Uranium One Announces Financial Results for 2007



    Trading Symbols: UUU - Toronto Stock Exchange, JSE Limited (Johannesburg
    Stock Exchange)

    TORONTO and JOHANNESBURG, South Africa, March 31 /CNW/ - Uranium One Inc.
("Uranium One") today reported financial results for the year ending
December 31, 2007. All figures are in US dollars unless otherwise indicated.

    
    Q4 2007 Highlights:

    -   Revenues of $61.0 million from the sale of 689,200 pounds U(3)O(8),
        representing an average realized price of $89 per pound U(3)O(8)
    -   Earnings from mine operations of $46.5 million
    -   Attributable production from Akdala of 435,400 pounds U(3)O(8)
    -   Cash cost per pound sold from Akdala was approximately $11 per
        pound(1)

    The net loss for the quarter ending December 31, 2007 was $2.2 million, or
$0.01 per share.

    2007 Full-Year Highlights:

    -   Revenues of $134.0 million from the sale of 1,608,700 pounds
        U(3)O(8), representing an average realized price of $83 per pound
        U(3)O(8)
    -   Earnings from mine operations of $101.8 million
    -   Attributable production from Akdala of 1,827,200 pounds U(3)O(8)
    -   Cash cost per pound sold from Akdala was approximately $11 per
        pound(1)
    -   Pre-commercial production from Dominion totalled 171,300 pounds
        U(3)O(8)
    -   Attributable pre-commercial production from South Inkai was 39,600
        pounds U(3)O(8)
    

    The net loss for the year ending December 31, 2007 was $17.6 million,
or $0.05 per share.

    Jean Nortier, Interim CEO of Uranium One commented:

    "During 2007, Akdala Uranium Mine remained a steady, low cost operation
for the Company. Also during the year, Uranium One started producing uranium
from two advanced development projects - Dominion in South Africa and South
Inkai in Kazakhstan. South Inkai is currently exceeding our production
expectations and Dominion is performing in line with our revised production
forecast. During 2008, we expect additional assets within our diversified
pipeline of projects to come online as we work towards commencing production
at the Kharasan Uranium Project in Kazakhstan and at the Hobson ISR Facility
in the United States."

    Conference Call Details

    Uranium One will be hosting a conference call and webcast to discuss the
2007 results today starting at 10:00 a.m. (Toronto time). Participants may
join the call by dialling toll free 1-800-595-8550 or 1-416-644-3422 for calls
from outside Canada and the United States. A live webcast of the call will be
available through CNW Group's website at: www.newswire.ca/webcast

    A recording of the conference call will be available for replay for one
week beginning at approximately 1:00 p.m. on March 31, 2008 by dialling toll
free 1-877-289-8525 or 1-416-640-1917 for calls outside Canada and the United
States. The pass code for the replay is 21266689. A replay of the webcast will
be available on our website at www.uranium1.com

    About Uranium One

    Uranium One Inc. is a Canadian-based uranium producing company with a
primary listing on the Toronto Stock Exchange and a secondary listing on the
JSE Limited (the Johannesburg stock exchange). The Corporation owns a 70%
interest in the producing Akdala Uranium Mine and a 70% interest in the South
Inkai Uranium Project in Kazakhstan. Uranium One also owns the Dominion
Uranium Project in South Africa and a 30% interest in the Kharasan Uranium
Project in Kazakhstan. In the United States, the Corporation owns projects in
the Powder River and Great Divide Basins in Wyoming, the Hobson ISR Uranium
Processing Facility in Texas and the Shootaring Mill in Utah. The Corporation
also owns the Honeymoon Uranium Project in Australia. Uranium One is engaged
in uranium exploration activities in the United States, the Athabasca Basin of
Saskatchewan, South Africa and Australia.

    (1) Uranium One has included non-GAAP performance measures: sales per
    pound U(3)O(8) and cash cost per pound of U(3)O(8) sold. The Corporation
    reports total cash costs on a sales basis. In the uranium mining
    industry, these are common performance measures but do not have any
    standardized meaning, and are non-GAAP measures. The Corporation believes
    that, in addition to conventional measures prepared in accordance with
    GAAP, the Corporation and certain investors use this information to
    evaluate the Corporation's performance and ability to generate cash flow.
    Accordingly, it is intended to provide additional information and should
    not be considered in isolation or as a substitute for measures of
    performance prepared in accordance with GAAP.

    Cautionary Statement

    No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.

    Forward-looking statements: This press release contains certain forward-
looking statements. Forward-looking statements include but are not limited to
those with respect to the price of uranium and gold, the estimation of mineral
resources and reserves, the realization of mineral reserve estimates, the
timing and amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits, success of
exploration activities, permitting time lines, currency fluctuations,
requirements for additional capital, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses, title
disputes or claims and limitations on insurance coverage and the timing and
possible outcome of pending litigation. In certain cases, forward-looking
statements can be identified by the use of words such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or "believes"
or variations of such words and phrases, or state that certain actions, events
or results "may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Uranium One to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Such risks and uncertainties include, among
others, the actual results of current exploration activities, conclusions of
economic evaluations, changes in project parameters as plans continue to be
refined, possible variations in grade and ore densities or recovery rates,
failure of plant, equipment or processes to operate as anticipated, accidents,
labour disputes or other risks of the mining industry, delays in obtaining
government approvals or financing or in completion of development or
construction activities, risks relating to the integration of acquisitions, to
international operations, to prices of uranium and gold as well as those
factors referred to in the section entitled "Risk factors" in Uranium One's
Annual Information Form for the year ended December 31, 2007,which is
available on SEDAR at www.sedar.com, and which should be reviewed in
conjunction with this document. Although Uranium One has attempted to identify
important factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements. Uranium One expressly disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except in accordance with applicable
securities laws.

    For further information about Uranium One, please visit www.uranium1.com

    
                              Uranium One Inc.

                    Management's Discussion and Analysis
    

    Set out below is a review of the activities, results of operations and
financial condition of Uranium One Inc. (formerly sxr Uranium One Inc.)
("Uranium One") and its subsidiaries (collectively, the "Corporation") for the
year ended December 31, 2007, together with certain trends and factors that
are expected to impact its 2008 financial year. Information herein is
presented as of March 31, 2008 and should be read in conjunction with the
audited consolidated financial statements of the Corporation for the year
ended December 31, 2007 and the notes thereto, the December 31, 2006 audited
consolidated financial statements, and the related annual Management's
Discussion and Analysis of the Corporation's predecessor companies, sxr
Uranium One Inc. and UrAsia Energy Ltd. ("UrAsia Energy") and the July 31,
2006 audited consolidated financial statements, and the related annual
Management's Discussion and Analysis of UrAsia Energy, on file with the
Canadian provincial securities regulatory authorities (referred to herein as
the "consolidated financial statements"). The Corporation's consolidated
financial statements and the financial data set out below have been prepared
in accordance with Canadian generally accepted accounting principles ("GAAP").
All amounts are in US dollars and tabular amounts are in thousands, except
where otherwise indicated. Canadian dollars are referred to herein as C$.
South African rand are referred to herein as ZAR.
    Uranium One completed a business combination with UrAsia Energy on
April 20, 2007. The transaction was treated as a reverse take-over under GAAP,
with UrAsia Energy identified as the acquirer and Uranium One as the acquiree.
For periods subsequent to the acquisition date, the comparative figures are
those contained in the financial statements of UrAsia Energy. During 2006,
UrAsia Energy changed its fiscal year end from July 31 to December 31.
Accordingly, the comparative figures used herein are those for the five months
ended December 31, 2006 and the year ended July 31, 2006. References herein to
"the December 2006 Period", "the July 2006 Year" and "the 2007 financial year"
refer to the five months ended December 31, 2006, the year ended July 2006 and
the year ended December 31, 2007, respectively.
    The common shares of Uranium One are listed on the Toronto and
Johannesburg stock exchanges ("TSX" and "JSE" respectively). Uranium One's
convertible unsecured subordinated debentures due December 31, 2011 are also
listed on the TSX. The shares of Uranium One's majority-owned subsidiary,
Aflease Gold Limited ("Aflease Gold"), are listed on the JSE and its
convertible bonds due December 2012 are listed on the Open Market of the
Frankfurt Stock Exchange.
    Additional information about the Corporation and its business and
operations can be found in its continuous disclosure documents. These
documents are available under the Corporation's profile at www.sedar.com.

    This Management's Discussion and Analysis includes certain forward-
looking statements. Please refer to "Forward-Looking Statements".

    
    Key statistics

    -------------------------------------------------------------------------
                                                                     Full
                                                        Q4 2007    year 2007
    -------------------------------------------------------------------------
    Attributable production (lbs of U(3)O(8))(1)        435,400    1,827,200
    -------------------------------------------------------------------------
    Attributable sales (lbs of U(3)O(8))(1)             689,200    1,608,700
    -------------------------------------------------------------------------
    Average sales price achieved ($ per lbs
     of U(3)O(8))(2)                                        $89          $83
    -------------------------------------------------------------------------
    Average cash cost of production sold ($ per
     lbs of U(3)O(8))(2)                                    $11          $11
    -------------------------------------------------------------------------
    Revenue ($ millions)                                  $61.0       $134.0
    -------------------------------------------------------------------------
    Earnings from mine operations ($ millions)            $46.5       $101.8
    -------------------------------------------------------------------------
    Net loss ($ millions)                                  $2.2        $17.6
    -------------------------------------------------------------------------
    Loss per share - basic and diluted ($ per share)      $0.01        $0.05
    -------------------------------------------------------------------------

    (1) Attributable production and sales are from assets that are in
        commercial production - currently only Akdala

    (2) The Corporation has included non-GAAP performance measures: sales per
        pound of U(3)O(8) and cost per pound of U(3)O(8) sold. The
        Corporation reports total cash costs on a sales basis. In the uranium
        mining industry, these are common performance measures but do not
        have any standardized meaning, and are non-GAAP measures. The
        Corporation believes that, in addition to conventional measures
        prepared in accordance with GAAP, the Corporation and certain
        investors use this information to evaluate the Corporation's
        performance and ability to generate cash flow. Accordingly, it is
        intended to provide additional information and should not be
        considered in isolation or as a substitute for measures of
        performance prepared in accordance with GAAP.


    Highlights

    Operations

      -  Akdala continues to produce at expected rates of throughput and
         grade. 100% production for the year was 2,610,300 pounds of
         U(3)O(8).

      -  National shortage of sulphuric acid supply has not affected
         production at Akdala.

    Projects

      -  At the South Inkai Project in Kazakhstan, pre-commercial production
         of U(3)O(8) has commenced and the completion of the production
         complex is on track for mid-year 2008. The industrial production
         license is expected to be awarded in the first half of 2009.

      -  At South Inkai, pre-commercial production totalled 56,500 pounds of
         U(3)O(8) (39,600 pounds of U(3)O(8) attributable) in 2007. Pre-
         commercial production for the year 2008 to date, on a 100% basis,
         was approximately 26,000 pounds of U(3)O(8) in January 2008, 52,000
         pounds of U(3)O(8) in February 2008 and is currently at 3,900 -
         5,200 lbs of U(3)O(8) per day.

      -  Acidification of the first wellfield at the Kharasan Project in
         Kazakhstan commenced in March 2008. Construction work at Kharasan is
         expected to be completed by the end of 2008. The industrial
         production licence is expected to be awarded in the first half of
         2009.

      -  The shortage of sulphuric acid has not constrained the ramp-up of
         production levels at the South Inkai Project and the Kharasan
         Project.

      -  At the Dominion Project in South Africa, pre-commercial production
         of U(3)O(8) has commenced. The pressure leach circuit of the plant
         was commissioned in December 2007 and underground mine development
         is ongoing.

      -  Pre-commercial production from Dominion totalled 171,300 pounds of
         U(3)O(8) in 2007. In line with the revised production plan, Dominion
         has produced approximately 12,000 pounds of U(3)O(8) in January 2008
         and 18,000 pounds of U(3)O(8) in February 2008.

      -  Refurbishment of the Hobson ISR Uranium Processing Facility in
         Texas, USA is well underway and resource delineation and exploration
         is continuing at the Corporation's La Palangana Project, which will
         provide feed for the Hobson Facility.

      -  The U.S. Nuclear Regulatory Commission has completed its acceptance
         review of Uranium One's permit application to build and operate an
         in situ uranium recovery facility at the Moore Ranch Project in the
         Powder River Basin, Wyoming, USA. The technical review by the U.S.
         Nuclear Regulatory Commission is now underway. A feasibility study
         for the Moore Ranch Project has been completed and is now being
         reviewed externally.

    Corporate

      -  In line with the Corporation's increased focus on its development
         projects, Jean Nortier was appointed as Interim Chief Executive
         Officer and David Hodgson was appointed as Acting Chief Operating
         Officer of the Corporation in February 2008.

      -  On March 27, 2008, the Corporation entered into an agreement to sell
         a portion of its shareholding in Aflease Gold for $40 million and
         granted an option to sell its remaining shareholding for additional
         proceeds of approximately $49 million.

    Outlook

      -  The Corporation is focused on achieving commercial production from
         its projects on schedule, controlling costs at its operations and
         remaining a reliable supplier of U(3)O(8) to the nuclear fuel
         industry.

      -  The Corporation seeks to dispose of its non-core assets.

      -  The Corporation's attributable production in 2008 is expected to be
         approximately 3.1 million pounds of U(3)O(8) including 1.8 million
         pounds from Akdala and 1.3 million pounds of pre-commercial
         production from development projects.

      -  The Corporation's attributable production (including pre-commercial
         production) in 2009 is expected to be approximately 6.8 million
         pounds of U(3)O(8).

      -  The Corporation expects to incur capital expenditures of
         $200 million on fully owned development projects for 2008.

      -  The Corporation does not expect to be required to contribute towards
         additional capital expenditure of $70 million by joint ventures in
         2008 (of which the Corporation's pro-rata share is $32 million).

      -  General and administrative expenses, excluding stock based
         compensation, are expected to be $45 million for 2008.

      -  Akdala's average cash production cost per pound of U(3)O(8) sold is
         expected to be approximately $12 in 2008.
    


    Overview

    Uranium One is a Canadian uranium corporation engaged through
subsidiaries and joint ventures in the mining and production of uranium, and
in the acquisition, exploration and development of properties for the
production of uranium, in Kazakhstan, South Africa, the United States,
Australia and Canada. The Corporation is in the process of disposing of its
67% interest in Aflease Gold, which is engaged in the development of the
Modder East Gold Project in South Africa.
    Uranium One owns a 70% interest in both the producing Akdala Uranium Mine
and the South Inkai Uranium Project and it is developing the Kharasan Project
in Kazakhstan, in which it owns a 30% interest. The Corporation also owns the
Dominion Uranium Project in South Africa. In the United States, the
Corporation owns projects in the Powder River and Great Divide Basins in
Wyoming, the Hobson ISR Uranium Processing Facility and La Palangana ISR
Project in Texas and the Shootaring Mill in Utah. The Corporation also owns
the Honeymoon Uranium Project in Australia. The Corporation owns, either
directly or through joint ventures, a large portfolio of uranium exploration
properties in South Africa, the western United States, South Australia, and
the Athabasca Basin of Saskatchewan in Canada.
    The following mineral properties and operations of the Corporation
referred to in the Corporation's 2007 annual financial statements are
discussed in more detail in the Management's Discussion and Analysis below:
    The following are the Corporation's principal mineral properties and
operations:

    
    -------------------------------------------------------------------------
    Operating
     mine        Project          Location    Status       Ownership
    -------------------------------------------------------------------------
    Betpak Dala  Akdala Uranium   Kazakhstan  Producing    70% J.V. interest
    LLP          Mine
    -------------------------------------------------------------------------
    Advanced
     development
     projects    Project          Location    Status       Ownership
    -------------------------------------------------------------------------
    Betpak Dala  South Inkai      Kazakhstan  Commission-  70% J.V. interest
    LLP          Uranium Project              ing(2)

    Kyzylkum LLP Kharasan         Kazakhstan  Development  30% J.V. interest
                 Uranium Project

    Uranium One  Dominion Uranium South       Commission-  100% interest(1)
    Africa       Project          Africa      ing(2)
    Limited
    -------------------------------------------------------------------------


    The Corporation is also developing the following mineral properties:
    -------------------------------------------------------------------------
    Development
     projects    Project          Location    Status       Ownership
    -------------------------------------------------------------------------
    South Texas  Hobson Facility  USA         Development  99% interest
    Mining       and La
    Venture      Palangana
                 Project, Texas

    Energy       Powder River     USA         Development  100% interest
    Metals       Basin, Wyoming
    Corp (US)    Projects (Incl.
                 Moore Ranch,
                 Peterson,
                 Ludeman,
                 Allemand-Ross,
                 and Barge)

    Energy       Great Divide     USA         Development  100% interest
    Metals       Basin, Wyoming
    Corp (US)    Projects (Incl.
                 JAB and
                 Antelope)

    Uranium One  Shootaring Mill, USA         Development  100% interest
    USA Inc.     Utah

    Uranium One  Honeymoon        Australia   Development  100% interest
    Australia    Uranium Project
    (Proprietary)
    Ltd.

    Aflease      Modder East      South       Development  67% interest
    Gold         Gold Project     Africa
    Limited(3)
    -------------------------------------------------------------------------
    Note 1: Uranium One's 100% interest is subject to a definitive purchase
    and sale agreement of an undivided 26% interest in the Dominion Uranium
    Project to its Black Economic Empowerment partner Micawber 397
    (Proprietary) Limited ("Micawber 397"). The Micawber 397 transaction will
    be accounted for in the Corporation's financial statements when the risks
    and rewards of the transaction are deemed to have passed to Micawber 397.

    Note 2: The Dominion Uranium Project and the South Inkai Uranium Project
    are in the commissioning stage: production has commenced but the mines
    have not yet achieved a commercial production level. Commercial
    production is achieved when a pre-defined operating level, based on the
    design of the plant, is maintained.

    Note 3: The Corporation is in the process of disposing of its investment
    in Aflease Gold.

    

    Corporate Development

    Business Combination of Uranium One and UrAsia Energy Ltd.

    On April 20, 2007 Uranium One completed the acquisition of all of the
outstanding common shares of UrAsia Energy. Upon the completion of the
transaction, Uranium One was held approximately 60% by former UrAsia Energy
shareholders and approximately 40% by former Uranium One shareholders.
Accordingly, the business combination has been accounted for as a reverse
takeover under GAAP with UrAsia Energy being identified as the acquirer and
Uranium One as the acquiree.
    As a result of this transaction, the Corporation's assets include Uranium
One's Dominion Uranium Project and the Honeymoon Uranium Project and UrAsia
Energy's assets in Kazakhstan, comprising a 70% interest in the Akdala Uranium
Mine and South Inkai Uranium Project and a 30% interest in the Kharasan
Uranium Project.
    The total cost of the acquisition of $1.8 billion represents the value of
the common shares of Uranium One issued in exchange for shares of UrAsia
Energy of $1.7 billion, the fair value of options, warrants and restricted
shares outstanding at the announcement date of $62 million, the fair value of
the equity component of convertible debentures of $46 million and acquisition
costs of $19 million. Assets acquired consist primarily of mineral interests
and plant and equipment with a fair value of $2.5 billion, which includes the
related future income tax effect.

    Acquisition of U.S. Energy Assets

    On April 30, 2007, Uranium One completed the purchase from U.S. Energy
Corporation ("U.S. Energy") of the Shootaring Canyon Uranium Mill in Utah, as
well as a land package comprising uranium exploration properties and a
database of geological information for consideration equal to 6,607,605
Uranium One common shares valued at $99.4 million, a cash payment of
$6.5 million and transaction costs of $2.6 million.
    The transaction was accounted for as an asset purchase and the cost of
each item of property, plant and equipment acquired as part of the group of
assets acquired was determined by allocating the price paid for the group of
assets to each item based on its relative fair value at the time of the
acquisition.
    The purchase agreement also provided for the assignment of U.S. Energy's
right to receive $4.1 million in cash and 1.5 million common shares of Uranium
Power Corp. ("UPC") after closing under a purchase and related joint venture
agreement between U.S. Energy and UPC relating to certain of the purchased
properties. The Corporation received these outstanding payments during Q4 2007
and UPC therefore completed the earn-in process for the assets under the joint
venture agreement.

    Acquisition of Energy Metals Corporation

    On August 10, 2007 Uranium One completed the acquisition of all of the
outstanding common shares of Energy Metals Corporation ("EMC"). The
transaction resulted in the addition of a large portfolio of uranium
exploration properties located throughout the western United States, including
the Powder River and Great Divide Basin properties in Wyoming, and the Hobson
ISR Uranium Processing Facility in Texas. The Hobson Facility is currently
being refurbished.
    The transaction was accounted for as an asset purchase and the cost of
each item of property, plant and equipment acquired as part of the group of
assets acquired was determined by allocating the price paid for the group of
assets to each item based on its relative fair value at the time of
acquisition.
    The total cost of the acquisition of $1.1 billion represents the value of
the common shares of Uranium One issued in exchange for shares of EMC of
$1.0 billion, the fair value of options in EMC outstanding at the acquisition
date of $35.3 million and acquisition costs of $9.3 million. Assets acquired
consist primarily of mineral interests with a fair value of $1.4 billion,
which includes the related future income tax effect.

    Sale of shareholding in Aflease Gold

    During Q1 2008, in line with the Corporation's strategy to dispose of its
non-core assets, the board of directors approved a plan to pursue the sale of
the Corporation's shareholding in Aflease Gold and the Corporation entered
into negotiations regarding the sale of Aflease Gold.
    Consequently the Corporation entered into an agreement on March 27, 2008,
pursuant to which it agreed to sell 152,195,122 shares in Aflease Gold, held
by the Corporation's wholly owned subsidiary, Uranium One Africa Limited
("Uranium One Africa"), for consideration of approximately $40 million
(ZAR320 million). The transaction is expected to close during April 2008,
subject to approval by the South African Reserve Bank.
    An option has been granted to the purchaser to acquire Uranium One
Africa's remaining shareholding of 186,816,558 shares in Aflease Gold at a
consideration of approximately $49 million (ZAR393 million) on or before May
8, 2008. Once the option is exercised, the purchase and sale of the shares in
Aflease Gold will be required to comply with the provisions of the Securities
Regulation Code of the Securities Regulation Panel of South Africa relating to
a compulsory offer to the other shareholders of Aflease Gold and, within 150
days, to obtain approval from the South African Reserve Bank and the
satisfaction of merger approval requirements of the South African Competition
Act, 89 of 1998.
    It is expected that the Corporation will reflect a loss of approximately
$90 million in Q1 2008 pursuant to this transaction.

    Proposed sale of non-core assets

    The Corporation remains focused on operating and developing its core
uranium assets and has identified several non-core assets that do not fit into
its long-term growth strategy.
    In line with this focus, the Corporation intends to divest several of its
non-core assets and expects to finalize a number of transactions during 2008.

    Review of Operations

    Akdala Uranium Mine

    Akdala is an operating acid in situ recovery ("ISR") uranium mine located
in the Suzak region of South Kazakhstan. The Betpak Dala Joint Venture Limited
Liability Partnership, a Kazakhstan registered limited liability partnership
("Betpak Dala"), owns a 100% interest in the Akdala Mine. Uranium One owns a
70% joint venture interest in Betpak Dala. The remaining 30% is owned by JSC
NAC Kazatomprom ("Kazatomprom"), a Kazakhstani state-owned company responsible
for the mining, importing and exporting of uranium in Kazakhstan.
    The production rate at the Akdala Mine is 2,600,000 pounds of triuranium
octoxide ("U(3)O(8)") (1,000 tonnes uranium ("U")) per year.
    In Kazakhstan, in situ recovery involves circulating ground water
fortified with acid through the ore by means of a grid of injection and
production wells and processing the water pumped from the production wells to
recover uranium in a processing plant before returning the leach solution to
the injection wells.

    Production:

    Akdala produced 2,610,300 pounds of U(3)O(8) (1,004 tonnes U) of which
1,827,200 pounds of U(3)O(8) (703 tonnes U) is attributable to the Corporation
during 2007. As Akdala is operating in steady state at licenced capacity,
production expected for 2008 is in line with production achieved in 2007.

    Operations:

    The following is a summary of the operational statistics (100%) for
Akdala during 2007:

    
    -------------------------------------------------------------------------
                         Total
                         wells    Average no
                       completed     of                 Concentra
                       (including production Average      -tion    Production
           Drill rigs  production  wells in  flow rate in solution   (lbs of
           on site(1)    wells)   operation (m(3)/hour) (mg U/l)    U(3)O(8))
    -------------------------------------------------------------------------
    Q1 2007   3           27        145        893        131.2      697,100
    -------------------------------------------------------------------------
    Q2 2007   6           54        129      1,034        112.5      646,000
    -------------------------------------------------------------------------
    Q3 2007   7           93        139      1,066        108.2      645,100
    -------------------------------------------------------------------------
    Q4 2007   6           90        138      1,047         98.2      622,100
    -------------------------------------------------------------------------
    (1) As at end of quarter

    Flow rate, concentration and the number of operating wells are carefully
monitored and managed to produce the required amount of U(3)O(8), in
accordance with Akdala's licence.

    Financial information:

    The following table shows the attributable production, sales and
production cost trends for Akdala over the prior eight quarterly periods.

    -------------------------------------------------------------------------
    (all figures are the                          3 months ended
    Corporation's                   Dec 31    Sept 30    June 30     Mar 31
    attributable share)              2007       2007       2007       2007
    -------------------------------------------------------------------------
    Production of U(3)O(8) in lbs   435,400    451,600    452,200    488,000
    -------------------------------------------------------------------------
    Sales of U(3)O(8) in lbs        689,200     70,000    244,300    605,200
    -------------------------------------------------------------------------
    Inventory U(3)O(8) in lbs       748,900  1,007,000    636,800    436,500
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Sales ($000's)                   61,010      8,019     23,265     41,730
    -------------------------------------------------------------------------
    Sales $/lb of U(3)O(8) sold          89        115         95         69
    -------------------------------------------------------------------------
    Operating expenses ($000's)       7,521        660      2,058      7,043
    -------------------------------------------------------------------------
    Operating expenses $/lb of
     U(3)O(8) sold                       11          9          8         12
    -------------------------------------------------------------------------
    Depletion and depreciation
     ($000's)                         6,972      1,067      2,024      4,859
    -------------------------------------------------------------------------
    Depletion and depreciation
     $/lb of U(3)O(8) sold               10         15          8          8
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                   2 months
    (all figures are the            ended             3 months ended
    Corporation's                   Dec 31     Oct 31     Jul 31     Apr 30
    attributable share)              2006       2006       2006       2006
    -------------------------------------------------------------------------
    Production of U(3)O(8) in lbs   426,500    513,100    478,300    388,800
    -------------------------------------------------------------------------
    Sales of U(3)O(8) in lbs        880,700     99,300     70,100    380,300
    -------------------------------------------------------------------------
    Inventory U(3)O(8) in lbs       565,400  1,026,900    637,000    251,900
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Sales ($000's)                   46,256      4,193      2,922     14,383
    -------------------------------------------------------------------------
    Sales $/lb of U(3)O(8) sold          53         42         42         38
    -------------------------------------------------------------------------
    Operating expenses ($000's)       7,872      1,417      1,630      3,863
    -------------------------------------------------------------------------
    Operating expenses $/lb of
     U(3)O(8) sold                        9         14         23         10
    -------------------------------------------------------------------------
    Depletion and depreciation
     ($000's)                         7,240      1,209      3,294        976
    -------------------------------------------------------------------------
    Depletion and depreciation
     $/lb of U(3)O(8) sold                8         12         47          3
    -------------------------------------------------------------------------
    

    Uranium revenues are recorded upon delivery of product to utilities and
intermediaries and do not occur evenly throughout the year. Timing of
deliveries is usually at the contracted discretion of customers within a
quarter or similar time period. Changes in revenues, net earnings/loss and
cash flow are therefore affected primarily by fluctuations in contracted
delivery of product from quarter to quarter as well as by changes in the price
of uranium.
    Operating expenses are directly related to the quantity of U(3)O(8) sold
and are lower in periods when the quantity of U(3)O(8) sold is lower. There is
a corresponding build-up of inventory in periods when the quantity of U(3)O(8)
sold is lower. During Q4 2007, revenue from sales was $61.0 million from
689,200 pounds of U(3)O(8) sold and cash production costs were $7.5 million or
approximately $11 per pound of U(3)O(8) sold. During Q4 2006, sales were
$46.3 million from 880,700 pounds of U(3)O(8) sold and cash production costs
were $7.9 million or $9 per pound of U(3)O(8) sold. The average depletion per
pound of U(3)O(8) sold in Q4 2007 was $10 per pound of U(3)O(8) sold, compared
to $8 per pound of U(3)O(8) sold in Q4 2006.


    Review of Development Projects

    South Inkai Uranium Project

    South Inkai is an ISR uranium project located in the Suzak region of
South Kazakhstan. Betpak Dala owns a 100% interest in the South Inkai Project.
Accordingly, Uranium One owns a 70% indirect interest in the project.
    The design capacity of the South Inkai Project is 5,200,000 pounds of
U(3)O(8) (2,000 tonnes U) per year. It is expected that the annualized rate of
production will reach this level in 2011.

    Pre-commercial production:

    Pre-commercial production from South Inkai in 2007 was 56,500 pounds of
U(3)O(8) (22 tonnes U) of which 39,600 pounds of U(3)O(8) (15 tonnes U) is
attributable to the Corporation during the year. South Inkai is not currently
permitted to produce more than 780,000 pounds of U(3)O(8) (300 tonnes U) per
year under the existing pilot production licence and the Corporation expects
pre-commercial production from South Inkai to be 714,000 pounds of U(3)O(8)
(275 tonnes U) of which 500,000 pounds of U(3)O(8) (192 tonnes U) would be
attributable to the Corporation during 2008.

    Operations:

    The following is a summary of the operational statistics (100%) for South
Inkai during 2007:

    
    -------------------------------------------------------------------------
                       Total wells  Average
                        completed    no of                Concentra-
              Drill     (including production Average     tion in  Production
               rigs     production wells in   flow rate  solution   (lbs of
             on site(1)   wells)   operation (m(3)/hour)  (mg U/l)  U(3)O(8))
    -------------------------------------------------------------------------
    Q1 2007      5          38          -          -          -           -
    -------------------------------------------------------------------------
    Q2 2007      5          78          -          -          -           -
    -------------------------------------------------------------------------
    Q3 2007      6         113          -          -          -           -
    -------------------------------------------------------------------------
    Q4 2007      6          92         30        106      122.7      56,500
    -------------------------------------------------------------------------
    (1) As at end of quarter
    

    South Inkai has produced approximately 26,000 pounds of U3O8 in January
2008, 52,000 pounds of U3O8 in February 2008 and is currently producing at
3,900 - 5,200 lbs of U3O8 per day.

    Industrial production licence:

    In Kazakhstan, a sub-soil use permit granted by the Ministry of Mineral &
Energy Resources ("MEMR") is required by a company to mine a deposit. These
permits typically allow for up to a 4-year period of exploration, with two 2-
year extensions, and for 25 years of production. The license is normally
extended to the extent that additional resources are available for recovery.
There is usually a two-phase development of a deposit with a requirement to
commence production initially at a pilot production level. For uranium this is
normally a nominal amount of 300 tonnes U per year of production and lasts 12-
18 months or longer. The objective of this phase is to operate at this level
to demonstrate that the approach being used for extraction is achieving
acceptable results, specifically in terms of recovery. Upon being able to
demonstrate acceptable performance with the reserve and subject to the
completion of sufficient drilling to convert Russian resources into Russian
reserves and the approval of these reserves by the State Committee for
Resources, a company may apply for an industrial production licence.
    An industrial production licence (often also referred to as a
"commercial" production licence) is required by a company to mine any mineral
in Kazakhstan at a commercial or full production rate.
    In the case of South Inkai, the subsoil use permit specifies a pilot
production level of 300 tonnes U per year, with industrial production levels
of 600 tonnes U per year. The Corporation expects that the industrial
production licence will be obtained in the first half of 2009. Betpak Dala is
applying to amend the subsoil use permit and to extend the industrial
production levels to 2,000 tonnes per year.
    A delineation drilling program to convert a sufficient amount of material
from the Russian C2 category to the Russian C1 category was completed on
schedule in December 2007. A total of 413 exploration holes were drilled for
this purpose and a presentation is being prepared for submission as part of
the industrial production licence application.
    The well fields required for the pilot test program to prove the
productivity of the well fields were completed successfully during 2007.

    Construction:

    Uranium processing facilities being constructed at South Inkai are of a
similar design to those at the Akdala Mine. Construction of the production
complex is on schedule and final completion of the production complex is
expected by the second half of 2008.
    Production well drilling and piping has been completed for the first
three production blocks and production flow has commenced from the first two
blocks.
    To date, total expenditure incurred by Betpak Dala relating to the
construction project at South Inkai is $36.5 million and further capital
expenditure to complete the project to design capacity is expected to be
$8 million.

    Kharasan Uranium Project

    Kharasan is an ISR uranium development project located in the Suzak
region of South Kazakhstan. Kyzylkum LLP ("Kyzylkum"), a Kazakhstan registered
limited liability partnership, owns a 100% interest in the Kharasan Project.
Uranium One owns a 30% joint venture interest in Kyzylkum and the remaining
interests in Kyzylkum are owned as to 30% by Kazatomprom and as to 40% by
Energy Asia (BVI) Ltd., which is owned by a consortium of Japanese utilities
and a trading company.
    The design capacity of Kharasan is 5,200,000 pounds of U(3)O(8) (2,000
tonnes U) per year. It is expected that the annualized rate of production will
reach this level in 2011.

    Pre commercial production:

    Acidification of the first well field at Kharasan commenced in March
2008. Kharasan has not yet obtained its industrial production licence and it
expects to produce 715,000 pounds of U3O8 (275 tonnes U) of which 220,000
pounds of U3O8 (85 tonnes U) will be attributable to the Corporation during
2008 under the existing pilot production licence.

    Operations:

    The following is a summary of the operational statistics (100%) for
Kharasan during 2007:

    
    -------------------------------------------------------------------------
                       Total wells  Average
                        completed    no of                Concentra-
              Drill     (including production Average     tion in  Production
               rigs     production wells in   flow rate  solution   (lbs of
             on site(1)   wells)   operation (m(3)/hour)  (mg U/l)  U(3)O(8))
    -------------------------------------------------------------------------
    Q1 2007      5           -          -          -          -           -
    -------------------------------------------------------------------------
    Q2 2007      6          14          -          -          -           -
    -------------------------------------------------------------------------
    Q3 2007      7          33          -          -          -           -
    -------------------------------------------------------------------------
    Q4 2007     10          47          -          -          -           -
    -------------------------------------------------------------------------
    (1) As at end of quarter
    

    Drilling operations were slowed down in December due to extreme cold
temperatures as some of the drill rigs experienced problems with freezing. In
addition to the procurement of winterization covers for the affected rigs,
there will be a focus in Q1 2008 on training personnel on operational
techniques in freezing temperatures.

    Industrial production licence:

    A delineation drilling program to convert a sufficient amount of material
from the Russian C2 category to the Russian C1 category is ongoing and 78
drill holes were completed in 2007.
    During 2007, 19 of the required 26 production wells were completed for
the pilot test program to prove the productivity of the well fields.
    The Corporation expects to receive an industrial production licence for
Kharasan in the first half of 2009.

    Construction:

    Access to the project site was restricted early in 2007 due to the
flooding of the Syr Darya River, and construction activities had to be
accelerated in the second half of 2007 to get the construction program back on
schedule. Good progress has been made in this regard and the estimated
percentage of completion of the process plant was 65% at the end of
December 2007, with the main circuit components installed. The main focus will
now be on the completion of the piping and the enclosure of the plant. The
portions of the plant required for pilot production will be completed during
2008.
    To date, total expenditure incurred by Kyzylkum relating to the
construction project at Kharasan is $35.0 million and further capital
expenditure to complete the project to design capacity is expected to be
$15 million.

    Infrastructure development:

    Construction of the paved road and the bridge over the Syr Darya River
were completed in October 2007. The railroad switching station and Phase 1 of
the railroad transhipment base are expected to be completed in Q2 2008.
Completion of the transhipment base for shipment of U(3)O(8) is required as it
is not permitted to ship U(3)O(8) through villages on alternate routes to
other shipping points.
    Total expenditure incurred by Kyzylkum relating to infrastructure
development at Kharasan is $39.0 million and further capital expenditure to
complete the required infrastructure is expected to be $40 million.
    Negotiations are well advanced with an adjacent uranium ISR development
joint venture to share in the development cost of the local infrastructure
required to support the operations (road, bridge, rail and marshalling
facilities). Once finalized, this will result in a return of capital to
Kyzylkum of approximately 40% of infrastructure amounts expended to date.

    Project Finance Facility:

    In addition to the $80 million loan from the Corporation, Kyzylkum
negotiated unsecured bank loan facilities totalling $100 million. One facility
in the amount of $70 million was obtained from the Japan Bank for
International Cooperation and the other facility, in the amount of
$30 million, was obtained from Citibank. Draw downs of $60 million against the
facility were received in 2007. The $80 million loan from the Corporation
(capital of $66.7 outstanding as at March 31, 2008) has to be repaid in full
before repayments can be made on these facilities. The Corporation's
proportionate share of these facilities will amount to $30 million when fully
drawn down. The loan facilities have floating interest rates of LIBOR plus
0.25% and 0.35%, respectively.

    Sulphuric acid supply constraints in Kazakhstan

    Kazakhstan is experiencing a temporary shortage in the supply of
sulphuric acid. This has been caused by a number of factors including the
delayed commissioning of a sulphuric acid plant at Balkash, which will
contribute to the sulphuric acid supply when operating. The Corporation has
identified a potential source of sulphuric acid in Russia, and while it has
been actively pursuing this source the Corporation believes that it may not be
necessary to purchase this additional acid at this time, as current and
expected acid allocations are sufficient for its operations in Kazakhstan. The
Betpak Dala Joint Venture is currently receiving allotments of sulphuric acid
which are sufficient to operate the Akdala Uranium Mine at an annualized rate
of production of 1,000 tonnes U per year and the South Inkai Uranium Project
at an annualized rate of production in excess of 300 tonnes U per year. At the
Kyzylkum Joint Venture, sulphuric acid deliveries have arrived at the Kharasan
Uranium Project and acidification of the first well field commenced in
March 2008. With the expected start up of the Balkash acid plant in the second
half of 2008, the Corporation expects an increase in acid supply in
Kazakhstan.
    Longer term U(3)O(8) production forecasts Akdala, South Inkai and
Kharasan assume that the temporary shortage of sulphuric acid is alleviated in
the latter half of 2008.
    To address long term supply constraints, the Corporation is establishing
a joint venture with Kazatomprom and other affected parties to build a
sulphuric acid plant at Zhanakorgan, which is close to Kharasan. Progress on
the project includes the selection of a well established reliable technology
and a suitable contractor for construction of the plant. The contractor will
be supported by local Kazakhstan contractors where necessary and sulphur will
be sourced from the oil and gas fields in western Kazakhstan. The
Corporation's ownership percentage in the joint venture is expected to be 19%.
A final estimate of the total construction cost of the plant is being prepared
and construction of the plant is expected to be completed in 2011.

    Dominion Uranium Project

    The Dominion Uranium Project is a conventional shallow underground mining
operation, situated in the North West Province of South Africa, approximately
150 kilometres west-southwest of Johannesburg.
    The design throughput capacity of the processing plant is 200,000 tonnes
of material per month. The initial feasibility study considered a life of mine
of 11 years.

    Pre-commercial production:

    In 2007, pre-commercial production from the Dominion Uranium Project was
171,300 pounds of U(3)O(8). Pre-commercial production in 2008 is estimated to
be 590,000 pounds of U(3)O(8). Sales of this material, produced during the
commissioning period, will be used to partially fund the development
activities.
    In line with the revised production plan, Dominion has produced
approximately 12,000 pounds of U(3)O(8) in January 2008 and 18,000 pounds of
U(3)O(8) in February 2008.

    Mine Development:

    
    Mining operations for 2007 can be summarized as follows:

    -------------------------------------------------------------------------
                      Underground         Underground        Underground ore
                 development achieved     tonnes mined       blasted grade(1)
    -------------------------------------------------------------------------
                       (metres)             (tonnes)      (kg U(3)O(8)/tonne)
    -------------------------------------------------------------------------
    Q1 2007             2,187                36,200                 0.261
    -------------------------------------------------------------------------
    Q2 2007             3,197                64,500                 0.304
    -------------------------------------------------------------------------
    Q3 2007             3,662                84,300                 0.406
    -------------------------------------------------------------------------
    Q4 2007             3,130                86,800                 0.358
    -------------------------------------------------------------------------
    (1) Blasted grade includes all in-stope mining dilution and on reef
        development.
    

    Underground mine development was slower than expected in 2007.
Underground development has been adversely affected by a number of factors,
including disruption in electrical power supply and equipment breakdowns.
Additional trackless equipment has been ordered to ensure planned development
is achieved. The grade of the material treated was lower than forecast due to
a number of reasons including higher than expected leaching of near-surface
uranium resources, higher than expected mining dilution and lower than
expected grade for the surface tailings materials currently being processed
through the plant.
    At the Rietkuil section where mining has occurred at depths well below
the weathered zone, close-spaced sampling conducted during mining operations
have allowed for a quantitative reconciliation between in-situ grades
currently being mined and grades from the resource estimation based on
historic underground sampling data and exploration drilling. The forecast in-
situ grades based on the exploration models approximate those being mined.
    At the Dominion section an increase in the anticipated leached zone from
20 metres below surface to approximately 40 metres below surface resulted in
grades within this zone being lower than anticipated. Although insufficient
sampling below the leached area has been completed to undertake quantitative
reconciliations to the existing resource models, increased sample grades below
the leached zone have been intersected with the latest mine development where
the majority of the 2008 forecast production is scheduled.
    During February 2008 the in-situ grade of the areas mined was
approximately 500g/t U(3)O(8). Stoping dilution and on reef development
resulted in a delivered grade to the plant of approximately 330 g/t U(3)O(8).
Higher grade areas planned to be mined towards the end of the year, an
increased ratio of stoping to on-reef development and a program to minimize
dilution are anticipated to result in improved delivered grades to the plant
by the end of the year.
    Electro-hydraulic drill rigs were implemented to facilitate quicker
capital development.
    Since November 2007, Dominion has been subject to electrical load
shedding arising from the current South African electrical power crisis.
Diesel generators have been ordered to ensure back-up power for underground
operations is available during periods of load shedding. Installation of the
generators are expected to commence in Q2 2008.
    As a consequence of the business combination between Uranium One and
UrAsia, the Dominion Uranium Project is carried at fair value as at April 20,
2007, plus development costs since the transaction date. The mine development
cost from April 20, 2007 up to December 31, 2007, amounted to $20.6 million.

    Metallurgical Plant:

    The plant is operating in line with recovery expectations, but below
throughput design capacity. Current throughput is approximately 27,000 tonnes
per month from underground and 63,000 tonnes per month from surface tailings
material. Total plant recoveries are approximately 64% at present. Based on
current head grades and residues the estimated U(3)O(8) recovery of
underground material is 76% and recovery of surface tailing material is 54%.
Overall plant recoveries are expected to increase with time as the lower grade
surface material is displaced by higher grade and quantities of underground
ore. Once the surface tailings material has been entirely replaced with
underground ore, recoveries are expected to increase in line with feasibility
study test work.
    The commissioning of the pressure leach circuit at the plant was
completed in December 2007 and production of ammonium diuranate commenced in
May 2007. Currently U(3)O(8) is being produced on a continuous basis.
Underground ore and surface tailings material are currently being processed
through one autoclave, and the other autoclave is on standby. An additional 40
tonne per hour boiler is scheduled to be commissioned in Q3 2008, to allow
both autoclaves to be operated together at design capacity and also to
facilitate expansion.
    The plant development cost from April 20, 2007 up to the completion of
the plant in Q4 2007, amounted to $55.4 million.

    Hobson and La Palangana

    The Hobson Facility is an ISR uranium processing facility located about
one mile south of the town of Hobson in Karnes County, Texas.
    In the United States, in situ recovery involves circulating ground water
fortified with carbonate and oxygen through the ore by means of a grid of
injection and production wells and processing the water pumped from the
production wells to recover uranium in a processing plant before returning the
leach solution to the injection wells.
    The mill is currently being refurbished to a capacity of approximately
1,000,000 pounds of U(3)O(8) per year. Pre-commercial production from Hobson
and La Palangana in 2008 is estimated to be 35,000 pounds of U(3)O(8).
    The refurbishment and construction activity at the Hobson Facility
remains on schedule for completion in Q2 2008. The schedule for initial
production of U(3)O(8) is directly tied to the licencing and development of
the La Palangana Uranium Project, and is expected to take place by the end of
2008.
    The La Palangana Uranium Project is an ISR uranium deposit located in
close proximity to the Hobson Facility. Uranium bearing resins from the La
Palangana satellite ion exchange plant will be shipped to the Hobson Facility
for further processing into U(3)O(8). The Corporation is continuing with a
drilling program that commenced prior to acquisition of the property, to
develop an area of the deposit to commence production and to conduct
exploration drilling on other areas of the property.
    The Corporation has applied for all permits necessary to conduct ISR
operations at the La Palangana site from the Texas Commission on Environmental
Quality ("TCEQ"). All applications are progressing through the regulatory
process.
    A public meeting on the La Palangana Area Permit was held in January 2008
and was well received. The draft Area Permit to approve mining operations at
La Palangana is expected to be issued in Q2 2008. Final approvals of the RML,
Area Permit, and disposal well permit are anticipated to be received in Q3
2008. Hobson is already permitted for commercial operations. The Corporation
submitted an application to renew the licence for another 10 year period in
December 2006. That application was submitted on time and operations can
therefore continue while licence renewal is underway. A new air permit for
Hobson was approved early in 2008.

    Powder River Basin, Wyoming

    The Powder River Basin in Wyoming hosts several of the Corporation's
uranium projects. The most advanced project in the Powder River Basin is the
Moore Ranch Project. Moore Ranch has a NI 43-101 compliant measured resource
suitable for in situ recovery. On October 3, the Corporation submitted an
application to the U.S. Nuclear Regulatory Commission ("NRC") for a licence to
construct and operate an in situ uranium recovery facility at Moore Ranch, the
first application of its kind received by the NRC since 1988. The application
contains plans for uranium extraction ramping up to a rate of a nominal
1,000,000 pounds of U(3)O(8) per year from the Moore Ranch well fields
beginning in 2010, with construction of a central processing plant with
capacity of 2,000,000 pounds of U(3)O(8) per year eventually expandable to
4,000,000 pounds of U(3)O(8) per year. If installed, the excess plant capacity
would be used to process uranium bearing resins from other properties owned by
the Corporation in the Powder River and/or Great Divide Basins. Construction
of the full central plant may not immediately be necessary due to a
toll-processing agreement with a subsidiary of Cameco Corporation, executed on
August 21, 2007.
    The NRC has completed its acceptance review of Uranium One's licence
application to build and operate an in situ uranium recovery facility at the
Moore Ranch Project. The NRC's technical review of the application is
currently in progress and the Corporation expects to receive the permit during
2009. A feasibility study for the Moore Ranch Project has recently been
completed and is now being reviewed externally.
    Other Powder River Basin properties where delineation drilling and
environmental data collection for permitting purposes is ongoing include the
Ludeman, Allemand-Ross and Peterson projects.

    Great Divide Basin, Wyoming

    The Corporation's principal properties in the Great Divide Basin in
Wyoming are the JAB and Antelope projects. JAB has a NI 43-101 compliant
measured and indicated resource suitable for in situ recovery.
    An extensive delineation drilling program comprising 261 holes was
concluded at JAB during 2007 and the Corporation anticipates submitting an
application to the NRC for a licence to construct and operate an in situ
uranium recovery facility for JAB in Q2 2008. Environmental baseline data
collection and additional hydrologic testing of the aquifer were completed in
Q1 2008 at JAB and the data collected will be analyzed in Q2 2008.
    Environmental baseline data was also collected from the Antelope property
during 2007 for the preparation of an application to the NRC for a licence to
construct and operate an in situ uranium recovery facility. Hydrologic testing
at Antelope is scheduled for the middle of 2008. Submission of the application
to the NRC for Antelope is scheduled for Q2 2008. Further delineation drilling
will occur at Antelope during 2008.

    Shootaring Mill and Associated Uranium Properties

    On April 30, 2007, Uranium One completed the purchase of the Shootaring
Mill in Utah, an acid leach facility with 750 tons per day throughput
capacity.
    In addition to the mill, a land package comprising approximately 38,000
acres of uranium exploration properties in Utah, Wyoming, Arizona and Colorado
and a database of geological information were acquired.
    A mill assessment by an independent firm was completed in Q4 2007,
however refurbishment cannot begin until the application to change the licence
to operational status has been accepted.
    Exploration on properties acquired in the EMC transaction is focused on
proving code compliant resources through upgrading these assets in drilling
and associated exploration programs designed for these properties. A
feasibility study has been initiated on the Shootaring Mill including the
feasibility of mining two of the most suitable underground uranium assets with
conventional mining techniques.

    Honeymoon Uranium Project

    The Honeymoon ISR Uranium Project is located in the north-eastern section
of the State of South Australia, approximately 75 kilometres northwest of
Broken Hill.
    The Honeymoon Project has a design capacity of 880,000 pounds of U(3)O(8)
per year, with an expected mine life of six years. The Corporation does not
expect any production from Honeymoon during 2008.
    The redesign of the Honeymoon Project and the new plant layout, including
a reversion to mixer settler technology, was finalized in Q4 2007.
    The Corporation received full approval for its mining operations at
Honeymoon in January 2008. The South Australian Government approved the
Corporation's mining and rehabilitation program and the Environmental
Protection Agency has given its approval to the mine's radioactive waste
management plan and radiation management plan.
    The revised cost estimate for the construction of Honeymoon is
$76.0 million, of which $19.6 million has been spent up to December 31, 2007.
    Production is expected to commence in 2009.

    Exploration Projects

    The Corporation is exploring its other properties and has current
exploration programs in progress on its properties in South Africa, the
western United States, Canada and Australia.

    Selected Financial Information

    The Corporation's consolidated financial statements and the financial
data set out below have been prepared in accordance with GAAP. Uranium One and
its operating subsidiaries use the United States dollar, the South African
rand, the Australian dollar and the Canadian dollar as measurement currencies.

    
    (US dollars in thousands except per share amounts)

                                                         5 Months     Year
                                            Year ended     ended      ended
                                           December 31, December 31, July 31,
                                                2007       2006       2006
                                                 $          $          $
                                          -----------------------------------
    Revenue                                    134,024     50,449     23,507
    Net (loss) / earnings                      (17,609)    19,684    (48,939)
    Cash flows from / (to) operating
     activities                                 22,069    (11,375)    (1,437)
    (Loss) / earnings per share                  (0.05)      0.09      (0.27)
    Adjusted net earnings / (loss)(1)            1,118     (5,052)    (6,337)
    Product inventory carrying value            15,220     10,826     10,760
    Total assets                             5,612,898    971,618    951,025
    Long term financial liabilities          1,838,401    341,964    368,490

    Average realized uranium price per
     lb of U(3)O(8)                                 83         51         29
    Average U(3)O(8) spot price per lb              99         60         38

                                               lbs of      lbs of     lbs of
                                              U(3)O(8)    U(3)O(8)   U(3)O(8)
    Attributable sales volume                1,608,700    980,000    811,700
    Attributable production volume           1,827,200    939,600  1,192,800
    Attributable inventory                     748,900    565,400    637,000

    (1) Adjusted net earnings / loss is a non-GAAP measure used to provide
        investors with additional information about the Corporation's
        performance. Accordingly, it should be considered as supplemental in
        nature and should not be considered in isolation or as a substitute
        for measured performance prepared in accordance with GAAP. Refer
        below for a reconciliation of adjusted net earnings to reported net
        earnings.
    

    Non-GAAP measures

    Adjusted net earnings / loss

    The Corporation has included a non-GAAP performance measure, adjusted net
earnings, throughout this document. The Corporation believes that, in addition
to conventional measures prepared in accordance with GAAP, certain investors
use this information to evaluate the Corporation's performance and ability to
generate cash flow. Accordingly, it is intended to provide additional
information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. The following table
provides a reconciliation of adjusted net earnings to the financial
statements:

    
    (US dollars in thousands)

                                                      5 Months
                                        Year ended      ended     Year ended
                                       December 31,  December 31,   July 31,
                                            2007         2006         2006
                                             $            $            $
                                       --------------------------------------

    Net (loss) / earnings                  (17,609)      19,684      (48,939)
    Unrealized foreign exchange
     loss / (gain) on future income
     tax liabilities                        18,727      (24,736)      42,602
                                       --------------------------------------
    Adjusted net earnings / (loss)           1,118       (5,052)      (6,337)
                                       --------------------------------------
                                       --------------------------------------
    

    Sales per pound of U(3)O(8) and cost per pound of U(3)O(8) sold

    The Corporation has included non-GAAP performance measures throughout
this document: sales per pound of U(3)O(8) and cost per pound of U(3)O(8)
sold. The Corporation reports total cash costs on a sales basis. In the
uranium mining industry, these are common performance measures but do not have
any standardized meaning, and are non-GAAP measures. The Corporation believes
that, in addition to conventional measures prepared in accordance with GAAP,
the Corporation and certain investors use this information to evaluate the
Corporation's performance and ability to generate cash flow. Accordingly, it
is intended to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with GAAP. As in previous periods, sales per pound of U(3)O(8) and
cost per pound of U(3)O(8) sold is calculated by dividing the Revenues and
Operating expenses per the Statement of Operations in the Consolidated
Financial Statements by the pounds of U(3)O(8) sold in the period.

    Results of Operations and Discussion of Financial Position

    
    Summary of Quarterly Results

    -------------------------------------------------------------------------
                                    Dec 31    Sept 30    June 30     Mar 31
                                     2007       2007      2007       2007
                                  -------------------------------------------
                                   $(000's)   $(000's)   $(000's)   $(000's)
    -------------------------------------------------------------------------
    Revenue from uranium sales       61,010      8,019     23,265     41,730
    -------------------------------------------------------------------------
    Net (loss) / income
     for period                      (2,239)   (17,257)   (13,694)     7,971
    -------------------------------------------------------------------------
    Basic and diluted (loss) /
     earnings per share(1)            (0.01)     (0.04)     (0.04)      0.04
    -------------------------------------------------------------------------
    Total assets                  5,612,898  5,710,605  4,247,176    999,950
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                   Dec 31     Oct 31     Jul 31     Apr 30
                                   2006(2)     2006       2006       2006
                                  -------------------------------------------
                                   $(000's)   $(000's)   $(000's)   $(000's)
    -------------------------------------------------------------------------
    Revenue from uranium sales      46,256      4,193      2,922      14,383
    -------------------------------------------------------------------------
    Net (loss) / income
     for period                     (6,228)    25,912    (32,165)    (12,068)
    -------------------------------------------------------------------------
    Basic and diluted (loss) /
     earnings per share(1)           (0.03)      0.12      (0.15)      (0.06)
    -------------------------------------------------------------------------
    Total assets                   971,618    949,530    951,025     810,086
    -------------------------------------------------------------------------
    Notes:
    1.  The basic and diluted earnings / loss per share is computed
        separately for each quarter presented and therefore may not sum to
        the year ended December 31, 2007 or the 5 months ended December 31,
        2006.
    2.  The December 31, 2006 quarter consists of a 2 month period.
    


    Results of Operations

    Uranium sales, inventory and operating costs

    Sales attributable to the Corporation during 2007 amounted to
approximately 1.6 million pounds of U(3)O(8). The Corporation's attributed
share of revenue from those sales amounted to $134.0 million. Earnings from
mining operations were $101.8 million after the deduction of operating
expenses of $17.3 million and depreciation and depletion charges of
$14.9 million. During 2007 attributable inventory increased by 183,500 pounds
of U(3)O(8) as more U(3)O(8) was produced than sold during the year.
    Attributable sales in the December 2006 Period amounted to approximately
1.0 million pounds of U(3)O(8). The related revenue from those sales amounted
to $50.4 million. Earnings from mining operations were $32.7 million after the
deduction of operating expenses of $9.3 million and depletion costs of
$8.4 million. Attributable sales in the July 2006 Year amounted to
approximately 0.8 million pounds of U(3)O(8). The related revenue from those
sales amounted to $23.5 million. Earnings from mining operations were
$8.9 million after the deduction of operating expenses of $9.5 million and
depletion costs of $5.1 million.
    The average unit price received for sales in 2007 was $83 per pound of
U(3)O(8). The average price obtained in the December 2006 Period was $51 per
pound of U(3)O(8) and $29 per pound of U(3)O(8) in the July 2006 Year. The
spot price of uranium at December 31, 2007 was $90 per pound of U(3)O(8),
compared to a spot price of $72 per pound of U(3)O(8) at December 31, 2006 and
$47 per pound of U(3)O(8) at July 31, 2006.

    General and administration costs

    General and administrative costs for 2007 are not comparable to previous
periods, due to the significant changes in the Corporation in the current
financial year, most notably, the transaction between Uranium One and UrAsia
Energy in Q2 2007 and the acquisition of EMC during Q3 2007. The expenses for
the December 2006 Period and the July 2006 Year therefore represent the
expenses for UrAsia Energy only, while the expense in 2007 relates to the
combined operations of Uranium One, UrAsia Energy and EMC.
    General and administration expenses, including stock-based compensation
expenses of $37.7 million, amounted to $74.3 million for 2007, compared to
$24.8 million for the December 2006 Period and $14.9 million for the July 2006
Year, including stock-based compensation of $22.2 million and $9.4 million,
respectively. Higher administrative costs largely relate to the substantial
increase in size of operations resulting from acquisition activities and
growth. Change of control payments were also made to certain former officers
of the companies acquired. In addition to the growth in the combined
administration activity internationally, integration activities required
considerably greater travel and accommodation than normal, and salaries and
wages increased as a result of an increase in the number of employees. The
expense for 2007 includes salaries of $14.7 million, travel expenses of
$3.1 million, consulting fees of $2.3 million and legal fees of $2.0 million.
    Stock-based compensation expenses are calculated using the Black Scholes
option pricing model. The price at which the options were issued, as well as
the remaining term of the options, affects the fair value of the options and
therefore the expense incurred. In both the Uranium One / UrAsia Energy
transaction and the EMC transaction, the market price of Uranium One's shares
on date of acquisition was, in most instances, higher than the exercise price
of the unvested options acquired. This, combined with the volatility of
Uranium One's share price around the time of the transactions, attributed
materially to high fair values attributed to these options. As most of these
options were issued some time before the dates of the acquisitions, their
vesting periods from the date of the transactions are also relatively short.
The stock based compensation expense is recorded using a graded vesting
schedule and the expense is therefore heavily weighted towards the earlier
part of the vesting period. The combined effect of these factors was that the
stock-based compensation expense incurred during 2007 was abnormally high.

    Exploration

    Exploration expenditure in 2007 of $19.2 million related to exploration
programs being undertaken on the Corporation's licence areas in the United
States, South Africa, Canada, Australia and the Kyrgyz Republic. Exploration
expenditures for the December 2006 Period of $2.9 million and the July 2006
Year of $2.6 million, which are included in the Corporate and other segment of
the consolidated financial statements, related to properties in the Kyrgyz
Republic only.

    Interest income and expense

    Interest income amounted to $13.0 million for 2007, compared to
$3.7 million for the December 2006 Period and $4.4 million for the July 2006
Year. In addition to the interest earned on loans to joint ventures, interest
is earned on funds held on deposit by the Corporation. Additional interest
income is attributable to an increase in cash and short term investments
acquired in the business combination between Uranium One and UrAsia and the
acquisition of EMC.
    The interest expense for 2007 includes interest accrued on the
convertible debentures, the interest expense on the short term loans from
Nedcor Securities and interest on other long term debt. There was no interest
expense incurred for the December 2006 Period and the July 2006 Year.

    Dilution gain

    Dilution gains or losses occur when the percentage of equity held in
Aflease Gold by Uranium One Africa decrease. Such decreases occur when shares
in Aflease Gold are issued to shareholders other than Uranium One Africa. From
April 20, 2007, when the Corporation's interest on Aflease Gold was 67.61%,
issuances of shares to outside shareholders resulted in a dilution gain of
$5.3 million. As a result of the acquisition of EMC during Q3 2007, the
Corporation acquired an additional 2.38% interest in Aflease Gold, as EMC held
12.5 million shares of Aflease Gold. The Corporation's interest in Aflease
Gold was 67.07% at December 31, 2007. As the interest in Aflease Gold was
acquired during the 2007 year, there were no dilution gains in previous
periods.

    Foreign exchange gain / loss

    The net foreign exchange loss during 2007 amounted to $13.0 million and
consisted of a $18.7 million loss consisting primarily of an unrealized
exchange loss arising from translation of the future income tax liability in
respect of the Corporation's investment in Kazakhstan which increased as
result of a strengthening of the Kazakhstan tenge against the US dollar during
the year and an unrealized loss of $7.5 million on other items, offset by a
realized gain of $13.2 million. For the December 2006 Period, a foreign
exchange gain of $23.5 million was recorded and for the July 2006 Year, the
loss was $41.1 million.

    Income taxes

    Current income tax expense for 2007 was $41.3 million and represents
taxes paid and payable in Kazakhstan on profits from the Corporation's Akdala
Uranium Mine. For the December 2006 Period a $16.0 million tax expense was
recorded for the Akdala Uranium Mine and $5.3 million was recorded for the
July 2006 Year.
    The future income tax recovery during 2007 of $17.6 million arises from a
reduction in the future income tax liability related to the acquisition of
assets through the purchase of participating interests in the joint ventures
in Kazakhstan, as well as an increase in future income tax assets due to
temporary differences and tax loss carry forwards. In the December 2006
Period, a recovery of future income taxes of $4.0 million was recorded, being
a reduction in future income tax liability, compared to $1.9 million for the
July 2006 Year.

    Non-controlling interest

    Non-controlling interest relates to Uranium One Africa's 67% ownership of
its subsidiary company, Aflease Gold.

    Net loss for the period

    The net loss for 2007 amounted to $17.6 million or $0.05 per share,
compared to net income of $19.7 million or $0.09 per share (basic and diluted)
for the December 2006 Period and a net loss of $48.9 million or $0.27 per
share for the July 2006 Year.

    Financial Condition

    On December 31, 2007, the Corporation had cash and cash equivalents of
$252.2 million, compared to $61.8 million at December 31, 2006. The increase
in 2007 is mainly due to the addition of $291.1 million from Uranium One, in
in cash and cash equivalents when the assets of Uranium One and UrAsia Energy
were combined, an increase in $86.0 million in cash and cash equivalents
included in the assets acquired from EMC and the proceeds from a convertible
bond offering by Aflease Gold of $87.4 million. Major outflows during the year
include the capital expenditure on the Corporation's development properties of
$279.4 million and the repayment of the Nedcor Securities short term loans in
the amount of $53.1 million. Cash and cash equivalents do not include any
asset backed commercial paper.
    Inventories increased by $8.9 million over the $12.0 million held at
December 31, 2006, due to the build-up of uranium concentrates and solutions
and concentrates in process, as well as an increase in material and supplies.
As at December 31, 2007 the Corporation had attributable inventory of
0.7 million pounds of U(3)O(8) of which approximately 0.5 million pounds is
saleable product. All of the saleable product on hand as at December 31, 2007,
is committed for delivery under existing sales contracts subsequent to year
end. Shipping times for finished product can be up to four months, depending
on the distance between the mine site and conversion facility, where sales are
concluded through transfer of legal title and ownership.

    
    A summary of attributable inventory carried at year end are as follows:
    -------------------------------------------------------------------------
                                                               Thousands of
    Category                 Location                      pounds of U(3)O(8)
    -------------------------------------------------------------------------
    In process               Mine site                                 28.0
    -------------------------------------------------------------------------
    In process               External processing facilities           150.2
    -------------------------------------------------------------------------
    In transit               In transit                                67.0
    -------------------------------------------------------------------------
    Finished product ready
     to be shipped           External processing facilities           350.5
    -------------------------------------------------------------------------
    Finished product at
     conversion facility     Conversion facilities                    153.2
    -------------------------------------------------------------------------
    Total inventory                                                   748.9
    -------------------------------------------------------------------------
    

    Loans receivable from Betpak Dala of $62.6 million plus interest of
$0.9 million were repaid during the 2007 financial year. Short term loans
advanced to Betpak Dala of $17.0 million were repaid in full by February 9,
2008.
    The Corporation advanced $32 million to Kyzylkum during the period for
development of the Kharasan Uranium Project, completing its commitment to
provide $80 million of project financing. Scheduled repayments on this loan,
of $6.7 million plus interest were received from Kyzylkum during the 2007
financial year. Further repayments of $6.7 million were received for the
period up to March 31, 2008 resulting in an outstanding loan of $66.7 million.
    Mineral interests, plant and equipment increased, when compared to the
balance sheet at December 31, 2006, due to the UrAsia/Uranium One business
combination and the addition of $2.5 billion in Uranium One mineral interests,
plant and equipment to UrAsia Energy's assets. The acquisition of EMC in Q3
2007 resulted in a further increase in mineral interests of $1.4 billion.
Other increases of $104.3 million from the acquisition of the Shootaring Mill
and exploration properties from U.S. Energy and additions to plant and
equipment of $279.4 million occurred during the year.
    The increase in current liabilities from December 31, 2006 can be
attributed to an increase in accounts payable and accrued liabilities
resulting from increased costs due to growth and to the costs of the business
combination and an increase in taxes payable in Kazakhstan due to the profits
from the Akdala Uranium Mine.
    Long term liabilities increased by $1.5 billion from December 31, 2006.
Of this amount, $136.5 million results from the business combination and the
recording of convertible debentures that were issued by Uranium One in
December 2006. Asset retirement obligations increased by $12.2 million. The
amount outstanding on the convertible bond issued by Aflease Gold during 2007
amounted to $90.6 million. The Corporation's proportionate share of the
Kyzylkum third party loan facility arranged during 2007 was $18.2 million.
Future income tax liabilities increased by $1.2 billion as a result of assets
acquired in business combinations during the year. These future income tax
liabilities are not accruals for actual taxes payable but arise due to a
temporary taxable difference resulting from the increase in the carrying value
of an asset to fair value without a corresponding adjustment to the tax basis
of the asset. These future income tax credits will be credited to the
Statement of Operations as a recovery against current income taxes in the
periods that the associated asset is depleted.
    Shareholders' equity increased by $3.1 billion from December 31, 2006.
The largest component of the increase was share capital which increased by
$2.9 billion from December 31, 2006. The increase consists inter alia of
$1.7 billion from shares issued for the acquisition of all of the shares of
UrAsia Energy; $1.0 billion from shares issued for the acquisition of all of
the shares of EMC; $99.4 million from shares issued for the acquisition of the
U.S. Energy assets; and $57.0 million for the exercise of options, warrants
and restricted shares.
    Other contributions to the increases in shareholders' equity were the
increase in contributed surplus of $103.1 million. Increases in contributed
surplus were a result of stock-based compensation of which $62.0 million
related to the fair value of options, restricted shares and warrants acquired
in the business combination with UrAsia Energy; $35.3 million related to the
fair value of options acquired in the business combination with EMC; stock-
based compensation expense of $37.7 million recorded for the period and a
reduction of $31.9 million for warrants, options and restricted shares
exercised. Other increases in shareholder's equity are comprised of the equity
component of the convertible debentures acquired from Uranium One of
$46.5 million and $52.0 million in accumulated other comprehensive income
mainly from foreign currency translation of foreign operations.
    Shareholders' equity was reduced by the net loss of $17.6 million ($0.05
per share) for the 2007 financial year.

    Liquidity and Capital Resources

    At December 31, 2007 the Corporation had working capital of
$316.5 million. Included in this amount are cash and cash equivalents of
$252.2 million, which includes the proportionate share of the Corporation's
cash and cash equivalents at its joint venture operations in Kazakhstan and
cash held by Aflease Gold. The interest earned on these cash balances will be
applied to existing commitments in respect of the Corporation's development
projects and other current commitments. The cash held by Aflease Gold will be
applied to the business of Aflease Gold.
    As described elsewhere in this document, the Corporation has entered into
an agreement to sell a portion of its stake in Aflease Gold for approximately
$40 million, with an option to sell the balance of its shareholding for
approximately $49 million. The proceeds from the sale will be used to fund
capital expenditure on the Corporation's development projects.
    The Corporation anticipates that it has sufficient liquidity and capital
resources to meet the Corporation's approved development plans and corporate
costs for at least the next twelve months. Please refer to "Commitments and
Contingencies".
    The Corporation earns revenue from the sale of uranium from the operating
Akdala Uranium Mine in Kazakhstan. Additional sales revenue will be earned
from uranium sales when the South Inkai and Kharasan Uranium Projects in
Kazakhstan, the Dominion Uranium Project in South Africa, the Hobson ISR
facility and the Honeymoon Uranium Project in Australia reach commercial
production.
    Uranium is sold under forward long-term delivery contracts. All such
contracted deliveries are planned to be filled from the Corporation's mining
operations. The ability to deliver contracted product is therefore dependent
upon the continued operation of the mining operations as planned.
    The Corporation has entered into market related sales contracts with
price mechanisms that reference the spot price in effect near the time of
delivery. In addition, the Corporation has negotiated floor price protection
in most of its sales contracts.
    Committed sales under contracts total 2.55 million pounds U(3)O(8)
(attributable) in 2008. This is comprised of 600,000 pounds from Dominion and
1,950,000 pounds (attributable) from Betpak Dala.
    Should Uranium One be required to provide funds to support the
development of any of the Corporation's projects, prospective sources of
additional funding include debt financing, the sale of non-core assets, the
proceeds from the exercise of stock options and warrants and equity financing.
Uranium One's ability to raise capital is highly dependent on the commercial
viability of its projects and the underlying prices of uranium.
    Other risk factors, for instance, the Corporation's ability to develop
its projects into commercially viable mines, international uranium industry
competition, public acceptance of nuclear power and governmental regulation,
can also adversely affect Uranium One's ability to raise additional funding.
There is no assurance that additional sources of funding, if required, will be
forthcoming. Please refer to "Risks and Uncertainties".

    
    Contractual Obligations
                                               Payments due by period
                                           Less
    Contractual                            than    1 to 3  4 to 5    After
     obligations ($'000)          Total    1 year   years  years    5 years
    ------------------------------------------------------------------------
    Lease obligations
      - Short term                  350      350        -        -        -
      - Long term                 6,650    2,141    2,004    1,026    1,479
    ------------------------------------------------------------------------
    Total                         7,000    2,491    2,004    1,026    1,479
    Long term debt               18,431      431    4,200   13,800        -
    Capital commitments         118,436  118,436        -        -        -
    Asset retirement obligation  14,676        -        -        -   14,676
    ------------------------------------------------------------------------
    Total contractual
     obligations                158,543  121,358    6,204   14,826   16,155
    



    Commitments and Contingencies

    Acquisition of the Shootaring Mill

    Further payments due under the purchase agreement for the Shootaring Mill
and related uranium exploration properties are:

    
    -  $27.5 million depending on the achievement of certain production
       targets; and

    -  the payment of a royalty to U.S. Energy of 5% of the gross proceeds
       from the sale of commodities produced at the Mill, to a maximum amount
       of $12.5 million.
    

    Acquisition of interest in Betpak Dala

    A bonus payment is payable in cash based on uranium reserves discovered
on the South Inkai property in excess of 66,000 tonnes. The payment is based
on the Corporation's share of pounds of U(3)O(8) in excess of 66,000 tonnes
times the average spot price of U(3)O(8) times 6.25%. This payment is
initially to be calculated at the end of 2011 and each year thereafter, and
paid 60 days after the end of the year in which a payment is due. As security
for the bonus payments, the Corporation pledged its participatory interest in
Betpak Dala (including the shares of a subsidiary) and its share of uranium
products produced by Betpak Dala.

    Acquisition of interest in Kyzylkum

    A bonus payment is due upon commencement of commercial production. The
seller elected, under the terms of the arrangement, to receive 6,964,200
shares of Uranium One upon commencement of commercial production. An
additional bonus payment of 30% of 12.5% (being an effective 3.75%) of the
weighted average spot price of U(3)O(8) will be paid on incremental reserves
in excess of 55,000 tonnes of U(3)O(8) discovered during each fiscal year end,
with payments beginning within 60 days of the end of the 2008 calendar year.

    Acquisition of EMC

    The Corporation has assumed all of the obligations of EMC and its
subsidiaries arising under certain option and joint venture agreements with
third parties. Uranium One has reserved a total of 1,925,100 common shares of
Uranium One for issuance pursuant to the assumed obligations under the
Contingent Share Rights Agreements.

    Off-balance Sheet Arrangements

    The Corporation has no off-balance sheet arrangements.

    Outstanding Share Data

    As of March 31, 2008, there were issued and outstanding 467,641,548
common shares and common share purchase warrants for 150,000 Series D warrants
exercisable at C$6.95 per warrant and 2,431,619 warrants exercisable to
acquire common shares at C$3.55 per common share. Each warrant is exercisable
for one common share of Uranium One. In addition (as discussed under
"Commitments and Contingencies"), a warrant was issued in connection with the
acquisition of the Corporation's interest in Kyzylkum entitling the holder to
acquire 6,964,200 shares in Uranium One for no additional consideration upon
commencement of commercial production from the Kharasan Uranium Project.
    As of March 31, 2008, there were 20,293,052 stock options outstanding
under Uranium One's stock option plan at exercise prices ranging from C$1.09
to C$16.87 and 295,532 restricted shares outstanding.
    Uranium One has 155,250 convertible debentures outstanding, each
convertible to 50 common shares of Uranium One, representing 7,762,500 common
shares.

    Dividends

    There have been no dividend payments on the common shares of Uranium One.
Holders of common shares are entitled to receive dividends if, as and when
declared by the Board of Directors. There are no restrictions on Uranium One's
ability to pay dividends except as set out under its governing statute.

    Critical Accounting Policies and Estimates

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements,
and reported amounts of revenues and expenditures during the reporting period.
Note 2 to the Corporation's consolidated financial statements for the year
ended December 31, 2007 describes all of the Corporation's significant
accounting policies.

    New / Changes in Accounting Policies

    The Corporation's accounting policies have been consistently followed
except that the Corporation has adopted the following CICA standards effective
January 1, 2007, none of which had a material impact on the Corporation's
consolidated financial statements:

    
    (a) Sections 3855 - Financial Instruments - Recognition and Measurement

        Section 3855 requires that all financial assets except those
        classified as held to maturity, and derivative financial instruments,
        must be measured at fair value. All financial liabilities must be
        measured at fair value when they are classified as held for trading;
        otherwise, they are measured at cost. Investments classified as
        available for sale are reported at fair market value (or mark to
        market) based on quoted market prices with unrealized gains or losses
        excluded from earnings and reported as other comprehensive income or
        loss. Investments subject to significant influence are reported at
        cost and are not adjusted to fair market value.

    (b) Section 3861 - Financial Instruments - Disclosure and Presentation

        Section 3861 establishes standards for the presentation of financial
        instruments and non-financial derivatives, and identifies the
        information that should be disclosed about them. The purpose of the
        section is to enhance financial statement users' understanding of the
        significance of financial instruments to an entity's financial
        position, performance and cash flows.

    (c) Section 3865 - Hedges

        This standard is applicable when a company chooses to designate a
        hedging relationship for accounting purposes. It builds on the
        existing AcG-13 "Hedging Relationships" and Section 1650 "Foreign
        Currency Translation", by specifying how hedge accounting is applied
        and what disclosures are necessary when certain financial derivative
        instruments do not meet the requirements for hedge accounting. The
        Corporation did not have any accounting hedges upon adoption and as
        at December 31, 2007.

    (d) Section 1530 - Comprehensive Income

        Comprehensive income is the change in the Corporation's assets that
        result from transactions, events and circumstances from sources other
        than the Corporation's shareholders and includes items that would not
        normally be included in net earnings such as unrealized gains or
        losses on available-for-sale investments. Other comprehensive income
        includes the holding gains and losses such as changes in currency
        adjustment relating to self-sustaining foreign operations; and the
        effective portion of gains or losses on derivatives designated as
        cash flow hedges or hedges or the net investment in self-sustaining
        foreign operations.

        The Corporation has added two new statements to the consolidated
        financial statements entitled "Consolidated Statements of Changes in
        Equity" and "Consolidated Statements of Comprehensive Income".

        The Corporation reclassified currency translation adjustments on its
        net investment in self-sustaining foreign operations to other
        comprehensive income.

    (e) Section 3251 - Equity

        This new standard was adopted in combination with the adoption of the
        financial instrument standards in 2007. It establishes standards for
        the presentation of equity and changes in equity during the reporting
        period.

    (f) Section 1506 - Accounting Changes

        Section 1506: Accounting Changes, effective for fiscal years
        beginning on or after January 1, 2007 establishes standards and new
        disclosure requirements for the reporting of changes in accounting
        policies and estimates and the reporting of error corrections. CICA
        1506 clarifies that a change in accounting policy can be made only if
        it is a requirement under GAAP or if it provides reliable and more
        relevant financial statement information. Voluntary changes in
        accounting policies require retrospective application of prior period
        financial statements, unless the retrospective effects of the changes
        are impracticable to determine, in which case the retrospective
        application may be limited to the assets and liabilities of the
        earliest period practicable, with a corresponding adjustment made to
        opening retained earnings.

    Effective January 1, 2008, the Corporation will adopt the following CICA
standards, none of which is expected to have a material impact on the
Corporation's consolidated financial statements:

    (a) Section 3031 - Inventories

        The new Section 3031 on inventories replaces Section 3030 and
        converges with the International Accounting Standard Board's
        recently amended standard IAS 2, Inventories. The standard introduces
        significant changes to the measurement and disclosure of inventory.
        Changes apply to interim and annual financial statements relating to
        fiscal years beginning on or after January 1, 2008. The main
        differences between the new section and Section 3030 include
        measurement of inventories at the lower of cost and net realizable
        value, with guidance on the determination of cost, including
        allocation of overhead expenses and other costs to inventory. The new
        section also requires consistent use of either first in, first out
        (FIFO) or weighted average cost formula to measure the cost of other
        inventories and the reversal of previous write downs to net
        realizable when there is a subsequent increase in the value of
        inventories. Inventory policies, carrying amounts, amounts recognized
        as an expense, write downs and the reversals of write downs are
        required to be disclosed.

    (b) Section 3862 - Financial Instruments - Disclosures and Section 3863 -
        Financial Instruments - Presentation

        These sections apply to interim and annual financial statements
        relating to fiscal years beginning on or after October 1, 2007.
        Section 3862 establishes standards for disclosures about financial
        instruments and non-financial derivatives. The main features of this
        Section are requirements for an entity to disclose the significance
        of financial instruments for its financial position and performance,
        revised from those of Section 3861. The requirements for disclosures
        about fair value are revised, but not substantially different, from
        those of Section 3861. The revised requirements for the disclosure of
        qualitative and quantitative information about exposure to risks
        arising from financial instruments are more extensive than those of
        Section 3861. The qualitative disclosures describe management's
        objectives, policies and processes for managing such risks. The
        quantitative disclosures provide information about the extent to
        which the entity is exposed to credit risk, liquidity risk and market
        risk (i.e., currency risk, interest rate risk, and other price risk).
        Section 3863 carries forward, unchanged from Section 3861, standards
        for presentation of financial instruments and non-financial
        derivatives.

    (c) Section 1535 - Capital Disclosures

        The new requirements are effective for interim and annual financial
        statements relating to fiscal years beginning on or after October 1,
        2007. This section will require the Corporation to disclose
        qualitative information about its objectives, policies and processes
        for managing capital and quantitative data about what the Corporation
        regards as capital. It will also be a requirement to disclose whether
        the Corporation has complied with any externally imposed capital
        requirements and, if not, the consequences of such non-compliance.
    

    Risks and uncertainties

    The Corporation's operations and results are subject to various risks and
uncertainties. These include, but are not limited to, the following:
exploration and mining involves operational risks and hazards; mineral
resources and mineral reserves are estimates only; there is no certainty that
further exploration will result in new economically viable mining operations
or yield new reserves to replace and expand current reserves; Uranium One
cannot give any assurance that the South Inkai Uranium Project, Kharasan
Uranium Project, Dominion Uranium Project and Honeymoon Uranium Project will
become operating mines; or when the Shootaring Mill, the Hobson Uranium ISR
Processing Facility or the La Palangana Uranium Project will become fully
operational; mineral rights and tenures may not be granted or renewed on
satisfactory terms and may be revoked, altered or challenged by third parties;
limited supply of desirable mineral lands for acquisition; risks and problems
associated with integrating acquisitions; competition in marketing uranium and
gold; in the case of uranium, competition from other sources of energy and
public acceptance of nuclear energy; volatility and sensitivity to uranium and
gold prices; the capital requirements to complete the Corporation's current
projects and expand its operations are substantial; currency fluctuations; the
Corporation's operations and activities are subject to environmental risks;
government regulation may adversely affect the Corporation; the risks of
obtaining and maintaining necessary licences and permits; risks associated
with foreign operations including, in relation to Kazakhstan, the risk that
the sulphuric acid shortage continues for an extended period of time and in
relation to South Africa, economic, social and political issues such as
employment creation, black economic empowerment and land redistribution,
crime, corruption, poverty and HIV/AIDS; the Corporation is dependent on key
personnel; and potential conflicts of interest.
    In November 2007, the parliament of Kazakhstan enacted legislation,
giving the government the right in certain circumstances to re-negotiate
previously concluded subsoil use contracts. Together with its joint venture
partner, Kazatomprom, the Corporation has been reviewing the potential impact
and application of this legislation. Based on these discussions, the
Corporation understands that the legislation is not directed at the uranium
mining industry in Kazakhstan.
    Uranium One's risk factors are discussed in detail in its Annual
Information Form for the year ended December 31, 2007, which is available on
SEDAR at www.sedar.com, and should be reviewed in conjunction with this
document.

    Stock Option and Restricted Share Plans

    A significant contributing factor to Uranium One's future success is its
ability to attract and retain qualified and competent personnel. To accomplish
this, Uranium One adopted a stock option plan and a restricted share plan to
advance its interests by encouraging directors, officers and employees to have
equity participation in Uranium One.
    Under the stock option plan, options granted are non-assignable and may
be granted for a term not exceeding ten years. The aggregate maximum number of
common shares available for issuance under the stock option plan may not
exceed 7.2% of the common shares outstanding from time to time on a non-
diluted basis and the aggregate maximum number of common shares available for
issuance to non-employee directors under the plan may not exceed 1.0% of the
total number of common shares outstanding on a non-diluted basis.
    Under the restricted share plan, restricted share rights exercisable for
common shares of Uranium One at the end of a restricted period, for no
additional consideration, are granted by the Board of Directors in its
discretion to eligible directors, officers and employees. The aggregate
maximum number of common shares available for issuance under the restricted
share plan is capped at three million. The number of shares available for
issuance to non-employee directors may not exceed 0.5% of the total number of
common shares outstanding on a non-diluted basis.

    During 2007 stock options and restricted share rights activity was as
follows:

    
    -  Pursuant to the business combination agreement with UrAsia Energy
       options that were outstanding in UrAsia Energy at April 20, 2007 were
       exchanged for an equal number of options in Uranium One multiplied by
       0.45; at an exercise price equal to the exercise price of the options
       of UrAsia Energy divided by 0.45; accordingly 9,763,498 options of
       Uranium One were granted to UrAsia Energy option holders at prices
       ranging from C$1.25 to C$15.63 per share, with expiry dates ranging
       from April 20, 2008 to March 30, 2017.

    -  Pursuant to the business combination agreement with Uranium One,
       options that were outstanding in EMC at August 10, 2007 were exchanged
       for an equal number of options in Uranium One multiplied by 1.15, at
       an exercise price equal to the exercise price of the options of EMC
       divided by 1.15. Accordingly, on closing of the EMC acquisition
       8,362,546 options of Uranium One were granted to EMC option holders at
       prices ranging from C$1.15 to C$13.57 per share, with expiry dates
       ranging from November 30, 2009 to July 1, 2012.

    -  During 2007 1,867,817 options were granted to directors and employees
       at a prices ranging from C$8.51 to C$15.59 per share, with expiry
       dates ranging from April 26, 2012 to December 24, 2012.

    -  4,228,640 options were exercised during 2007 and 351,187 were forfeit.

    -  20,000 restricted shares were granted during 2007 at a deemed price of
       $14.10 per share;

    -  125,977 restricted shares were exercised.
    

    Disclosure Controls and Procedures

    Disclosure controls and procedures are designed to provide reasonable
assurance that all relevant information is gathered and reported on a timely
basis to senior management, including Uranium One's President and Interim
Chief Executive Officer and Chief Financial Officer, so that appropriate
decisions can be made regarding public disclosure. As at the end of the period
covered by this management's discussion and analysis, management evaluated the
effectiveness of the Corporation's disclosure controls and procedures as
required by Canadian securities laws.
    Based on that evaluation, the President and Interim Chief Executive
Officer and Chief Financial Officer have concluded that, as of the end of the
period covered by this management's discussion and analysis, the disclosure
controls and procedures were effective to provide reasonable assurance that
information required to be disclosed in Uranium One's annual filings and
interim filings (as such terms are defined under Multilateral Instrument 52-
109 - Certification of Disclosure in Issuers' Annual and Interim Filings) and
other reports filed or submitted under Canadian securities laws is recorded,
processed, summarized and reported within the time periods specified by those
laws, and that material information is accumulated and communicated to
management including the President and Interim Chief Executive Officer and
Chief Financial Officer as appropriate to allow timely decisions regarding
required disclosure.

    Internal Controls and Procedures

    The Corporation evaluated the design of its internal controls and
procedures over financial reporting as defined under Multilateral Instrument
52-109 for the year ended December 31, 2007. Based on this evaluation, the
President and Interim Chief Executive Officer and Chief Financial Officer have
concluded that the design of these internal controls and procedures over
financial reporting was effective.
    There have been no material changes in the Corporation's internal control
over financial reporting during the Corporation's year ended December 31, 2007
that have materially affected, or are reasonably likely to materially affect,
the Corporation's internal control over financial reporting.

    Outlook

    During 2008, the Corporation is focused on achieving commercial
production from its projects on schedule, controlling costs at its operations,
remaining a reliable supplier of U(3)O(8) to the nuclear fuel industry and
maintaining production of U(3)O(8) from Akdala. Accordingly, the Corporation's
attributable production estimate is 3.1 million pounds of U(3)O(8) (including
1.8 million pounds of U(3)O(8) from Akdala and 1.3 million pounds of
pre-commercial production from development projects) and 6.8 million pounds of
U(3)O(8) (including pre-commercial production) for 2008 and 2009 respectively.
    The Corporation will continuously be considering opportunities to unlock
value from its non-core assets.
    The cash cost per pound of U(3)O(8) sold from Akdala is expected to be
approximately $12 per pound of U(3)O(8) sold in 2008.
    The Corporation expects to incur capital expenditure of $200 million on
fully owned development projects for 2008 and does not expect to be required
to contribute towards additional capital expenditure of $70 million by joint
ventures in 2008 (of which the Corporation's pro-rata share is $32 million).
General and administrative expenses, excluding stock based compensation, are
expected to be $45 million for 2008.

    Forward-Looking Statements

    This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains certain forward-looking statements. Forward-
looking statements include but are not limited to those with respect to the
price of uranium and gold, the estimation of mineral resources and reserves,
the realization of mineral reserve estimates, the timing and amount of
estimated future production, the timing of uranium processing facilities being
fully operational, costs of production, capital expenditures, costs and timing
of the development of new deposits, success of exploration activities,
permitting time lines, currency fluctuations, requirements for additional
capital, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and limitations
on insurance coverage and the timing and possible outcome of pending
litigation. In certain cases, forward-looking statements can be identified by
the use of words such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes" or variations of such
words and phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved. Forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Corporation to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. Such
risks and uncertainties include, among others, the actual results of current
exploration activities, conclusions of economic evaluations, changes in
project parameters as plans continue to be refined, possible variations in
grade and ore densities or recovery rates, failure of plant, equipment or
processes to operate as anticipated, possible continued shortages of sulphuric
acid in Kazakhstan, accidents, labour disputes or other risks of the mining
industry, delays in obtaining government approvals or financing or in
completion of development or construction activities, risks relating to the
integration of acquisitions, to international operations, to prices of uranium
and gold as well as those factors referred to in the section entitled "Risk
factors" in Uranium One's Annual Information Form for the year ended
December 31, 2007 which is available on SEDAR at www.sedar.com, and which
should be reviewed in conjunction with this document. Although Uranium One has
attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no assurance
that forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on forward-
looking statements. Uranium One expressly disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except in accordance
with applicable securities laws.
    Readers are advised to refer to independent technical reports for
detailed information on the Corporation's material properties. Those technical
reports, which are available at www.sedar.com under Uranium One's profile, and
also under UrAsia Energy's profile, provide the date of each resource or
reserve estimate, details of the key assumptions, methods and parameters used
in the estimates, details of quality and grade or quality of each resource or
reserve and a general discussion of the extent to which the estimate may be
materially affected by any known environmental, permitting, legal, taxation,
socio-political, marketing, or other relevant issues. The technical reports
also provide information with respect to data verification in the estimation.
    This document and the Corporation's other publicly filed documents use
the terms "measured", "indicated" and "inferred" resources as defined in
accordance with National Instrument 43-101 - Standards of Disclosure for
Mineral Projects. United States investors are advised that while these terms
are recognized and required by Canadian regulations, the SEC does not
recognize them. Investors are cautioned not to assume that all or any part of
the mineral deposits in these categories will ever be converted into reserves.
In addition, "inferred resources" have a great amount of uncertainty as to
their existence and economic and legal feasibility and it cannot be assumed
that all or any part of an inferred mineral resource will ever be upgraded to
a higher category. Investors are cautioned not to assume that all or any part
of an inferred resource exists or is economically or legally mineable. Mineral
resources are not mineral reserves and do not have demonstrated economic
viability.
    Historical estimates referred to herein and in the Corporation's other
publicly filed documents, as Russian C1 and C2 resources are derived from
Kazatomprom documents, an entity of the Government of Kazakhstan. Although
Russian C1 and C2 Resources do not meet Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) standards on Mineral Resource and Reserve
definitions, they are considered relevant because of previous pilot plant
production, but should not be relied upon. The CIM resource definition which
most closely resembles C1 resources is that of Inferred Resources. However,
there is less confidence attributed to a C1 resource since a C1 resource is
estimated on the basis of a lower drill density than an inferred resource.
Scientific and technical information contained herein has been reviewed on
behalf of the Corporation by Mr. M.H.G. Heyns, Pr.Sci.Nat. (SACNASP), MSAIMM,
MGSSA, Senior Vice President Technical Services of the Corporation, a
qualified persons for the purposes of NI 43-101. Neither the Corporation nor
Mr. Heyns have not done sufficient work to classify the historical estimates
as current mineral resources or mineral reserves. The Corporation does not
intend to treat such historical estimates of mineral resources and mineral
reserves as a current estimate and the historical estimates should not be
relied upon.


    
                   Annual Consolidated Financial Statements
                     for the year ended December 31, 2007


    Uranium One Inc.

    Consolidated Balance Sheets
    as at December 31, 2007 and 2006 and July 31, 2006
    (in United States dollars)
                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                      Notes      $'000      $'000      $'000
    -------------------------------------------------------------------------
    ASSETS
    Current assets
    Cash and cash equivalents             5    252,219     61,838    128,328
    Restricted cash                                  -        500      2,500
    Accounts and other receivables        6     72,635     49,186     11,350
    Current portion of loans to joint
     ventures                           7.2     32,867     13,488      4,440
    Inventories                           8     20,994     12,044     11,940
    Other assets                                18,056          -          -
    -------------------------------------------------------------------------
                                               396,771    137,056    158,558
    -------------------------------------------------------------------------

    Non-current assets
    Mineral interests, plant and
     equipment                            9  5,112,907    768,887    762,547
    Loans to joint ventures             7.2     24,359     39,850     21,000
    Available for sale securities        10     21,257          -          -
    Other assets                         11     57,604     25,825      8,920
    -------------------------------------------------------------------------
                                             5,216,127    834,562    792,467
    -------------------------------------------------------------------------
    Total assets                             5,612,898    971,618    951,025
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Current liabilities
    Accounts payable and accrued
     liabilities                        12      75,882     12,947      6,095
    Income taxes payable                         4,402      1,018      3,080
    -------------------------------------------------------------------------
                                                80,284     13,965      9,175
    -------------------------------------------------------------------------

    Non-current liabilities
    Convertible debentures              13     136,548          -          -
    Aflease Gold convertible bonds      14      90,551          -          -
    Asset retirement obligations        15      15,011      2,856      1,953
    Future income tax liabilities       16   1,576,262    337,642    365,491
    Long term debt                     7.1      18,205          -          -
    Other long term payables                     1,824      1,466      1,046
    -------------------------------------------------------------------------
                                             1,838,401    341,964    368,490
    -------------------------------------------------------------------------

    Non-controlling interest                    11,308          -          -

    SHAREHOLDERS' EQUITY
    Share capital                       17   3,496,884    613,607    612,941
    Contributed surplus                 18     134,387     31,286      9,307
    Equity component of convertible
     debentures                        3.1      46,480          -          -
    Deficit                                    (46,813)   (29,204)   (48,888)
    Accumulated other comprehensive
     income                                     51,967          -          -
    -------------------------------------------------------------------------
                                             3,682,905    615,689    573,360
    -------------------------------------------------------------------------

    Total shareholders' equity and
     liabilities                             5,612,898    971,618    951,025
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basis of presentation and principles of consolidation (note 2.1)
    Commitments and contingencies (note 4 & 22)
    Subsequent event (note 25)

    The accompanying notes form an integral part of these Annual Consolidated
    Financial Statements.

    Approved on behalf of the board of directors


    Ian Telfer                              Andrew Adams
    Chariman of the board                   Chairman of the audit committee



    Uranium One Inc.

    Consolidated Statements of Operations
    For the year ended December 31, 2007, 5 months ended December 31, 2006
    and year ended July 31, 2006
    (in United States dollars)
                                                  Year   5 months       Year
                                                 ended      ended      ended
                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                      Notes      $'000      $'000      $'000
    -------------------------------------------------------------------------
    Revenues                                   134,024     50,449     23,507
    Operating expenses                         (17,282)    (9,289)    (9,548)
    Depreciation and depletion                 (14,922)    (8,449)    (5,107)
    -------------------------------------------------------------------------
    Earnings from mine operations              101,820     32,711      8,852
    General and administrative(1)              (74,272)   (24,799)   (14,863)
    Exploration expense                        (19,178)    (2,914)    (2,648)
    Other                                        1,129       (552)      (169)
    -------------------------------------------------------------------------
    Operating earnings/(loss)                    9,499      4,446     (8,828)
    Interest and other income                   13,031      3,742      4,408
    Interest expense                           (12,536)         -          -
    Dilution gain on investment in
     Aflease Gold                                5,339          -          -
    Foreign exchange (loss)/gain         19    (13,022)    23,507    (41,120)
    -------------------------------------------------------------------------
    Earnings/(loss) before income taxes
     and non-controlling interest                2,311     31,695    (45,540)
    Current income tax expense           16    (41,346)   (15,984)    (5,304)
    Future income tax recovery           16     17,621      3,973      1,905
    -------------------------------------------------------------------------
    (Loss)/earnings before non-
     controlling interest                      (21,414)    19,684    (48,939)
    Non-controlling interest                     3,805          -          -
    -------------------------------------------------------------------------
    Net (loss)/earnings                        (17,609)    19,684    (48,939)
    -------------------------------------------------------------------------

    (1) - Stock option and restricted
     share expense (non-cash) included
     in general and administrative       18     37,660     22,162      9,370


    (Loss)/earnings per share
      Basic                                      (0.05)      0.09      (0.27)
      Diluted                                    (0.05)      0.09      (0.27)

    Weighted average number of shares
     (in thousands)
      Basic                              21    360,656    215,999    182,808
      Diluted                            21    360,656    217,975    182,808

    The accompanying notes form an integral part of these Annual Consolidated
    Financial Statements.



    Uranium One Inc.

    Consolidated Statements of Changes in Equity
    For the year ended December 31, 2007, 5 months ended December 31, 2006
    and year ended July 31, 2006
    (in United States dollars)
                                                        Equity   Accumulated
                                                  component of         other
                                     Contributed   convertible comprehensive
                     Share capital       surplus     debenture        income
    -------------------------------------------------------------------------
    Balance as at
     August 1, 2005          4,094             -             -             -
    Net loss for the
     period                      -             -             -             -
    Share options issued
     and vested                  -         9,370             -             -
    Acquisition of Signature   271           153             -             -
    Acquisition of
     Kyzylkum               37,500             -             -             -
    Exercise of warrants       673             -             -             -
    Exercise of stock
     options and
     restricted shares         579          (216)            -             -
    Shares issued for
     private placements    569,824             -             -             -
    -------------------------------------------------------------------------
    Balance as at
     July 31, 2006         612,941         9,307             -             -
    Net earnings for
     the period                  -             -             -             -
    Share options issued
     and vested                  -        22,162             -             -
    Exercise of warrants        48             -             -             -
    Exercise of stock
     options and
     restricted shares         618          (183)            -             -
    -------------------------------------------------------------------------
    Balance as at
     December 31, 2006     613,607        31,286             -             -
    Net loss for the
     period                      -             -             -             -
    Share options and
     restricted shares
     vested                      -        37,660             -             -
    Exercise of warrants     2,115        (1,035)            -             -
    Exercise of stock
     options and
     restricted shares      54,912       (30,873)            -             -
    Uranium One Inc/
     UrAsia Energy Ltd
     business
     combination         1,709,647        62,042        46,480             -
    U.S. Energy Corp
     asset purchase
     consideration          99,401             -             -             -
    Energy Metals
     Corporation asset
     purchase            1,013,215        35,307             -             -
    Unrealized gains
     recognized on
     translation of
     self-sustaining
     foreign operations          -             -             -        51,779
    Shares issued for
     services rendered       3,987             -             -             -
    Gain on available
     for sale securities,
     net of tax benefit
     (note 10)                   -             -             -           188
    -------------------------------------------------------------------------
    Balance as at
     December 31, 2007   3,496,884       134,387        46,480        51,967
    -------------------------------------------------------------------------



                           Deficit         Total
    ---------------------------------------------
    Balance as at
     August 1, 2005             51         4,145
    Net loss for the
     period                (48,939)      (48,939)
    Share options issued
     and vested                  -         9,370
    Acquisition of Signature     -           424
    Acquisition of
     Kyzylkum                    -        37,500
    Exercise of warrants         -           673
    Exercise of stock
     options and
     restricted shares           -           363
    Shares issued for
     private placements          -       569,824
    ---------------------------------------------
    Balance as at
     July 31, 2006         (48,888)      573,360
    Net earnings for
     the period             19,684        19,684
    Share options issued
     and vested                  -        22,162
    Exercise of warrants         -            48
    Exercise of stock
     options and
     restricted shares           -           435
    ---------------------------------------------
    Balance as at
     December 31, 2006     (29,204)      615,689
    Net loss for the
     period                (17,609)      (17,609)
    Share options and
     restricted shares
     issued and vested           -        37,660
    Exercise of warrants         -         1,080
    Exercise of stock
     options and
     restricted shares           -        24,039
    Uranium One Inc/
     UrAsia Energy Ltd
     business
     combination                 -     1,818,169
    U.S. Energy Corp
     asset purchase
     consideration               -        99,401
    Energy Metals
     Corporation asset
     purchase                    -     1,048,522
    Unrealized gains
     recognized on
     translation of
     self-sustaining
     foreign operations          -        51,779
    Shares issued for
     services rendered           -         3,987
    Gain on available
     for sale securities,
     net of tax benefit
     (note 10)                   -           188
    ---------------------------------------------
    Balance as at
     December 31, 2007     (46,813)    3,682,905
    ---------------------------------------------


    Consolidated Statement of Comprehensive Income
    For the year ended December 31, 2007

    (in United States dollars)
                                                                        2007
                                                          Note         $'000
    -------------------------------------------------------------------------
    Net loss                                                         (17,609)
    Unrealized gains recognized on translation of
     self-sustaining foreign operations                               51,779
    Gain on available for sale securities, net of
     tax benefit                                            10           188
    -------------------------------------------------------------------------
    Comprehensive income                                              34,358
    -------------------------------------------------------------------------

    The accompanying notes form an integral part of these Annual Consolidated
    Financial Statements.



    Uranium One Inc.

    Consolidated Statements of Cash Flows
    For the year ended December 31, 2007, 5 months ended December 31, 2006
    and year ended July 31, 2006
                                                  Year   5 months       Year
                                                 ended      ended      ended
                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                      Notes      $'000      $'000      $'000
    -------------------------------------------------------------------------
    Net (loss)/earnings                        (17,609)    19,684    (48,939)

    Items not affecting cash:
    -   Depreciation and depletion              14,922      8,449      5,107
    -   Accretion of asset retirement
         obligation                      15      1,000          -          -
    -   Stock option expense             18     37,660     22,162      9,370
    -   Interest accrued on loans and
         debentures                              4,585          -          -
    -   Unrealized foreign exchange
         (gain)/loss                            26,196    (22,622)    42,662
    -   Fair value adjustment on
         Aflease Gold convertible bonds  14      3,106          -          -
    -   Future income tax recovery             (17,621)    (3,973)    (1,905)
    -   Non-controlling interest                (1,179)         -          -
    -   Other                                      935          -        120
    Movement in non-cash working
     capital                             20    (29,926)   (35,075)    (7,852)
    -------------------------------------------------------------------------
    Cash flows from/(to) operating
     activities                                 22,069    (11,375)    (1,437)
    -------------------------------------------------------------------------

    Acquisition of Uranium One Inc.,
     net of acquisition costs           3.1    271,670          -          -
    Acquisition of Energy Metals
     Corporation, net of acquisition
     costs                              4.2     76,706          -          -
    Acquisition of interest in
     Betpak Dala                                     -          -   (356,224)
    Acquisition of interest in Kyzylkum              -          -    (38,925)
    Acquisition of Signature                         -          -        465
    Acquisition of mineral interests,
     plant and equipment                      (279,370)   (13,509)   (12,319)
    Advance cash payment for other
     assets                                     (2,606)   (16,054)    (8,675)
    Joint venture earn in payments
     received                                    1,600          -          -
    Restricted cash                                500      2,000     (2,500)
    Cash advances to joint ventures       7    (27,500)   (27,150)   (25,440)
    Cash proceeds from joint ventures     7     23,447          -          -
    -------------------------------------------------------------------------
    Cash flows from from/(to) investing
     activities                                 64,447    (54,713)  (443,618)
    -------------------------------------------------------------------------

    Common shares issued, net of issue
     costs                                      25,119        483    570,859
    Convertible bond issued by subsidiary       87,445          -          -
    Shares issued by subsidiary to non-
     controlling shareholders                    2,061          -          -
    Loans received by Kyzylkum, net of
     acquisition costs                  7.1     17,769          7          -
    Short term loan repaid               20    (53,131)         -          -
    Other                                            -          -       (106)
    -------------------------------------------------------------------------
    Cash flows from financing activities        79,263        490    570,753
    -------------------------------------------------------------------------

    Effects of exchange rate changes on
     cash and cash equivalents                  24,602       (885)         -

    -------------------------------------------------------------------------
    Net increase/(decrease) in cash and
     cash equivalents                          190,381    (66,483)   125,698
    Cash and cash equivalents at the
     beginning of the period                    61,838    128,328      2,630
    -------------------------------------------------------------------------
    Cash and cash equivalents at the end
     of the period                        5    252,219     61,845    128,328
    -------------------------------------------------------------------------

    Supplemental cash flow information (note 20)

    The accompanying notes form an integral part of these Annual Consolidated
    Financial Statements.



    Uranium One Inc.

    Notes to the Consolidated Financial Statements
    as at December 31, 2007 and 2006 and July 31, 2006

    1   Nature of operations

        Uranium One Inc. ("Uranium One" or "the Corporation") is a Canadian
        uranium corporation engaged through subsidiaries and joint ventures
        in the mining and production of uranium, and in the acquisition,
        exploration and development of properties for the production of
        uranium, in Kazakhstan, South Africa, the United States, Australia
        and Canada. Uranium One also owns a 67% interest in Aflease Gold
        Limited ("Aflease Gold"), which is engaged in the development of the
        Modder East Gold Project in South Africa.

        Uranium One owns a 70% interest in both the producing Akdala Uranium
        Mine and the South Inkai Uranium Project and it is developing the
        Kharasan Project in Kazakhstan, in which it owns a 30% interest. The
        Corporation also owns the Dominion Uranium Project in South Africa.
        In the United States, the Corporation owns projects in the Powder
        River and Great Divide Basins in Wyoming, the Hobson ISR Uranium
        Processing Facility and La Palangana ISR Project in Texas and the
        Shootaring Mill in Utah. The Corporation also owns the Honeymoon
        Uranium Project in Australia. The Corporation owns a large portfolio
        of uranium exploration properties in South Africa, the western United
        States, South Australia, and the Athabasca Basin of Saskatchewan in
        Canada.

    2   Significant accounting policies

        2.1  Basis of presentation and principles of consolidation

             The consolidated financial statements of Uranium One and its
             subsidiaries (collectively, the "Corporation") have been
             prepared by Uranium One in accordance with Canadian generally
             accepted accounting principles ("Canadian GAAP").

             The consolidated financial statements include the accounts of
             the Corporation and all of its subsidiaries and the
             proportionate share of its interests in joint ventures. All
             intercompany balances and transactions have been eliminated.

             Uranium One acquired all of the issued and outstanding shares of
             UrAsia Energy Limited ("UrAsia Energy") on April 20, 2007
             (note 3.1). UrAsia Energy shareholders received 0.45 Uranium One
             common shares for each UrAsia Energy common share. For
             accounting purposes, the transaction is treated as a reverse
             takeover whereby UrAsia Energy is considered the acquiring
             company as the shareholders of UrAsia Energy acquired a majority
             shareholding in Uranium One. The comparative consolidated
             balance sheet as at December 31, 2006 and July 31, 2006 and the
             consolidated statements of operations, changes in equity and
             cash flows for the period ended December 31, 2006 and year ended
             July 31, 2006 are those of UrAsia Energy. The results of
             operations of Uranium One have been included from
             April 20, 2007.

             The following are the Corporation's principal mineral properties
             and operations as at December 31, 2007.


    Operating mine:

                     Mineral property/
    Entity           Operation         Location    Ownership Status
    -------------------------------------------------------------------------
    Betpak Dala LLP  Akdala Uranium    Kazakhstan     70%    Proportionately
                     Mine(1)                                 consolidated


    Advanced development projects:

                     Mineral property/
    Entity           Operation         Location    Ownership Status
    -------------------------------------------------------------------------
    Betpak Dala LLP  South Inkai       Kazakhstan     70%    Proportionately
                     Uranium                                 consolidated
                     Project(1)

    Kyzylkum LLP     Kharasan Uranium  Kazakhstan     30%    Proportionately
                     Project(1)                              consolidated

    Uranium One      Dominion Uranium  South Africa   100%   Consolidated
    Africa Limited   Project(2)(5)



    The Corporation is also developing the following mineral properties:

                     Mineral property/
    Entity           Operation         Location    Ownership Status
    -------------------------------------------------------------------------
    Energy Metals    US development    United States
    Corp US          projects

    South Texas      Hobson Facility   United States  99%    Consolidated
    Mining Venture   and La Palangana
                     Project(6)

    Uranium One      Shootaring        United States  100%   Consolidated
    USA Inc          Canyon
                     Uranium Mill(4)

    Uranium One      Honeymoon         Australia      100%   Consolidated
    Australia        Uranium
    (Proprietary)    Project(2)
    Limited

    Pitchstone       Pitchstone Joint  Canada         50%    Proportionately
    Joint Venture    Venture(2)                              consolidated

    Aflease Gold     Modder East Gold  South Africa   67%    Consolidated
    Limited          Project(3)

    (1) -  Legacy UrAsia Energy assets
    (2) -  Legacy Uranium One assets
    (3) -  Legacy Uranium One assets. The Modder East Gold Project is owned
           by Aflease Gold, a subsidiary of Uranium One (note 25)
    (4) -  Purchased from U.S. Energy Corp (note 4.1)
    (5) -  Refer to note 24 for the contingent sale of an interest in the
           Dominion Uranium Project
    (6) -  Legacy Energy Metals Corporation assets (note 4.2)


        2.2  Change in accounting policies
             On January 1, 2007, the Corporation adopted the following
             accounting standards:

                Section 1530 -  Comprehensive Income
                Section 3251 -  Equity
                Section 3855 -  Financial Instruments - Recognition and
                                measurement
                Section 3861 -  Financial Instruments - Disclosure and
                                presentation
                Section 3865 -  Hedges

             These standards address the classification, recognition and
             measurement of financial instruments in the financial
             statements, the inclusion of other comprehesive income ("OCI"),
             and establish the standards for hedge accounting. In addition,
             these standards provide guidance for reporting items in other
             comprehensive income, which is included on the Consolidated
             Balance Sheets as accumulated other comprehensive income or
             loss, a separate component of Shareholders' Equity.

             The Corporation did not record any adjustments as a result of
             adopting these new standards, other than reclassifying currency
             translation adjustments on its net investment in self-sustaining
             foreign operations to other comprehensive income.

        2.3  Measurement and reporting currency

             Items included in the financial statements of each entity in the
             Corporation are measured using the currency that best reflects
             the economic substance of the underlying events and
             circumstances relevant to that entity (the "functional
             currency").

             The Corporation's reporting currency is the United States
             dollar. Uranium One, its subsidiaries and joint ventures operate
             in Kazakhstan, South Africa, Australia, the United States,
             Canada, and the Kyrgyz Republic.

             The financial statements of the entities that are determined to
             be integrated foreign operations have been translated into
             United States dollars by translating foreign currency
             denominated monetary assets and liabilities, which includes
             future income tax, at rates of exchange in effect at the balance
             sheet date. Non-monetary items are translated at historical
             exchange rates and revenues and expenses at average rates of
             exchange during the period. Exchange gains and losses arising on
             translation are included in the consolidated statements of
             operations.

             The financial statements of the entities that are determined to
             be self-sustaining foreign operations have been translated into
             United States dollars by translating all assets and liabilities,
             which includes future income tax, at rates of exchange in effect
             at the balance sheet date. Revenues and expenses are translated
             at average exchange rates for the period. All resulting exchange
             differences are included in accumulated other comprehensive
             income on the balance sheet.

        2.4  Inventories

             Inventories of solutions and uranium concentrates are valued at
             the lower of average production cost or net realizable value.
             Production costs include the cost of raw materials, direct
             labour, mine-site related overhead expenses and depreciation and
             depletion of mining interests.

             The related direct production costs associated with in-process
             gold are deferred and charged to costs as the contained gold is
             recovered. In-process metals are identified and measured from
             the ore stockpiles up to and including the on-site refining
             plant.

             Materials and supplies are valued on the weighted average basis
             and recorded at the lower of average cost or replacement cost.

        2.5  Mineral interests, plant and equipment

             Mineral interests, plant and equipment are recorded at cost less
             accumulated depreciation and depletion.

             Mineral interests represent capitalized expenditures related to
             the development of mineral properties and related plant and
             equipment. Capitalized costs and plant and equipment are
             depreciated and depleted using either a unit-of-production
             method, over the estimated economic life of the mine to which
             they relate, or using the straight-line method over their
             estimated useful lives.

             The costs associated with mineral interests are separately
             allocated to reserves, resources and exploration potential, and
             include acquired interests in production, development and
             exploration stage properties representing the fair value at the
             time they were acquired. The value allocated to reserves is
             depreciated on a unit-of-production method over the estimated
             recoverable proven and probable reserves at the mine. The
             reserve value is noted as depletable mineral properties for
             operations in commercial production in note 9. The resource
             value represents the property interests that are believed to
             potentially contain economic mineralized material such as
             inferred material; measured, indicated, and inferred resources
             with insufficient drill spacing to qualify as proven and
             probable reserves; and inferred resources in close proximity to
             proven and probable reserves.

             Resource value and exploration potential value is noted as non-
             depletable mineral properties for operations in commercial
             production in note 9. At least annually or when otherwise
             appropriate, value from the non-depletable category will be
             transferred to the depletable category as a result of an
             analysis of the conversion of resources or exploration potential
             into reserves. Costs related to property acquisitions are
             capitalized until the viability of the mineral property is
             determined. Resource value and exploration potential for
             development projects not in commercial production is noted as
             non-depletable mineral properties. When it is determined that a
             property is not economically viable the capitalized costs are
             impaired. Exploration expenditures on properties not advanced
             enough to identify their development potential are charged to
             operations as incurred.

             Mining expenditures incurred either to develop new ore bodies or
             to develop mine areas in advance of current production are
             capitalized. Commercial production is deemed to have commenced
             when management determines that the completion of operational
             commissioning of major mine and plant components is completed,
             operating results are being achieved consistently for a period
             of time and that there are indicators that these operating
             results will be continued. Mine development costs incurred to
             sustain current production are included in production costs.

             Upon sale or abandonment of any mineral interest, plant and
             equipment, the cost and related accumulated depreciation or
             accumulated depletion, are written off and any gains or losses
             thereon are included in the statement of operations.

        2.6  Impairment of long-lived assets

             The Corporation reviews the carrying values of its property,
             plant and equipment when changes in circumstances indicate that
             those carrying values may not be recoverable. Estimated future
             net cash flows are calculated using estimated recoverable
             reserves, estimated future commodity prices and the expected
             future operating and capital costs. An impairment loss is
             recognized when the carrying value of an asset held for use
             exceeds the sum of undiscounted future net cash flows. An
             impairment loss is measured as the amount by which the asset's
             carrying amount exceeds its fair value.

        2.7  Asset retirement obligations

             The Corporation recognizes liabilities for statutory,
             contractual or legal obligations associated with the retirement
             of mineral property, plant and equipment, when those obligations
             result from the acquisition, construction, development or normal
             operation of the assets. Initially, the net present value of the
             liability for an asset retirement obligation is recognized in
             the period incurred. The net present value of the liability is
             added to the carrying amount of the associated asset and
             amortized over the asset's useful life. The liability is
             accreted over time through periodic charges to earnings and is
             reduced by actual costs of reclamation. Subsequent to the
             initial measurement, the asset retirement obligation is adjusted
             at the end of each year to reflect the passage of time and
             changes in the estimated future cash flows underlying the
             obligation.

        2.8  Revenue recognition

             Revenue from uranium sales is recognized, net of value added
             tax, when: (i) persuasive evidence of an arrangement exists;
             (ii) the risks and rewards of ownership pass to the purchaser
             including delivery of the product; (iii) the selling price is
             fixed or determinable, and (iv) collectibility is reasonably
             assured.

             Interest income is recognized on a time proportion basis, taking
             account of the principal outstanding and the effective rate over
             the period to maturity, when it is determined that such income
             will accrue to the Corporation.


        2.9  Future income and mining taxes

             The Corporation uses the liability method of accounting for
             income and mining taxes. Under the liability method, future tax
             assets and liabilities are recognized for the future tax
             consequences attributable to differences between the financial
             statement carrying amounts of existing assets and liabilities
             and their respective tax bases and for tax losses and other
             deductions carried forward. For business acquisitions, the
             liability method results in a gross up of mining interests to
             reflect the recognition of the future tax liabilities for the
             tax effect of such differences.

             Future tax assets and liabilities are measured using enacted or
             substantively enacted tax rates expected to apply when the asset
             is realized or the liability settled. A reduction in respect of
             the benefit of a future tax asset (a valuation allowance) is
             recorded against any future tax asset if it is not likely to be
             realized. The effect on future tax assets and liabilities of a
             change in tax rates is recognized in the statement of operations
             in the period in which the change is substantively enacted.

        2.10 Stock based compensation

             The Corporation's stock-based compensation plans are described
             in note 18.

             The Corporation uses the fair value method of accounting for all
             stock option awards. Under this method, the Corporation
             determines the fair value of the compensation expense for all
             stock options on the date of grant using an option pricing
             model. The fair value of the options is expensed over the
             vesting period of the options.

             Upon exercise of the stock option, consideration received and
             the related amount of stock based compensation, is transferred
             from contributed surplus and recorded as share capital.

        2.11 Earnings/loss per share

             Earnings/loss per share calculations are based on the weighted
             average number of common shares and common share equivalents
             issued and outstanding during the year. Diluted earnings per
             share are calculated using the treasury method which assumes
             that outstanding stock options and warrants with an average
             market price that exceeds the average exercise prices of the
             options and warrants for the year are exercised, and the assumed
             proceeds are used to repurchase shares of Uranium One at the
             average market price of the common shares for the period. The
             impact of outstanding share options and warrants are excluded
             from the diluted share calculation for loss per share amounts,
             because it is anti-dilutive. Dilution from convertible
             securitities is calculated based on the number of shares to be
             issued after taking into account the reduction of the related
             after tax interest expense.

        2.12 Financial instruments

             The Corporation's financial instruments comprise primarily cash
             and cash equivalents, restricted cash, accounts receivable, and
             accounts payable. The fair value of these financial instruments
             approximate their carrying values, due primarily to their
             immediate or short-term maturity. Fair values of other financial
             instruments have been estimated by reference to quoted market
             prices for actual or similar instruments where available and
             disclosed accordingly.

             Comprehensive income comprises the Corporation's net income and
             other comprehensive income. Comprehensive income represents
             changes in shareholders' equity during a period arising from
             non-owner sources and, for the Corporation, other comprehensive
             income includes currency translation adjustments on its net
             investment in self-sustaining foreign operations, and unrealized
             gains and losses on available-for-sale securities.

             Financial assets and financial liabilities are recognized on the
             balance sheet when the Corporation has become party to the
             contractual provisions of the instruments. Financial instruments
             are initially measured at cost, which includes transaction
             costs. Subsequent to initial recognition these instruments are
             measured as set out below:

             Investments

             Purchases and sales of marketable investments are recognized on
             the trade date at market value, which is the date that the
             Corporation commits to purchase or sell the asset. After initial
             recognition, the investments are classified as available for
             sale investments carried at market value, with the market value
             adjustments accounted for in other comprehensive income.

             The Corporation accounts for its other investments using the
             cost basis of accounting whereby investments are initially
             recorded at cost and earnings from such investments are
             recognized only to the extent received or receivable. The
             carrying value of other investments is reduced to the estimated
             market value, if there is an other than temporary decline in the
             value of the investment; such reduction is included in the
             consolidated statement of operations.

             Cash and cash equivalents

             Cash and cash equivalents consist of cash on hand, bank
             balances, deposits held at call and certificates of deposits,
             money market instruments, including cashable guaranteed
             investment certificates, bearer deposit notes and commercial
             paper with a remaining maturity of three months or less at date
             of purchase, and are carried at fair value.

             Accounts receivable

             Accounts receivable are carried at original invoice amount
             unless a provision has been recorded for impairment of these
             receivables. A provision for impairment of accounts receivable
             is established when there is objective evidence that the
             Corporation will not be able to collect all amounts due
             according to the original terms of receivables.

             Impairment and uncollectability of financial assets

             An assessment is made at each balance sheet date to determine
             whether there is objective evidence that a financial asset or
             group of financial assets may be impaired. If such evidence
             exists, the estimated recoverable amount of the asset is
             determined and an impairment loss is recognized for the
             difference between the recoverable amount and the carrying
             amount as follows: the carrying amount of the asset is reduced
             to its discounted estimated recoverable amount, either directly
             or through the use of an allowance account and the resulting
             loss is recognized in the consolidated statement of operations
             for the period.

             Financial liabilities

             After initial recognition, financial liabilities other than
             trading liabilities are subsequently measured at amortized cost
             using the effective interest rate method. Amortized cost is
             calculated by taking into account any transaction costs and any
             discount or premium on settlement.

             Accounts payable

             Liabilities for trade and other payables which are normally
             settled on 30 to 90 day terms are carried at cost.

             Loans payable

             Loans payable are recognized initially at the proceeds received,
             net of transaction costs incurred. Loans payable are
             subsequently stated at amortized cost using the effective yield
             method; any difference between proceeds (net of transaction
             costs) and the redemption value is recognized in the income
             statement over the period of the loan.

             Offset

             Where a legally enforceable right of offset exists for
             recognized financial assets and financial liabilities, and there
             is an intention to settle the liability and realize the asset
             simultaneously, or settle on a net basis, all related financial
             effects are offset.

             Embedded derivatives

             Derivatives may be embedded in other financial instruments (the
             "host instrument"). Embedded derivatives are treated as separate
             derivatives when their economic characteristics and risks are
             not clearly and closely related to those of the host instrument,
             the terms of the embedded derivative are the same as those of a
             stand-alone derivative, and the combined contract is not held
             for trading or designated at fair value. These embedded
             derivatives are measured at fair value with subsequent changes
             recognized in gains or losses on derivatives within interest and
             other on the consolidated statements of operations.

             Compound instruments

             The component parts of compound instruments are classified
             separately as financial liabilities and equity in accordance
             with the substance of the contractual agreement. At the date of
             issue, the fair value of the liability component is estimated
             using the prevailing market interest rate for similar non-
             convertible instruments. This amount is recorded as a liability
             on an amortized cost basis until extinguished upon conversion or
             at the instrument's maturity date. The equity component is
             determined by deducting the amount of the liability component
             from the face value of the compound instrument as a whole. This
             is recognized and included in equity, net of income tax effects,
             and is not subsequently remeasured.

        2.13 Equity instruments

             Equity instruments issued by Uranium One are recorded at the
             proceeds received, net of direct issue costs.

        2.14 Use of estimates

             The preparation of financial statements in conformity with
             Canadian GAAP requires the Corporation's management to make
             estimates and assumptions about future events that affect the
             amounts reported in the consolidated financial statements and
             related notes to the financial statements. Actual results may
             differ from those estimates.

             Significant estimates used in the preparation of these
             consolidated financial statements include, but are not limited
             to, the recoverability of accounts receivable and investments,
             the proven and probable reserves and resources and the related
             depletion and amortization, the estimated net realizable value
             of inventories, the accounting for stock-based compensation, the
             valuation of investments, the provision for income taxes and
             composition of income tax assets and liabilities, the expected
             economic lives of and the estimated future operating results and
             net cash flows from mining interests, the anticipated costs of
             reclamation and closure cost obligations, and the fair value of
             assets and liabilities acquired in business combinations and
             asset acquisitions.

        2.15 Non-controlling interests

             Non-controlling interests exist with respect to less than
             wholly-owned subsidiaries of the Corporation and represent the
             outside interest's share of the carrying values of the
             subsidiaries. When the subsidiary company issues its own shares
             to outside party's, a dilution gain or loss arises as a result
             of the difference between the Corporation's share of the
             proceeds and the carrying value of the underlying equity.

        2.16 Variable interest entities

             Variable interest entities ("VIE's") as defined by the
             Accounting Standards Board in Accounting Guideline ("AcG") 15,
             "Consolidation of Variable Interest Entities" are entities in
             which equity investors do not have characteristics of a
             "controlling financial interest" or there is not sufficient
             equity at risk for the entity to finance its activities without
             additional subordinated financial support. VIE's are subject to
             consolidation by the primary beneficiary who will absorb the
             majority of the entities expected losses and/or expected
             residual returns. The Corporation has determined that none of
             its equity investments qualify as VIE's.

        2.17 Recent accounting pronouncements - effective January 1, 2008

             In March 2007, the CICA issued Section 3862 Financial
             Instruments - Disclosures and Section 3863 Financial Instruments
             - Presentation which will replace section 3861 - Financial
             Instruments - Disclosure and Presentation. These new sections
             revise and enhance current disclosure requirements for financial
             instruments, and place an increased emphasis on disclosure about
             risk, including both qualitative and quantitative information
             about the risk exposures arising from financial instruments.

             Section 1535 Capital Disclosures identifies disclosure
             requirements about the Corporation's objectives, policies, and
             processes for managing capital, as well as quantitative
             information about capital.

             Section 3031 Inventories, will replace Section 3030, and
             provides standards for the measurement and disclosure of
             inventories. The new standard provides more extensive guidance
             on the determination of cost, including allocation of overhead,
             requirements for impairment testing and expands the existing
             disclosure requirements. The adoption of this standard is not
             expected to have a material impact on the Corporation's
             consolidated financial position and results of operations.

    3   Business combinations

        3.1  UrAsia Energy acquisition

             On February 11, 2007, Uranium One entered into a definitive
             arrangement agreement whereby Uranium One agreed to acquire all
             of the outstanding common shares of UrAsia Energy. Under the
             agreement, each UrAsia Energy share was exchanged for 0.45
             Uranium One common shares. Each UrAsia Energy warrant and stock
             option, which previously gave the holder the right to acquire
             common shares of UrAsia Energy was exchanged for a warrant or
             stock option which gives the holder the right to acquire common
             shares of Uranium One on the same basis as the shareholders of
             UrAsia Energy, with all other terms of such warrants and options
             (such as term and expiry) remaining unchanged.

             The shareholders of UrAsia Energy approved the arrangement at a
             Special Meeting held on April 5, 2007, with the transaction
             closing on April 20, 2007. Upon completion of the transaction,
             Uranium One was held approximately 60% by former UrAsia Energy
             shareholders and approximately 40% by former Uranium One
             shareholders. Accordingly, this business combination is
             accounted for as a reverse takeover under Canadian GAAP with
             UrAsia Energy being identified as the acquirer and Uranium One
             as the acquiree.

             The cost of acquisition includes the fair value of the deemed
             issuance of the following instruments: 307.0 million UrAsia
             Energy common shares at $5.57 per share, plus 6.1 million share
             purchase warrants with an average exercise price of $1.57 per
             share and a fair value of $26.4 million, plus 12.0 million stock
             options, of which 8.0 million are exercisable at the date of
             acquisition, with an average exercise price of $2.66 per share
             and a fair value of the vested portion of $34.8 million, plus
             0.8 million restricted shares with a fair value of $0.9 million,
             plus the fair value of the equity component of the Uranium One
             convertible debenture of $46.5 million plus UrAsia Energy's
             transaction costs of $19.4 million, providing a total purchase
             price of $1,837.6 million.

             The value of the deemed issuance of UrAsia Energy shares was
             calculated using the weighted average share price of UrAsia
             Energy shares two days before, the day of, and two days after
             the date of the announcement of the arrangement. The following
             weighted average assumptions were used for the Black scholes
             option pricing model for the fair value of the stock options,
             warrants, restricted shares and equity component of the
             convertible debenture:


             Risk-free interest rate                                   4.17%
             Expected volatility of the share price                      61%
             Expected life                                        3.79 years
             Dividend rate                                               Nil


             The aggregate fair values of assets acquired and liabilities
             assumed were as follows on acquisition date:


                                                                       $'000
             ----------------------------------------------------------------
             Purchase price:
               Common shares (note 17)                             1,709,647
               Options, warrants and restricted shares                62,042
               Equity component of convertible debentures             46,480
               Acquisition costs                                      19,418
             ----------------------------------------------------------------
                                                                   1,837,587
             ----------------------------------------------------------------
             Net assets acquired:
               Cash and cash equivalents                             291,088
               Other current assets                                   33,442
               Mineral interests, plant and equipment              2,459,355
               Other assets                                           13,502
               Accounts payable and accrued liabilities              (57,223)
               Short term loans                                      (54,130)
               Asset retirement obligations                           (4,602)
               Convertible debentures                               (118,450)
               Future income tax liabilities                        (713,732)
               Non-controlling interest                              (11,663)
             ----------------------------------------------------------------
                                                                   1,837,587
             ----------------------------------------------------------------


        3.2  Betpak Dala acquisition

             On November 7, 2005, the Corporation acquired a 70% joint
             venture interest in Betpak Dala LLP ("Betpak") which has 100%
             interests in the Akdala Mine and the South Inkai Project, both
             of which are located in the Republic of Kazakhstan. In
             consideration for its interest, the Corporation paid a total of
             $350 million. The remaining 30% interest in Betpak is held by
             JSC NAC Kazatomprom ("Kazatomprom").

             Under the terms of the agreement, a bonus payable in cash or
             shares, capped at $36.4 million, was due based on the uranium
             reserves discovered on the Akdala and South Inkai properties and
             surrounding areas during the 12 month period ended November 7,
             2006, in excess of the existing uranium reserves and resources.
             As at November 7, 2006, no additional uranium reserves and
             resources were discovered on the Akdala and South Inkai
             properties. No payment was due at December 31, 2007 (July 31,
             2006 - $Nil, December 31, 2006 - $Nil).

             A further bonus payment is payable in cash based on uranium
             reserves discovered on the South Inkai property in excess of
             66,000 tonnes. The payment is based on the Corporation's share
             of U(3)O(8) in excess of 66,000 tonnes times the average spot
             price of U(3)O(8) times 6.25%. This payment is to be calculated
             at the end of 2011 and each year thereafter, and paid 60 days
             after the end of the year in which a payment is due. No payment
             was due at December 31, 2007 (July 31, 2006 - $Nil,
             December 31, 2006 - $Nil).

             As security for the bonus payment, the Corporation has pledged
             its participatory interest in Betpak (including the shares of a
             subsidiary) and its share of uranium products produced by
             Betpak.

             The allocation of the purchase price is summarized in the table
             below:
                                                                       $'000
             ----------------------------------------------------------------
             Purchase price:
               Cash                                                  350,000
               Acquisition costs                                       7,690
             ----------------------------------------------------------------
                                                                     357,690
             ----------------------------------------------------------------

             Net assets acquired:
               Cash                                                    1,981
               Mineral interests, plant and equipment                614,494
               Other net assets                                          683
               Future income taxes                                  (259,468)
             ----------------------------------------------------------------
                                                                     357,690
             ----------------------------------------------------------------

             For the purpose of these consolidated financial statements, the
             purchase consideration has been allocated to the fair value of
             assets acquired and liabilities assumed.


        3.3  Kyzylkum Acquisition

             On November 7, 2005, the Corporation acquired a 30% joint
             venture interest in Kyzylkum LLP ("Kyzylkum") which has a 100%
             interest in the Kharassan Project, located in the south central
             area of the Republic of Kazakhstan. In consideration for its
             interest, the Corporation paid a total of $75 million, including
             $37.5 million in cash with the balance consisting of the
             issuance of 24,181,250 common shares.

             A bonus payment is due upon commencement of commercial
             production. The seller initially had an option, exercisable
             until October 31, 2006, to elect to receive this bonus payment
             as a cash payment of $24 million or receive 15,476,000 shares of
             UrAsia Energy. The seller elected under the terms of the
             arrangement, to receive 15,476,000 shares of UrAsia Energy upon
             commencement of commercial production. The 15,476,000 bonus
             payment shares of UrAsia Energy has been converted to 6,964,200
             Uranium One shares as part of the UrAsia Energy acquistion
             (Note 3.1). The fair value of the contingently issuable shares
             has not been included as part of the purchase price for Kyzylkum
             as commencement of commercial production could not be reasonably
             determined.

             An additional bonus payment of 30% of 12.5% (being an effective
             3.75%) of the weighted average spot price of U(3)O(8) will be
             paid on incremental reserves in excess of 55,000 tonnes of
             U(3)O(8) discovered during each fiscal year with payment
             beginning within 60 days of the end of the 2008 calendar year.
             No payment was due at December 31, 2007 (July 31, 2006 - $Nil,
             December 31, 2006 - $Nil).

             The Corporation is responsible for arranging project financing
             of $80 million for the construction and commissioning of a mine
             in respect of the Kharassan Project. As security for this
             obligation and the obligation to make the bonus payments
             referred to above, the Corporation has granted a security
             interest over the shares of a subsidiary holding the
             Corporation's interest in Kharassan.

             The allocation of the purchase price is summarized in the table
             below:

                                                                       $'000
             ----------------------------------------------------------------
             Purchase price:
               Cash                                                   37,500
               24,181,250 common shares                               37,500
               Acquisition costs                                       1,509
             ----------------------------------------------------------------
                                                                      76,509
             ----------------------------------------------------------------

             Net assets acquired:
               Cash                                                       84
               Mineral interests, plant and equipment                141,487
               Other net assets                                           13
               Future income taxes                                   (65,075)
             ----------------------------------------------------------------
                                                                      76,509
             ----------------------------------------------------------------

        3.4  Signature acquisition

             In September 2005, Signature Resources Ltd ("Signature") signed
             a binding letter of agreement with UrAsia Energy Holdings Ltd
             ("UrAsia BVI"), a subsidiary of UrAsia Energy, pursuant to which
             Signature agreed to acquire all of the issued and outstanding
             shares of UrAsia BVI in consideration for the issuance of common
             shares of Signature. Pursuant to the terms of the agreement,
             Signature consolidated its common shares on a one for two basis
             and issued one post-consolidation share of Signature for each
             issued and outstanding ordinary share of UrAsia BVI.

             As the shareholders of UrAsia BVI acquired control of Signature
             following the UrAsia Acquisition, this transaction was a reverse
             takeover and has been accounted for as an acquisition of
             Signature by UrAsia BVI. The purchase price has been determined
             by reference to the fair value of the net assets acquired from
             Signature.

             The allocation of the purchase price is summarized in the table
             below:

                                                                       $'000
             ----------------------------------------------------------------
             Purchase price:
               5,935,621 common shares                                   271
               Stock options and warrants of Signature                   153
             ----------------------------------------------------------------
                                                                         424
             ----------------------------------------------------------------

             Net assets acquired:
               Cash                                                      465
               Non-cash working capital deficiency                       (41)
             ----------------------------------------------------------------
                                                                         424

    4   Asset purchases

        4.1  US Energy

             On April 30, 2007, Uranium One completed the purchase, from U.S.
             Energy Corporation ("U.S. Energy"), of the Shootaring Canyon
             Uranium Mill in Utah, as well as a land package comprising
             uranium exploration properties in Utah, Wyoming, Arizona and
             Colorado and a substantial database of geological information
             for consideration equal to 6,607,605 Uranium One common shares
             valued at $99.4 million, a cash payment of $6.5 million, and
             transaction costs of $2.6 million including $750,000 paid in
             cash by Uranium One on the execution of an exclusivity agreement
             with the vendor. The purchase agreement provides for further
             payments by Uranium One of $27.5 million dependent on the
             achievement of certain production targets. U.S. Energy will
             receive a royalty equal to 5% of the gross proceeds from the
             sale of commodities produced at the Shootaring Canyon Mill, to a
             maximum amount of $12.5 million.

             The transaction was accounted for as an asset purchase and the
             cost of each item of property, plant and equipment acquired as
             part the group of assets acquired was determined by allocating
             the price paid for the group of assets to each item based on its
             relative fair value at the time of acquisition. The summarized
             result of the allocation is indicated in the table below:


             Purchase price:                                           $'000
               6.6 million common shares of Uranium One               99,401
               Cash payment                                            6,515
               Acquisition costs, including exclusivity fee            2,603
             ----------------------------------------------------------------
                                                                     108,519
             ----------------------------------------------------------------

             Allocation of purchase price to assets:
               Shootaring Canyon Mill                                 39,107
               Exploration properties and geological information      65,183
               Stockpiles                                              7,772
               Asset retirment obligation                             (3,543)
             ----------------------------------------------------------------
                                                                     108,519
             ----------------------------------------------------------------

             Pursuant to the asset purchase agreement, the reclamation bonds
             and guarantees given by U.S. Energy in connection with the
             acquired assets were substituted by Uranium One surety bonds
             with the appropriate Governmental Entity to provide coverage for
             the reclamation obligations of the acquired assets. The bond
             payments of $9.3 million are included in other assets as part of
             the asset retirement fund. The asset retirement obligation was
             assessed and accounted for on acquisition date (Refer note 15).


        4.2  Energy Metals Corporation

             On June 3, 2007, Uranium One and Energy Metals Corporation
             ("EMC") entered into a definitive agreement whereby Uranium One
             agreed to acquire all of the issued and outstanding common
             shares and options to purchase common shares of EMC. The
             agreement was approved by the shareholders of EMC on July 31,
             2007 and the acquisition was completed on August 10, 2007. Under
             the agreement, Uranium One exchanged 1.15 common shares of
             Uranium One for each common share of EMC. A total of
             100,444,543 Uranium One common shares were issued in exchange
             for 87,343,081 EMC common shares.

             The cost of the acquisition includes the fair value of the
             issuance of 100,444,543 Uranium One common shares at $10.09 per
             share, plus 8,382,546 stock options of Uranium One, of which
             5,380,458 were exercisable at the date of acquisition,
             with an average exercise price of $8.14 per share and a fair
             value of the vested portion of $35.3 million plus Uranium One's
             transaction costs of $9.3 million for a total purchase price of
             $1,057.8 million.

             The value of the Uranium One common shares issued was calculated
             using the share price of Uranium One's shares on the date of
             acquisition. The following weighted average assumptions were
             used for the Black-Scholes option pricing model for the fair
             value of the stock options:

             Risk-free interest rate                                   4.57%
             Expected volatility of the share price                      60%
             Expected life                                        3.07 years
             Dividend rate                                               Nil

             The transaction was accounted for as an asset purchase and the
             cost of each item of property, plant and equipment acquired as
             part of the group of assets acquired was determined by
             allocating the price paid for the group of assets to each item
             based on its relative fair value at the time of acquisition. The
             summarized results of the allocation is indicated in the table
             below:

                                                                       $'000
             ----------------------------------------------------------------
             Purchase price:
               100.4 million shares of Uranium One                 1,013,215
               Options of Uranium One                                 35,307
               Acquisition costs                                       9,311
             ----------------------------------------------------------------
                                                                   1,057,833
             ----------------------------------------------------------------

             Net assets acquired:
               Cash and cash equivalents                              86,017
               Marketable securities                                   6,909
               Other current assets                                   12,497
               Mineral interests, plant and equipment              1,441,077
               Other non-current assets                               23,662
               Accounts payable and accrued liabilities               (5,627)
               Asset retirement obligations                           (2,281)
               Future income tax liability                          (504,421)
             ----------------------------------------------------------------
                                                                   1,057,833
             ----------------------------------------------------------------


    5   Cash and cash equivalents
                                                  Dec 31,   Dec 31,   Jul 31,
                                                    2007      2006      2006
                                                   $'000     $'000     $'000
                                                -----------------------------
        Cash                                     240,160    21,624    61,028
        Money market instruments, including
         cashable guaranteed investment
         certificates, bearer deposit notes and
         commercial paper                         12,059    40,214    67,300
        ---------------------------------------------------------------------
                                                 252,219    61,838   128,328
        ---------------------------------------------------------------------

        Cash and cash equivalents do not include any asset backed commercial
        paper.

    6   Accounts and other receivables

                                                  Dec 31,   Dec 31,   Jul 31,
                                                    2007      2006      2006
                                                   $'000     $'000     $'000
                                                -----------------------------
        Trade receivables                         55,595    47,798    10,173
        Value added tax and general sales tax      9,528        51         -
        Prepayments and advances                   5,558       894     1,177
        Deposits and guarantees                    3,220         -         -
        Other receivables                          1,954       443         -
        ---------------------------------------------------------------------
                                                  75,855    49,186    11,350

        Less: non current deposits and
         guarantees included in other assets
         (note 11)                                 3,220         -         -
        ---------------------------------------------------------------------
                                                  72,635    49,186    11,350
        ---------------------------------------------------------------------

    7   Joint ventures

        7.1  Proportionate interests in joint ventures

             A number of the exploration properties in the western United
             States acquired from U.S. Energy in April 2007, were under an
             option agreement with Uranium Power Corp ("UPC") at the time of
             purchase. The Corporation acquired the right to the outstanding
             payments under this agreement together with the exploration
             properties. During the fourth quarter of 2007, UPC made the
             final payments pursuant to the option agreement and therefore
             satisfied the earn in requirements and the Corporation and UPC
             formed a 50:50 joint venture to explore and develop these
             properties.

             The Corporation owns the following interests in joint ventures:

             ----------------------------------------------------------------
             Betpak Dala                                                 70%
             Kyzylkum                                                    30%
             Joint Venture with UPC                                      50%
             Pitchstone                                                  50%

             The Corporation's proportionate share of assets and liabilities
             are as follows:

             As at                                 Joint
             December 31,     Betpak             Venture    Pitch-
             2007               Dala  Kyzylkum  with UPC     stone     Total
                               $'000     $'000     $'000     $'000     $'000
             ----------------------------------------------------------------
             Cash              1,643     3,659       224        77     5,603
             Other current
              assets          73,039       291         5        68    73,403
             Mineral interests,
              plant and
              equipment      680,046   182,740    50,422    20,191   933,399
             Other assets      4,070     4,771     1,093         -     9,934
             Current
              liabilities    (19,395)     (900)       72         -   (20,223)
             Long term
              debt(1)              -   (18,205)        -         -   (18,205)
             Other            (1,567)     (135)        -         -    (1,702)
             Future income
              taxes         (280,075)  (72,486)        -    (5,831) (358,392)
             Asset retirement
              obligation      (3,377)        -         -         -    (3,377)
             ----------------------------------------------------------------
             Net assets      454,384    99,735    51,816    14,505   620,440
             ----------------------------------------------------------------

             (1)  In addition to the $73.3 million loan (note 7.2) from the
                  Corporation, Kyzylkum negotiated unsecured bank loan
                  facilities totalling $100 million. One facility in the
                  amount of $70 million was obtained from the Japan Bank for
                  International Cooperation and the other facility in the
                  amount of $30 million was obtained from Citibank. A total
                  of $60 million has been drawn down from the facility during
                  the year. The loan facilities will be repayable after full
                  repayment of the loan from the Corporation. The
                  Corporation's proportionate share of these facilities will
                  amount to $30 million when fully drawn down. The loan
                  facilities have floating interest rates of LIBOR plus 0.25%
                  and 0.35%, respectively.



             As at December 31, 2006  Betpak Dala Kyzylkum             Total
                                            $'000    $'000             $'000
             ----------------------------------------------------------------
             Cash                           5,321    3,055             8,376
             Other current assets          56,424    2,357            58,781
             Mineral interests, plant and
              equipment                   617,740  150,739           768,479
             Other assets                  10,732    1,679            12,411
             Current liabilities           (3,717)    (154)           (3,871)
             Other                         (1,466)       -            (1,466)
             Future income taxes         (268,938) (68,662)         (337,600)
             Asset retirement obligation   (2,856)       -            (2,856)
             ----------------------------------------------------------------
             Net assets                   413,240   89,014           502,254
             ----------------------------------------------------------------



             As at July 31, 2006      Betpak Dala Kyzylkum             Total
                                            $'000    $'000             $'000
             ----------------------------------------------------------------
             Cash                           5,388    6,907            12,295
             Other current assets          19,373       16            19,389
             Mineral interests, plant and
              equipment                   618,019  143,874           761,893
             Other assets                     780        -               780
             Current liabilities           (6,710)    (160)           (6,870)
             Other                         (1,046)       -            (1,046)
             Future income taxes         (291,803) (73,643)         (365,446)
             Asset retirement obligation   (1,953)       -            (1,953)
             ----------------------------------------------------------------
             Net assets                   342,048   76,994           419,042
             ----------------------------------------------------------------


             The Corporation's proportionate share of revenue, expenses, net
             income and cash flows for the year ended December 31, 2007, five
             months ended December 31, 2006 and year ended July 31, 2006 are
             as follows:


             Year ended                            Joint
             December 31,     Betpak             Venture    Pitch-
             2007               Dala  Kyzylkum  with UPC     stone     Total
                               $'000     $'000     $'000     $'000     $'000
             ----------------------------------------------------------------
             Revenue         134,024         -         -         -   134,024
             Expenses        (29,664)     (962)     (177)   (1,938)  (32,741)
             Foreign exchange
              loss            (5,774)     (432)        -         -    (6,206)
             ----------------------------------------------------------------
             Income/(loss)
              before income
              taxes           98,586    (1,394)     (177)   (1,938)   95,077
             Provision for
              income taxes   (38,656)        -         -         -   (38,656)
             ----------------------------------------------------------------
             Net income/
              (loss)          59,930    (1,394)     (177)   (1,938)   56,421
             ----------------------------------------------------------------

             Cash flows from/
              (to) operating
              activities      77,544       (12)     (885)   (2,507)   74,140
             Cash flows to
              investing
              activities     (47,711)  (23,736)     (128)        -   (71,575)
             Cash flows
              (to)/from
              financing
              activities     (33,736)   24,120     1,238     2,583    (5,795)
             ----------------------------------------------------------------
             Net increase/
              (decrease) in
              cash            (3,903)      372       225        76    (3,230)
             ----------------------------------------------------------------


             Five months ended
             December 31,     Betpak
             2006               Dala  Kyzylkum                         Total
                               $'000     $'000                         $'000
             ----------------------------------------------------------------
             Revenue          50,449         -                        50,449
             Expenses        (17,276)        -                       (17,276)
             Foreign
              exchange
              gain            19,337     4,426                        23,763
             ----------------------------------------------------------------
             Earnings before
              income taxes    52,510     4,426                        56,936
             (Provision for)
              / recovery of
              income taxes   (12,117)      106                       (12,011)
             ----------------------------------------------------------------
             Net income       40,393     4,532                        44,925
             ----------------------------------------------------------------

             Cash flows
              from to
              operating
              activities     (18,215)     (180)                      (18,395)
             Cash flows
              from
              investing
              activities      33,950     5,400                        39,350
             Cash flows to
              financing
              activities     (15,792)   (8,472)                      (24,264)
             ----------------------------------------------------------------
             Net decrease
              in cash            (57)   (3,252)                       (3,309)
             ----------------------------------------------------------------


             Year ended
             July 31,
             2006        Betpak Dala  Kyzylkum                         Total
                               $'000     $'000                         $'000
             ----------------------------------------------------------------
             Revenue          23,507         -                        23,507
             (Expenses) /
              other
              income         (13,181)       12                       (13,169)
             Foreign
              exchange loss  (32,933)   (8,326)                      (41,259)
             ----------------------------------------------------------------
             Loss before
              income taxes   (22,607)   (8,314)                      (30,921)
             Provision for
              income taxes    (3,290)     (106)                       (3,396)
             ----------------------------------------------------------------
             Net loss        (25,897)   (8,420)                      (34,317)
             ----------------------------------------------------------------

             Cash flows
              from operating
              activities       6,637       307                         6,944
             Cash flows from
              investing
              activities       9,870     9,020                        18,890
             Cash flows to
              financing
             activities      (13,095)   (2,503)                      (15,598)
             ----------------------------------------------------------------
             Net decrease in
              cash             3,412     6,824                        10,236
             ----------------------------------------------------------------

        7.2  Loans to Joint Ventures
                                                  Dec 31,   Dec 31,   Jul 31,
                                                    2007      2006      2006
                                                   $'000     $'000     $'000
             ----------------------------------------------------------------
             Current portion
             Betpak Dala                           5,175    12,736     4,394
             Kyzylkum                             27,692       752        46
             ----------------------------------------------------------------
                                                  32,867    13,488     4,440
             ----------------------------------------------------------------

             ----------------------------------------------------------------
             Long term portion
             Betpak Dala                               -     6,250         -
             Kyzylkum                             24,359    33,600    21,000
             ----------------------------------------------------------------
                                                  24,359    39,850    21,000
             ----------------------------------------------------------------

             ----------------------------------------------------------------
             Total                                57,226    53,338    25,440
             ----------------------------------------------------------------

             Subsequent to year end, Kyzylkum has repaid $6.7 million of the
             outstanding loan, and Betpak Dala has repaid the entire
             outstanding amount.

             Betpak Dala loan                     Dec 31,   Dec 31,   Jul 31,
                                                    2007      2006      2006
                                                   $'000     $'000     $'000
             ----------------------------------------------------------------
             Loan advanced in December 2005.
              The loan bears interest at LIBOR
              plus 1.5% per annum, with principal
              and interest amounts payable
              before May 31, 2007.                     -    14,100    14,100
             Loans advanced from July to
              November 2006:
             Pursuant to its commitment to provide
              project financing for construction
              and commissioning of the South Inkai
              Project, the loans bear interest at
              LIBOR plus 1.5% per annum                -    48,500

             Loans advanced in November and
              December 2007:
             The loans bear interest at LIBOR plus
              6.5% per annum, and is payable
              before February 9, 2008             17,000         -         -
             ----------------------------------------------------------------

                                                  17,000    62,600    14,100
             Interest accrued                        249       688       548
             ----------------------------------------------------------------
                                                  17,249    63,288    14,648
             Less elimination of proportionate
              share - 70%                        (12,074)  (44,302)  (10,254)
             ----------------------------------------------------------------
                                                   5,175    18,986     4,394
             Less current portion                 (5,175)  (12,736)   (4,394)
             ----------------------------------------------------------------
             Long term portion                         -     6,250         -
             ----------------------------------------------------------------

             The loans to Betpak Dala are
              unsecured


             Kyzylkum loan                        Dec 31,   Dec 31,   Jul 31,
                                                    2007      2006      2006
                                                   $'000     $'000     $'000
             ----------------------------------------------------------------
             The Corporation made loans to
              Kyzylkum pursuant to its obligation
              to provide project financing for
              construction and commissioning of
              the Kharasan Project in the amount
              of $80 million on or before
              December 31, 2007. The loans bears
              interest at LIBOR plus 1.5% per
              annum, with interest payable on a
              semi-annual basis, commencing
              within 2 years of funding.          80,000    48,000    30,000
             Repaid to date                       (6,667)
             ----------------------------------------------------------------
                                                  73,333    48,000    30,000
             Interest accrued                      1,025     1,074        65
             ----------------------------------------------------------------
                                                  74,358    49,074    30,065
             Less elimination of proportionate
              share - 30%                        (22,307)  (14,722)   (9,019)
             ----------------------------------------------------------------
                                                  52,051    34,352    21,046
             Less current portion                (27,692)     (752)      (46)
             ----------------------------------------------------------------
             Long term portion                    24,359    33,600    21,000
             ----------------------------------------------------------------

             The loans to Kyzylkum are unsecured.



    8   Inventories
                                                  Dec 31,   Dec 31,   Jul 31,
                                                    2007      2006      2006
                                                   $'000     $'000     $'000
        ---------------------------------------------------------------------
        Finished uranium concentrates             10,093     5,791     8,672
        Solutions and concentrates in process      5,128     5,035     2,088
        Materials and supplies                     5,773     1,218     1,180
        Stockpiles                                 7,772         -         -
        ---------------------------------------------------------------------
                                                  28,766    12,044    11,940

        Less: non-current inventory included in
         other assets (note 11)                    7,772         -         -
        ---------------------------------------------------------------------
                                                  20,994    12,044    11,940
        ---------------------------------------------------------------------

    9   Mineral interests, plant and equipment

                                                        December 31,
                                                            2007        Net
                                                        Accumulated  carrying
                                                  Cost  amortization   amount
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Mineral interests                    4,561,160    (32,771) 4,528,389
        Plant and equipment                    591,893     (7,375)   584,518
         --------------------------------------------------------------------
                                             5,153,053    (40,146) 5,112,907
        ---------------------------------------------------------------------

                                                        December 31,
                                                            2006        Net
                                                        Accumulated  carrying
                                                  Cost  amortization  amount
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Mineral interests                      761,627    (17,539)   744,088
        Plant and equipment                     25,348       (549)    24,799
        ---------------------------------------------------------------------
                                               786,975    (18,088)   768,887
        ---------------------------------------------------------------------


                                                       July 31, 2006    Net
                                                        Accumulated  carrying
                                                  Cost  amortization   amount
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Mineral interests                      754,605     (9,656)   744,949
        Plant and equipment                     18,182       (584)    17,598
        ---------------------------------------------------------------------
                                               772,787    (10,240)   762,547
        ---------------------------------------------------------------------


        A summary by property of the net book value is as follows:

                                                                       Total
                                 Mineral interests      Plant and   December
                           ---------------------------  equipment   31, 2007
                                        Non-
                           Deple-     deple-
                           table      table      Total
                 Country   $'000      $'000      $'000      $'000      $'000
    -------------------------------------------------------------------------
    Akdala
     Uranium      Kazakh-
     Mine         stan   111,302     74,358    185,660     15,906    201,566
    South Inkai
     Uranium      Kazakh-
     Project      stan         -    422,631    422,631     31,388    454,019
    Kharasan
     Uranium      Kazakh-
     Project      stan         -    146,538    146,538     29,376    175,914
    Dominion
     Uranium      South
     Project      Africa       -  1,756,018  1,756,018    350,146  2,106,164
    United
     States
     development  United
     projects     States       -    278,654    278,654      7,184    285,838
    United
     States
     exploration  United
     projects     States       -  1,073,130  1,073,130      1,285  1,074,415
    Hobson
     Facility
     and La
     Palangana    United
     Project      States       -     56,869     56,869     33,503     90,372
    Shootaring
     Canyon       United
     Mill         States       -     50,009     50,009     47,614     97,623
    Honeymoon
     Uranium
     Project      Australia    -    276,087    276,087     23,951    300,038
    Modder East
     Gold         South
     Project      Africa       -    261,332    261,332     24,400    285,732
    Pitchstone
     exploration  Canada       -     21,216     21,216          -     21,216
    Corporate
     and other                 -        245        245     19,765     20,010
    -------------------------------------------------------------------------
    Total                111,302  4,417,087  4,528,389    584,518  5,112,907
    -------------------------------------------------------------------------

                                                                       Total
                                 Mineral interests      Plant and   December
                           ---------------------------  equipment   31, 2006
                                        Non-
                           Deple-     deple-
                           table      table      Total
                 Country   $'000      $'000      $'000      $'000      $'000
    -------------------------------------------------------------------------
    Akdala
     Uranium     Kazakh-
     Mine        stan    118,755     74,358    193,113     16,294    209,407
    South Inkai
     Uranium     Kazakh-
     Project     stan          -    404,125    404,125      3,312    407,437
    Kharasan
     Uranium     Kazakh-
     Project     stan          -    146,717    146,717      4,020    150,737
    Corporate
     and other                 -        133        133      1,173      1,306
    -------------------------------------------------------------------------
    Total                118,755    625,333    744,088     24,799    768,887
    -------------------------------------------------------------------------

                                                                       Total
                                 Mineral interests      Plant and    July 31,
                           ---------------------------  equipment       2006
                                        Non-
                           Deple-     deple-
                           table      table      Total
                           $'000      $'000      $'000      $'000      $'000
    -------------------------------------------------------------------------
    Akdala
     Uranium     Kazakh-
     Mine        stan    126,638     74,358    200,996     16,831    217,827
    South Inkai
     Uranium     Kazakh-
     Project     stan          -    400,193    400,193          -    400,193
    Kharasan
     Uranium     Kazakh-
     Project     stan          -    143,627    143,627        247    143,874
    Corporate
     and other                 -        133        133        520        653
    -------------------------------------------------------------------------
    Total                126,638    618,311    744,949     17,598    762,547
    -------------------------------------------------------------------------


    10  Available for sale securities
                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                Market     Market     Market
                                                 value      value      value
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Available for sale securities           21,257          -          -
        ---------------------------------------------------------------------


        Movement in available for sale securities               Dec 31, 2007
                                                                       $'000
        ---------------------------------------------------------------------
        Balance as at July 31, 2006 and December 31, 2006                  -
        Received as part of a joint venture earn in payment            1,268
        Purchased as part of the EMC acquisition (refer note 4.2)     20,391
        Purchased during the period                                      278
        Impairment of available for sale securities included in
         the statement of operations                                    (932)
        Foreign exchange movement                                         64
        Fair value adjustment included in other comprehensive
         income                                                          188
        ---------------------------------------------------------------------
        Balance as at December 31, 2007                               21,257
        ---------------------------------------------------------------------

        The Corporation has recognized a future income tax liablity of
        $0.1 million that relates to the cumulative mark-to-market gains on
        the available for sale securities. The tax estimate is based on the
        assumption that if the securities were sold at their December 31,
        2007 fair market value, the capital gains would be calculated at the
        appropriate tax rate of the jurisdiction in which the security is
        held.

        By holding these long-term investments the Corporation is inherently
        exposed to various risk factors including currency risk, market price
        risk and liquidity risk.

    11  Other assets
                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Advances for plant and equipment        12,643     23,085      8,710
        Long term deposits (note 6)              3,220          -          -
        Long term inventory (note 8)             7,772          -          -
        Asset retirement fund (note 15)         20,316          -          -
        Advances for future services            10,629          -          -
        Reclamation Bond payment on behalf of
         UPC joint venture                       1,094          -          -
        Other                                    1,930      2,740        210
        ---------------------------------------------------------------------
                                                57,604     25,825      8,920
        ---------------------------------------------------------------------

    12  Accounts payable and accrued liabilities

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Trade payables                          30,161      6,471      5,007
        Accruals                                24,714        260      1,088
        Commodity and other taxes payable       11,280          -          -
        Other                                    9,727      6,216          -
        ---------------------------------------------------------------------
                                                75,882     12,947      6,095
        ---------------------------------------------------------------------

    13  Convertible debentures

        On April 20, 2007, the Corporation acquired Uranium One who had an
        outstanding debt offering of Cdn $155.3 ($133.2 million) convertible
        unsecured subordinated debentures maturing December 31, 2011 (the
        "debentures"). The debentures were issued at Cdn $1,000 per debenture
        and the underwriters' fees amounted to Cdn $30 per debenture, which
        resulted in the net proceeds to the Corporation of Cdn $970 per
        debenture. The debentures bear interest at an annual rate of 4.25%,
        payable semi-annually in arrears on June 30 and December 31 of each
        year, commencing June 30, 2007. The June 30, 2007 interest payment
        represents accrued interest from the closing of the offering to June
        30, 2007. The conversion price was set at Cdn $20 per share, which is
        equivalent to 50 common shares for each Cdn $1,000 principal amount
        of debentures. The debt and equity component were valued on April
        20, 2007, and were included as part of the purchase price for the
        Uranium One / UrAsia Energy business combination (note 3.1). The
        table below indicates the breakdown of the liability:


                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Liability component on date of
         business combination (note 3.1)       118,450          -          -
        Interest incurred                       11,641          -          -
        Coupon payment                          (6,564)         -          -
        Foreign exchange movement               13,021          -          -
        ---------------------------------------------------------------------
        Liability as at the end of the period  136,548          -          -
        ---------------------------------------------------------------------

    14  Aflease Gold convertible bonds

        On December 13, 2007, Aflease Gold issued 600 convertible bonds ("the
        bonds"), denominated in South African rand ("ZAR"), maturing 5 years
        from the issue date at a redemption value of 109.6% of the nominal
        value. The bonds were issued at a nominal value of ZAR1 million
        ($0.15 million) per bond and bear interest at an annual rate of 8.5%.
        The effective yield to maturity is 10%. The holders of the bonds have
        the option to convert the bonds into ordinary shares of Aflease Gold
        at any time up to, and including, the maturity date, at a fixed
        conversion rate of 266,058 shares per bond. In the event that the
        Modder East Gold Project has not commenced continuous production by
        March 31, 2010, the conversion rate will be recalculated using a
        formula based on Aflease Gold's share price at that date.

        Aflease Gold or the holders of the bonds can enforce early settlement
        of the bonds under certain circumstances. Aflease Gold is not
        permitted to raise any additional financing secured by the Modder
        East Gold Project while any of the bonds remain outstanding.

        The convertible bonds are presented in the balance sheet as
        designated at fair value through operations as follows:

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Face value of
         convertible bonds issued               87,445          -          -
        Fair value adjustment
         through operations                      3,106          -          -
        ---------------------------------------------------------------------
        Liability as at the end of the period   90,551          -          -
        ---------------------------------------------------------------------

        Financial risk factors and critical judgement applied by management

        The bonds are designated at fair value and therefore the carrying
        amount will approximate the fair value of the financial liability.
        The fair value of the convertible bonds has been estimated using the
        following assumptions:

                                                      Inception     Year end
                                                           date         2007
        ---------------------------------------------------------------------
                                                       Binomial     Binomial
        Methodology used                                pricing      pricing
        Maturity date: matures                           Dec 13,      Dec 13,
         over a period of 5 years                          2012         2012
        Risk free interest rate: South African
         zero coupon bond curves                           9.86%        9.86%
        Expected dividend yield                            0.00%        0.00%
        Expected volatility of the Aflease Gold's
         share price: exponentially weighted moving
         average methodology (lambda = 99%)    48.80%       49.30%
        Credit spread: Johannesburg
         Interbank Rate (JIBAR) plus                       5.00%        5.00%
        Aflease Gold's spot share price                  R 2.58       R 2.95
        Conversion price                                 R 4.12       R 4.12



                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------

        Payable in                             133,960          -          -
        - 2007                                       -
        - 2008                                   7,486
        - 2009                                   7,486
        - 2010                                   7,486
        - 2011                                   7,486
        - 2012                                 104,016
        - Thereafter                                 -


    15  Asset retirement obligations

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------

        Opening balance                          2,856      1,953      1,875
        Acquisition of Uranium One (note 3.1)    4,602          -          -
        Acquisition of U.S. Energy
         assets (note 4.1)                       3,543          -          -
        Acquisition of EMC assets (note 4.2)     2,281          -          -
        Reclamation revision of estimates          423        299          -
        Accretion expense                        1,000        604         78
        Foreign exchange movement                  306          -          -
        ---------------------------------------------------------------------
        Closing balance                         15,011      2,856      1,953
        ---------------------------------------------------------------------

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
        ---------------------------------------------------------------------
        Undiscounted and uninflated amount
         of estimated cash flows ($'000)        28,074      4,284      5,355
        ---------------------------------------------------------------------
        Payable in years                        4 - 27     4 - 18     5 - 19
        Inflation rate                    2.30% - 8.60%      7.00%      7.00%
        Discount rate                    7.39% - 14.75%     12.00%      5.00%
        ---------------------------------------------------------------------

        Security of $20.3 million for reclamation obligations has been
        provided in the form required by the relevant country's authorities
        (note 11).

    16  Income taxes

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                               US$'000    US$'000    US$'000
        ---------------------------------------------------------------------
        Current income tax expense              41,346     15,984      5,304
        Future income tax recovery             (17,621)    (3,973)    (1,905)
        ---------------------------------------------------------------------
                                                23,725     12,011      3,399
        ---------------------------------------------------------------------

        Reconciliation between the average effective tax rate and the
        applicable statutory tax rate

                                                Dec 31,    Dec 31,    Jul 31,
        Income tax rate reconciliation            2007       2006       2006
                                                     %          %          %
        ---------------------------------------------------------------------
        Earnings / (Loss) before income taxes    2,311     31,695    (45,540)
        Canadian federal and
         provincial income tax rates             34.12%     34.12%     34.12%
        ---------------------------------------------------------------------
        Expected income tax expense / (recovery)   788     10,814    (15,534)
        Permanent differences, including share
         based compensation and foreign
         exchange                                6,644    (3,018)     13,054
        Effect of tax rate changes               2,954     4,481       2,947
        Change in valuation allowance            9,121       (495)     1,823
        Differences in tax rates in foreign
         jurisdictions                           4,546      1,229      1,860
        Other                                     (328)    (1,000)      (751)
        ---------------------------------------------------------------------
                                                23,725     12,011      3,399
        ---------------------------------------------------------------------

        Tax loss carry forwards

        Canada and provincial tax jurisdictions
        At December 31, 2007, the Corporation had Canadian federal and
        provincial net operating loss carry-fowards totaling $21.5 million
        that expire from 2016 through 2027. A valuation allowance of
        $6.0 million has been applied against the future tax asset
        representing these losses.

        United States federal and state tax jurisdictions
        At December 31, 2007, the Corporation had United States federal and
        state net operating loss carry-forwards totaling $44.4 million that
        expire from 2008 through 2027. A valuation allowance of $2.8 million
        has been applied against the future tax asset representing these
        losses.

        South Africa tax jurisdictions
        At December 31, 2007, the Corporation had South Africa net operating
        loss carry-forwards totaling $105.4 million with no expiry. A
        valuation allowance of $nil million has been applied against future
        tax asset representing these losses.

        Kazakhstan tax jurisdictions
        At December 31, 2007, the Corporation had Kazakhstan net operating
        loss carry-forwards totaling $2.3 million that expire from 2008
        through 2010. A valuation allowance of $1.0 million has been applied
        against the future tax asset representing these losses.

        Future income tax

        The significant components of the Corporation's future income tax
        assets and liabilities are as follows:

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                               US$'000    US$'000    US$'000
        ---------------------------------------------------------------------
        Future income tax assets
        Mineral interests, plant & equipment    30,803      1,157        295
        Other                                   31,249      2,910      2,228
        Non-capital losses                      58,134        503      1,691
        ---------------------------------------------------------------------
        Future income tax assets
         before valuation allowance            120,186      4,570      4,214
        Valuation allowance                    (20,166)    (3,509)    (4,004)
        ---------------------------------------------------------------------
        Future income tax assets,
         net of valuation allowance            100,020      1,061        210
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        Future income tax liabilities
        Mineral interests, plant & equipment 1,657,663    337,642    365,491
        Other                                   18,619                     -
        ---------------------------------------------------------------------
                                             1,676,282    337,642    365,491
        Less current portion                         -          -          -
        ---------------------------------------------------------------------
        Future income tax liabilities        1,676,282    337,642    365,491
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        Total                                1,576,262    336,581    365,281
        ---------------------------------------------------------------------

    17  Share capital
                                                                    Value of
                                                        Number of     shares
        Issued and outstanding common shares    Note       shares      $'000
        ---------------------------------------------------------------------
        UrAsia Energy - movement from
         August 1, 2005 to April 20, 2007
        Balance of common shares
         at August 1, 2005                             70,400,000      4,094
        Shares issued for private placements          375,436,250    569,824
        Acquisition of Signature                        5,935,621        271
        Acquisition of Kyzylkum                        24,181,250     37,500
        Exercise of warrants                            3,219,750        673
        Exercise of stock options                         550,000        579
        ---------------------------------------------------------------------
        Common shares on July 31, 2006                479,722,871    612,941
        Exercise of warrants                              268,000         48
        Exercise of stock options                         249,833        618
        ---------------------------------------------------------------------
        Common shares on December 31, 2006            480,240,704    613,607
        Exercise of warrants                              481,000         82
        Exercise of stock options                       1,866,807      7,601
        ---------------------------------------------------------------------
        Common shares on April 20, 2007               482,588,511    621,290
        ---------------------------------------------------------------------

        Conversion of UrAsia Energy shares to
         Uranium One shares at a ratio of 0.45   3.1  217,164,830    621,290

        Shares of Uranium One owned by Uranium
         One shareholders at acquisition              138,129,435  1,709,647
        Exercise of warrants                              150,000      2,033
        Exercise of stock options
         and restricted shares                          4,354,617     47,311
        U.S. Energy asset purchase consideration 4.1    6,607,605     99,401
        EMC asset purchase consideration         4.2  100,444,543  1,013,215
        Shares issued for services rendered               322,393      3,987
        ---------------------------------------------------------------------
        Balance of issued and outstanding
         common shares at December 31, 2007           467,173,423  3,496,884
        ---------------------------------------------------------------------

    18  Contributed surplus

        The following table details the movements of contributed surplus
        during the period:

                                                    Restr-
                                    Note    Warr-    icted  Options    TOTAL
                                             ants   shares

                                            $'000    $'000    $'000    $'000
        ---------------------------------------------------------------------
        As at August 1, 2005                    -        -        -        -
        Issued on acquisition
         of Signature                3.4        -        -      153      153
        Share options
         issued and vested                      -        -    9,370    9,370
        Share options exercised                 -        -     (216)    (216)
        ---------------------------------------------------------------------
        As at July 31, 2006                     -        -    9,307    9,307

        Share options
         issued and vested                      -        -   22,162   22,162
        Share options exercised                 -        -     (183)    (183)
        ---------------------------------------------------------------------
        As at December 31, 2006                 -        -   31,286   31,286

        Issued on Uranium One /
         UrAsia Energy business
         combination                 3.1   26,407      853   34,782   62,042

        Issued on EMC
         asset acquisition           4.2        -        -   35,307   35,307
        Share options
         issued and vested                      -        -   33,734   33,734
        Share options exercised                 -        -  (29,213) (29,213)
        Restricted shares vested                -    3,926        -    3,926
        Restricted shares exercised             -   (1,660)       -   (1,660)
        Warrants exercised                 (1,035)       -        -   (1,035)
        ---------------------------------------------------------------------
        As at December 31, 2007            25,372    3,119  105,896  134,387
        ---------------------------------------------------------------------

        Assumptions

        The fair value of stock options and restricted shares used to
        calculate the compensation expense was estimated using the Black
        scholes option pricing model with the following assumptions:

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
        ---------------------------------------------------------------------
        Risk free interest rate                   4.38%      3.80%      4.00%
        Expected dividend yield                      0%         0%         0%
        Expected volatility of the
         Uranium One's share price                  61%        46%        38%
        Expected life                          5 years   10 years   10 years


        Options

        Under Uranium One's Option plan, options granted are non-assignable
        and may be granted for a term not exceeding ten years. The plan is
        administered by the Board of Directors, which determines individual
        eligibility under the plan, number of shares reserved underlying the
        options granted to each individual (not exceeding 5% of issued and
        outstanding shares to any insider and not exceeding 1% of the issued
        and outstanding shares to any non-employee director on a non-diluted
        basis) and any vesting period which, pursuant to the stock option
        plan was previously one-third on the grant date, one-third on the
        first anniversary of the grant date and the remainder on the second
        anniversary of the grant date. On December 8, 2006 the Board of
        Directors decided to adopt an amended vesting schedule such that any
        options granted on and after December 8, 2006, would vest as to one-
        third on the first anniversary of the grant date, one-third on the
        second anniversary of the grant date and one-third on the third
        anniversary of the grant date. The maximum number of shares of
        Uranium One that are issuable pursuant to the plan is limited to 7.2%
        of issued and outstanding shares.

        The following is a summary of Uranium One's options granted under its
        stock-based compensation plan:
                                                                    Weighted
                                                                     average
                                                                    exercise
                                                       Number of       price
                                                         options       Cdn $
        ---------------------------------------------------------------------

        Balance as at August 1, 2005                           -           -
        Stock options granted on Signature acquisition   500,000        0.53
        Granted                                       11,855,000        2.16
        Exercised                                       (550,000)       0.76
        Forfeiture of share options
         up to July 31, 2006                             (20,000)       1.80
        ---------------------------------------------------------------------
        Outstanding options as at July 31, 2006       11,785,000        2.16
        Granted                                       10,190,000        3.74
        Exercised                                       (249,833)       1.95
        Forfeiture or expiry of share options            (66,667)       3.00
        ---------------------------------------------------------------------
        Outstanding options at December 31, 2006      21,658,500        2.90

        Granted up to April 20, 2007                   1,935,000        5.99
        Exercised up to April 20, 2007                (1,866,807)       2.11
        Forfeiture of share options
         up to April 20, 2007                            (30,000)       1.80
        ---------------------------------------------------------------------
        Outstanding options as at April 20, 2007      21,696,693        5.86

        Converted UrAsia Energy share options
         on date of business combination               9,763,498        7.33

        Existing Uranium One share options
         on April 20, 2007                             5,390,754        6.67
        EMC replacement options                        8,382,546        8.14
        Granted subsequent to April 20, 2007           1,867,817       15.27
        Exercised subsequent to April 20, 2007        (4,228,640)       5.14
        Forfeiture of share options
         subsequent to April 20, 2007                   (351,187)      13.14
        ---------------------------------------------------------------------
        Outstanding options as at December 31, 2007   20,824,788        8.55
        ---------------------------------------------------------------------

        The stock option compensation expense for the year ended December 31,
        2007 was $33.7 million, $22.2 million for the 5 months December 31,
        2006 and $9.4 million for the year ended July 31, 2006. As at
        December 31, 2007, the aggregate unexpended fair value of unvested
        stock options granted amounted to $18.6 million. The fair value of
        options granted during the year amounts to $18.0 million.

        The following table summarizes certain information about Uranium
        One's stock options outstanding at December 31, 2007:


                                                 Options outstanding
                                    -----------------------------------------
                                          Number     Weighted       Weighted
                                     outstanding     average         average
                                           as at     remaining      exercise
        Range of Exercise Prices    Dec 31, 2007          life         price
        Cdn $                                           (years)        Cdn $
        ---------------------------------------------------------------------
        1.09 to 2.74                   1,585,746          2.40          2.39
        3.03 to 4.81                   3,339,250          3.37          4.02
        5 to 7.79                      3,646,640          5.48          6.68
        8.26 to 9.9                    5,676,745          4.53          8.42
        10.4 to 11.91                    740,750          5.38         11.61
        12.02 to 13.7                  3,528,100          4.13         12.25
        14.12 to 16.87                 2,307,557          5.88         15.94
        ---------------------------------------------------------------------
                                      20,824,788          4.52          8.55
        ---------------------------------------------------------------------

                                                 Options exercisable
                                    -----------------------------------------

                                          Number      Weighted      Weighted
                                     exercisable       average       average
                                           as at     remaining      exercise
        Range of Exercise Prices    Dec 31, 2007          life         price
        Cdn $                                           (years)        Cdn $
        ---------------------------------------------------------------------
        1.09 to 2.74                   1,585,747          2.40          2.39
        3.03 to 4.81                   3,336,179          3.37          4.02
        5 to 7.79                      3,028,550          5.48          6.57
        8.26 to 9.9                    5,523,746          4.53          8.41
        10.4 to 11.91                    365,000          5.38         11.55
        12.02 to 13.7                  1,791,320          4.13         12.15
        14.12 to 16.87                   588,280          5.88         15.69
        ---------------------------------------------------------------------
                                      16,218,822          4.52          7.32
        ---------------------------------------------------------------------

        Restricted shares

        Under the Uranium One Restricted Share Plan, restricted share rights
        are granted to eligible employees, contractors and directors. Each
        restricted share right is exercisable for one common share of
        Uranium One at the end of the restricted period for no additional
        consideration. The vesting period is generally two-thirds on the
        first anniversary of the grant date and the remainder on the second
        anniversary of the grant date. The aggregate maximum number of shares
        available for issuance under the restricted share plan was initially
        capped at one million and subsequently increased to 3 million at
        Uranium One's annual and special meeting held on June 7, 2007. The
        number of shares for issuance to non-employee directors may not
        exceed 0.5% of the total number of common shares outstanding on a
        non-diluted basis.

        The following is a summary of Uranium One's restricted shares issued
        under the Restricted Share Plan:

                                           Number of restricted shares

                                                Dec 31,    Dec 31,    Jul 31,
                                       Note       2007       2006       2006
        ---------------------------------------------------------------------

        Restricted shares issued
         on business combination        3.1    404,231          -          -
        Granted                                 20,000          -          -
        Exercised during the period           (125,977)         -          -
        Expired                                 (2,722)         -          -
        ---------------------------------------------------------------------
        Total restricted shares
         outstanding at the end
         of the period                         295,532          -          -
        ---------------------------------------------------------------------

        Of the outstanding number of Restricted share rights, the grant date
        was July 1, 2007 for 20,000 Restricted share rights, December 8, 2006
        for 50,440 Restricted share rights, and June 7, 2006 for 225,092
        Restricted share rights. Restricted share rights will not expire
        while the participant is in the employ of the Corporation.

        The Restricted share rights expense for the year ended December 31,
        2007 was $4.0 million, $Nil for the 5 months ended December 31, 2006
        and $Nil for the year ended July 31, 2006. As at December 31, 2007
        the aggregate unexpensed fair value of unvested restricted share
        rights granted amounted to $805,506.


    Warrants               Number of warrants            Allocated value
                    ---------------------------------------------------------
                       Dec 31,  Dec 31,  Jul 31,    Dec 31,  Dec 31,  Jul 31,
                         2007     2006     2006       2007     2006     2006
                                                     $'000    $'000    $'000
    -------------------------------------------- ------------------- --------
    Issued on
     business
     combination
     (note 3.1)     2,731,619        -        -     26,407        -        -
    Exercised during
     the period      (150,000)       -        -     (1,035)       -        -
    -------------------------------------------- ------------------- --------
    At the end
     of the period  2,581,619        -        -     25,372        -        -
    -------------------------------------------- ------------------- --------



                           Number of warrants       Average exercise price
                    ---------------------------------------------------------
    Warrants           Dec 31,  Dec 31,  Jul 31,    Dec 31,  Dec 31,  Jul 31,
     comprise:           2007     2006     2006       2007     2006     2006
    -------------------------------------------------------------------------
    2008 Warrants   2,431,619        -        -       3.55        -        -
    Series D
     Warrants         150,000        -        -       6.95        -        -
    -------------------------------------------------------------------------
    Total           2,581,619        -        -       3.75        -        -
    -------------------------------------------------------------------------


        Series D warrants represent 150,000 warrants that expire on January
        4, 2008. The 2008 warrants expire on September 24, 2008.

        Contingently issuable shares

        Under the terms of the acquisition agreement for the Kyzylkum JV
        interest, Uranium One is obligated to issue 6,964,200 common shares
        of Uranium One upon commencement of commercial production from
        Kyzylkum (Note 3.3).

        The Corporation has assumed all of the obligations of EMC and its
        subsidiaries arising under certain option and joint venture
        agreements with third parties. Uranium One has reserved a total of
        1,925,100 common shares of Uranium One for issuance pursuant to the
        assumed obligations under the Contingent Share Rights Agreements.

    19  Foreign exchange (losses) / gains

        A summary of the foreign exchange (loss) / gain by item is as
        follows:

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
        ---------------------------------------------------------------------
        Unrealized foreign exchange (loss) /
         gain on future income tax liability   (18,727)    24,736    (42,602)
        Unrealized foreign exchange
         loss on other items                    (7,469)    (2,114)       (20)
        Realized foreign exchange
         gain on other items                    13,174        885      1,502
        ---------------------------------------------------------------------
                                               (13,022)    23,507    (41,120)
        ---------------------------------------------------------------------


    20  Cash flow information

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
                                                 $'000      $'000      $'000
                                             --------------------------------
        Changes in non-cash working capital
         excluding business combinations:
        - Increase in accounts and other
           receivables                          (3,706)   (39,816)    (4,743)
        - Prepaid expenses and other            (8,396)       309      1,012
        - Increase in inventories               (3,442)      (475)    (3,042)
        - Increase / (decrease) in accounts
           payable and accrued liabilities     (17,750)     7,019     (4,159)
        - Increase / (decrease) in income
           taxes payable                         3,368     (2,112)     3,080
                                             --------------------------------
                                               (29,926)   (35,075)    (7,852)
                                             --------------------------------
        Significant non-cash
         investing activities
        EMC asset purchase                   1,048,522          -          -
        - common shares                      1,013,215          -          -
        - options                               35,307          -          -
        Uranium One business combination     1,818,169          -          -
        - common shares                      1,709,647          -          -
        - options, warrants and
          restricted share rights               62,042          -          -
        - equity component of
          convertible debentures                46,480          -          -
        U.S. Energy asset purchase              99,401          -          -
        Shares issued for services rendered      3,987          -          -
        Supplemental cash flow information
        Cash interest paid                       6,564          -         45
        Cash taxation paid                      13,636     13,530      6,136

        Short term loans

        The February 2005 Nedcor Securities loan represented draw-downs on a
        facility provided by Nedcor Securities, secured by the investment
        held by Uranium One's wholly owned subsidiary, Uranium One Africa
        Limited, in Randgold and Exploration Company Limited shares.

        The August 2006 Nedcor Securities loan represented draw-downs on a
        facility provided by Nedcor Securities, secured by Uranium One
        Africa's investment in Aflease Gold shares.

        Both loans were repaid during the year for a total cash consideration
        of $55.2 million including accrued interest of $2.10 million, with
        the security over the investments being released upon repayment.

    21  Basic and diluted weighted-average number of shares outstanding

                                                Dec 31,    Dec 31,    Jul 31,
                                                  2007       2006       2006
        ---------------------------------------------------------------------

        Basic weighted-average number
         of shares outstanding ('000)          360,656    215,999    182,808
        Effect of dilutive securities:
        - stock options                              -      1,706          -
        - warrants                                   -        270          -
        ---------------------------------------------------------------------
        Diluted weighted-average
         number of shares outstanding          360,656    217,975    182,808
        ---------------------------------------------------------------------

        For the year ended December 31, 2007, convertible debentures, stock
        options, warrants and restricted shares were not included in the
        dilutive weighted average number of shares outstanding as they were
        anti-dilutive. For the year ended July 31, 2006, stock options and
        warrants were not included as they were anti-dilutive.

    22  Contractual obligations

                                                                      Dec 31,
                                                                        2007
        ---------------------------------------------------------------------
        Capital commitments                                          118,436
        Other                                                         40,107
        ---------------------------------------------------------------------
        Total contractual obligations                                158,543
        ---------------------------------------------------------------------

        Payable in
        - 2008                                                       121,358
        - 2009                                                         1,129
        - 2010                                                         5,075
        - 2011                                                        10,550
        - 2012                                                         4,276
        ---------------------------------------------------------------------
                                                                     142,388
        - thereafter                                                  16,155
        ---------------------------------------------------------------------
                                                                     158,543
        ---------------------------------------------------------------------

        The capital commitments relates to capital expenditure on the
        Corporation's development projects.

    23  Segmented information

        The Corporation's reportable operating segments are summarized in the
        table below:

        For the year ended December 31, 2007: (in $'000)

                                                                Depreciation
                                                      Operating          and
                                 Country   Revenue     expenses    depletion
        ---------------------------------------------------------------------
        Akdala Uranium Mine   Kazakhstan   134,024      (17,282)     (14,922)
        South Inkai
         Uranium Project      Kazakhstan         -            -            -
        Kharasan Uranium
         Project              Kazakhstan         -            -            -
        Dominion Uranium
         Project            South Africa         -            -            -
        US Development
         projects          United States         -            -            -
        US Exploration
         projects          United States         -            -            -
        Hobson facility
         and La Palangana
         Project           United States         -            -            -
        Shootaring
         Canyon Mill       United States         -            -            -
        Honeymoon Uranium
         Project and
         exploration           Australia         -            -            -
        Modder East
         Gold Project       South Africa         -            -            -
        Pitchstone
         exploration              Canada         -            -            -
        Corporate and other                      -            -            -
        ---------------------------------------------------------------------
        Total                              134,024      (17,282)     (14,922)
        ---------------------------------------------------------------------

                                               Net      Capital
                             Exploration  earnings/     expend-
                             expenditure     (loss)       iture
        --------------------------------------------------------
        Akdala Uranium Mine            -    56,305        9,108
        South Inkai
         Uranium Project               -       110       39,243
        Kharasan Uranium
         Project                       -    (1,410)      21,135
        Dominion Uranium
         Project                  (1,913)   (1,225)     137,954
        US Development
         projects                      -         -        5,907
        US Exploration
         projects                 (5,077)   (5,079)         248
        Hobson facility
         and La Palangana
         Project                  (1,608)   (2,764)      14,674
        Shootaring
         Canyon Mill                 (32)      (63)       2,966
        Honeymoon Uranium
         Project and
         exploration              (1,987)   (1,745)      21,349
        Modder East
         Gold Project             (1,675)   (9,261)      13,377
        Pitchstone
         exploration              (1,938)   (1,938)           -
        Corporate and other       (4,948)  (50,539)      13,409
        --------------------------------------------------------
        Total                    (19,178)  (17,609)     279,370
        --------------------------------------------------------


        For the five months ended December 31, 2006: (in $'000)

                                                                Depreciation
                                                      Operating          and
                                 Country   Revenue     expenses    depletion
        ---------------------------------------------------------------------
        Akdala Uranium Mine
         and South Inkai
         Uranium Project      Kazakhstan    50,449       (9,289)      (8,416)
        Kharasan Uranium
         Project              Kazakhstan         -            -            -
        Corporate and other                      -            -          (33)
        ---------------------------------------------------------------------
        Total                               50,449       (9,289)      (8,449)
        ---------------------------------------------------------------------

                                               Net      Capital
                             Exploration  earnings/     expend-
                             expenditure     (loss)       iture
        --------------------------------------------------------
        Akdala Uranium Mine
         and South Inkai
         Uranium Project               -    44,628        6,689
        Kharasan Uranium
         Project                       -       106        6,793
        Corporate and other       (2,914)  (25,050)          27
        --------------------------------------------------------
        Total                     (2,914)   19,684       13,509
        --------------------------------------------------------


        For the year ended July 31, 2006: (in $'000)

                                                                Depreciation
                                                      Operating          and
                                 Country   Revenue     expenses    depletion
        ---------------------------------------------------------------------
        Akdala Uranium Mine
         and South Inkai
         Uranium Project      Kazakhstan    23,507       (9,548)      (5,030)
        Kharasan Uranium
         Project              Kazakhstan         -            -            -
        Corporate and other                      -            -          (77)
        ---------------------------------------------------------------------
        Total                               23,507       (9,548)      (5,107)
        ---------------------------------------------------------------------

                                               Net      Capital
                             Exploration  earnings/     expend-
                             expenditure     (loss)       iture
        --------------------------------------------------------
        Akdala Uranium Mine
         and South Inkai
         Uranium Project               -   (35,316)       9,588
        Kharasan Uranium
         Project                       -        12        2,409
        Corporate and other       (2,648)  (13,635)         322
        --------------------------------------------------------
        Total                     (2,648)  (48,939)      12,319
        --------------------------------------------------------


        As at December 31, 2007: (in $'000)

                                               Mineral
                                              interest,                Total
                                             plant and      Total      liab-
                                  Country    equipment     assets    ilities
        ---------------------------------------------------------------------
        Akdala Uranium Mine    Kazakhstan      201,566    266,240     94,710
        South Inkai
         Uranium Project       Kazakhstan      454,019    457,510    207,461
        Kharasan Uranium
         Project               Kazakhstan      175,914    184,283     92,422
        Dominion Uranium
         Project             South Africa    2,106,164  2,111,565    598,102
        US Development
         projects           United States      285,838    285,838      1,637
        US Exploration
         projects           United States    1,074,415  1,079,794    115,368
        Hobson facility
         and La Palangana
         Project            United States       90,372     91,879     24,730
        Shootaring
         Canyon Mill        United States       97,623    112,894      2,573
        Honeymoon Uranium
         Project and
         exploration            Australia      300,038    300,043     86,613
        Modder East
         Gold Project        South Africa      285,732    381,776    178,275
        Pitchstone
         exploration               Canada       21,216     21,360      5,831
        Corporate and other                     20,010    319,716    510,963
        ---------------------------------------------------------------------
        Total                                5,112,907  5,612,898  1,918,685
        ---------------------------------------------------------------------


        As at December 31, 2006: (in $'000)

                                               Mineral
                                              interest,                Total
                                             plant and      Total      liab-
                                  Country    equipment     assets    ilities
        ---------------------------------------------------------------------
        Akdala Uranium Mine     Kazakhstan     209,407    285,654     89,317
        South Inkai
         Uranium Project        Kazakhstan     407,437    407,437    194,236
        Kharasan Uranium
         Project                Kazakhstan     150,737    156,267     68,816
        Corporate and other                      1,306    122,260      3,560
        ---------------------------------------------------------------------
        Total                                  768,887    971,618    355,929
        ---------------------------------------------------------------------


        As at July 31, 2006: (in $'000)

                                               Mineral
                                              interest,                Total
                                             plant and      Total      liab-
                                  Country    equipment     assets    ilities
        ---------------------------------------------------------------------
        Akdala Uranium Mine    Kazakhstan      217,827    243,367     93,545
        South Inkai
         Uranium Project       Kazakhstan      400,193    400,193    208,326
        Kharasan Uranium
         Project               Kazakhstan      143,874    150,798     73,803
        Corporate and other                        653    156,667      1,989
        ---------------------------------------------------------------------
        Total                                  762,547    951,025    377,663
        ---------------------------------------------------------------------


    24  Contingent sale of an interest in the Dominion Uranium Project

        On June 7, 2005, Uranium One Africa and Micawber 397 (Proprietary)
        Limited ("Micawber 397"), a company owned by historically
        disadvantaged South Africans, entered into a definitive purchase and
        sale agreement, a management and skills transfer agreement and a
        joint venture agreement.

        Pursuant to these agreements, Uranium One Africa agreed to sell to
        Micawber 397 an undivided 26% interest in the Dominion Uranium
        Project for cash consideration equal to 26% of the net present value
        of the Dominion assets at the date when Micawber elects to pay at
        least 20% of the purchase price. This election must occur within
        three years after receipt of Micawber 397 of their first profit
        distribution from the joint venture. After the first payment,
        Micawber is obliged to pay at least 20% of the purchase price during
        each subsequent three year period, so that the purchase price is paid
        in full within twelve years of the date of the first payment.

        The parties agreed to contribute their interests in the assets to a
        joint venture to be managed by Uranium One Africa, and to fund the
        development and operation of those assets in accordance with their
        respective joint venture interests. Uranium One agreed to lend to
        Micawber 397 the funds required to contribute their share under the
        joint venture agreement. The aggregate amount of that loan, plus
        accrued interest, is repayable from Micawber 397's share of joint
        venture profits.

        The Micawber transaction was approved by Uranium One Africa's
        shareholders in September 2005, following which the South African
        Department of Minerals and Energy granted a "new order" mining right
        to the Corporation for the Dominion Uranium Project in October 2006.
        The Micawber 397 transaction will be accounted for in Uranium One's
        consolidated financial statements when the risks and rewards of the
        transaction are deemed to have passed to Micawber 397. Management has
        determined that this event will occur on the day that Micawber 397
        elects to pay at least 20% of the purchase price, prompting the
        determination of the purchase price. As at December 31, 2007,
        Micawber 397 has not paid any part of the purchase price.

    25  Subsequent event

        Partial sale of shareholding in Aflease Gold

        During Q1 2008, in line with the Corporation's strategy to dispose of
        its non-core assets, the board of directors approved a plan to pursue
        the sale of the Corporation's shareholding in Aflease Gold and the
        Corporation entered into negotiations regarding the sale of Aflease
        Gold.

        Consequently the Corporation entered into an agreement on March 27,
        2008, pursuant to which it agreed to sell 152,195,122 shares in
        Aflease Gold, held by the Corporation's wholly owned subsidiary,
        Uranium One Africa Limited ("Uranium One Africa"), for consideration
        of approximately $40 million (ZAR320 million). The transaction is
        expected to close during April 2008, subject to approval by the South
        African Reserve Bank.

        An option has been granted to the purchaser to acquire Uranium One
        Africa's remaining shareholding of 186,816,558 shares in Aflease Gold
        at a consideration of no less than approximately $49 million (ZAR393
        million) on or before May 8, 2008. Once the option is exercised, the
        purchase and sale of the shares in Aflease Gold will be required to
        comply with the provisions of the Securities Regulation Code of the
        Securities Regulation Panel of South Africa relating to a compulsory
        offer to the other shareholders of Aflease Gold and, within 150 days,
        to obtain approval from the South African Reserve Bank and the
        satisfaction of merger approval requirements of South African
        Competition Act, 89 of 1998.

        It is expected that the Corporation will reflect a loss of
        approximately $90 million in Q1 2008 pursuant to this transaction.
    

    %SEDAR: 00005203E




For further information:

For further information: Jean Nortier, Interim Chief Executive Officer,
Tel: + 27 82 418 2241; Chris Sattler, Senior Vice President, Corporate
Development & Investor Relations, Tel: (416) 350-3657

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Uranium One Inc.

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