates of
said persons, during the recently-completed financial year.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
During the financial year ended September 30, 2003, except as otherwise
disclosed in this circular, none of the insiders of the Corporation nor any
proposed nominee for election as director, nor any associate or affiliate of
said persons, has had any material interest, direct or indirect, in any
transaction, which has materially affected or would materially affect the
Corporation or any of its subsidiaries.
MANAGEMENT CONTRACTS
Management functions of the Corporation are performed by directors, executive
officers or senior officers of the Corporation and not, to any substantial
degree, by any other person with whom the Corporation has contracted.
CERTIFICATE
The contents and the distribution of this management proxy circular have been
approved by the Board.
DATED at Denver, Colorado, this 12th day of February, 2004.
BY ORDER OF THE BOARD
(signed) David C. Frydenlund,
Corporate Secretary
13
Exhibit 4
PROXY
ANNUAL MEETING OF SHAREHOLDERS OF
INTERNATIONAL URANIUM CORPORATION (THE "CORPORATION")
TO BE HELD AT SUITE 2101, 885 WEST GEORGIA STREET, VANCOUVER, B.C., CANADA, ON
TUESDAY, THE 23RD DAY OF MARCH, 2004 AT 10:00 AM.
The undersigned shareholder ("Registered Shareholder") of the Corporation hereby
appoints, Lukas H. Lundin, the Chairman of the Board of the Corporation, or
failing this person, Ron F. Hochstein, President and Chief Executive Officer of
the Corporation, or failing these persons, William A. Rand, a Director of the
Corporation, OR IN THE PLACE OF THE FOREGOING,_________________________________
_____________________________________, as proxyholder for and on behalf of the
Registered Shareholder with the power of substitution to attend, act and vote
for and on behalf of the Registered Shareholder in respect of all matters that
may properly come before the aforesaid meeting of the Registered Shareholders of
the Corporation (the "Meeting") and at every adjournment thereof, to the same
extent and with the same powers as if the undersigned Registered Shareholder
were present at the said Meeting, or any adjournment thereof.
The Registered Shareholder hereby directs the proxyholder to vote the securities
of the Corporation recorded in the name of the Registered Shareholder as
specified herein.
IF ANY AMENDMENTS OR VARIATIONS TO THE MATTERS IDENTIFIED IN THE NOTICE OF
MEETING ARE PROPOSED AT THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF,
OR IF ANY OTHER MATTERS WHICH ARE NOT NOW KNOWN TO MANAGEMENT SHOULD PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF, THIS PROXY
CONFERS DISCRETIONARY AUTHORITY ON THE PERSON VOTING THE PROXY TO VOTE ON SUCH
AMENDMENTS OR VARIATIONS OR SUCH OTHER MATTERS IN ACCORDANCE WITH THE BEST
JUDGMENT OF SUCH PERSON.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RESOLUTIONS (For full details of each item, please see the enclosed Notice of
Meeting and Management Proxy Circular)
FOR WITHHOLD
----------------------------------------------------------- ------------- --------------
1. To reappoint PricewaterhouseCoopers LLP,
Chartered Accountants, as the auditors of the
Corporation for the ensuing year, at a remuneration
to be fixed by the board of directors of the
Corporation
----------------------------------------------------------------------------------------
2. To elect the directors as nominated by
management of the Corporation in the accompanying
Management Proxy Circular.
----------------------------------------------------------------------------------------
3. To grant the proxyholder authority to vote at
his/her discretion on any other business or
amendment or variation to the previous resolutions
----------------------------------------------------------------------------------------
THE UNDERSIGNED REGISTERED SHAREHOLDER HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN
TO ATTEND AND VOTE AT SAID MEETING.
SIGN HERE: __________________________________________________
PLEASE PRINT NAME: _____________________________________________
DATE: _________________________________________________________
NUMBER OF SHARES REPRESENTED BY PROXY ___________________________
(IF THE NUMBER OF SHARES REPRESENTED BY THIS PROXY FORM IS NOT INDICATED BY THE
REGISTERED SHAREHOLDER, THEN IT SHALL BE DEEMED TO REPRESENT THAT NUMBER
INDICATED ON THE AFFIXED LABEL.)
THIS PROXY FORM IS NOT VALID UNLESS IT IS SIGNED
SEE IMPORTANT INSTRUCTIONS ON REVERSE
INSTRUCTIONS FOR COMPLETION OF PROXY
1. THIS PROXY IS SOLICITED BY THE MANAGEMENT OF THE CORPORATION.
2. THIS FORM OF PROXY ("INSTRUMENT OF PROXY") MUST BE SIGNED BY YOU, THE
REGISTERED SHAREHOLDER, OR BY YOUR ATTORNEY DULY AUTHORIZED BY YOU IN
WRITING, OR, IN THE CASE OF A CORPORATION, BY A DULY AUTHORIZED OFFICER OR
REPRESENTATIVE OF THE CORPORATION; AND IF EXECUTED BY AN ATTORNEY, OFFICER,
OR OTHER DULY APPOINTED REPRESENTATIVE, THE ORIGINAL OR A NOTARIAL COPY OF
THE INSTRUMENT SO EMPOWERING SUCH PERSON, OR SUCH OTHER DOCUMENTATION IN
SUPPORT AS SHALL BE ACCEPTABLE TO THE CHAIRMAN OF THE MEETING, MUST
ACCOMPANY THE INSTRUMENT OF PROXY.
3. IF THIS INSTRUMENT OF PROXY IS NOT DATED in the space provided, it is
deemed to bear the date on which it is mailed.
4. A REGISTERED SHAREHOLDER WHO WISHES TO ATTEND THE MEETING AND VOTE ON THE
RESOLUTIONS IN PERSON, may simply register with the scrutineers before the
Meeting begins.
5. A REGISTERED SHAREHOLDER WHO IS NOT ABLE TO ATTEND THE MEETING OR ANY
ADJOURNMENT THEREOF IN PERSON BUT WISHES TO VOTE ON THE RESOLUTIONS, may do
the following:
(a) APPOINT ONE OF THE MANAGEMENT PROXYHOLDERS named on the Instrument of
Proxy, by leaving the wording appointing a nominee as is (i.e. do not
strike out the management proxyholders shown and do not complete the
blank space provided for the appointment of an alternate proxyholder).
Where no choice is specified by a Registered Shareholder with respect
to a resolution set out in the Instrument of Proxy, a management
appointee acting as a proxyholder will vote the resolution as if the
Registered Shareholder had specified an affirmative vote; OR
(b) APPOINT ANOTHER PROXYHOLDER, WHO NEED NOT BE A REGISTERED SHAREHOLDER
OF THE CORPORATION, TO VOTE ACCORDING TO THE REGISTERED SHAREHOLDER'S
INSTRUCTIONS, BY STRIKING OUT THE MANAGEMENT PROXYHOLDER NAMES SHOWN
AND INSERTING THE NAME OF THE PERSON YOU WISH TO REPRESENT YOU AT THE
MEETING IN THE SPACE PROVIDED FOR AN ALTERNATE PROXYHOLDER. IF NO
CHOICE IS SPECIFIED, THE PROXYHOLDER HAS DISCRETIONARY AUTHORITY TO
VOTE AS THE PROXYHOLDER SEES FIT.
6. THE SECURITIES REPRESENTED BY THIS INSTRUMENT OF PROXY WILL BE VOTED OR
WITHHELD FROM VOTING IN ACCORDANCE WITH THE INSTRUCTIONS OF THE REGISTERED
SHAREHOLDER ON ANY POLL of a resolution that may be called for and, if the
Registered Shareholder specifies a choice with respect to any matter to be
acted upon, the securities will be voted accordingly. IN RESPECT OF PROXIES
IN WHICH THE SHAREHOLDERS HAVE NOT SPECIFIED THAT THE PROXY NOMINEES ARE
REQUIRED TO VOTE OR WITHHOLD FROM VOTING IN RESPECT OF THE ELECTION OF EACH
OF MANAGEMENT'S NOMINEES FOR DIRECTORS AND THE REAPPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS AUDITORS AT A REMUNERATION TO BE FIXED BY THE
BOARD OF DIRECTORS OF THE CORPORATION, THE SHARES REPRESENTED BY PROXIES IN
FAVOUR OF MANAGEMENT NOMINEES WILL BE VOTED IN FAVOUR OF THE ELECTION OF
EACH OF MANAGEMENT'S NOMINEES SET OUT IN THE MANAGEMENT PROXY CIRCULAR AS
DIRECTORS OF THE CORPORATION AND IN FAVOUR OF THE REAPPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS AUDITORS AT A REMUNERATION TO BE FIXED BY THE
BOARD OF DIRECTORS OF THE CORPORATION. Further, if so authorized by this
Instrument of Proxy, the securities will be voted by the appointed
proxyholder with respect to any amendments or variations of any of the
resolutions set out on the Instrument of Proxy or matters which may
properly come before the Meeting as the proxyholder in its sole discretion
sees fit.
If a Registered Shareholder has submitted an Instrument of Proxy, the Registered
Shareholder may still attend the Meeting and may vote in person. To do so, the
Registered Shareholder must record his/her attendance with the scrutineers
before the commencement of the Meeting and revoke, in writing, the prior votes.
================================================================================
TO BE REPRESENTED AT THE MEETING, THIS PROXY FORM MUST BE RECEIVED AT THE OFFICE
OF COMPUTERSHARE TRUST COMPANY OF CANADA BY MAIL OR BY FAX NO LATER THAN FORTY
EIGHT (48) HOURS (EXCLUDING SATURDAYS, SUNDAYS AND HOLIDAYS) PRIOR TO THE TIME
OF THE MEETING, OR ADJOURNMENT THEREOF OR MAY BE ACCEPTED BY THE CHAIRMAN OF THE
MEETING PRIOR TO THE COMMENCEMENT OF THE MEETING. THE MAILING ADDRESS IS:
COMPUTERSHARE TRUST COMPANY OF CANADA
PROXY DEPT., 100 UNIVERSITY AVENUE, 9TH FLOOR
TORONTO, ONTARIO M5J 2Y1
FAX: WITHIN NORTH AMERICA: 1-866-249-7775 -
OUTSIDE NORTH AMERICA: (416) 263-9524
================================================================================
Exhibit 5
INTERNATIONAL URANIUM CORPORATION
(the "Company")
REQUEST FOR INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 54-102 of the Canadian Securities
Administrators, registered and beneficial shareholders of the Company may elect
annually to receive interim corporate mailings, including interim financial
statements of the Company, if they so request. If you wish to receive such
mailings, please complete and return this form to:
COMPUTERSHARE TRUST COMPANY OF CANADA
100 UNIVERSITY AVENUE
9TH FLOOR
TORONTO, ON
M5J 2Y1
NAME:
---------------------------------------------------------------------------
ADDRESS:
------------------------------------------------------------------------
POSTAL CODE:
------------------------------
I confirm that I am the BENEFICIAL owner of shares of the Company.
--------------
(Common)
SIGNATURE OF
SHAREHOLDER: DATE:
--------------------------------- --------------------------
CUSIP: 46052H-10-2
SCRIP COMPANY CODE: IUCQ
INTERNATIONAL URANIUM CORPORATION
(THE "COMPANY")
REQUEST FOR INTERIM FINANCIAL STATEMENTS
In accordance with National Instrument 54-102 of the Canadian Securities
Administrators, registered and beneficial shareholders of the Company may elect
annually to receive interim corporate mailings, including interim financial
statements of the Company, if they so request. If you wish to receive such
mailings, please complete and return this form to:
COMPUTERSHARE TRUST COMPANY OF CANADA
100 UNIVERSITY AVENUE
9TH FLOOR
TORONTO, ON
M5J 2Y1
NAME:
---------------------------------------------------------------------------
ADDRESS:
------------------------------------------------------------------------
------------------------------------------------------------------------
POSTAL CODE:
------------------------------
I confirm that I am the REGISTERED owner of shares of the Company.
---------------
(Common)
SIGNATURE OF
SHAREHOLDER: DATE:
--------------------------------- --------------------------
CUSIP: 46052H-10-2
SCRIP COMPANY CODE: IUCQ
Exhibit 6
TO OUR SHAREHOLDERS
We are pleased to report on some very exciting developments in the uranium
market and in your Company. Over the past two years, due to the depressed
uranium price, your Company has been focusing on the alternate feed business and
maintaining its Mongolian and U.S. uranium assets on stand-by pending an
increase in the uranium price. In the past six months, the price of uranium has
increased over 40%, from $11.20 per pound at the end of July 2003 to over $15.00
per pound as of February, 2004. Uranium consumption is currently about 170
million pounds per year, with primary production contributing only about 95
million pounds of that amount. The difference is being made up from government
programs, government stockpiles and market inventories. This market imbalance,
where demand significantly exceeds primary production, has been evident for the
last ten years. However, many uranium market analysts now believe that the
industry is at or near the point where uranium from government programs,
government stockpiles and inventories is becoming depleted and there is going to
be a significant short fall in the supply of uranium. This has led many market
analysts to conclude that further strengthening in the price of uranium could
occur.
Given the recent increase in the price of uranium and the perceived long term
improvement in the uranium market, your Company has increased its efforts to add
premium uranium assets to its existing uranium portfolio, while maintaining its
position in the alternate feed business.
Perhaps the most exciting of these assets is the Company's option to acquire a
75% interest in the Moore Lake uranium exploration project from JNR Resources
Inc. ("JNR"). The Moore Lake project, considered to be one of the three best
exploration projects in the world, is located in the Athabasca Basin region of
northern Saskatchewan, Canada, which is presently the most prolific uranium
exploration and mining area in the world. Three mines in the Athabasca Basin
region, the McArthur River, McClean Lake and Eagle Point mines, currently
account for about one-third of the world's primary uranium production. The
Company, and its partner JNR, are currently carrying out an initial 5,000 meter
drilling program which will be expanded pending the results of the first fifteen
holes.
In addition to the Moore Lake project, the Company has also optioned a 75%
interest in the Lazy Edward Bay project with JNR, and has entered into a letter
of intent to option a 75% interest in the Crawford Lake project with Phelps
Dodge Exploration (Canada) Limited. Both of these projects are also in the
Athabasca Basin region. The Company and JNR have also been carrying out an
aggressive staking campaign over the past three months in the area. As of the
end of January, the Company has optioned or has a 100% interest in over 114,000
hectares in the Athabasca Basin region.
To assist and advise the Company on the acquisition, exploration and development
of prospective uranium exploration properties in Canada, the Company has formed
a Uranium Exploration Advisory Committee. Heading the committee is Dr. Klaus
Lehnert-Thiel, P.Eng., P.Geo., an exploration geoscientist with over 30 years of
progressive operations and management experience on uranium, gold, diamond and
base metals projects, predominantly in Canada. Considered an expert in the
uranium field, Dr. Lehnert-Thiel began his work in the Athabasca Basin of
northern Saskatchewan in the late 1960's where he was in charge of large
integrated exploration programs during the uranium exploration boom in the area
following the discovery of the Rabbit Lake mine. In the early 1970's, Dr.
Lehnert-Thiel joined Uranerz Exploration and Mining Limited and was part of the
Key Lake discovery team. The other members of the committee are Ron Netolitzky
and Rick Bailes. Ron and Rick bring a wealth of uranium exploration, Athabasca
Basin, and economic geology experience to the team.
With the recent increases in the price of uranium, the Company is also
evaluating the possibility of recommencing its uranium exploration and
development program in Mongolia. The Gurvan Saihan Joint Venture, in which the
Company has a 70% interest, holds over 1.0 million hectares in Mongolia and has
identified mineral deposits to date containing 21.67 million pounds of uranium
amenable to the in situ leach method of mining. The Company will also continue
to monitor uranium and vanadium prices to determine if and when it would be
viable to recommence mining activities on any of its U.S. uranium properties.
Due to the higher cost of production at its U.S. mines, further increases in
both uranium and vanadium prices above current levels will be required.
Your Company continued to put significant effort into the development of its
alternate feed, uranium-bearing waste recycling business, which resulted in
several alternate feed contracts and the formation of the Urizon Joint Venture
with Nuclear Fuel Services, Inc. ("NFS"). In fiscal 2003, the Company processed
over 266,000 tons of alternate feed material from four different sites. The mill
run lasted almost twelve months and was completed without one lost time
accident. Currently the Mill has approximately 39,000 tons of alternate feed
material on the ore pad and an additional 5,900 tons of material, containing
approximately 400,000 pounds of uranium, in stockpile at the Mill. The Company
will be evaluating restarting the Mill to process both of these materials this
year. The Linde project will continue to ship alternate feed materials to the
Mill throughout the next fiscal year, and the Company will be receiving
approximately 5,000 tons of alternate feed materials from another commercial
processor. As well as the foregoing activity, the Company continues to pursue
additional alternate feed contracts.
With respect to Urizon, NFS and the Company continued to develop this program
over the year, with the completion of the preliminary technical program and the
preparation of an application to amend the Company's license for the White Mesa
Mill. In April, 2003, NFS submitted a proposal, on behalf of Urizon, to the U.S.
Department of Energy ("DOE"), requesting funding for the processing of DOE
materials under the Urizon program. These materials would have
- 2 -
resulted in the production of about 6.0 million pounds of uranium over a three
year period. Unfortunately, the DOE informed Urizon that it was not prepared to
accept the proposal at this time due to funding considerations and other DOE
priorities. NFS and the Company are currently evaluating the feasibility of the
Urizon program and investigating the potential for alternative commercial
opportunities to move the program forward without government funding. In the
interim, the Company will not be submitting its license amendment application
until the path forward is further defined.
On the Moab project, where the Company is proposing to relocate an historic
uranium mill tailings pile situated on the flood plain of the Colorado River
near Moab, Utah to the White Mesa Mill using slurry pipeline technology, the DOE
is progressing with the completion of an Environmental Impact Statement. This
EIS will evaluate stabilizing the tailings in place, or relocating the tailings
to one of three sites, including the Company's White Mesa Mill. The DOE has
released its preliminary EIS to certain government and other interested agencies
for comment and plans to issue the EIS for public comment in April of 2004.
Although the White Mesa option is currently estimated by DOE to be the highest
cost option, there are a number of factors that still need to be considered by
the DOE, including the long term use of the pipeline, which the Company believes
will make the White Mesa option competitive with the other options being
considered by DOE.
Through the year, the Company continued to advance its precious and base metals
exploration program in Mongolia. Initial regional field work generated several
high ranking prospects, which led to refinement of the land position from 3.5
million hectares to 2.5 million hectares, to concentrate resources on the most
prospective areas.
A 3,100 meter drill program was carried out on the Company's Tsagaan
Tolgoi/Shiveen Gol precious and base metals project in northwest Mongolia.
Results from this initial drilling include favorable geology with accessory
mineralization and associated anomalous copper. Thick intersections of low-grade
mineralization, as well as thin intercepts of high-grade copper and silver
mineralization, were encountered. Results of gold exploration have also been
encouraging, as extensive stream sediment anomalies have been defined, and
high-grade vein systems were identified which justify follow up investigation.
Elsewhere on its holdings, the Company has located large, discrete porphyry
copper-gold targets that are ready for detailed site work followed by drilling.
For the upcoming year the Company intends to maintain its Mongolian precious and
base metals exploration effort at similar expenditure levels as last year, and
is also evaluating opportunities to sell or joint venture all or a portion of
these properties.
Financially, the position of the Company has improved significantly. In fiscal
2003, the Company had net earnings of $5,533,152, or $0.08 per share as compared
to net earnings of $184,990 in 2002. The primary source of earnings was the
processing of the significant inventories of alternate feed material that had
been stockpiled at the Mill over the past four
- 3 -
years. Through this processing, the Company converted its deferred revenue
liability into revenue, which improved the Company's balance sheet. In addition,
the Company raised Cdn $12.25 million through the issuance of equity in the
first quarter of fiscal 2004.
Even though the Company is in a stronger financial position than it was a year
ago, management continues to reduce overhead expenditures. Upon the completion
of the Mill run in June 2003, the Mill crew was reduced from 65 to 15 personnel.
Typically, while the Mill is receiving feed material, there would be a workforce
of 20 to 25. However, Mill personnel have developed more efficient procedures
and work practices enabling the Company to reduce its workforce without
impairing its ability to receive alternate feed materials or to prepare the Mill
for the next Mill run. In addition to the changes at the Mill, the Company has
also reduced its staffing at its Denver office significantly. To accomplish
this, a number of functions have been moved to the Mill and to the Company's
Vancouver office.
With the increases in the price of uranium and the acquisition by the Company of
premium uranium exploration properties in Canada, together with the potential to
recommence exploration and development activities on the Company's Mongolian
uranium properties, this is truly an exciting time for the Company.
Finally, the Board, the management and the employees of IUC, would like to thank
you, our shareholders, for your continued support.
On behalf of the Board,
/s/ Ron F. Hochstein
-------------------------------------
Ron F. Hochstein
President and Chief Executive Officer
- 4 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
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, 2003 should be read in conjunction with the
consolidated financial statements and accompanying notes. The consolidated
financial statements are prepared in accordance with generally accepted
accounting principles in Canada. Note 16 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 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 these operations, 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 pending further improvements in commodity prices. In addition, the Company
is engaged in precious and base metals exploration in Mongolia.
Due to deterioration in commodity prices at the time 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 indefinitely,
pending significant improvements in commodity prices. 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 prices have risen significantly in late fiscal 2003 and to date in
fiscal 2004. As a result of these recent increases in uranium prices and
improved market fundamentals, the Company acquired uranium exploration
properties in the Athabasca Region of Saskatchewan, Canada, and commenced an
exploration program on certain of those properties in early fiscal 2004. While
the Company is currently evaluating the possibility of recommencing its uranium
exploration program in Mongolia, further increases in both uranium and vanadium
prices above current levels would be required in order for the Company to
consider recommencing its U.S. mining activities since its U.S. mines have a
higher cost of production.
- 5 -
In addition to its exploration 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 development of the business of recycling 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, and the alternate feed business
has helped to offset Mill and mine standby costs, 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 an 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.
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 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
- 6 -
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.
The Company receives a recycling fee for a majority of the alternate feed
materials once they are delivered to the Mill. Fees are recorded as deferred
revenue until the material is processed at which time they are recorded as
revenue. In addition to the recycling fees, the Company will retain any uranium
recovered from these materials, which can be sold in subsequent periods.
The Company continues to hold approximately 424,000 pounds of vanadium, as black
flake, and approximately 144,000 pounds of vanadium, as vanadium pregnant
liquor. Over the past six months, vanadium prices have improved and are
currently trading in the range of $3.00 to $3.75 per pound V(2)O(5). The Company
will continue to evaluate opportunities to sell its inventory.
In addition to FUSRAP (Formerly Utilized Sites Remedial Action Program) material
from the Linde site, 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, 2003, there were approximately 5,900 tons
of these materials at the Mill, containing approximately 396,700 lbs of uranium.
Revenues from these materials 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 FUSRAP materials.
2003
($000, except per share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
---------------------------------------------- ------------- ------------ ------------ ------------- ------------
Process milling revenue 4,274 4,818 3,281 42 12,415
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
2002
($000, except per share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
---------------------------------------------- ------------- ------------ ------------ ------------- ------------
Process milling revenue 115 147 607 5,961 6,830
Net income (loss) (1,133) (1,146) (1,763) 4,227 185
Basic and diluted income (loss) per share (0.02) (0.02) (0.03) 0.06 -
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
- 7 -
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. The timing of the next mill run will depend
on a number of factors such as uranium price and the amount of materials that
will have been received on site.
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. Currently a crew of 15
management and maintenance personnel remains at the Mill. During the recently
completed mill run, the Mill maintained an average of 64 employees to process
its stockpile of alternate feed material.
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
$2,622,131 as compared to $3,386,845 for fiscal 2002. The decrease of $764,714
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 is being 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
- 8 -
drilled approximately 3,100 meters on its Shiveen Gol project area in western
Mongolia. Exploration property holdings are being refined as fieldwork results
become available.
Total gross program expenditures, including capitalized exploration
expenditures, for fiscal 2003 of $1,565,419 increased by $963,586 as compared to
$601,833 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%. The joint
venture holds 5 exploration licenses totaling 1 million hectares. This in-situ
leach uranium project remained on stand-by during fiscal 2003.
OTHER INCOME AND EXPENSE
Net interest and other income for fiscal 2003 was $1,296,738 as compared to
$916,780 for fiscal 2002. The increase of $379,958 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 $89,155 due to a decrease in the average cash balances
available for investment.
RESULTS OF OPERATIONS
FISCAL 2002 VERSUS FISCAL 2001
IUC recorded net income of $184,990 (nil per share) for the year ended September
30, 2002, compared with a net loss of $2,822,876 ($0.04 per share) for 2001.
Results for 2002 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 to the carrying value of the "other
asset" of $261,000 to reflect current uranium prices. For 2001, results included
a charge of $300,663 for expenses associated with an increase in Mill
reclamation obligations, a $361,177 gain on the sale of short-term investments,
and an increase to the carrying value of the "other asset" of $760,000 to
reflect current uranium prices.
REVENUES
Revenues for fiscal 2002 of $6,830,137 consisted of process milling fees
generated under the Company's alternate feed processing agreements. Revenues for
fiscal 2002 increased $6,020,374 from $809,763 in fiscal 2001. The increase was
due primarily to the commencement of the alternate feed mill run, which began on
June 13, 2002.
- 9 -
Process milling fees for fiscal 2002 of $6,830,137 increased $6,067,907 as
compared to process milling fees of $762,230 for fiscal 2001. Alternate feed
processing activities in fiscal 2002 consisted primarily of the receipt,
sampling and analysis of Ashland 1, Linde and Heritage materials and the
processing of Ashland 1 materials. Approximately 37,000 tons of material was
received during the fiscal year bringing the total received to over 251,100 tons
from the Ashland 1, Linde and Heritage sites. The Mill processed approximately
88,300 tons of this material during fiscal 2002, leaving a stockpile of
approximately 162,800 tons to be processed in fiscal 2003.
2002
($000, except per share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
---------------------------------------------- ------------- ------------ ------------ ------------- ------------
Process milling revenue 115 147 607 5,961 6,830
Net income (loss) (1,133) (1,146) (1,763) 4,227 185
Basic and diluted income (loss) per share (0.02) (0.02) (0.03) 0.06 -
2001
($000, except per share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
---------------------------------------------- ------------- ------------ ------------ ------------- ------------
Process milling revenue 276 246 153 87 762
Net income (loss) (709) (1,037) (1,274) 197 (2,823)
Basic and diluted income (loss) per share (0.01) (0.02) (0.02) - (0.04)
COST OF PRODUCTS AND SERVICES SOLD
Process milling expenditures for fiscal 2002 of $2,047,791, which represent
expenditures incurred receiving and processing alternate feed materials,
increased $1,280,830 as compared to process milling expenditures of $766,961 for
fiscal 2001. The increase was due primarily to the start-up of the Mill in
fiscal 2002. Expenditures incurred during fiscal 2002 for processing materials
were $1,726,572 as compared to fiscal 2001 when the Company did not process any
alternate feed materials. This increase in processing expenditures was partially
offset by a lower volume of material received at the Mill during 2002 as
compared to 2001. During fiscal 2002, the Company received 36,950 tons of
Ashland 1, Linde and Heritage materials at a cost of $321,218 as compared to
fiscal 2001 when the Company received 88,865 tons at a cost of $766,962. The
decrease of 51,915 tons or 58% was due to a decline in Ashland 1 material, as
the receipt of this material was then nearly complete.
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 $2,136,389 for fiscal 2002 as
- 10 -
compared to $2,675,090 for fiscal 2001. The decrease of $538,701 or 20% was due
to approximately nine months of stand-by in fiscal 2002 versus twelve months in
fiscal 2001. The decrease in costs due to the shorter duration of stand-by was
partially offset by ramping up the number of personnel and additional
expenditures preparing for the mill run, which began during the third quarter of
fiscal 2002. The Mill added 42 additional employees in fiscal 2002 to process
its stockpile of alternate feed material.
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 2002 were
$3,386,845 as compared to $2,222,478 for fiscal 2001, an increase of $1,164,367.
The increase resulted primarily from increased expenditures for labor and
professional services, insurance, and other related costs associated with the
Company's vigorous efforts to expand its alternate feed, uranium-bearing waste
recycling business, and increased expenditures associated with the Urizon Joint
Venture, and the Moab Project.
EXPLORATION
The Company initiated a precious and base metals exploration effort during
fiscal 2002 in Mongolia. This program was funded 100% by the Company, and the
Company holds a 100% interest in the lands that have been licensed for
exploration. At the end of September 2002, the Company had acquired 23
exploration licenses totaling 1.6 million hectares. Additional exploration
licenses were pending at the time. As of September 2002, activities had included
land and data acquisition, geophysical and geochemical analysis and an extensive
field program. Total program expenditures, including capitalized exploration
expenditures, for fiscal 2002 were $601,833.
OTHER INCOME AND EXPENSE
Net interest and other income for fiscal 2002 was $916,780 as compared to
$1,558,194 for fiscal 2001. The decrease of $641,414 was primarily the result of
an increase of $256,505 in income from equipment sales offset by a decrease of
$792,639 in interest income due to significantly lower interest rates paid on
short-term investments and a decrease in the average cash balances available for
investment.
- 11 -
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2003, the Company had cash and short-term investments of
$4,729,039 and working capital of $7,294,884 as compared to cash and short-term
investments of $9,759,946 and a working capital deficit of $82,136 at September
30, 2002. The increase of $7,377,020 in working capital was primarily the result
of the Company's processing of alternate feed materials. As the alternate feed
materials were processed, deferred revenue was recorded as revenue, which
reduced current liabilities and assisted in the elimination of the Company's
working capital deficit. Deferred revenue of $2,158,938, which is associated
with approximately 35,700 tons of alternate feed material that remained in
stockpile after completion of the 2002/2003 mill run and is not expected to be
processed during the next 12 months, was accounted for as a long-term liability.
The Company must continue to generate new sources of alternate feed material to
maintain a positive working capital position.
Net cash used in operating activities was $4,396,379 for the fiscal year ended
September 30, 2003 and consisted primarily of net income from continuing
operations of $5,533,152, adjusted for non-cash items of depreciation of
$617,554, offset by an increase in trade and other receivables of $1,184,340
reflecting increased receipts of alternate feed material as well as amounts due
from Urizon. In addition, deferred revenues decreased by $8,740,256. Deferred
revenues represent proceeds received or receivable on delivery of alternate feed
materials but in advance of the required processing activity. As the Ashland 1,
Linde, Heritage and Molycorp materials were processed; the deferred revenue was
reclassified as revenue. The cost of processing these materials was recorded as
process milling expenditures and the Company's cash position was decreased by
the cost of processing.
Net cash provided by investment activities was $1,148,438 for the fiscal year
ended September 30, 2003 and consisted primarily of proceeds from the sale of
short-term investments of $3,559,403, offset by purchases of short-term
investments of $996,675. Restricted investments decreased by $536,392, primarily
reflecting the settlement and termination of the uranium concentrates sale and
put option agreement entered into with a third party. A $1,000,000 bond that
secured a portion of this transaction was released on January 15, 2003, which
resulted in an equal reduction in restricted investments. This reduction in
bonding was offset by interest income from restricted investments of $440,010.
Exploration expenditures on mineral properties in Mongolia that were capitalized
totaled $1,356,166 during fiscal 2003, and investment in intellectual property
from Urizon was $750,000. Intellectual property represents the Company's 50%
interest in Urizon's technology.
Net cash provided by financing activities during the fiscal year ended September
30, 2003 totaled $176,238 and consisted primarily of cash received from stock
options exercised of
- 12 -
$468,924, offset by a cash payment of $280,000 to settle and terminate the put
option entered into during fiscal 1999.
The Company believes that existing funds and cash flow from operations should be
sufficient to satisfy its exploration activities, working capital requirements,
commitments under the Urizon Joint Venture, and capital expenditures for the
next twelve months. These funds have been supplemented by the issuance of
additional equity amounting to gross proceeds of Cdn $12,250,000, in the first
quarter of fiscal 2004.
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.
The most critical accounting principles upon which the Company's financial
status depends are those requiring estimates of the timing and amount of future
reclamation obligations and the recoverability of its capitalized mineral
property expenditures.
On an ongoing basis, management re-evaluates its estimates and assumptions.
However actual amounts could differ from those based on such estimates and
assumptions. The Company's accounting policies are further described in Note 2
to the consolidated financial statements.
CONTRACTUAL OBLIGATIONS
Set out below are the Company's principal contractual obligations in the
following categories:
Less than 1 1 to 3 3 to 5 More than
(expressed in thousands of dollars) Year Years Years 5 Years
--------------------------------------------------------- -------------- ------------ ----------- -------------
Operating lease obligations $109 $291 $92 -
Reclamation obligations - 12,321 - -
-------------- ------------ ----------- -------------
$109 $12,612 $92 $99
============== ============ =========== =============
The reclamation obligations are fully bonded and the timing may be subject to
change depending upon the Company's business objectives.
- 13 -
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 the U.S. Nuclear Regulatory Commission. The Mill and mine
reclamation estimates at September 30, 2003 are $12,320,983, 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 2003 and 2002, the amount of these restricted investments
collateralizing the Company's reclamation obligations was $12,106,947 and
$11,666,937, respectively. The increase of $440,010 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.
- 14 -
TREND INFORMATION
During the period 1997 through 2000, the Company saw a deterioration in both
uranium and vanadium prices, from $11.00 per pound of U(3)O(8) and $4.10 per
pound of V(2)O(5) in October 1997 to $7.40 per pound of U(3)O(8) and $1.70 per
pound of V(2)O(5) at the end of September, 2000. As a result of these decreases
in commodity prices, the Company decided to cease its uranium and
uranium/vanadium mining and exploration activities in 1999, and has shutdown all
of its uranium and uranium/vanadium mines and its Mongolian Gurvan-Saihan Joint
Venture. 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.
Although uranium prices have increased to $15.50-$15.60 per pound U(3)O(8) as of
February 12, 2004, and vanadium is currently trading in the range of $3.00 to
$3.75 per pound V(2)O(5), prices are still too low to justify the operation of
the Company's U.S. mines given their higher cost of production. However, with
these higher uranium prices, the Company is evaluating restarting development of
its Gurvan-Saihan Joint Venture. In addition, the Company acquired additional
uranium exploration properties in Canada in fiscal 2004 and has commenced an
aggressive exploration program on certain of those properties.
Although the Mill's tailings system currently has capacity to process all of the
alternate feed materials under contract with the Company, this capacity is
expected to run out within the next one to three years, depending on the level
of success of the Company in entering into contracts for the processing of
additional feed materials. In order to provide additional tailings capacity, the
Company will have to repair existing tailings Cell No. 4A, at an estimated cost
of $1.5-$3.0 million. In addition, if Cell No. 4A is put into use, the
reclamation obligation for the Mill would increase by approximately $1.0
million, which would require an increase in the Mill's reclamation bond by that
amount. The repair of Cell No. 4A will provide the Company with approximately 2
million tons of additional tailings capacity, which should be ample capacity for
the foreseeable future.
OUTLOOK FOR 2004
With the recent increases in uranium price and the improvement in uranium market
fundamentals, the Company will be putting more focus on acquisition and
development of world-class uranium projects, including its Canadian exploration
properties, while also continuing to aggressively pursue additional alternate
feed material for the White Mesa Mill.
Revenues for fiscal 2004 will depend on the timing and length of the next mill
run and the decision by management to sell uranium and vanadium from
inventories. Currently, the Company is performing confirmatory test work for a
potential mill run later in the year, in which three alternate feed materials,
which have uranium grades ranging from 2% to 10%, would be
- 15 -
processed. In addition to these materials, the Company anticipates continuing to
receive alternate feed materials from the Linde FUSRAP site throughout the year,
as well as approximately 5,000 tons of material from a commercial generator.
With respect to the Urizon project, the Company and its joint venture partner,
Nuclear Fuel Services, Inc., are investigating alternative commercial
arrangements, and re-evaluating the feasibility of the project, as a result of
the Department of Energy's recent decision not to fund the program at this time.
To reduce overhead and stand-by expenditures, the Company has reduced the White
Mesa Mill staff from a typical stand-by crew of 20 to 25 personnel to 15
personnel. At its Denver office, the Company has reduced staffing and relocated
some functions to the White Mesa Mill and to its office in Vancouver, B.C.
With higher uranium prices, the Company is evaluating restarting activity in
Mongolia on its Gurvan-Saihan Joint Venture. With respect to the U.S.
uranium/vanadium mines, however, the Company intends to maintain those assets on
stand-by pending further increases in uranium and vanadium prices, at which time
the Company would study the feasibility of re-opening some of these mine sites.
The Company will continue to pursue its precious and base metals program in
Mongolia on a limited basis, with the goal to identify potential joint venture
partners to provide additional funding for the exploration programs or to
potentially sell the properties.
RISKS AND UNCERTAINTIES
Under the NRC's Alternate Feed Guidance, the Mill is required to obtain a
specific license amendment allowing for the processing of each new alternate
feed material. Various third parties have challenged certain of the Mill's
license amendments, although none of such challenges 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.
Exploration for and development of mineral properties involve 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
- 16 -
current exploration programs of the Company will result in profitable commercial
mining operations.
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).
- 17 -
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
16, 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
November 14, 2003
- 18 -
AUDITORS' REPORT
TO THE SHAREHOLDERS OF
INTERNATIONAL URANIUM CORPORATION
We have audited the consolidated balance sheets of International Uranium
Corporation as at September 30, 2003 and 2002 and the consolidated statements of
operations and deficit and cash flows for the years ended September 30, 2003,
2002 and 2001. 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 generally accepted auditing standards
in Canada and the 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,
2003 and 2002 and the results of its operations and its cash flows for the years
ended September 30, 2003, 2002 and 2001 in accordance with Canadian generally
accepted accounting principles.
/s/ PricewaterhouseCoopers LLP
-------------------------------
Chartered Accountants
Vancouver, B.C., Canada
November 14, 2003 (except as to Note 17, which is as of January 8, 2004)
- 19 -
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNITED STATES DOLLARS)
AT SEPTEMBER 30,
-----------------------------
2003 2002
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,639,079 $ 6,710,782
Short-term investments 1,089,960 3,049,164
Trade and other receivables 833,038 99,850
Inventories (Note 3) 1,761,368 1,720,952
Prepaid expenses and other 382,488 368,435
Due from Urizon Joint Venture (Note 4) 451,152 --
Other asset (Note 8) -- 3,861,000
------------ ------------
8,157,085 15,810,183
Plant and equipment, net (Note 5) 2,825,238 3,363,253
Mongolia mineral properties (Note 6) 1,776,982 538,897
Intangible asset (Note 4) 750,000 --
Restricted investments (Note 7) 12,106,947 12,666,937
------------ ------------
$ 25,616,252 $ 32,379,270
============ ============
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 847,729 $ 762,883
Notes payable 14,472 10,242
Deferred revenue -- 10,899,194
Deferred credit (Note 8) -- 4,220,000
862,201 15,892,319
Notes payable, net of current portion 51,052 43,548
Reclamation obligations (Note 9) 12,320,983 12,320,983
Deferred revenue 2,158,938 --
Other long-term liability (Note 4) 98,582 --
15,491,756 28,256,850
SHAREHOLDERS' EQUITY
Share capital (Note 10)
Issued and outstanding (68,970,066 and
65,735,066 shares) 37,935,533 37,466,609
Deficit (27,811,037) (33,344,189)
------------ ------------
10,124,496 4,122,420
------------ ------------
$ 25,616,252 $ 32,379,270
============ ============
Contingency (Note 14)
Subsequent events (Note 17)
ON BEHALF OF THE BOARD
/s/ Ron F. Hochstein /s/ Lukas H. Lundin
------------------------------ -----------------------------
Ron F. Hochstein, Director Lukas H. Lundin, Director
- 20 -
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(UNITED STATES DOLLARS)
YEARS ENDED SEPTEMBER 30,
------------------------------------------------
2003 2002 2001
------------ ------------ ------------
OPERATIONS
Revenue
Vanadium sales $ -- $ -- $ 47,533
Process milling 12,415,001 6,830,137 762,230
Engineering services (Note 13(d)) 135,017 -- --
------------ ------------ ------------
Total revenue 12,550,018 6,830,137 809,763
------------ ------------ ------------
Costs and expenses
Vanadium cost of sales -- -- 22,108
Process milling expenditures 4,671,199 2,047,791 766,961
Mill stand-by expenditures 738,730 2,136,389 2,675,090
Selling, general and administrative 2,622,131 3,386,845 2,222,478
Exploration general 209,253 62,936 --
Write-down of inventories (Note 3) -- 155,334 --
Write-down of mineral properties (Note 6) 118,081 -- --
Change in market value of other asset (Note 8) (79,000) (261,000) (760,000)
Change in reclamation obligations -- (29,174) 157,663
Depreciation 33,210 62,806 106,533
------------ ------------ ------------
8,313,604 7,561,927 5,190,833
------------ ------------ ------------
Income (loss) before the undernoted items 4,236,414 (731,790) (4,381,070)
Other income (expense)
Gain (loss) on sale of land and equipment 210,603 4,586 (143,929)
Gain on sale of short-term investments 579,926 288,409 361,177
Net interest and other income 506,209 623,785 1,340,946
------------ ------------ ------------
NET INCOME (LOSS) FOR THE YEAR 5,533,152 184,990 (2,822,876)
============ ============ ============
Basic and diluted income (loss) per share (Note 10) $ 0.08 $ -- $ (0.04)
============ ============ ============
Basic weighted average number of shares outstanding 67,011,765 65,652,998 65,542,943
============ ============ ============
DEFICIT
Deficit, beginning of year (33,344,189) (33,529,179) (30,706,303)
Net income (loss) for the year 5,533,152 184,990 (2,822,876)
------------ ------------ ------------
DEFICIT, END OF YEAR $(27,811,037) $(33,344,189) $(33,529,179)
============ ============ ============
- 21 -
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNITED STATES DOLLARS)
YEARS ENDED SEPTEMBER 30,
------------------------------------------------
2003 2002 2001
------------ ------------ ------------
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net income (loss) for the year $ 5,533,152 $ 184,990 $ (2,822,876)
Items not affecting cash
Depreciation 617,554 813,050 872,307
(Gain) loss on sale of land and equipment (210,603) (4,586) 143,929
Gain on sale of short-term investments (579,926) (288,409) (361,177)
Write-down of inventories -- 155,334 --
Gain on disposition of other asset (79,000) -- --
Gain in market value of other asset -- (261,000) (760,000)
(Decrease) increase in reclamation liabilities -- (29,174) 157,663
Write-down of mineral properties 118,081 -- --
Forgiveness of notes receivable -- 200,000 --
Changes in non-cash working capital items
(Increase) decrease in trade and other receivables (1,184,340) 1,450,388 892,826
(Increase) decrease in inventories (40,416) 10,269 26,983
(Increase) decrease in other current assets (14,053) (162,525) 50,778
Increase (decrease) in other accounts payable
and accrued liabilities 183,428 355,493 (248,662)
(Decrease) increase in deferred revenue (8,740,256) (4,166,921) 5,786,113
------------ ------------ ------------
NET CASH (USED IN) PROVIDED BY OPERATIONS (4,396,379) (1,743,091) 3,737,884
------------ ------------ ------------
INVESTING ACTIVITIES
Purchase of properties, plant and equipment (74,616) (215,554) (78,151)
Mongolia mineral properties (1,356,166) (538,897) --
Purchase of intangible asset (750,000) -- --
Proceeds from sale of surplus equipment and land 230,100 40,964 41,907
Purchase of short-term investments (996,675) (752,626) (13,070,658)
Proceeds from sale of short-term investments 3,559,403 9,679,079 1,744,627
Decrease (increase) in restricted investments 536,392 (2,141,864) (1,654,084)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTMENT ACTIVITIES 1,148,438 6,071,102 (13,016,359)
------------ ------------ ------------
FINANCING ACTIVITIES
(Increase) decrease in notes payable (12,686) 31 (16,592)
Settlement of other asset (280,000) -- --
Exercise of stock options 468,924 17,396 9,811
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 176,238 17,427 (6,781)
------------ ------------ ------------
(Decrease) increase in cash and cash equivalents (3,071,703) 4,345,438 (9,285,256)
Cash and cash equivalents, beginning of year 6,710,782 2,365,344 11,650,600
------------ ------------ ------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 3,639,079 $ 6,710,782 $ 2,365,344
============ ============ ============
- 22 -
INTERNATIONAL URANIUM CORPORATION
Notes to Consolidated Financial Statements
September 30, 2003, 2002 and 2001
(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 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 these
operations, 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 pending further
improvements in commodity prices. The Company is also engaged in precious
and base metals exploration in Mongolia.
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 development of the business of
recycling 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, and the alternate feed business has helped to
offset Mill and mine standby costs, 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.
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 16.
a. Basis of consolidation
The consolidated financial statements include the accounts of its wholly
owned subsidiaries, International Uranium Holdings Corporation,
International Uranium (Bermuda I) Ltd., International Uranium (Bermuda II)
Ltd., International Uranium Company (Mongolia) Ltd., and International
Uranium (USA) Corporation, and on a proportionate consolidation basis,
Urizon Recovery Systems, LLC.
- 23 -
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. 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
Investments are valued at the lower of cost and market value except for
restricted fixed income securities, which are to be held to maturity and
are recorded at amortized cost. Investments are written down to reflect an
other than temporary impairment.
Investments in joint ventures 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
- 24 -
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.
h. Exploration properties
Mineral exploration costs are capitalized as incurred. 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
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 measured as the
amount by which 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
undiscounted estimated future cash flows. Future cash flows are determined
by subtracting production and capital costs from estimated revenues.
Estimated revenues are based on estimated uranium and vanadium prices
(considering current and historical prices, price trends and related
factors), estimates of the pounds of uranium and vanadium to be produced,
and estimated recycling fees from alternate feed materials. 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
Canadian Institute of Chartered Accountants ("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. Substantially all of the
Company's assets and operations are located in the United States, with the
exception of the mineral exploration properties in Mongolia and Canada. 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;
- 25 -
b. non-monetary assets at historical rates;
c. revenue and expense items at the average rates for the period.
The net effect of the foreign currency translation is included in the
statement of earnings.
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.
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 10(c).
Effective October 1, 2002, the Company adopted the new 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
10c).
o. Intangible Assets
Intangible assets consist of technological licenses and are amortized over
the estimated useful life of the license.
- 26 -
p. Reclassifications
Certain amounts reported in prior years have been reclassified to conform
to the 2003 presentation.
3. Inventories
2003 2002
---------- ----------
Vanadium concentrates $ 838,474 $ 828,062
In process 70,242 20,450
Parts and supplies 852,652 872,440
---------- ----------
$1,761,368 $1,720,952
========== ==========
In fiscal 2002, the Company wrote-down the carrying value of its chemical
reagents by $155,334 due to the extended duration of mill stand-by.
4. Urizon Joint Venture
On October 18, 2002, the Company entered into a joint venture with Nuclear
Fuel Services, Inc. for the pursuit of an 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. 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 intellectual property
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 acquisition.
Following are condensed balance sheet and income statements reflecting
IUC's interest in the Urizon joint venture.
2003
---------
Current assets $ 710,836
Other assets $ 750,000
Current liabilities $ 237,982
Long term debt $ 98,582
Operating loss ($827,282)
Cash flows from operating activities ($ 39,242)
The joint venture has no cash flows arising from investing or financing
activities.
- 27 -
5. Plant and Equipment
Accumulated 2003
Cost Depreciation Net
---------- ------------ ----------
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
========== ========== ==========
Accumulated 2002
Cost Depreciation Net
---------- ------------ ----------
Mill buildings and equipment $6,908,150 $3,989,793 $2,918,357
Other machinery and equipment 1,117,780 672,884 444,896
---------- ---------- ----------
$8,025,930 $4,662,677 $3,363,253
========== ========== ==========
During fiscal 1999 the Company placed its mining operations on stand-by. At
September 30, 2003 and September 30, 2002, capital assets include other
machinery and equipment held for resale with an aggregate net book value
(being the estimated net realizable value) of $376,285 and $401,937,
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. Mongolia Mineral Properties
Mongolia mineral properties are currently made up of the Company's interest
in precious and base metals exploration areas in Mongolia. Amounts
capitalized during the year include costs related to acquisition of land
interests, review of geological data and satellite imagery, drilling,
collection of samples and lab analysis. An analysis by project is shown
below:
2002 2003 2003
Net Expenditures Write-downs Net
----------- ------------ ----------- -----------
Shiveen Gol $ 46,775 $ 765,332 -- $ 812,107
Tsagaan Tologoi 57,742 116,921 -- 174,663
Burkheer Khar 19,756 52,934 -- 72,690
Erdenet 65,461 116,666 (113) 182,014
Huvsgol 42,180 86,094 (4,500) 123,774
Ulziit 8,761 35,224 -- 43,985
Chandman Uul 36,498 4,130 (40,628) --
Bayan Uul 60,081 1,000 (61,081) --
Gants Modot -- 46,329 -- 46,329
Other Exploration Costs 201,643 131,536 (11,759) 321,420
----------- ----------- ----------- -----------
$ 538,897 $ 1,356,166 ($ 118,081) $ 1,776,982
=========== =========== =========== ===========
- 28 -
7. Restricted Investments
The Company has placed cash and fixed income securities on deposit to
secure its reclamation bonds and certain other obligations (Notes 8 and 9).
2003 2002
----------- -----------
Cash and cash equivalents $ 2,177,688 $ 3,297,063
Fixed income securities 9,929,259 9,369,874
----------- -----------
$12,106,947 $12,666,937
=========== ===========
8. Other Asset
On September 13, 1999 the Company entered into a uranium concentrates sale
and put option agreement with a third party. The Company transferred
400,000 pounds U(3)O(8) at a purchase price of $10.80 per pound U(3)O(8)
under this agreement giving the third party the option to put up to an
equivalent quantity to the Company at $10.55 per pound U(3)O(8) at any one
time within the period beginning October 1, 2001 and ending March 1, 2003.
The transaction was accounted for as a financing and the cost of the
inventory was reclassified as an other asset. Restricted investments (Note
7) collateralized a portion of the transaction.
The carrying amount of the other asset was adjusted to the lower of cost or
market value at the balance sheet date. Changes in market value were
reflected in the statement of operations. In fiscal 2001, as a result of an
increase in the uranium market price, the other asset was increased from
$7.10 to $9.00 per pound U(3)O(8) resulting in a gain of $760,000. In
fiscal 2002, as a result of an increase in the uranium market price, the
other asset was increased from $9.00 to $9.75 per pound U(3)O(8) net of any
estimated costs to sell, resulting in a gain of $261,000.
On December 20, 2002, the third party exercised the put option. The Company
negotiated a settlement and termination of the put option agreement with a
payment of $280,000. This resulted in a gain of $79,000.
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 United States Nuclear Regulatory Commission
("NRC") as appropriate, to accurately reflect the estimated costs of
reclamation.
The Company has posted bonds (secured by cash and fixed income securities)
in favor of the NRC and the applicable state regulatory agencies as partial
collateral for these liabilities and has deposited fixed income securities
on account of these obligations (Note 7).
There have been no changes to the reclamation cost estimate or bonding
requirement during the fiscal year.
- 29 -
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.
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. Share Capital
a. Authorized - unlimited number of common shares.
b. Issued and outstanding
Shares
2003 2002 2001
---------- ---------- ----------
Beginning of year 65,735,066 65,600,066 65,525,066
Employee stock options exercised 3,235,000 135,000 75,000
---------- ---------- ----------
End of year 68,970,066 65,735,066 65,600,066
========== ========== ==========
Amount
2003 2002 2001
----------- ----------- -----------
Beginning of year $37,466,609 $37,449,213 $37,439,402
Employee stock options exercised 468,924 17,396 9,811
----------- ----------- -----------
End of year $37,935,533 $37,466,609 $37,449,213
=========== =========== ===========
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.
- 30 -
Stock option transactions were as follows:
2003 2002 2001
---------- ---------- ----------
Beginning of year 4,055,000 4,370,000 4,280,000
Granted 250,000 495,000 200,000
Exercised (3,235,000) (135,000) (75,000)
Expired (400,000) (675,000) (35,000)
---------- ---------- ----------
End of year 670,000 4,055,000 4,370,000
========== ========== ==========
Weighted average exercise prices per share were as follows:
2003 2002 2001
--------- --------- ---------
Beginning of year Cdn $0.25 Cdn $0.32 Cdn $0.32
Granted Cdn $0.31 Cdn $0.32 Cdn $0.26
Exercised Cdn $0.20 Cdn $0.20 Cdn $0.20
Expired Cdn $0.57 Cdn $0.75 Cdn $0.20
--------- --------- ---------
End of year Cdn $0.32 Cdn $0.25 Cdn $0.32
========= ========= =========
Stock options outstanding and exercisable as of September 30, 2003 were as
follows:
Options Outstanding and Exercisable
--------------------------------------------------------------------------------------------------------------------
Average Remaining Contractual Life Weighted Average
Number Outstanding (Years) Exercise Price Per Share
------------------------------------- ------------------------------------- ----------------------------------------
300,000 1.25 Cdn $0.30
250,000 2.03 Cdn $0.31
120,000 0.72 Cdn $0.37
------------------------------------- ------------------------------------- ----------------------------------------
670,000 1.44 Cdn $0.32
===================================== ===================================== ========================================
Outstanding options expire between June 2004 and October 2005.
Effective October 1, 2002, the Company adopted the new 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 $35,751 in respect of its employee
and director stock options. Pro forma earnings information determined under
the fair value method of accounting for stock options are as follows:
- 31 -
Year Ended
September 30, 2003
------------------
Net earnings as reported $ 5,533,152
Compensation expense $ (35,751)
Pro forma $ 5,497,401
Basic and diluted earnings per share:
As reported $ 0.08
Pro forma $ 0.08
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:
Dividend yield 0%
Average risk free interest rate 4.04%
Expected volatility 65%
Expected life of options 3 years
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, 2003, 2002 and 2001 was
67,011,765, 65,652,998 and 65,542,943, respectively.
Diluted net income per share reflects the dilutive effect of the exercise
of stock options outstanding as at year end. The effect of stock options on
the net loss per share in 2001 was not reflected as to do so would be anti
dilutive. The number of shares for the diluted net income per share
calculation for 2003 and 2002 were 67,634,896 and 66,926,114 respectively.
11. Income Taxes
2003 2002 2001
----------- ----------- -----------
Reconciliation
Combined basic rate 40% 40% 40%
Income (loss) from operations 5,533,152 184,990 ($2,822,876)
----------- ----------- -----------
Income tax recovery at basic rate 2,213,261 73,996 (1,129,150)
Change in valuation allowance (2,448,966) 6,228 1,116,563
Other 235,705 (80,224) 12,587
----------- ----------- -----------
Tax expense per consolidated financial
statements -- -- --
=========== =========== ===========
- 32 -
2003 2002 2001
---------- ---------- ----------
Future income tax assets
Tax losses carried forward 5,283,133 4,667,921 2,532,076
Inventory 382,169 413,769 456,036
Mineral properties 1,124,872 1,472,807 1,444,766
Deferred revenue 863,575 3,149,145 4,815,913
Other -- -- 448,623
---------- ---------- ----------
7,653,749 9,703,642 9,697,414
Future income tax liability
Capital assets (1,215,287) (881,176) (881,176)
Valuation allowance (6,438,462) (8,822,466) (8,816,238)
---------- ---------- ----------
Net future income taxes -- -- --
========== ========== ==========
Non-capital loss carry forwards for Canadian tax purposes of approximately
$2,386,693 expire from 2004. For U.S. income tax purposes, loss carry
forwards of approximately $11,022,815 begin to expire in 2015 unless
utilized.
12. Segmented Information
a. Geographic information
2003 2002 2001
------------ ------------ ------------
Revenue
United States $ 12,550,018 $ 6,830,137 $ 809,763
------------ ------------ ------------
$ 12,550,018 $ 6,830,137 $ 809,763
============ ============ ============
Net loss
Canada ($ 174,372) ($ 192,922) ($ 189,151)
United States 6,065,195 446,697 (2,440,296)
Mongolia (357,671) (68,785) (193,429)
------------ ------------ ------------
$ 5,533,152 $ 184,990 ($ 2,822,876)
============ ============ ============
Total assets
Canada $ 465,510 $ 71,657 $ 49,080
United States 23,047,594 31,656,351 35,873,177
Mongolia 2,103,148 651,262 95,198
------------ ------------ ------------
$ 25,616,252 $ 32,379,270 $ 36,017,455
============ ============ ============
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
2003, 2002 and 2001, a process milling customer accounted for approximately
89%, 100% and
- 33 -
80% of total revenues, respectively. Accounts receivable from any
individual customer will exceed 10% of total accounts receivable on a
regular basis.
13. Related Party Transactions
a. During the year ended September 30, 2003, the Company incurred legal
fees of $45,847 with a law firm of which a partner is a director of
the Company. Legal fees incurred with this law firm were $10,960 for
the year ended September 30, 2002 and $8,402 for the year ended
September 30, 2001.
b. During each of the years ended September 30, 2003, 2002 and 2001, the
Company incurred management and administrative service fees of $90,000
with a company owned by the Chairman of the Company, which provides
investor relations, office premises, secretarial and other services in
Vancouver. Amounts due to this company were nil as of September 30,
2003 (2002 - $7,500).
c. During the period ended September 30, 1997, the Company loaned
$200,000 to an officer of the Company in order to facilitate
relocation to the Company headquarters. The loan was forgiven on
September 30, 2002. The loan was non-interest bearing and was
collateralized by the officer's personal residence.
d. During the year ended September 30, 2003, the Company provided mine
reclamation management and engineering support services of $135,017 on
a cost plus basis to a company with common directors. Amounts due from
this company were $92,426 as of September 30, 2003.
14. Contingency and Commitments
As mentioned in previous reports, the Company had detected some chloroform
contamination at the Mill site that appeared to have resulted from the
operation of a temporary laboratory facility that was located at the site
prior to and during the construction of the Mill facility, and septic drain
fields that were used for laboratory and sanitary wastes prior to
construction 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.
- 34 -
The Company has committed to payments under operating leases for the rental
of office space and office equipment. The future minimum lease payments
over the next five years are as follows:
2003 $109,198
2004 $111,377
2005 $70,824
2006 $12,276
2007 $9,207
The company's mineral property commitments are described in Note 17.
15. Financial Instruments
a. Credit risk
Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents,
short-term investments, 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 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, 2003, one processing milling customer accounted for 44% of
accounts receivable. At September 30, 2002, the same processing milling
customer accounted for 86% of accounts receivable.
b. Fair values
At September 30, 2003 and 2002, the fair values of cash and cash
equivalents, trade and other receivables, and amounts due from the Urizon
Joint Venture, 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, 2003, market value of these securities
exceeded cost by $929,275.
The fair values of the Company's investments in U.S. government bonds,
commercial paper, and corporate bonds, approximate carrying values. Notes
receivable and notes payable are at market terms and accordingly, fair
values approximate carrying values.
The fair value of cash and cash equivalents and fixed income securities
classified as restricted investments approximates carrying values.
- 35 -
16. 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.
Consolidated Balance Sheets
2003 2002
------------ ------------
Short-term investments
Canadian basis $ 1,089,960 $ 3,049,164
Unrealized gain on available for sale securities (d) 929,275 --
------------ ------------
U.S. basis $ 2,019,235 $ 3,049,164
============ ============
Plant and equipment, net
Canadian basis $ 2,825,238 $ 3,363,253
Accumulated depreciation of assets held for resale (a) 223,234 223,234
------------ ------------
U.S. basis $ 3,048,472 $ 3,586,487
============ ============
Mongolia mineral properties
Canadian basis $ 1,776,982 $ 538,897
Exploration expenditures (b) (1,776,982) (538,897)
------------ ------------
U.S. basis -- --
============ ============
Share capital
Canadian basis $ 37,935,533 $ 37,466,609
Amalgamation (c) (615,970) (615,970)
------------ ------------
U.S. basis $ 37,319,563 $ 36,850,639
============ ============
2003 2002
------------ ------------
Deficit
Canadian basis ($27,811,037) ($33,344,189)
Amalgamation (c) 615,970 615,970
Exploration expenditures (b) (1,776,982) (538,897)
Accumulated depreciation of assets held for resale (a) 223,234 223,234
------------ ------------
U.S. basis ($28,748,815) ($33,043,882)
============ ============
Other Comprehensive Income - U.S. basis
Unrealized gain on available for sale securities (d) 929,275 --
============ ============
- 36 -
Consolidated Statements of Earnings
2003 2002 2001
------------ ------------ ------------
Net income (loss) under Canadian GAAP $ 5,533,152 $ 184,990 ($ 2,822,876)
Exploration expenditures (b) (1,238,085) (538,897) --
------------ ------------ ------------
Net income (loss) under U.S. GAAP 4,295,067 (353,907) (2,822,876)
Unrealized gain on available for sale securities (d) 929,275 -- --
============ ============ ============
Comprehensive income (loss) under U.S. GAAP $ 5,224,342 ($ 353,907) ($ 2,822,876)
============ ============ ============
Basic and diluted net income (loss)
per share, U.S. GAAP $ 0.06 ($ 0.01) ($ 0.04)
============ ============ ============
Consolidated Statements of Cash Flows
2003 2002 2001
------------ ------------ ------------
Cash (used in) provided by operations under Canadian GAAP ($ 4,396,379) ($ 1,743,091) $ 3,737,884
Exploration expenditures (b) (1,238,085) (538,897) --
------------ ------------ ------------
Cash provided by (used in) operations under U.S. GAAP ($ 5,634,464) ($ 2,281,988) $ 3,737,884
============ ============ ============
Cash provided by (used in) investing activities under
Canadian GAAP $ 1,148,438 $ 6,071,102 ($13,016,359)
Exploration expenditures (b) 1,238,085 538,897 --
------------ ------------ ------------
Cash provided by (used in) investing activities under U.S.
GAAP $ 2,386,523 $ 6,609,999 ($13,016,359)
============ ============ ============
a. Under Canadian GAAP, the Company's surplus assets were depreciated in
excess of 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 unproven mineral properties. When proven reserves are
determined for a property, subsequent exploration and 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.
- 37 -
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 marketable securities are carried
at the lower of cost and estimated fair market value.
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 venture are to be accounted
for using the equity method. Under an accommodation of the United
States Securities and Exchange Commission, the accounting for joint
venture 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. In 2002, the CICA issued Section 3063, "Impairment of long-lived
assets". This standard is effective for years beginning on or after
April 1, 2003. This new Section provides guidance on the recognition,
measurement and disclosure of the impairment of non monetary
long-lived assets, including property, plant and equipment, intangible
assets with finite useful lives, deferred pre-operating costs and long
term prepaid assets. The Company does not expect that the
implementation of this new standard will have a material impact on its
consolidated financial position or results of operations.
The FASB has issued Interpretation No. 46, "Consolidation of Variable
Interest Entities - an Interpretation of ARB No. 51 (FIN 46). The
primary purpose of FIN 46 is to provide guidance on the identification
of and financial reporting for, entities over which control is
achieved through means other than voting rights. Such entities are
known as Variable Interest Entities. FIN 46 is effective for the
Company's 2004 year-end. A similar guideline has been introduced in
Canada, Accounting Guideline 15 "Consolidation of Variable Interest
Entities". This guideline applies to annual and interim periods
beginning on or after November 1, 2004. The Company is continuing to
evaluate the potential impact of FIN 46 and Accounting Guideline 15.
The CICA has released amendments to Section 3870, "Stock-based
Compensation and Other Stock-based Payments," which require an expense
to be recognized in financial statements for all forms of employee
stock-based compensation, including stock options, effective for
periods beginning on or after January 1, 2004, for public companies.
The Company will be required to adopt the standard on October 1, 2004.
In July 2003, the CICA released Section 1100 "Generally Accepted
Accounting Principles". This new Section establishes standards for
financial reporting in accordance with generally accepted accounting
principles. It describes what constitutes Canadian GAAP and its
sources, replacing "Financial Statements Concepts" paragraphs
1000.59-61. Also in July 2003, the CICA released section 1400,
"General Standards of Financial Statement Presentation". This Section
clarifies what constitutes fair presentation in accordance with
generally accepted accounting principles. Both these Sections are
effective for fiscal years beginning on or after October 1, 2003 and
the Company is currently evaluating their impact.
- 38 -
17. Subsequent events
During the first quarter of fiscal 2004, the Company signed a letter of
intent to acquire a 75% interest in the Moore Lake project, a uranium
exploration project in the southeastern sector of the Athabasca Basin of
northern Saskatchewan. The Moore Lake project is being optioned from JNR
Resources Inc. IUC has an option to earn up to a 75% interest in the
property through aggregate expenditures and investments of Cdn $4.4 million
over a period of 4 years. The first year expenditure requirement is Cdn
$850,000. In addition, IUC has an option to acquire a 75% interest in the
Lazy Edward Bay uranium property, located west of Moore Lake, through
expenditures of Cdn $500,000 over a period of 2 years. In order to fund
exploration work on this project, the Company has completed a private
placement for 2 million flow through common shares at a price of Cdn $1.10
per share.
On December 16, 2003, the Company completed a private placement for 6.7
million common shares at a price of Cdn $1.50 per share. Net proceeds of
the offering will be used towards uranium exploration in the Athabasca
Basin of northern Saskatchewan as well as for general working capital
purposes.
On January 8, 2004, the Company signed a letter of intent to acquire a 75%
interest in the Crawford Lake uranium exploration project from Phelps Dodge
Corporation of Canada, Limited. The property is located in the Athabasca
Basin of northern Saskatchewan. Upon completion of the formal agreement and
receipt of regulatory approvals, the Company will be able to earn up to a
75% interest in the property through expenditures of Cdn $2.5 million over
a four year period. The first year expenditure requirement is Cdn $250,000
of which Cdn $150,000 is a firm commitment.
- 39 -
INTERNATIONAL URANIUM CORPORATION
CORPORATE DIRECTORY
EXECUTIVE OFFICERS
Ron F. Hochstein
President and
Chief Executive Officer
David C. Frydenlund
Vice President, General Counsel,
Chief Financial Officer, and
Corporate Secretary
BOARD OF DIRECTORS
John H. Craig
Audit Committee
Compensation Committee
Corporate Governance and
Nominating Committee
Environment, Health, and Safety
Committee
Toronto, Ontario, Canada
David C. Frydenlund
Environment, Health, and Safety
Committee
Lone Tree, Colorado, USA
Ron F. Hochstein
Lakewood, Colorado, USA
Lukas H. Lundin
Chairman
Audit Committee
Corporate Governance and
Nominating Committee
Environment, Health, and Safety
Committee
Compensation Committee
Vancouver, BC, Canada
William A. Rand
Audit Committee
Compensation Committee
Corporate Governance and
Nominating Committee
Vancouver, BC, Canada
EXECUTIVE OFFICE
International Uranium (USA) Corp.
1050 Seventeenth Street, Suite 950
Denver, Colorado, USA 80265
Tel: 303.628.7798
Fax: 303.389.4126
www.intluranium.com
CHAIRMAN'S OFFICE
International Uranium Corporation
885 West Georgia St., Suite 2101
Vancouver, BC, Canada V6C 3E8
MONGOLIA OFFICE
International Uranium Company (Mongolia) Ltd.
Str. Olympia 8, Shuren Building
Sukhbaatar District
Ulaanbaatar 13, Mongolia
WHITE MESA MILL OFFICE
International Uranium (USA) Corp.
6425 S. Highway 191
PO Box 809
Blanding, Utah, USA 84511
REGISTERED AND RECORDS OFFICE
Cassels Brock & Blackwell
Scotia Plaza, Suite 2100
40 King Street West
Toronto, Ontario, Canada M5H 3C2
LEGAL COUNSEL
Cassels Brock & Blackwell
Scotia Plaza, Suite 2100
40 King Street West
Toronto, Ontario, Canada M5H 3C2
Shaw Pittman 2300 N Street N.W.
Washington, DC USA 20037
Parsons Behle & Latimer
One Utah Center, Suite 1800
201 South Main Street
Salt Lake City, Utah, USA 84145
INVESTOR RELATIONS
International Uranium Corporation
885 West Georgia St. Suite 2101
Vancouver, BC, Canada V6C 3E8
Tel: 604.689.7842
Fax: 604.689.4250
BANKERS
Canadian Imperial Bank of Commerce
Vancouver, BC, Canada
Wells Fargo Bank
Denver, Colorado, USA
AUDITORS
PricewaterhouseCoopers LLP
Vancouver, BC, Canada
TRANSFER AGENT
Computershare Trust Company
of Canada
Toronto, Ontario, Canada
Vancouver, BC, Canada
SHARE CAPITAL
Authorized: unlimited common shares
Issued and Outstanding: 68,970,066
STOCK EXCHANGE LISTING
Toronto Stock Exchange
Trading Symbol: IUC
The Annual General Meeting will be held at the Corporation's Vancouver office,
Suite 2101 - 885 West Georgia Street, Vancouver, BC, Canada on Tuesday, March
23, 2004, at the hour of 10:00 a.m. (Vancouver time).