Uranium One Announces Financial Results for Q2 2007



    TORONTO and JOHANNESBURG, South Africa, Aug. 13 /CNW/ - Uranium One Inc.
("Uranium One") today reported unaudited financial results for the three and
six months ended June 30, 2007. All figures are in US dollars unless otherwise
indicated. Complete details of the June 30, 2007 financial statements and
management's discussion and analysis thereon can also be found on the Uranium
One website www.uranium1.com and on SEDAR at www.sedar.com.
    The net loss for the quarter ending June 30, 2007 was $13.7 million, or
$0.04 per share. This compares to a net loss of $32.2 million, or $0.15 per
share for the quarter ending July 31, 2006.

    
    Highlights for quarter ending June 30, 2007 include:

    -   Revenues of $23.3 million from the sale of 244,200 pounds U(3)O(8),
        representing an average realized uranium price of $95 per pound
    -   Earnings from mine operations of $19.2 million
    -   Attributable production of 452,200 pounds U(3)O(8)
    -   Cash cost per pound sold was approximately $8 per pound(1)
    -   The UrAsia Energy Ltd. transaction and the acquisition of the uranium
        assets of U.S. Energy Corp. were completed during the quarter
    -   The acquisition of Energy Metals Corporation was completed subsequent
        to the end of the quarter
    

    Uranium One recorded revenue of $65.0 million for the six months ending
June 30, 2007 compared to revenue of $17.3 million for the six months ending
July 31, 2006. Earnings from mine operations were $49.0 million for the six
months ending June 30, 2007 compared to $6.0 million for the six months ending
July 31, 2006. For the six months ended June 30, 2007, the net loss was
$5.7 million, or $0.02 per share compared to a net loss of $44.2 million, or
$0.20 per share for the six months ending July 31, 2006. Attributable
production of U(3)O(8) was 940,200 pounds for the six months ending June
30, 2007, which represents an 8% increase over attributable production of
867,200 pounds for the six months ending July 31, 2006. The cash cost per
pound sold was approximately $11 per pound for the six months ending
June 30, 2007 compared to a cash cost per pound sold of approximately $12 per
pound for the six months ending July 31, 2006.

    Commenting on the results, Uranium One's President and CEO Neal Froneman
said:

    "Uranium One's sales of uranium from Akdala proves that we have one of
the best contract books in the industry with an average realized price of
$95 per pound sold during the quarter. Our contract book has allowed us to
achieve solid revenues and earnings from mine operations for the six months
ending June 30, 2007. From this sound platform of low cost production from
Akdala, and with sales from new production expected at Dominion, South Inkai,
Kharasan and Honeymoon over the upcoming quarters, Uranium One offers its
shareholders excellent leverage to the current price for uranium. In addition,
these results demonstrate tangible progress that our operational and project
development teams have made toward our goal of becoming one of the world's top
five, low cost international uranium producers."

    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 70% of the
operating Akdala Uranium Mine in Kazakhstan and is also developing the South
Inkai and Kharasan Uranium Projects in Kazakhstan. Uranium One owns the
Dominion Uranium Project in South Africa, as well as the Honeymoon Uranium
Project in South Australia. In the United States, Uranium One has extensive
property holdings in Wyoming, Texas, Utah and New Mexico, including the
Shootaring Canyon Mill and the Hobson ISR facility. Uranium One is also
engaged in uranium exploration activities in the United States, the Athabasca
Basin of Saskatchewan, South Africa, Australia and the Kyrgyz Republic.

    (1) Uranium One has included a non-GAAP performance measure, total cash
    cost per pound sold, throughout this document. The Company believes that,
    in addition to conventional measures prepared in accordance with GAAP,
    certain investors use total cash cost per pound sold to evaluate the
    Company's operating 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, 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, 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, 2006, and in the
section entitled "Risks Factors" in UrAsia Energy's Annual Information Form
for the year ended July 31, 2006 which are 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 be 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.
    For further information about Uranium One, please visit www.uranium1.com


    
     MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE SECOND QUARTER AND
                        SIX MONTHS ENDED JUNE 30, 2007
    

    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
three and six months ended June 30, 2007, together with certain trends and
factors that are expected to impact the remainder of its 2007 financial year.
Information herein is presented as of August 10, 2007 and should be read in
conjunction with the unaudited consolidated financial statements of Uranium
One for the three and six months ended June 30, 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, Uranium One and UrAsia Energy Ltd. ("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 ("Canadian GAAP"). All amounts are in US dollars, except
where otherwise indicated, tabular amounts are in thousands, Canadian dollars
are referred to herein as C$.
    Uranium One completed a business combination with UrAsia Energy on April
20, 2007. The transaction was treated as a reverse take-over under Canadian
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 accordingly those contained in the financial statements of UrAsia
Energy. During 2006, UrAsia Energy changed its fiscal year end from July 31 to
December 31. As UrAsia Energy did not prepare financial statements for the
three and six months ended June 30, 2006, the most closely comparative period
in the prior fiscal year was the three and six months ended July 31, 2006.
Accordingly, the comparative figures used herein are those for the three and
six months ended July 31, 2006 and references herein to "Q2 2006" and "Q2
2007" refer to the three months ended July 31, 2006 and the three months ended
June 30, 2007, respectively, and references to "FY 2006" refer to the five
months ended December 31, 2006.
    The common shares of Uranium One are listed on the TSX and JSE
(Johannesburg Stock Exchange). 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.
    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".

    
    Highlights: Second Quarter 2007

    Key features for the quarter

    -   Attributable sales from Akdala during Q2 2007 were $23.3 million,
        compared to $2.9 million in Q2 2006.
    -   Sales from Akdala achieved a record average price of $95 per lb
        during Q2 2007 versus $42 per lb during Q2 2006.
    -   The average cash production cost per lb of U(3)O(8) sold was $8 per
        lb, compared to $23 per lb during Q2 2006.
    -   Earnings from mine operations in Q2 2007 were $19.2 million compared
        to a loss from operations in Q2 2006 of $2.0 million.
    -   Net loss for Q2 2007 was $13.7 million ($0.04 per share) compared to
        a net loss of $32.2 million for Q2 2006 ($0.15 per share).
    -   Akdala has increased inventory levels in expectation of scheduled
        deliveries during Q3 2007.
    -   The Kyzylkum Joint Venture has arranged a third party project loan of
        $100 million.

    Key features for the half year to June 30, 2007

    -   Akdala Uranium Mine produced a record of 1.3 million lbs U(3)O(8) in
        the six months ended June 30, 2007, slightly ahead of nameplate
        capacity.
    -   Revenue increased by 276% to $65.0 million compared to the six months
        ended July 31, 2006.
    -   Earnings from mine operations increased to $49.0 million compared to
        $6.0 million in the six months ended July 31, 2006.
    -   Net loss reduced to $5.7 million from $44.2 million in the six months
        ended July 31, 2006.

    Projects

    -   At Dominion, plant commissioning continued and U(3)O(8) production
        has commenced.
    -   Underground development at Dominion is increasing on a monthly basis
        and in the first half of 2007 has exceeded 5 kilometres.
    -   The South Inkai and Kharasan plant and well field development in
        Kazakhstan continues with targeted commencement of production in late
        2007 and early 2008, respectively.

    Corporate

    -   On April 20, 2007, the business combination between Uranium One and
        UrAsia Energy was completed, creating a globally diversified
        low-cost uranium producer; as a result, the Corporation's assets
        now include Uranium One's Dominion Uranium Project and
        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.
    -   On April 30, 2007, Uranium One completed its purchase of assets from
        US Energy Corp., consisting of the Shootaring Mill in Utah and
        approximately 38,000 acres of uranium exploration properties in Utah,
        Wyoming, Arizona and Colorado.
    -   On August 10, 2007, Uranium One acquired all of the outstanding
        shares of Energy Metals Corporation ("EMC"); EMC owns a 99% interest
        in the Hobson ISR Uranium Processing Plant and the La Palangana
        Uranium Project, together with interests in a large portfolio of
        uranium exploration properties in the western United States.
    -   Additional appointments of senior personnel were made during the
        quarter resulting in a further strengthening of the Corporation's
        global corporate management team.

    Outlook

    -   The Corporation expects to achieve attributable production of
        2.5 million lbs U(3)O(8) for the year, including 1.8 million lbs
        of U(3)O(8) from the operating Akdala Uranium Mine.
    -   In Kazakhstan, production from the South Inkai Uranium Project and
        the Kharasan Uranium Project is scheduled to commence in Q4 2007 and
        Q1 2008, respectively.
    -   At the Dominion Uranium Project, the Corporation expects to complete
        the commissioning of the first autoclave in August and to commence
        commissioning of the second autoclave in September.
    -   Despite the loss of approximately 100 production days due to
        commissioning challenges, and with the successful commissioning of
        both autoclaves, it is anticipated that the Corporation will achieve
        its current pre-commercial production target from Dominion during
        2007 from the processing of both tailings material and underground
        ore. Dominion is expected to reach commercial production in early
        2008.
    -   Uranium One is proceeding with an application for a secondary listing
        of its common shares on the main board of the London Stock Exchange.
    -   Uranium One intends to take full advantage of what it anticipates
        will be a continuing favourable uranium price environment by selling
        most of its uranium under long-term contracts that offer market-
        related pricing at the time of delivery.
    -   Uranium One intends to continue exploration on its projects, with a
        focus on projects which it believes to be prospective and have low
        technical risk.

    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, Australia, the United States, Canada and
the Kyrgyz Republic. Through Aflease Gold, Uranium One is engaged in the
development of the Modder East Gold Project in South Africa.
    Uranium One owns the Dominion Uranium Project in South Africa and a 70%
interest in the producing Akdala Uranium Mine in Kazakhstan. Uranium One is
also developing the South Inkai and Kharasan Uranium Projects in Kazakhstan.
South Inkai, in which the Corporation owns a 70% interest, and Kharasan, in
which the Corporation owns a 30% interest, are scheduled to come into
production in Q4 2007 and Q1 2008, respectively. In Australia, the Corporation
owns the Honeymoon Uranium Project. In the United States, the Corporation owns
the Shootaring Mill in Utah and the Hobson ISR Uranium Processing Plant in
Texas, both of which are currently being refurbished. The Corporation also
owns a large portfolio of uranium exploration properties in the western United
States, South Australia, the Athabasca Basin of Saskatchewan and the Kyrgyz
Republic.
    The discussion and analysis contained in this MD&A follows the reporting
segments as described in the Corporation's Q2 2007 interim financial
statements.

    -------------------------------------------------------------------------
    Entity           Project              Location     Status      Ownership
    -------------------------------------------------------------------------
    Betpak Dala LLP  Akdala Uranium Mine  Kazakhstan  Producing     70% J.V.
                                                                    interest
    Betpak Dala LLP  South Inkai Uranium  Kazakhstan  Development   70% J.V.
                     Project                                        interest
    Kyzylkum LLP     Kharasan Uranium     Kazakhstan  Development   30% J.V.
                     Project                                        interest
    Uranium One      Dominion Uranium    South Africa Development   100%
     Africa Limited   Project                                       interest
                                                                    (1)
    Aflease Gold     Modder East Gold    South Africa Development   68%
     Limited         Project                                        interest
    Uranium One      Honeymoon Uranium    Australia   Development   100%
     Australia        Project                                        interest
     (Proprietary)
     Ltd.
    Uranium One      Shootaring Mill      USA         Development   100%
    (USA) Inc.                                                      interest
    Pitchstone Joint Pitchstone Joint     Canada      Exploration   50%
    Venture          Venture                                        interest

    -------------------------------------------------------------------------

    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.

    Acquisition of Energy Metals Corporation

    On June 3, 2007, Uranium One and EMC entered into a definitive business
combination agreement pursuant to which Uranium One agreed to acquire all of
the outstanding common shares of EMC on the basis of 1.15 shares of Uranium
One for each share of EMC. The acquisition was completed on August 10, 2007.
The transaction resulted in the addition of a large portfolio of uranium
exploration properties located throughout the western United States and the
Hobson ISR processing facility in Texas. The Hobson processing facility is
currently being refurbished.

    Based on the March 31, 2007 balance sheet of EMC, the preliminary
allocation of the purchase price, summarized in the table below, is subject to
change (Note 1):


                                                                     $'000's

    Purchase price:
      99.3 million shares of Uranium One                           1,494,700
      Options outstanding of EMC                                      72,500
      Acquisition costs                                                8,000
    -------------------------------------------------------------------------
                                                                   1,575,200
    -------------------------------------------------------------------------
    Net assets acquired:
      Cash and cash equivalents                                       76,500
      Marketable securities                                           31,800
      Other current assets                                             2,100
      Mining interests                                               128,300
      Other non-current assets                                         5,900
      Accounts payable and accrued liabilities                        (1,400)
      Asset retirement obligations                                    (2,300)
      Future income tax liability                                    (28,500)
      Unallocated purchase price                                   1,362,800
    -------------------------------------------------------------------------
                                                                   1,575,200
    -------------------------------------------------------------------------

    Note 1: The fair value of all identifiable assets and liabilities
    acquired as well as any goodwill arising upon the acquisition will be
    determined through an independent valuation as at the date of closing of
    the transaction. On completion of the valuation, with corresponding
    adjustments to the carrying amounts of mining interests, or on recording
    of any finite life intangible assets on acquisition, these adjustments
    will impact the measurement of amortization recorded in the consolidated
    financial statements after the date of acquisition. No adjustments have
    been reflected in the table above for any change in future tax assets or
    liabilities that would result from recording EMC's identifiable assets
    and liabilities at fair value as the process of estimating the fair value
    of identifiable assets and liabilities is not complete.

    Selected Financial Information

    The Corporation's consolidated financial statements and the financial data
set out below have been prepared in accordance with Canadian 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.

                                               Three Months    Three Months
    (US dollars in thousands                       Ended           Ended
    except per share amounts)                  June 30, 2007   July 31, 2006
                                              --------------- ---------------
    Revenues                                    $ 23,265        $  2,922
    Net loss                                     (13,694)        (32,165)
    Cash flows from operating activities         (18,728)         16,353
    Loss per share                                 (0.04)          (0.15)
    Adjusted net loss(1)                          (7,517)         (3,587)
    Average realized uranium price
     (per lb U(3)O(8))                                95              42

    Sales volume (lbs of U(3)O(8))
     (Corporation's share)                       244,200 lbs      70,000 lbs
    Production volume (lbs of U(3)O(8))
     (Corporation's share)                       452,200 lbs     478,400 lbs

    Average uranium (U(3)O(8)) spot price       $    126        $     46

    (1) Net loss for the three months ended June 30, 2007 has been adjusted
        to exclude a $6.2 million unrealized exchange loss ($28.6 million
        exchange loss for the three months ended July 31, 2006) on the
        translation of future income tax liabilities in respect of the
        Corporation's investment in Kazakhstan for the strengthening of the
        local currency against the US dollar. 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.
    

    Review of Operations

    Akdala Uranium Mine

    Akdala is an operating acid in situ leach ("ISL") uranium mine located in
the Suzak region of South Kazakhstan. 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
NAK 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 1,000 tonnes (2,600,000 lbs   
U(3)O(8)) of uranium per year. It is expected that production will continue at
this rate until exhaustion of the current resources in approximately 2020.
    In situ leaching 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
the processing plant before returning the leach solution to the injection
wells.

    Production: Akdala production is ahead of schedule with 1,343,000 lbs of
U(3)O(8) produced for the six months ended June 30, 2007, which is slightly
above nameplate capacity.

    Operations: The total number of production well patterns in operation was
managed by adjusting the number of wells in operation to average 132 pumping
wells during the quarter. At June 30, 2007 there were 137 operating production
wells. Feed to the pregnant solutions plant from the well field had an average
grade of 113 ppm U during the quarter. The number of wells in operation and
the flow from each well is adjusted based on uranium content in the flow from
each well to produce the targeted production rate. The number of drill rigs at
site has been increased from three to six with the addition of a second
drilling contractor. The number of drill rigs is sufficient to ensure that
well field development should continue to match budgeted production levels
from the mine.

    Construction: Construction of the yellowcake precipitation and filtration
plant commenced in April 2007 and is expected to be completed by the fourth
quarter of 2007. When operational, this plant is expected to result in cash
operating cost savings as the Corporation will then no longer be required to
use external facilities for yellowcake precipitation and filtration.
Installation of the drying plant is in the design phase and construction is
scheduled for completion in 2008.

    South Inkai Uranium Project

    South Inkai is an ISL uranium development 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% interest in the project.

    Exploration Drilling: The drilling program to convert Russian C2 to C1
resources as per the Kazakhstan classification system continued at South
Inkai. For this project, beginning in 2006, a total of 255 drill holes have
been drilled of a planned project of 390. Final preparation of a report and
approval by the State Committee for Reserves is expected in 2008 for a total
addition of 15,000-17,000 tonnes of C1 category resource. Approval of adequate
C1 resources is part of the process for approval of industrial production from
South Inkai. During the quarter, 54 drill holes were completed compared to a
plan for 48 drill holes.

    Production Drilling and Well Completion: Joint Drilling, Betpak Dala's
drilling and well completion contractor, had five Russian Ziff 1200 rigs
drilling production wells on South Inkai. Currently, five Russian Ziff rigs
and two GEFCO SS-40 rigs are drilling and completing wells. A total of 64
wells have been completed as scheduled for the September 2007 start of pilot
well field production, as part of the process of Industrial Production
Licensing. Management expects that the required portion of process plant and
well field production facilities will be ready for the commencement of well
field acidification by August 2007 with production flow commencing from the
first block of pilot well patterns by September 2007 in preparation for pilot
stage production in Q4 2007. Capital construction of the portion of the
industrial complex required for pilot stage production is currently on
schedule for operation by Q4 2007. A training program for the drill crews on
the new GEFCO rigs is underway and is expected to result in drilling
productivity improvements when training is completed.

    Construction: Uranium processing facilities being constructed at South
Inkai are similar to the processing plant that has been constructed at the
Akdala Mine. The plant is being fully constructed to the capacity of 2,000
tonnes U per year. Construction of the industrial complex is underway.
Completion of the required portion of the processing acidification system is
expected to be completed by September 2007 to facilitate the initiation of
production from the first block of pilot well fields. Final completion is
expected for mid year 2008. Completion of the buildings in the complex is as
follows:

    
    -   main administration building - 56% complete
    -   utility building - 54% complete
    -   special laundry - 57% complete
    -   auxiliary buildings - 58% complete
    -   ammonium nitrate storage building - 32% complete
    

    The shift camp is partially completed and one section is in use. The
sulphuric acid storage has been completed with the exception of commissioning
for use. The processing plant has all major equipment installed, structural
steel erected, and piping of the first two ion exchange (absorption) columns
and the first elution (desorption) column is expected to be completed by
September 2007 to allow the start of pilot production in Q4 2007 to
demonstrate performance for the obtaining of the Industrial Production
Licenses.
    Project to date expenditure relating to the construction project at South
Inkai is $19.5 million.

    Kharasan Uranium Project

    The Kharasan Project is a 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; the
remaining interests in Kyzylkum are owned as to 30% by Kazatomprom and 40% by
Energy Asia (BVI) Ltd., which is owned by a consortium of Japanese utilities
and a trading company.

    Exploration Drilling: Kyzylkum has plans to drill 137 drill holes in 2007
to convert Russian C2 to C1 resources as per the Kazakhstan classification
system. As of June 9, 2007 - 59 drill holes have been completed. The plan is
to complete this program by the end of the year to add 5,000 tonnes of C1
resources to the already approved 6,560 tonnes to bring total C1 resources at
Kharasan to 11,560 tonnes, sufficient for the Industrial Production License.
For this program, Volkogeology, a Kyzylkum drilling contractor, drilled 15
drill holes during 2006 and has agreed to complete an additional 25 drill
holes to bring the total to be completed by Volkogeology to 75 in this
program. This leaves 62 drill holes which are planned for Joint Drilling, a
second Kyzylkum drilling contractor to complete. Currently Volkogeology has 1
drill rig on site drilling on this program.

    Production Drilling: The drilling plan for the first pilot production
consists of 26 well patterns made up of 108 wells. It is planned to complete
these pilot production patterns in two blocks. An initial 33 wells
(7 patterns) will comprise the first operating block. Of this program, Joint
Drilling has completed 14 wells to date. Joint Drilling has five Russian Ziff
Rigs and 6 GEFCO SS-40 drill rigs on site. Training on the GEFCO rigs began in
May and continues to progress. The training and certification of sufficient
qualified and trained drillers will allow the GEFCO rigs to significantly
accelerate the rate of drilling and completing wells.

    Construction: The industrial complex, including the first phase with
annual production of 750 tonnes per year, is to be developed on the basis of
an annual production rate of 2,000 tonnes of U. A second processing plant, (a
satellite plant) with capacity of 1,000 tonnes of U per year is expected to be
constructed to allow for production to increase from 2,000 tonnes to 3,000
tonnes per year. Design is currently in progress to allow the project to reach
a capacity of 3,000 tonnes U.
    The construction schedule for the process plant and shift camp has been
designed to deliver initial pilot production in Q1 2008. The full completion
of the process plant and related facilities is expected in November 2007, the
road construction and the bridge are expected to be completed in October 2007.
The railroad switching station and Phase 1 of the railroad transshipment base
are expected to be completed in March 2008. Until the transshipment base is
available for shipment of U(3)O(8), it will be necessary to store the product
on site, as it is not legally approved to ship U(3)O(8) through the villages
on the alternate routes to other shipping points.
    Project to date expenditure relating to the construction project at
Kharasan is $39.1 million.

    Project Finance Facility: Kyzylkum has entered into an unsecured bank
loan facility totaling $100 million. $70 million of this facility is provided
by the Japan Bank for International Cooperation and $30 million is provided by
Citibank. The first draw down on these facilities is planned for August 2007.
These loan facilities, when drawn down, will be repayable after full repayment
of the existing loan from the Corporation. The Corporation's proportionate
share of the new unsecured bank loan facility will be $30 million when fully
drawn down. The loan facilities have floating interest rates of LIBOR plus
0.25% and 0.35%, respectively.

    Dominion Uranium Project

    The Dominion Uranium Project is situated in the North West Province of
South Africa, approximately 150 kilometres west-southwest of Johannesburg.
    Total capital cost to completion is now estimated to be approximately 25%
over the early 2006 feasibility study estimate of $180 million. Changes in
design, scope, material specifications and material prices accounts for
approximately 70% of the forecasted overrun.

    Metallurgical Plant Construction: Commissioning of the atmospheric leach
circuit commenced on February 28, 2007, with the first uranium bearing
material being processed through the plant; the first ADU was produced on
May 18, 2007. Two shipments of ADU were delivered to a calcining facility in
July 2007, yielding 20,339 lbs of U(3)O(8).
    The commissioning of the uranium plant is following a planned phased
approach using a blend of underground ore and lower grade historic tailings
material as feed stock. The solvent extraction section of the plant was
successfully commissioned during June 2007, marking completion of the
commissioning of the atmospheric leach production circuit. The first autoclave
(pressure leach vessel) was mechanically and electrically completed by the end
of June 2007; has been brought up to design temperature and pressure and is
currently being prepared to be fed with a blend of lower grade historic
tailings material and ore from underground. Construction of the second
autoclave is progressing well and is scheduled for completion by the end of
August 2007 and commissioning is expected to commence in September 2007. The
completion and successful commissioning of both autoclaves will allow the
uranium plant's design efficiency parameters to be realized (200,000 tonnes
per month throughput and a uranium recovery rate of approximately 85%).

    Mine Development: A total of 5,384 metres of development was achieved in
the six months ended June 30, 2007 compared to feasibility of 7,485 metres.
The previously reported problematic ground conditions associated with a fault
zone at the Dominion 2 decline has been successfully negotiated and decline
development is now progressing in normal ground conditions.
    Stoping operations have commenced at all 3 production sections (Dominion
1, Dominion 2 and Rietkuil).

    Process re-optimization: The tailings material has provided the project
with considerable flexibility and as a result the Corporation is completing a
study that will assess the optimal mix of tailings material and ore from
underground in order to maximize plant throughput and recovery rates.

    Expansion: A conceptual study considering the expansion of the Dominion
Uranium Project commenced in September 2006 and was completed in May 2007. The
conceptual study is based predominantly on inferred resources. The expansion
considers two areas, namely the Dominion North (D3 and D4 decline areas) and a
vertical shaft at Rietkuil. The full feasibility study for the D3 and D4 area,
based on the upgraded indicated resources, will be completed by the end of Q4
2007 and a pre-feasibility for the vertical shaft area by Q1 2008. The plans
consider staged production and plant expansion from the current 200,000 tonnes
per month, to 300,000 and then to 400,000 tonnes per month.

    Exploration: A total of 58,975 m of exploration drilling has been
completed for the six months ended June 30, 2007. The primary focus of the
exploration campaign at Rietkuil and Dominion remains to increase the
indicated resource base for the planned expansion program.
    Sample analysis of the exploration holes have been constrained due to the
lack of accredited laboratories. To facilitate catching up on the sample back
log, an externally operated and managed laboratory has been commissioned on
site which commenced sample analysis on August 1, 2007.
    An aero-radiometric and magnetic survey to be flown across the
Corporation's existing prospecting rights commenced on July 28, 2007 and is
anticipated to be completed by the middle of August 2007. Physical exploration
(i.e. surface drilling) is expected to commence in the Ottosdal area once
required approvals are received.

    Honeymoon Uranium Project

    The Honeymoon Uranium Project is located in the north-eastern section of
the State of South Australia, approximately 75 kilometres northwest of Broken
Hill.
    Honeymoon construction is progressing and a new design using pulse
columns is being finalized. The Corporation is currently completing a revised
timeline and cost estimate for the project.

    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 substantial database of geological information were acquired.
    The process to request for proposals on the refurbishment of the
Shootaring Mill was initiated during Q2 2007.
    An exploration program consisting of airborne surveys has been conducted
over certain of the U.S. exploration properties, additional claims were staked
as a result of the targets identified in the surveys.

    Aflease Gold Limited

    Uranium One owns 68% of Aflease Gold. Aflease Gold's principal property
is the Modder East Gold Project in the East Rand gold fields of South Africa's
Witwatersrand Basin. Aflease Gold is solely responsible for funding the
development of its assets, including the Modder East Gold Project.

    Modder East Gold Project

    The Modder East Gold Project is located approximately 30 kilometres east
of Johannesburg, South Africa. Project construction commenced in May 2006 and
has advanced significantly, with the entire mine infrastructure required for
development operations in place.
    The revision of the Modder East feasibility study was completed and
submitted to SRK Consulting for auditing. The preliminary results for the
feasibility have shown significant improvement in values for the project.
Audit completion is scheduled for August 2007.
    Total project expenditure to date amounts to $11.0 million.

    Sub Nigel Gold Project

    A revised pre-feasibility study was completed and will be submitted to
SRK for audit at the beginning of August. Upon completion the feasibility
study will be presented to the board of Aflease Gold.

    Exploration Projects

    The Corporation is exploring its other properties and has current
exploration programs in progress on its properties in the western United
States, the Pitchstone Joint Venture in Canada and the Kyrgyzstan exploration
properties.

    Results of Operations and Discussion of Financial Position

    Summary of Quarterly Results

    
    -------------------------------------------------------------------------
                                      June 30   Mar 31    Dec 31     Oct 31
                                        2007     2007     2006(2)     2006
    -------------------------------------------------------------------------
                                      $(000's)  $(000's)  $(000's)  $(000's)
    -------------------------------------------------------------------------
    Revenue from uranium sales          23,265    41,730    46,256     4,193
    -------------------------------------------------------------------------
    Net income/(loss) for period       (13,694)    7,971    (6,228)   25,912
    -------------------------------------------------------------------------
    Basic and diluted earnings/
     (loss) per share                    (0.04)     0.02     (0.01)     0.05
    -------------------------------------------------------------------------
    Total assets                     4,247,176   999,950   971,618   949,530
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                       Jul 31    Apr 30    Jan 31    Oct 31
                                        2006      2006      2006      2005
    -------------------------------------------------------------------------
                                      $(000's)  $(000's)  $(000's)  $(000's)
    -------------------------------------------------------------------------
    Revenue from uranium sales           2,922    14,383     6,202         -
    -------------------------------------------------------------------------
    Net income/(loss) for period       (32,165)  (12,068)   (5,502)      796
    -------------------------------------------------------------------------
    Basic and diluted earnings/
     (loss) per share                    (0.15)    (0.03)    (0.01)     0.01
    -------------------------------------------------------------------------
    Total assets                       951,025   810,086   683,418    45,523
    -------------------------------------------------------------------------

    Note:

        1.    The basic and diluted earnings/(loss) per share is computed
              separately for each quarter presented and therefore may not sum
              to the July 31, 2006 twelve month period or December 31, 2006
              five month period.
        2.    The December 31, 2006 quarter consists of a 2 month period.

    Uranium sales are recorded upon delivery to utilities and intermediaries
and do not occur evenly throughout the year. Changes in sales, net
earnings/(loss) and cash flow are affected primarily by fluctuations in
delivery of product from quarter to quarter as well as changes in the price of
uranium.
    Operating expenses are related to sales and are lower in periods when
sales are lower. There is a corresponding build up of inventory in periods
when sales are lower. Operating expenses related to sales for Q2 2007 were
$2.1 million and sales were $23.3 million compared to production costs of
$1.6 million for Q2 2006 with corresponding sales of $2.9 million.
    During Q2 2007 a net loss was affected by an unrealized foreign exchange
loss resulting from a strengthening of the Kazakhstan tenge against the US
dollar. The $6.0 million loss on exchange recorded in the current quarter
results from a $6.2 million loss related to an unrealized foreign exchange
loss on translation of future income tax liabilities arising from the purchase
of assets in Kazakhstan and a $0.2 million gain related to other items.
    The following table shows the production, sales and production costs
trends over the quarterly periods. The interest in the Akdala Uranium Mine was
acquired in November 2005; consequently there are no figures for operations
during the three month period ended October 31, 2005.

    -------------------------------------------------------------------------
                                         3 months 3 months 2 months 3 months
                                            ended    ended    ended    ended
    (all figures are the                  June 30 March 31   Dec 31   Oct 31
    Corporation's attributable share)        2007     2007     2006     2006
    -------------------------------------------------------------------------
                                              lbs      lbs      lbs      lbs
    -------------------------------------------------------------------------
    Production of U(3)O(8)
     in lbs                               452,200  488,000  426,500  513,100
    -------------------------------------------------------------------------
    Sales of U(3)O(8) in lbs              244,200  605,000  881,000   99,000
    -------------------------------------------------------------------------
                                             $        $        $        $
    -------------------------------------------------------------------------
    Sales (000's)                          23,265   41,730   46,256    4,193
    -------------------------------------------------------------------------
    Sales $/lb U(3)O(8) sold                   95       69       53       42
    -------------------------------------------------------------------------
    Operating expenses (000's)              2,058    7,043    7,872    1,417
    -------------------------------------------------------------------------
    Operating expenses $/lb U(3)O(8) sold       8       12        9       14
    -------------------------------------------------------------------------
    Depletion and depreciation (000's)      2,024    4,859    7,240    1,209
    -------------------------------------------------------------------------
    Depletion and depreciation $/lb
     U(3)O(8) sold                              8        8        8       12
    -------------------------------------------------------------------------


    ----------------------------------------------------------------
                                         3 months 3 months 3 months
                                            ended    ended    ended
    (all figures are the                   Jul 31   Apr 30   Jan 31
    Corporation's attributable share)        2006     2006     2006
    ----------------------------------------------------------------
                                              lbs      lbs      lbs
    ----------------------------------------------------------------
    Production of U(3)O(8)
     in lbs                               478,400  388,800  325,700
    ----------------------------------------------------------------
    Sales of U(3)O(8) in lbs               70,000  380,000  361,000
    ----------------------------------------------------------------
                                             $        $        $
    ----------------------------------------------------------------
    Sales (000's)                           2,922   14,383    6,202
    ----------------------------------------------------------------
    Sales $/lb U(3)O(8) sold                   42       38       17
    ----------------------------------------------------------------
    Operating expenses (000's)              1,630    3,863    2,560
    ----------------------------------------------------------------
    Operating expenses $/lb U(3)O(8) sold      23       10        7
    ----------------------------------------------------------------
    Depletion and depreciation (000's)      3,294      976      837
    ----------------------------------------------------------------
    Depletion and depreciation $/lb
     U(3)O(8) sold                             47        3        2
    ----------------------------------------------------------------
    

    Three Months Ended June 30, 2007

    Uranium sales and operating costs

    Sales attributable to the Corporation during Q2 2007 amounted to
approximately 244,200 lbs U(3)O(8) (93,900 kg U). The Corporation's attributed
share of revenue from uranium sales amounted to $23.3 million. Mining
operations reflected a pre-tax income of $19.2 million after the deduction of
operating expenses of $2.1 million and depreciation and depletion charges of
$2.0 million. Sales in Q2 2006 amounted to approximately 70,000 lbs of       
U(3)O(8) (27,000 kg U). Attributable revenue from uranium sales amounted to
$2.9 million. Mining operations reflected a loss of $2.0 million after the
deduction of operating expenses and depletion costs of $4.9 million.
    The average unit price received for sales in Q2 2007 was $95 per pound of
U(3)O(8), which is a 38% increase over the average unit price for sales in the
prior quarter. The average price obtained in Q2 2006 was $42 per pound of    
U(3)O(8). The spot price of uranium at June 30, 2007 was $136 per pound of   
U(3)O(8) compared to a spot price of $47 per pound of U(3)O(8) at Q2 2006.
    During Q2 2007 operating expenses were $2.1 million or approximately
$8 per pound of U(3)O(8) sold. Operating expenses in the prior quarter were
$12 per pound of U(3)O(8) sold. Operating costs during Q2 2006 were
$1.6 million or $23 per pound of U(3)O(8) sold. The average unit cost of
depletion in Q2 2007 was $8 per pound of U(3)O(8) sold compared to $8 per
pound of U(3)O(8) sold in the prior quarter.

    General and administration costs

    General and administration expenses, including stock-based compensation
expense, were $18.7 million for Q2 2007 compared to $4.5 million Q2 2006. The
comparative expense for Q2 2006 relates to the costs of UrAsia Energy while
expenses in Q2 2007 include the combined costs of UrAsia Energy and Uranium
One. Higher administrative costs are related to increase in size of operations
resulting from acquisition activities and growth. The major increases in
general and administration during Q2, other than the combined administration
expenses resulting from the business combination, were increased travel and
accommodation expenses as a result of integration sessions held in the regions
and increased salaries and wages as a result of additional employees and
executive salaries.
    Stock-based compensation expense, which is included in general and
administration expense, has increased to $9.7 million in Q2 2007 from
$1.6 million in Q2 2006.

    Exploration

    Exploration expenditure in Q2 2007 of $5.0 million related to geological
programs being undertaken on the Corporation's license areas in Canada,
Australia, Africa, the United States and Kyrgyzstan. During Q2 2006
exploration expenditures totaling $1.6 million related to properties in
Kyrgyzstan only.

    Interest and Prior Financing Activities

    Interest income amounted to $4.5 million for Q2 2007 compared to
$2.3 million for Q2 2006. In addition to the interest earned on loans to joint
ventures, the acquisition of Uranium One assets resulted in increased interest
income due to income from funds held on deposit by Uranium One.
    Interest expense relates primarily to the short term loans from Nedcor
Securities.
    In the year ended December 31, 2006, Uranium One completed two financings
for aggregate net proceeds of $272.3 million. The proposed use of those
proceeds (other than for working capital), amounts spent in Q2 2007 and
amounts spent to date are as follows:

    
                                  Proposed Use  Amounts Spent  Amounts Spent
                                   of Proceeds   in Q2 2007       To Date
    -------------------------------------------------------------------------
    Dominion Uranium Project -
     completion of mine and
     related facilities and
     mine working capital       $113.6 million  $55.0 million $103.6 million

    Honeymoon Uranium Project -
     construction of mine and
     related facilities          $39.3 million   $4.8 million   $8.1 million

    Refinancing credit
     facilities                  $39.5 million              -              -
    

    Dilution loss on disposal of investment

    Dilution loss on disposal of investments occurs when the percentage of
equity held in Aflease Gold by Uranium One's wholly owned subsidiary, Uranium
One Africa Limited ("Uranium One Africa"), decreases when shares in Aflease
Gold are issued to shareholders other than Uranium One Africa. During Q2 2007
Uranium One's interest in Aflease Gold decreased from 68.05% to 67.61%
resulting in a dilution loss of $0.3 million. There was no dilution loss in
the comparative period for the prior year.

    Foreign exchange losses

    The foreign exchange loss during Q2 2007 amounted to $6.0 million
consisting of an unrealized loss of $6.2 million arising from the
strengthening of the Kazakhstan tenge against the US dollar during the period
and a $0.2 million gain related to other items. In Q2 2006, a foreign exchange
loss of $28.7 million was recorded, mostly consisting of a $28.6 million
unrealized exchange loss arising from a strengthening of the Kazakhstan tenge
against the US dollar in the quarter.

    Income taxes

    Current income tax expense for Q2 2007 was $7.8 million and represents
taxes paid and payable in Kazakhstan on profits from the Corporation's Akdala
Uranium Mine. In Q2 2006 a $0.7 million tax recovery was recorded as a result
of over provision of taxes in prior quarters.
    Future income tax recovery during Q2 2007 of $2.2 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. In Q2 2006 a recovery of future income taxes of $1.4 million
was recorded related to the reduction in the future income tax liability.

    Non-controlling interest

    Non-controlling interest relates to Uranium One Africa's 68% ownership of
its subsidiary company, Aflease Gold. The non-controlling interest's share of
the net loss for the three months ended June 30, 2007 was $0.7 million.

    Net loss for the period

    The net loss for Q2 2007 amounted to $13.7 million or $0.04 per share
compared to a net loss of $32.2 million or $0.15 per share in Q2 2006.

    Six Months Ended June 30, 2007

    Uranium sales and operating costs

    Revenue from uranium sales attributable to the Corporation during the six
months ended June 30, 2007 amounted to $65.0 million for approximately
849,200 lbs U(3)O(8) (319,000 Kg U) sold. Mining operations reflected a
pre-tax income of $49.0 million after the deduction of operating expenses of
$9.1 million and depreciation and depletion charges of $6.9 million. Revenue
from attributable uranium sales during the six months ended July 31, 2006
amounted to $17.3 million for approximately 450,000 lbs of U(3)O(8)
(173,000 Kg U) sold. Mining operations reflected a pre-tax income of $6.0
million after deduction of production and depletion costs totaling
$11.3 million.
    The average unit price received for sales in the six month period ended
June 30, 2007 was $77 per pound of U(3)O(8). The average price obtained in the
six months ended July 31, 2006 was $38 per pound of U(3)O(8).
    Operating expenses for the six month period ended June 30, 2007 were
$9.1 million or approximately $11 per pound of U(3)O(8) sold. Operating
expenses during the six months ended July 31, 2006 were $7.0 million or
$16 per pound of U(3)O(8) sold. The average unit cost of depletion was $8 per
pound of U(3)O(8) sold in the six months ended June 30, 2007 compared to $9
per pound of U(3)O(8) sold in the six months ended July 31, 2006.

    General and administration costs

    General and administration expenses, including stock-based compensation
expense, of $23.3 million were recorded for the six months ended June 30, 2007
compared to $7.2 million in the six months ended July 31, 2006. The
comparative amount for the six months ended July 31, 2006 includes general and
administration costs for UrAsia Energy only. General and administration costs
are in line with expectations and are due to an increase in size of operations
resulting from the acquisition of Uranium One, and an increase in staffing
requirements due to growth of the Corporation.
    Stock-based compensation expense included in general and administration
costs of $13.1 million was recorded for the six months ended June 30, 2007
compared to $5.0 million for the six month period ended July 31, 2006.

    Exploration

    Exploration expenditures in the six month period ended June 30, 2007 of
$6.4 million related to geological programs being undertaken on the
Corporation's exploration programs in Canada, Australia, Africa, the United
States and Kyrgyzstan. During the six months ended July 31, 2006 exploration
expenditures totaling $2.6 million related to properties in Kyrgyzstan only.

    Interest

    Interest income amounted to $5.6 million for the six months ended
June 30, 2007 compared to $3.8 million for the six months ended July 31, 2006.
The increase in interest results from interest earned on the loans to joint
ventures and cash balances during the period.

    Dilution loss on disposal of investment

    During the six month period ended June 30, 2007 Uranium One Africa's
interest in Aflease Gold decreased from 71.36% to 67.61% resulting in a
dilution loss of $0.3 million.

    Foreign exchange losses

    The foreign exchange loss during the six months ended June 30, 2007
amounted to $13.4 million which includes an unrealized loss of $14.8 million
arising from the strengthening of the Kazakhstan tenge against the US dollar
during the period. In the six months ended July 31, 2006 a foreign exchange
loss of $41.1 million was recorded that included a $42.6 million unrealized
exchange loss that arose from translation of the future income tax liability
denominated in Kazakhstan tenge, and was offset by a realized gain of $1.5
million on translation of normal transactions and asset and liability
revaluations.

    Income taxes

    Current income tax expense for the six months ended June 30, 2007 was
$20.4 million. Income tax expense represents taxes paid and payable in
Kazakhstan on income from the Akdala Uranium Mine. For the six months ended
July 31, 2006 a $4.7 million tax expense was recorded.
    Future income tax recovery of $4.4 million was recorded for the six
months ended June 30, 2007 compared to $1.7 million for the six months ended
July 31, 2006. A recovery of future income tax is recorded as the mineral
property asset to which it relates is depreciated.

    Non-controlling interest

    Non-controlling interest relates to Uranium One Africa's 68% ownership of
its subsidiary company, Aflease Gold. The non-controlling interest's share of
the net loss for the six months ended June 30, 2007 was $0.7 million.

    Net loss for the period

    The net loss for the six months ended June 30, 2007 amounted to
$5.7 million or $0.02 per share compared to a net loss of $44.2 million or
$0.20 per share for the six months ended July 31, 2006.

    Financial Condition

    On June 30, 2007, the Corporation had cash and cash equivalents of
$298.3 million compared to $61.8 million at December 31, 2006. The increase is
mainly due to the addition of $291.1 million in cash and cash equivalents on
acquisition when the assets of Uranium One and UrAsia Energy were combined.
    Accounts receivable increased by $12.0 million over the six months ended
June 30, 2007; the increase is mainly a result of an increase in recoverable
value added taxes.
    Inventories increased by $4.8 million or 40% over the amount held at
December 31, 2006, the increase was due to build up of uranium concentrates
and solutions and concentrates in process on hand as well as an increase in
material and supplies.
    Loans receivable from the joint venture, Betpak Dala, of $62.6 million
plus interest of $0.9 million were repaid during the six months ended
June 30, 2007. The Corporation advanced $32 million to the joint venture
Kyzylkum during the period for development of the Kharasan Uranium Project.
    Mineral interests, plant and equipment increased when compared to the
balance sheet at December 31, 2006 due to the business combination and the
addition of $2.4 billion in Uranium One assets to UrAsia Energy's assets.
Other increases were attributable as to $102.0 million to the acquisition of
the Shootaring Mill and exploration properties from U.S. Energy Corp. ("U.S.
Energy") and to additions to plant and equipment during the period of
$84.7 million. Goodwill of $255.3 million was recorded as a result of the
acquisition of the Uranium One assets; of which $119.2 million has been
allocated to Aflease Gold and $136.2 million has been allocated to the
Dominion Uranium Project. Allocation of the excess purchase price to Uranium
One assets acquired and to goodwill is subject to change; a valuation report
is being prepared and will be the basis of the final allocation.
    Other assets increased by $24.0 million over the six month period,
$13.5 million, of which was due to the asset additions resulting from the
business combination with UrAsia Energy and the acquisition of the U.S. Energy
assets, and consists primarily of an asset retirement fund.
    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; an increase in taxes payable in Kazakhstan due to the profits
from the Akdala Uranium Mine; and the short term loan liability assumed on
acquisition of Uranium One.
    Long term liabilities increased by $1.1 billion from December 31, 2006;
$122.7 million of this amount 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 $14.5 million. Future
income tax liabilities increased by $928 million as a result of assets
acquired in the business combination.
    A non-controlling interest of $11.3 million is a result of the
acquisition of the Uranium One assets and represents the non-controlling
interest share of its subsidiary, Aflease Gold.
    Shareholders' equity increased by $2.0 billion from December 31, 2006,
the largest component of the increase was share capital which increased by
$1.9 billion from December 31, 2006. The increase consists of $1.7 billion
from shares issued for the acquisition of all of the shares of UrAsia Energy;
$99.4 million from shares issued for the acquisition of U.S Energy assets;
$1.7 million for services; and $42.9 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 $51.3 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; and stock based compensation expense of
$13.1 million recorded for options and restricted shares granted during the
period and a reduction of $23.9 million for options and restricted shares
exercised. Other increases in shareholder's equity are a result of the equity
component of the convertible debentures acquired from Uranium One of
$46.5 million; and $77.5 million in accumulated other comprehensive income
from foreign currency translation of foreign operations.
    Shareholders' equity was reduced by the net loss of $5.7 million ($0.02
per share) for the six month period ended June 30, 2007.

    Liquidity and Capital Resources

    At June 30, 2007 the Corporation had working capital of $249.8 million.
As of June 30, 2007 the Corporation has cash and cash equivalents of
$298.3 million, including 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 also be
applied to existing commitments in respect of the Kharasan Uranium Project,
the Dominion Uranium Project, the Honeymoon Uranium Project and other current
commitments.
    The Corporation anticipates that it has sufficient liquidity and capital
resources to meet the Corporation's development plans and corporate costs for
the next twelve months. Please refer to "Commitments and Contingencies".
    The Corporation's liquidity position could be influenced if margin calls
in excess of ZAR175 million are made in respect of Uranium One Africa's
futures position under the August 2006 Nedcor facility. A margin call may be
made if Aflease Gold's share price declines to approximately ZAR1.65 per
share. In the period since the facility was drawn down, Aflease Gold's share
price has strengthened, closing at ZAR 2.90 per share on July 31, 2007.
    The Corporation earns revenue on the income 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 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 operations of the mining operations as planned.
    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 equity financing, debt financing and the proceeds
from the exercise of stock options and warrants. Uranium One's ability to
raise capital is highly dependent on the commercial viability of its projects
and the underlying prices of uranium.
    Declines in the prices for uranium may negatively impact Uranium One's
ability to raise additional funding. The Corporation has negotiated sales
contracts for 28% of the Dominion Uranium Project's planned production from
2008 to 2012; 40% of the Honeymoon Uranium Project's planned production from
2008 to 2014; and 20% of the production from the Kharasan Uranium Project.
Open executed contracts for sales from Betpak Dala represent future sales of
approximately 24.9 million lbs of U(3)O(8). The Corporation has negotiated
floor price protection on certain sales contracts, there are no other
mechanisms in place to manage exposure to price fluctuations.
    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".
    During Q2 2007 there have been no material changes in the specified
contractual obligations identified in Uranium One's Management's Discussion
and Analysis for the year ended December 31, 2006 that are outside the
ordinary course of Uranium One's business.

    
    Commitments and Contingencies

    a)  Betpak Dala has entered into various agreements for the construction
        and commissioning of the South Inkai Project. Pursuant to these
        agreements, Betpak Dala had future payment commitments of
        $19.4 million as of June 30, 2007, of which $13.6 million is the
        Corporation's proportionate share. The Corporation is not required to
        fund the Joint Venture; funds are expected to come from operations.

    b)  Kyzylkum has entered into various agreements for construction and
        commissioning of the Kharasan Project. Pursuant to these agreements,
        Kyzylkum had future payment commitments of $55.2 million as of
        June 30, 2007, of which $16.6 million is the Corporation's share. The
        Corporation is not required to fund the joint venture; Kyzylkum has
        arranged an unsecured credit facility totaling $100 million.
        $70 million of the facility was acquired from Japan Bank for
        International Cooperation and $30 million from Citibank. The first
        draw down on these facilities is planned for August 2007. The loan
        facilities, when drawn down will be repayable after full repayment of
        the loan from the Corporation. The Corporation's proportionate share
        of the loan, when fully drawn down, will be $30 million. The loan
        facility bears interest at the floating rates of LIBOR (3 month LIBOR
        rate) plus 0.25% - 0.30% per annum.

    c)  Capital expenditures of $42.5 million, of which $16.1 million
        represent current commitments, will be required to complete the
        construction of phase 1 of the Dominion Uranium Project.

    d)  The Corporation has approved budgeted expenditures totaling
        $17.7 million for planned exploration programs as follows:

                                                     Budget    Spent to Date
        Project                                    (millions)    (millions)
        ---------------------------------------------------------------------
        Dominion Uranium Project                       $ 9.4           $ 4.9
        Honeymoon Uranium Project                        1.0             0.7
        Pitchstone Joint Venture                         1.2             1.1
        Modder East Gold Project                         3.8             1.0
        Kyrgyzstan Exploration                           2.3             0.7
        ---------------------------------------------------------------------
        Total                                          $17.7           $ 8.4
        ---------------------------------------------------------------------

    e)  Aflease Gold is not funded by Uranium One and it currently funds
        itself by issuing shares through its listing on the JSE. Aflease Gold
        committed $20.0 million towards the development of the Modder East
        Gold Project as at June 30, 2007. Cash of $13.7 million and ongoing
        share placements to shareholders other than Uranium One are expected
        to fund the further development of the Modder East Gold Project.
        Further capital expenditure of $90.0 million, for which no current
        commitments exist, will be required to complete the construction of
        the Modder East Gold Project.

    f)  The Corporation entered into agreements for the purchase of twelve
        U.S.-built GEFCO drill rigs to supplement the current drill program
        in Kazakhstan. The contract is for a total of $17.9 million, of which
        $14.4 million was paid by June 30, 2007.

    g)  On October 20, 2006, UrAsia Energy concluded an Accession
        Agreement, which is subject to certain closing conditions, with
        owners of a drilling company in Kazakhstan, Joint Drilling LLP,
        whereby the Corporation will acquire a 50% interest for $3.8 million
        payable in cash. At June 30, 2007 the transaction had not yet closed.

    h)  The Corporation has two loan facilities with Nedcor Securities, the
        loans are secured by Uranium One Africa's investment in Randgold and
        Exploration Company Limited ("Randgold") shares and by Uranium One
        Africa's investment in Aflease Gold shares respectively. The loans
        bear interest in South Africa at a specified rate that is adjusted
        pursuant to a formula which is influenced by the movements in the
        share price of the shares held as security. Of the total liability of
        $53.1 million; one loan for $52.8 million is due on September 20,
        2007; the remaining loan for $0.3 million has no fixed repayment
        terms. Both loans are denominated in South African rand.

    i)  On December 20, 2006, Uranium One completed a debt offering of
        $133.2 million convertible unsecured subordinated debentures maturing
        December 31, 2011. The debentures bear interest at 4.25% payable
        semi-annually in arrears on June 30 and December 31 of each year,
        commencing June 30, 2007. The conversion price was set at C$20 per
        share, which is equivalent to 50 common shares for each C$1,000
        principal amount of debentures.

    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 dependent on
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)  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 to be initially calculated at the end of
        year 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.

    b)  In respect of the Akdala Uranium Mine, Betpak Dala is obligated to
        reimburse the Government of Kazakhstan for the cost of the geologic
        studies of the region aggregating $1.5 million, of which $1.0 million
        is attributable to the Corporation. The payments are to be made in 40
        equal, quarterly installments, commencing January 1, 2008 and ending
        December 31, 2017.

    c)  In respect of the South Inkai Project, Betpak Dala is obligated to
        reimburse the Government of Kazakhstan for the cost of geologic
        studies of the region, aggregating $1.7 million of which $1.2 million
        is proportionately attributable to the Corporation. The payments are
        to be made as to $35,000 on signing of the contract and the remaining
        $1.7 million to be paid as to $66 per tonne of uranium produced.

    Acquisition of interest in Kyzylkum

    a)  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.

    b)  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.

    c)  At June 30, 2007, Kyzylkum was obligated to reimburse the Government
        of Kazakhstan for $2.1 million in respect of the historic cost of
        geologic studies performed in respect of the Kharasan property, of
        which $0.6 million is proportionately attributable to the
        Corporation; $31,000 was paid on signing of the contract and the
        remainder is to be paid as to $66 per tonne of uranium produced.
    

    Off-balance Sheet Arrangements

    The Corporation has no off-balance sheet arrangements.

    Outstanding Share Data

    As of the August 10, 2007, there were 365,487,753 common shares issued
and outstanding and common share purchase warrants for 300,000 Series D
warrants exercisable at C$6.95 per warrant and 2,431,619 warrants exercisable
at C$3.55 per warrant. Each warrant is exercisable for one common share of
Uranium One. In addition, a warrant was issued in connection with the
acquisition of the Corporation's interest in Kyzylkum and entitles 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
in Kazakhstan.
    As of August 10, 2007, there were 13,083,897 stock options outstanding
under the Uranium One's stock option plan at exercise prices ranging from
$1.33 to $16.87 and 360,119 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.

    Dividend Policy

    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 of the Corporation's consolidated financial statements for the three
and six months ended June 30, 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:

    
        (a)   Section 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 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 classification of the Corporation's financial instruments as at
January 1, 2007 and their subsequent changes to June 30, 2007 have resulted in
no material gains or losses that require separate presentation in other
comprehensive income.

        (c)   Section 3251 - Equity

              Section 3251 establishes standards for the presentation of
              equity and changes in equity during the reporting period. The
              adoption of this new standard by the Corporation is not
              expected to have a material impact.

        (d)   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 Canadian
              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.
    

    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, Honeymoon Uranium Project and
Modder East Gold Project will become operating mines; or when the Shootaring
Mill or the Hobson Uranium ISR Processing Facility 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; risks associated
with foreign operations including, 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.
    Uranium One's risk factors are discussed in detail in its Annual
Information Form for the year ended December 31, 2006, which is available on
SEDAR at www.sedar.com, and should be reviewed in conjunction with this
document. UrAsia Energy's risk factors are discussed in detail in its Annual
Information Form for the year ended July 31, 2006 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 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 Q2 2007 stock options or 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.

    -   On April 26, 2007, 1,310,400 options were granted to directors and
        employees at a price of C$16.59 per share, exercisable on or before
        April 26, 2012.

    -   4,746,498 options were exercised during Q2 2007 and 57,198 were
        forfeit.

    -   No restricted shares were granted during Q2 2007; 64,112 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 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 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 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 five months ended December 31, 2006. Based on this evaluation,
the President and 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 six month period ended
June 30, 2007 that have materially affected, or are reasonably likely to
materially affect, the Corporation's internal control over financial
reporting.


    

    Uranium One Inc.
    Consolidated Balance Sheets
    As at June 30, 2007 and December 31, 2006
    (in United States dollars)

    -------------------------------------------------------------------------
    UNAUDITED                                           June 30,      Dec 31,
                                                           2007         2006
                                             Notes        $'000        $'000
    -------------------------------------------------------------------------
    ASSETS
    -------------------------------------------------------------------------
    Current assets
    -------------------------------------------------------------------------
    Cash and cash equivalents                    5      298,281       61,838
    -------------------------------------------------------------------------
    Restricted cash                                           -          500
    -------------------------------------------------------------------------
    Accounts and other receivables               6       61,208       49,186
    -------------------------------------------------------------------------
    Current portion of loans to
     joint ventures                            7.2            -       13,488
    -------------------------------------------------------------------------
    Inventories                                  8       16,829       12,044
    -------------------------------------------------------------------------
                                                        376,318      137,056
    -------------------------------------------------------------------------
    Non-current assets
    -------------------------------------------------------------------------
    Mineral interests, plant
     and equipment                               9    3,508,618      768,887
    -------------------------------------------------------------------------
    Goodwill                                     9      255,342            -
    -------------------------------------------------------------------------
    Loans to joint ventures                    7.2       57,072       39,850
    -------------------------------------------------------------------------
    Other assets                                10       49,826       25,825
    -------------------------------------------------------------------------
                                                      3,870,858      834,562
    -------------------------------------------------------------------------
    Total assets                                      4,247,176      971,618
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    LIABILITIES
    -------------------------------------------------------------------------
    Current liabilities
    -------------------------------------------------------------------------
    Accounts payable and
     accrued liabilities                        11       65,671       12,947
    -------------------------------------------------------------------------
    Income taxes payable                                  7,746        1,018
    -------------------------------------------------------------------------
    Short term loans                            12       53,131            -
    -------------------------------------------------------------------------
                                                        126,548       13,965
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Non-current liabilities
    -------------------------------------------------------------------------
    Convertible debentures                      13      122,699            -
    -------------------------------------------------------------------------
    Asset retirement obligations                14       17,369        2,856
    -------------------------------------------------------------------------
    Future income tax liabilities                     1,328,361      337,642
    -------------------------------------------------------------------------
    Other long term payables                              2,023        1,466
    -------------------------------------------------------------------------
                                                      1,470,452      341,964
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Non-controlling interest                             11,309            -
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
    -------------------------------------------------------------------------
    Share capital                               15    2,467,233      613,607
    -------------------------------------------------------------------------
    Contributed surplus                         16       82,579       31,286
    -------------------------------------------------------------------------
    Convertible debentures                       3       46,480            -
    -------------------------------------------------------------------------
    Deficit                                             (34,927)     (29,204)
    -------------------------------------------------------------------------
    Accumulated other
     comprehensive income                                77,502            -
    -------------------------------------------------------------------------
                                                      2,638,867      615,689
    -------------------------------------------------------------------------
    Total equity and liabilities                      4,247,176      971,618
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basis of presentation and principles of consolidation (note 2.1)
    Commitments and contingencies (note 4, 9 & 20)
    Subsequent event (note 21)

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


    Uranium One Inc.
    Consolidated Statements of Operations and Deficit
    For the three and six months ended June 30, 2007 and July 31, 2006
    (in United States dollars)

    -------------------------------------------------------------------------
                                3 months ended            6 months ended
    -------------------------------------------------------------------------
    UNAUDITED                  Jun 30,      Jul 31,      Jun 30,      Jul 31,
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
                   Notes        $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Revenues                   23,265        2,922       64,995       17,305
    -------------------------------------------------------------------------
    Operating
     expenses                  (2,058)      (1,630)      (9,101)      (6,988)
    -------------------------------------------------------------------------
    Depreciation
     and
     depletion                 (2,024)      (3,294)      (6,883)      (4,270)
    -------------------------------------------------------------------------
    Earnings/
     (loss) from
     mine
     operations                19,183       (2,002)      49,011        6,047
    -------------------------------------------------------------------------
    General and
     administ-
     rative(1)                (18,653)      (4,494)     (23,334)      (7,226)
    -------------------------------------------------------------------------
    Exploration
     expense                   (4,958)      (1,562)      (6,417)      (2,648)
    -------------------------------------------------------------------------
    Operating
     (loss)/
     profit                    (4,428)      (8,058)      19,260       (3,827)
    -------------------------------------------------------------------------
    Interest
     income                     4,540        2,312        5,562        3,802
    -------------------------------------------------------------------------
    Interest
     expense                   (2,997)           -       (2,997)           -
    -------------------------------------------------------------------------
    Dilution loss
     on disposal
     of investment               (321)           -         (321)           -
    -------------------------------------------------------------------------
    Other income/
     (expense)                    368          118        1,388         (137)
    -------------------------------------------------------------------------
    Foreign
     exchange
     losses           17       (5,980)     (28,707)     (13,411)     (41,110)
    -------------------------------------------------------------------------
    (Loss)/profit
     before
     income taxes
     and non-
     controlling
     interest                  (8,818)     (34,335)       9,481      (41,272)
    -------------------------------------------------------------------------
    Current
     income tax
     (expense)/
     recovery                  (7,847)         729      (20,375)      (4,659)
    -------------------------------------------------------------------------
    Future
     income tax
     recovery                   2,246        1,441        4,446        1,698
    -------------------------------------------------------------------------
    Loss before
     non-
     controlling
     interest                 (14,419)     (32,165)      (6,448)     (44,233)
    -------------------------------------------------------------------------
    Non-
     controlling
     interest                     725            -          725            -
    -------------------------------------------------------------------------
    Net loss                  (13,694)     (32,165)      (5,723)     (44,233)
    -------------------------------------------------------------------------
    Deficit at
     the beginning
     of the period            (21,233)     (16,723)     (29,204)      (4,655)
    -------------------------------------------------------------------------
    Deficit at the
     end of
     the period               (34,927)     (48,888)     (34,927)     (48,888)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    (1) - Stock
     option and
     restricted
     share expense
     included in
     general and
     administrative   16        9,733        1,602       13,110        4,974
    -------------------------------------------------------------------------
    Basic and
     diluted loss
     per common
     share            18        (0.04)       (0.15)       (0.02)       (0.20)
    -------------------------------------------------------------------------
    Weighted
     average
     number of
     basic and
     diluted
     common shares
     outstanding      18  332,955,827  217,164,830  275,380,193  217,164,830
    -------------------------------------------------------------------------
    See accompanying notes to the Interim Unaudited Consolidated Financial
    Statements.


    Uranium One Inc.
    Consolidated Statements of Comprehensive Income
    For the three and six months ended June 30, 2007
    (in United States dollars)

    -------------------------------------------------------------------------
    UNAUDITED                                          3 months     6 months
                                                          ended        ended
                                                         Jun 30,      Jun 30,
                                                           2007         2007
                                                          $'000        $'000
    -------------------------------------------------------------------------
                                                          Total        Total
    -------------------------------------------------------------------------
    Net loss                                            (13,694)      (5,723)
    -------------------------------------------------------------------------
    Unrealized gains recognized on translation of
     self-sustaining foreign operations                  77,502       77,502
    -------------------------------------------------------------------------
    Comprehensive income                                 63,808       71,779
    -------------------------------------------------------------------------


    Uranium One Inc.
    Consolidated Statements of Cash Flows
    For the three and six months ended June 30, 2007 and July 31, 2006
    (in United States dollars)

    -------------------------------------------------------------------------
                                 3 months ended             6 months ended
    -------------------------------------------------------------------------
    UNAUDITED                  Jun 30,      Jul 31,      Jun 30,      Jul 31,
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
                   Notes        $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Net loss                  (13,694)     (32,165)      (5,723)     (44,233)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Items not
     affecting
     cash:
    -------------------------------------------------------------------------
    - Depreciation
      and depletion             2,024        3,294        6,883        4,270
    -------------------------------------------------------------------------
    - Accretion
      of asset
      retirement
      obligation      14          308           78          308           78
    -------------------------------------------------------------------------
    - Stock
      option
      expense         16        9,733        1,602       13,110        4,974
    -------------------------------------------------------------------------
    - Interest
      accrued on
      loans and
      debentures                4,720            -        4,720            -
    -------------------------------------------------------------------------
    - Unrealized
      foreign
      exchange loss             5,474       28,560       12,691       42,662
    -------------------------------------------------------------------------
    - Future
      income tax
      recovery                 (2,246)      (1,441)      (4,446)      (1,698)
    -------------------------------------------------------------------------
    - Non-
      controlling
      interest                   (725)           -         (725)           -
    -------------------------------------------------------------------------
    - Other                     1,161           73        1,510           60
    -------------------------------------------------------------------------
    Changes in
     non-cash
     working
     capital:
    -------------------------------------------------------------------------
    - Increase/
      (Decrease) in
      accounts and
      other
      receivables               2,043       16,756       22,352       (8,281)
    -------------------------------------------------------------------------
    - Increase in
      inventories              (9,842)      (3,909)      (8,341)      (3,060)
    -------------------------------------------------------------------------
    - (Decrease)/
      increase in
      accounts
      payable and
      accrued
      liabilities             (18,093)       3,505      (15,950)       9,305
    -------------------------------------------------------------------------
    - Increase in
      income taxes
      payable                     409            -        6,301            -
    -------------------------------------------------------------------------
    Cash flows
     (from)/to
     operating
     activities               (18,728)      16,353       32,690        4,077
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Acquisition of
     Uranium One,
     net of
     acquisition
     costs             3      271,935            -      271,935            -
    -------------------------------------------------------------------------
    Acquisition
     of interest
     in Betpak
     Dala                           -         (578)           -       (1,177)
    -------------------------------------------------------------------------
    Acquisition of
     interest in
     Kyzylkum                       -           79            -          (45)
    -------------------------------------------------------------------------
    Acquisition of
     mineral
     interests,
     plant and
     equipment                (68,031)      (5,836)     (84,724)      (9,488)
    -------------------------------------------------------------------------
    Advance cash
     payment for
     other assets                   -       (8,420)      (4,313)      (8,626)
    -------------------------------------------------------------------------
    Restricted
     cash                        (500)        (500)        (500)      (2,500)
    -------------------------------------------------------------------------
    Cash advances
     to joint
     ventures          7      (15,400)     (13,996)     (22,400)     (19,413)
    -------------------------------------------------------------------------
    Cash proceeds
     from joint
     ventures          7            -            -       18,780            -
    -------------------------------------------------------------------------
    Cash flows
     from/(to)
     investing
     activities               188,004      (29,251)     178,778      (41,249)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Common shares
     issued, net               17,224           28       17,731      117,455
    -------------------------------------------------------------------------
    Shares issued
     by subsidiary
     to non-
     controlling
     shareholders                 338            -          338            -
    -------------------------------------------------------------------------
    Coupon interest
     payment on
     convertible
     debentures       13       (3,201)           -       (3,201)           -
    -------------------------------------------------------------------------
    Other                        (175)         (78)        (175)        (106)
    -------------------------------------------------------------------------
    Cash flows
     from/(to)
     financing
     activities                14,186          (50)      14,693      117,349
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Effects of
     exchange
     rate changes
     on cash and
     cash
     equivalents               10,068            -       10,282            -
    -------------------------------------------------------------------------
    Net increase/
     (decrease) in
     cash and cash
     equivalents              193,530      (12,948)     236,443       80,177
    -------------------------------------------------------------------------
    Cash and cash
     equivalents at
     the beginning
     of the period            104,751      141,276       61,838       48,151
    -------------------------------------------------------------------------
    Cash and cash
     equivalents
     at the end
     of the period     5      298,281      128,328      298,281      128,328
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Significant
     non-cash
     investing
     activities
     include:
    -------------------------------------------------------------------------
    Uranium One
     business
     combination       3    1,818,169            -    1,818,169            -
    -------------------------------------------------------------------------
    - Common
      shares                1,709,647            -    1,709,647            -
    -------------------------------------------------------------------------
    - Options,
      warrants and
      restricted
      shares                   62,042            -       62,042            -
    -------------------------------------------------------------------------
    - Equity
      component
      of
      convertible
      debentures               46,480            -       46,480            -
    -------------------------------------------------------------------------
    U.S. Energy
     asset
     purchase          4       99,401            -       99,401
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Supplemental
     information
    -------------------------------------------------------------------------
    Cash
     interest
     paid                       3,201            -        3,201            -
    -------------------------------------------------------------------------
    Cash
     taxation
     paid                       7,338        1,069       13,647        5,491
    -------------------------------------------------------------------------
    See accompanying notes to the Interim Unaudited Consolidated Financial
    Statements.



    Uranium One Inc.
    Notes to the Interim Consolidated Financial Statements
    as at June 30, 2007 and December 31, 2006
    UNAUDITED

    1   NATURE OF OPERATIONS

    Uranium One Inc. (previously sxr Uranium One Inc.) ("Uranium One") is a
    Canadian uranium corporation with a primary listing on the Toronto Stock
    Exchange and a secondary listing on the JSE Limited (the Johannesburg
    stock exchange), engaged through subsidiaries and joint ventures in the
    mining and production of uranium, and in acquisition, exploration, and
    development of properties for production of uranium in Kazakhstan, South
    Africa, Australia, the United States, Canada, and the Kyrgyz Republic.
    Through Aflease Gold Limited ("Aflease Gold"), Uranium One is engaged in
    the development of the Modder East Gold Project in South Africa.

    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 preparation of the consolidated financial
    statements is based on accounting policies and practices consistent with
    those used in the audited financial statements of UrAsia Energy Limited
    ("UrAsia Energy") for the period ended December 31, 2006.

    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 on April 20, 2007 (note 3). 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 the consolidated statements of operations and deficit and cash flows
    for the periods ended July 31, 2006 are those of UrAsia Energy. The
    results of operations of Uranium One have been included from
    April 20, 2007.

    The principal mineral properties and operations of the Corporation are
    listed below:
    -------------------------------------------------------------------------
                      Mineral
                      property/
    Entity            Operation      Location     Ownership  Status
    -------------------------------------------------------------------------
    Betpak Dala LLP   Akdala         Kazakhstan   70%        Proportionately
                       Uranium                                consolidated
                       Mine(1)
    -------------------------------------------------------------------------
    Betpak Dala LLP   South Inkai    Kazakhstan   70%        Proportionately
                       Uranium                                consolidated
                       Project(1)
    -------------------------------------------------------------------------
    Kyzylkum LLP      Kharasan       Kazakhstan   30%        Proportionately
                       Uranium                                consolidated
                       Project(1)
    -------------------------------------------------------------------------
    Uranium One       Dominion       South       100%        Consolidated
     Africa Limited    Uranium        Africa
                       Project(2)(5)
    -------------------------------------------------------------------------
    Aflease Gold      Modder East    South        68%        Consolidated
     Limited           Gold           Africa
                       Project(3)
    -------------------------------------------------------------------------
    Uranium One
     Australia
    -------------------------------------------------------------------------
    (Proprietary)     Honeymoon      Australia   100%        Consolidated
     Limited           Uranium
                       Project(2)
    -------------------------------------------------------------------------
    Uranium One       Shootaring     United      100%        Consolidated
     USA Inc           Canyon         States
                       Uranium
                       Mill(4)
    -------------------------------------------------------------------------
    Pitchstone        Pitchstone     Canada       50%        Proportionately
     Joint Venture     Joint                                  consolidated
                       Venture(2)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    (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, an indirect subsidiary of Uranium One
    -------------------------------------------------------------------------
    (4) - Purchased from U.S. Energy (note 4)
    -------------------------------------------------------------------------
    (5) - Refer to note 20 for the contingent sale of an interest in the
          Dominion Uranium Project
    -------------------------------------------------------------------------

    2.2 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 joint ventures and subsidiaries that are
    determined to be integrated foreign operations have been translated into
    United States dollars using the temporal method. The temporal method
    provides for foreign currency denominated monetary assets and
    liabilities, which includes future income tax, to be translated into
    United States dollars 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 and deficit.

    The financial statements of the joint ventures and subsidiaries that are
    determined to be self-sustaining foreign operations have been translated
    into United States dollars using the current rate method. The current
    rate method provides for all assets and liabilities, which includes
    future income tax, to be translated into United States dollars 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.

    2.3 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 is identified and measured from the ore stockpiles up to
    and including the on-site refining plant.

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

    2.4 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 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.
    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.

    2.5 Impairment of long-lived assets

    Management regularly reviews the net carrying value of each long lived
    asset whenever events or changes in circumstances indicate that the
    carrying amounts may not be recoverable. To determine fair value,
    management makes its best estimates of the future cash inflows that will
    be obtained each year over the life of the asset and discounts the cash
    flows by a rate that is based on the time value of money, adjusted for
    the risk associated with the applicable asset. Where impairment is
    identified, the carrying value of the related mineral interest, plant and
    equipment is written down to fair value.

    2.6 Goodwill

    Acquisitions are accounted for using the purchase method whereby assets
    and liabilities acquired are recorded at their fair values as of the date
    of acquisition and any excess of the purchase price over such fair value
    is recoded as goodwill. Goodwill is identified and allocated to reporting
    units by preparing estimates of the fair value of each reporting unit and
    comparing this amount to the fair value of assets and liabilities in the
    reporting unit. Goodwill is not amortized.

    The Corporation evaluates, on an annual basis, the carrying amount of
    goodwill to determine whether current events and circumstances indicate
    that such carrying amount may no longer be recoverable. To accomplish
    this, the Corporation compares the fair value of its reporting units to
    their carrying amounts. If the carrying value of a reporting unit exceeds
    its fair value, the Corporation compares the implied fair value of the
    reporting unit's goodwill to its carrying amount, and any excess of the
    carrying value over the fair value is charged to operations. Assumptions
    underlying fair value estimates are subject to significant risks and
    uncertainties.

    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 fair 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.

    Provision is made in full for the estimated future costs of pollution
    control and rehabilitation, in accordance with statutory requirements.

    2.8 Revenue recognition

    Revenue from uranium 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 16.

    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 period. Diluted earnings per share are calculated
    using the treasury method which requires the calculation of diluted
    earnings per share by assuming 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.

    2.12 Financial instruments

    On January 1, 2007, the Corporation adopted the following financial
    instrument accounting standards:

    Section 1530 - Comprehensive Income
    Section 3855 - Financial Instruments - Recognition and measurement
    Section 3865 - Hedges

    The adoption of these standards had no material financial impact on the
    financial statements of the Corporation. The newly adopted policies are
    explained below:

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

    Other long term investments that are intended to be held to maturity are
    subsequently measured at amortized cost using the effective interest rate
    method. Amortized cost is calculated by taking into account any discount
    or premium on acquisition over the period to maturity. For investments
    carried at amortized cost, gains and losses are recognized in the income
    statement when the investments are derecognized or impaired, as well as
    through the amortization process.

    Cash and cash equivalents

    Cash and cash equivalents consist of cash on hand, bank balances,
    deposits held at call and certificate of deposits with a remaining
    maturity of three months or less.

    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.

    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.

    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 income statement for the period.

    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.

    Equity instruments

    Equity instruments issued by Uranium One are recorded at the proceeds
    received, net of direct issue costs. The carrying amounts for cash and
    cash equivalents, short term investments, accounts receivable and
    accounts payable and accrued liabilities approximate fair value due to
    the short maturities of these instruments.

    2.13 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 provision for income and mining taxes and composition
    of future income and mining 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.

    2.14 Non-controlling interest

    Non-controlling interests exist in 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 interests, 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..

    2.15 Variable interest companies

    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.

    3   BUSINESS COMBINATION

    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, every UrAsia Energy
    share would be 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 agreed to be
    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. As a result of the transaction, Uranium One is held
    approximately 60% by former UrAsia Energy shareholders and approximately
    40% by former sxr Uranium One Inc. 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 9.3 million share purchase warrants with an average
    exercise price of $1.45 per share and a fair value of $26.4 million, plus
    12.0 million stock options, of which 6.9 million are exercisable at the
    date of acquisition, with an average exercise price of $2.66 per share
    and a fair value of $34.8 million, plus 0.9 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 $19.2 million, providing a total
    preliminary purchase price of $1,837.3 million.

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

    Risk-free interest rate                   4.19 - 4.25%
    Expected volatility of the share price    61%
    Expected life                             0.58 - 4.07 years
    Dividend rate                             Nil

    For the purposes of these consolidated financial statements, the purchase
    consideration has been allocated on a preliminary basis to the fair value
    of assets acquired and liabilities assumed, with goodwill assigned to a
    specific reporting unit, based on management's best estimates and taking
    into account all available information at the time of the acquisition as
    well as applicable information at the time these consolidated financial
    statements were prepared. The Corporation will continue to review
    information and perform further analysis with respect to these assets,
    including an independent valuation, prior to finalizing the allocation of
    the purchase price. This process will be performed in accordance with
    Emerging Issues Committee Abstract 152. Although the results of this
    review are presently unknown, it is anticipated that it may result in a
    material change to the amount assigned to goodwill and a change to the
    value attributable to tangible assets and future income tax liabilities.

    The aggregate preliminary fair values of assets acquired and liabilities
    assumed were as follows on acquisition date:
    -------------------------------------------------------------------------
                                                                       $'000
    -------------------------------------------------------------------------
    Purchase price:
    -------------------------------------------------------------------------
    Common shares (note 15)                                        1,709,647
    -------------------------------------------------------------------------
    Options, warrants and restricted shares                           62,042
    -------------------------------------------------------------------------
    Equity component of convertible debentures                        46,480
    -------------------------------------------------------------------------
    Acquisition costs                                                 19,153
    -------------------------------------------------------------------------
                                                                   1,837,322
    -------------------------------------------------------------------------
    Net assets acquired:
    -------------------------------------------------------------------------
    Cash and cash equivalents                                        291,088
    -------------------------------------------------------------------------
    Other current assets                                              33,442
    -------------------------------------------------------------------------
    Mineral interests, plant and equipment                         2,430,160
    -------------------------------------------------------------------------
    Goodwill                                                         241,855
    -------------------------------------------------------------------------
    Other assets                                                      13,502
    -------------------------------------------------------------------------
    Accounts payable and accrued liabilities                         (56,057)
    -------------------------------------------------------------------------
    Short term loans                                                 (53,903)
    -------------------------------------------------------------------------
    Asset retirement obligations                                      (4,602)
    -------------------------------------------------------------------------
    Convertible debentures                                          (118,450)
    -------------------------------------------------------------------------
    Future income tax liabilities                                   (928,050)
    -------------------------------------------------------------------------
    Non-controlling interest                                         (11,663)
    -------------------------------------------------------------------------
                                                                   1,837,322
    -------------------------------------------------------------------------

    4   ASSET PURCHASE

    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 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 Corporation will continue to review information and
    perform further analysis with respect to these assets prior to finalizing
    the allocation of the purchase price. 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                                            38,948
    -------------------------------------------------------------------------
    Exploration properties and geological information                 64,774
    -------------------------------------------------------------------------
    Stock pile                                                         4,797
    -------------------------------------------------------------------------
                                                                     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 14).

    5   CASH AND CASH EQUIVALENTS

    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    Cash                                                256,843       21,624
    -------------------------------------------------------------------------
    Money market instruments, including cashable
     guaranteed investment certificates, bearer
     deposit notes and commercial paper                  41,438       40,214
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                                        298,281       61,838
    -------------------------------------------------------------------------

    6   ACCOUNTS AND OTHER RECEIVABLES

    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    Trade receivables                                    26,992       47,798
    -------------------------------------------------------------------------
    Value added tax and general sales tax                26,659           51
    -------------------------------------------------------------------------
    Prepayments and advances                              5,367          894
    -------------------------------------------------------------------------
    Deposits and guarantees                               3,934            -
    -------------------------------------------------------------------------
    Other receivables                                     1,183          443
    -------------------------------------------------------------------------
                                                         64,135       49,186
    -------------------------------------------------------------------------
    Less: non current deposits and guarantees
     included in other assets (note 10)                   2,927
    -------------------------------------------------------------------------
                                                         61,208       49,186
    -------------------------------------------------------------------------

    7   JOINT VENTURES

    7.1 Proportionate interests in joint ventures

    The Corporation owns the following interests in joint ventures:
    -------------------------------------------------------------------------
    Betpak Dala                                                          70%
    -------------------------------------------------------------------------
    Kyzylkum                                                             30%
    -------------------------------------------------------------------------
    Pitchstone                                                           50%
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    The Corporation's proportionate share of assets and liabilities are
    as follows:
    -------------------------------------------------------------------------
    As at June 30, 2007   Betpak Dala     Kyzylkum   Pitchstone        Total
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Cash                        4,866        4,010          168        9,044
    -------------------------------------------------------------------------
    Other current assets       42,958          339          151       43,448
    -------------------------------------------------------------------------
    Mineral interests,
     plant and equipment      627,636      156,407        5,164      789,207
    -------------------------------------------------------------------------
    Other assets               17,827        5,993            -       23,820
    -------------------------------------------------------------------------
    Current liabilities       (19,858)      (1,599)           -      (21,457)
    -------------------------------------------------------------------------
    Intercompany loan(1)            -      (24,128)           -      (24,128)
    -------------------------------------------------------------------------
    Other                      (1,525)        (130)           -       (1,655)
    -------------------------------------------------------------------------
    Future income taxes      (276,020)     (65,075)           -     (341,095)
    -------------------------------------------------------------------------
    Asset retirement
     obligation                (3,155)           -            -       (3,155)
    -------------------------------------------------------------------------
    Net assets                 392,729      75,817        5,483      474,029
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    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)
    -------------------------------------------------------------------------
    Intercompany loan(1)       (18,986)    (34,352)                  (53,338)
    -------------------------------------------------------------------------
    Other                       (1,466)          -                    (1,466)
    -------------------------------------------------------------------------
    Future income taxes       (268,938)    (68,662)                 (337,600)
    -------------------------------------------------------------------------
    Asset retirement
     obligation                 (2,856)          -                    (2,856)
    -------------------------------------------------------------------------
    Net assets                 394,254      54,662                   448,916
    -------------------------------------------------------------------------
    (1) The intercompany loan represents the portion of the loan from Uranium
        One that is eliminated on consolidation.

    Kyzylkum has arranged unsecured bank loan facilities totaling
    $100 million. $70 million of the facility is from Japan Bank for
    International Cooperation, and $30 million from Citibank. The first draw-
    down on these facilities is planned for August 2007. The loan facilities,
    when drawn down, will be repayable after full repayment of the loan from
    Uranium One. Uranium One's proportionate share of these loans will be
    $30 million when fully drawn down. The loan facilities have floating
    interest rates of Libor plus 0.25% - 0.35% respectively.

    The Corporation's proportionate share of revenue, expenses, net income
    and cash flows for the three and six months ended June 30, 2007 are as
    follows:

    -------------------------------------------------------------------------
    Three months ended
     June 30, 2007        Betpak Dala     Kyzylkum   Pitchstone        Total
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Revenue                    23,265            -            -       23,265
    -------------------------------------------------------------------------
    Expenses                   (4,841)        (687)        (542)      (6,070)
    -------------------------------------------------------------------------
    Foreign exchange
     gain                         102           52            -          154
    -------------------------------------------------------------------------
    Income/(loss)
     before income taxes       18,526         (635)        (542)      17,349
    -------------------------------------------------------------------------
    Provision for
     income taxes              (7,659)           -            -       (7,659)
    -------------------------------------------------------------------------
    Net income/(loss)          10,867         (635)        (542)       9,690
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Six months ended
     June 30, 2007        Betpak Dala     Kyzylkum   Pitchstone        Total
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Revenue                    64,995            -            -       64,995
    -------------------------------------------------------------------------
    Expenses                  (16,452)        (687)        (542)     (17,681)
    -------------------------------------------------------------------------
    Foreign exchange loss      (6,037)      (1,342)           -       (7,379)
    -------------------------------------------------------------------------
    Income/(loss)
     before income taxes       42,506       (2,029)        (542)      39,935
    -------------------------------------------------------------------------
    Provision for
     income taxes             (18,318)           -            -      (18,318)
    -------------------------------------------------------------------------
    Net income/(loss)          24,188       (2,029)        (542)      21,617
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The Corporation's proportionate share of revenue, expenses, net income
    and cash flows for the three and six months ended July 31, 2006 are as
    follows:
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Three months ended
     July 31, 2006        Betpak Dala     Kyzylkum                     Total
    -------------------------------------------------------------------------
                                $'000        $'000                     $'000
    -------------------------------------------------------------------------
    Revenue                     2,922            -                     2,922
    -------------------------------------------------------------------------
    Expenses                   (3,338)          25                    (3,313)
    -------------------------------------------------------------------------
    Foreign
     exchange loss            (22,646)      (5,963)                  (28,609)
    -------------------------------------------------------------------------
    Loss before
     income taxes             (23,062)      (5,938)                  (29,000)
    -------------------------------------------------------------------------
    Provision for
     income taxes              (3,290)      (3,290)                   (6,580)
    -------------------------------------------------------------------------
    Net loss                  (26,352)      (9,228)                  (35,580)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Six months ended
     July 31, 2006        Betpak Dala     Kyzylkum                     Total
    -------------------------------------------------------------------------
                                $'000        $'000                     $'000
    -------------------------------------------------------------------------
    Revenue                    17,305            -                    17,305
    -------------------------------------------------------------------------
    Expenses                   (8,303)          12                    (8,291)
    -------------------------------------------------------------------------
    Foreign exchange
     loss                     (32,919)      (8,321)                  (41,240)
    -------------------------------------------------------------------------
    Loss before
     income taxes             (23,917)      (8,309)                  (32,226)
    -------------------------------------------------------------------------
    Provision for
     income taxes              (3,290)        (106)                   (3,396)
    -------------------------------------------------------------------------
    Net loss                  (27,207)      (8,415)                  (35,622)
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    7.2 Loans to Joint Ventures
    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    Current portion
    -------------------------------------------------------------------------
    Betpak Dala                                               -       12,736
    -------------------------------------------------------------------------
    Kyzylkum                                                  -          752
    -------------------------------------------------------------------------
                                                              -       13,488
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Long term portion
    -------------------------------------------------------------------------
    Betpak Dala                                               -        6,250
    -------------------------------------------------------------------------
    Kyzylkum                                             57,072       33,600
    -------------------------------------------------------------------------
                                                         57,072       39,850
    -------------------------------------------------------------------------

    During the 3 months ended March 31, 2007, in advance of scheduled payment
    dates, Betpak Dala repaid the principal amount of $62.6 million to the
    Corporation, together with $0.9 million of accrued interest.
    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    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 Corporation has made the following loans
     to Kyzylkum:
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Loan advanced in July 2006:
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    The loan bears interest at LIBOR plus 1.5%
     per annum, with interest payable on a semi-
     annual basis commencing January 2007. The
     principal amount is to be repaid in six
     equal consecutive amounts on a semi-annual
     basis commencing October 2007.                      30,000       30,000
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Loan advanced in November 2006:
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    The loan bears interest at LIBOR plus
     1.5% per annum, with interest payable on a
     semi-annual basis commencing May 2007.
     The principal amount is payable in six equal
     consecutive amounts on a semi-annual basis
     commencing February 2008.                           18,000       18,000
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Loan advanced in March 2007:
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    The loan bears interest at LIBOR plus 1.5% per
     annum, with interest payable on a semi-annual
     basis commencing June 2007. The principal
     amount is payable in six equal consecutive
     amounts on a semi-annual basis commencing
     December 2007.                                      10,000            -
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Loan advanced in April 2007:
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    The loan bears interest at LIBOR plus 1.5% per
     annum, with interest payable on a semi-annual
     basis commencing June 2007. The principal
     amount is payable in six equal consecutive
     amounts on a semi-annual basis commencing
     January 2008.                                       22,000            -
    -------------------------------------------------------------------------
                                                         80,000       48,000
    -------------------------------------------------------------------------
    Interest accrued                                      1,200        1,074
    -------------------------------------------------------------------------
                                                         81,200       49,074
    -------------------------------------------------------------------------
    Less elimination of proportionate share - 30%       (24,128)     (14,722)
    -------------------------------------------------------------------------
                                                         57,072       34,352
    -------------------------------------------------------------------------
    Less current portion                                      -         (752)
    -------------------------------------------------------------------------
    Long term portion                                    57,072       33,600
    -------------------------------------------------------------------------

    The loans to Kyzylkum are unsecured.


    8   INVENTORIES
    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    Finished uranium concentrates                         7,192        5,791
    -------------------------------------------------------------------------
    Solutions and concentrates in process                 4,890        5,035
    -------------------------------------------------------------------------
    Materials and supplies                                4,747        1,218
    -------------------------------------------------------------------------
    Stockpiles                                            4,797            -
    -------------------------------------------------------------------------
                                                         21,626       12,044
    -------------------------------------------------------------------------
    Less: non current inventory included in
     other assets (note 10)                               4,797            -
    -------------------------------------------------------------------------
                                                         16,829       12,044
    -------------------------------------------------------------------------

    9   MINERAL INTERESTS, PLANT AND EQUIPMENT

    -------------------------------------------------------------------------
                                                                         Net
                                                    Accumulated     carrying
    June 30, 2007                             Cost amortization       amount
    -------------------------------------------------------------------------
                                             $'000        $'000        $'000
    -------------------------------------------------------------------------
    Mineral interests                    3,168,696      (25,591)   3,143,105
    -------------------------------------------------------------------------
    Plant and equipment                    372,378       (6,865)     365,513
    -------------------------------------------------------------------------
                                         3,541,074      (32,456)   3,508,618
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Owned assets                                                   3,499,691
    -------------------------------------------------------------------------
    Leased assets                                                      8,927
    -------------------------------------------------------------------------
    Total net carrying amount as
     at end of the period                                          3,508,618
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                                         Net
                                                    Accumulated     carrying
    December 31, 2006                         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
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Owned assets                                                     768,887
    -------------------------------------------------------------------------
    Leased assets                                                          -
    -------------------------------------------------------------------------
    Total net carrying amount as
     at end of the period                                            768,887
    -------------------------------------------------------------------------

    A summary by property of the net book value is as follows (alphabetically
    by country):

    -------------------------------------------------------------------------
                           Mineral interests
    -------------------------------------------------------------------------
                                               Non-                Plant and
                 Country   Depletable   depletable        Total    equipment
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Honeymoon    Australia
     Project                        -      128,900      128,900        9,368
    -------------------------------------------------------------------------
    Australia    Australia
     explora-
     tion                           -       74,171       74,171            -
    -------------------------------------------------------------------------
    Pitchstone   Canada
     explor-
     ation                          -       27,235       27,235            -
    -------------------------------------------------------------------------
    Akdala       Kazakhstan
     Uranium
     Mine                     115,669       74,358      190,027       13,348
    -------------------------------------------------------------------------
    South        Kazakhstan
     Inkai
     Project                        -      406,871      406,871       17,390
    -------------------------------------------------------------------------
    Kharasan     Kazakhstan
     Uranium
     Project                        -      141,460      141,460       14,947
    -------------------------------------------------------------------------
    Kyrgyzstan   Kyrgyzstan
     explora-
     tion                           -          133          133          309
    -------------------------------------------------------------------------
    Dominion     South
     Uranium      Africa
     Project                        -    1,985,102    1,985,102      237,165
    -------------------------------------------------------------------------
    Modder       South
     East         Africa
     Gold
     project                        -      101,622      101,622       11,403
    -------------------------------------------------------------------------
    Sub-Nigel    South
     and          Africa
     other
     gold
     projects                       -       22,811       22,811          417
    -------------------------------------------------------------------------
    Shootaring   United
     Canyon       States
     Mill                           -            -            -       45,611
    -------------------------------------------------------------------------
    United       United
     States       States
     explor-
     ation                          -       64,773       64,773        2,618
    -------------------------------------------------------------------------
    Corporate
     and other                      -            -            -       12,937
    -------------------------------------------------------------------------
    Total                     115,669    3,027,436    3,143,105      365,513
    -------------------------------------------------------------------------


    ----------------------------------
                                Total
    ----------------------------------
                              June 30,
                  Country        2007
    ----------------------------------
                                $'000
    ----------------------------------
    Honeymoon     Australia
     Project                  138,268
    ----------------------------------
    Australia     Australia
     explora-
     tion                      74,171
    ----------------------------------
    Pitchstone       Canada
     explor-
     ation                     27,235
    ----------------------------------
    Akdala       Kazakhstan
     Uranium
     Mine                     203,375
    ----------------------------------
    South        Kazakhstan
     Inkai
     Project                  424,261
    ----------------------------------
    Kharasan     Kazakhstan
     Uranium
     Project                  156,407
    ----------------------------------
    Kyrgyzstan   Kyrgyzstan
     explora-
     tion                         442
    ----------------------------------
    Dominion     South
     Uranium      Africa
     Project                2,222,267
    ----------------------------------
    Modder       South
     East         Africa
     Gold
     project                  113,025
    ----------------------------------
    Sub-Nigel    South
     and          Africa
     other
     gold
     projects                  23,228
    ----------------------------------
    Shootaring   United
     Canyon       States
     Mill                      45,611
    ----------------------------------
    United       United
     States       States
     explor-
     ation                     67,391
    ----------------------------------
    Corporate
     and other                 12,937
    ----------------------------------
    Total                   3,508,618
    ----------------------------------



    -------------------------------------------------------------------------
                           Mineral interests
    -------------------------------------------------------------------------
                                               Non-                Plant and
                 Country   Depletable   depletable        Total    equipment
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Akdala       Kazakhstan
     Uranium
     Mine                     118,755       74,358      193,113       16,294
    -------------------------------------------------------------------------
    South        Kazakhstan
     Inkai
     Uranium
     Project                        -      404,125      404,125        3,312
    -------------------------------------------------------------------------
    Kharasan     Kazakhstan
     Uranium
     Project                        -      146,717      146,717        4,020
    -------------------------------------------------------------------------
    Kyrgyzstan   Kyrgyzstan
     explor-
     ation                          -          133          133          220
    -------------------------------------------------------------------------
    Corporate
     and other                      -            -            -          953
    -------------------------------------------------------------------------
    Total                     118,755      625,333      744,088       24,799
    -------------------------------------------------------------------------


    ----------------------------------
                                Total
    ----------------------------------
                              Dec. 30,
                  Country        2006
    ----------------------------------
                                $'000
    ----------------------------------
    Akdala       Kazakhstan
     Uranium
     Mine                     209,407
    ----------------------------------
    South        Kazakhstan
     Inkai
     Uranium
     Project                  407,437
    ----------------------------------
    Kharasan     Kazakhstan
     Uranium
     Project                  150,737
    ----------------------------------
    Kyrgyzstan   Kyrgyzstan
     explor-
     ation                        353
    ----------------------------------
    Corporate
     and other                    953
    ----------------------------------
    Total                     768,887
    ----------------------------------

    Commitments exist for capital expenditures of $69.8 million.

    The goodwill arising in the Uranium One/UrAsia Energy business
    combination included in the respective reportable operating segments is
    shown in the table below:

    -------------------------------------------------------------------------
                                                        Foreign
                                                       exchange
                                        Recognized    resulting
                                                on         from        Total
                                       acquisition       transl-     June 30,
                                              date        ation         2007
    -------------------------------------------------------------------------
                                             $'000        $'000        $'000
    -------------------------------------------------------------------------
    Aflease Gold                           112,864        6,294      119,158
    -------------------------------------------------------------------------
    Dominion Uranium Project               128,991        7,193      136,184
    -------------------------------------------------------------------------
                                           241,855       13,487      255,342
    -------------------------------------------------------------------------


    10  OTHER ASSETS

    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    Prepaid drill rigs                                    4,324       13,295
    -------------------------------------------------------------------------
    Advances for plant and equipment                     14,064        9,790
    -------------------------------------------------------------------------
    Long term deposits (note 6)                           2,927            -
    -------------------------------------------------------------------------
    Long term inventory (note 8)                          4,797            -
    -------------------------------------------------------------------------
    Asset retirement fund (note 14)                      13,892            -
    -------------------------------------------------------------------------
    Other                                                 9,822        2,740
    -------------------------------------------------------------------------
                                                         49,826       25,825
    -------------------------------------------------------------------------


    11  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    Trade payables                                       10,643        6,471
    -------------------------------------------------------------------------
    Accruals                                             45,032          260
    -------------------------------------------------------------------------
    Other                                                 9,996        6,216
    -------------------------------------------------------------------------
                                                         65,671       12,947
    -------------------------------------------------------------------------


    12  SHORT TERM LOANS

    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    February 2005 Nedcor Securities loan                    352            -
    -------------------------------------------------------------------------
    August 2006 Nedcor Securities loan                   52,779            -
    -------------------------------------------------------------------------
    Total liability                                      53,131            -
    -------------------------------------------------------------------------

    The February 2005 Nedcor Securities loan represents 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
    ("Uranium One Africa"), in Randgold and Exploration Company Limited
    ("Randgold") shares. This loan bears interest at a variable rate
    currently at 8.95%. The loan has no fixed repayment terms and is
    denominated in South African rand.

    The August 2006 Nedcor Securities loan represents draw-downs on a
    facility provided by Nedcor Securities, secured by Uranium One Africa's
    investment in Aflease Gold shares. This loan bears interest at a flat
    rate of 9% per annum. Interest on the loan is offset by interest income
    received on offsetting deposits required in connection with this loan.
    The interest on the deposits in influenced by movements in the Aflease
    Gold share price. The loan will be repaid on September 20, 2007 and is
    denominated in South African rand. Nedcor can request early payment for a
    portion of the August 2006 loan, if Aflease Gold's share price decline to
    levels below approximately ZAR 1.65 per share. During the six months
    ended June 30, 2007, Aflease Gold traded between ZAR 2.75 and ZAR 4.20,
    closing at ZAR 2.99 on June 29, 2007.

    The combined effective interest rate for the three and six month period
    was 6.4% and 5.8% respectively.

    Uranium One's investments in Randgold and Aflease Gold are encumbered
    while these finance arrangements remain in place. These loans are
    classified as liabilities held to maturity and are carried at amortized
    cost.

    13  CONVERTIBLE DEBENTURES

    On December 20, 2006, Uranium One completed a debt offering of
    $133.2 million (including the exercised over-allotment option of
    $17.4 million granted to underwriters) 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
    revalued on April 20, 2007, and were included as part of the purchase
    price for the Uranium One/UrAsia Energy business combination (note 3).
    The table below indicates the breakdown of the liability:

    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Liability component on date of business
     combination (note 3)                               118,450            -
    -------------------------------------------------------------------------
    Interest charged                                      3,988            -
    -------------------------------------------------------------------------
    Coupon payment                                       (3,201)           -
    -------------------------------------------------------------------------
    Foreign exchange movement                             3,462            -
    -------------------------------------------------------------------------
    Liability as at the end of the period               122,699            -
    -------------------------------------------------------------------------


    14  ASSET RETIREMENT OBLIGATIONS

    -------------------------------------------------------------------------
                                                        June 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Opening balance                                       2,856        1,953
    -------------------------------------------------------------------------
    Acquisition of Uranium One (note 3)                   4,602            -
    -------------------------------------------------------------------------
    Acquisition of US Energy assets (note 4)              9,389            -
    -------------------------------------------------------------------------
    Accretion expense                                       308          604
    -------------------------------------------------------------------------
    Revision                                                 27          299
    -------------------------------------------------------------------------
    Foreign exchange movement                               187            -
    -------------------------------------------------------------------------
    Closing Balance                                      17,369        2,856
    -------------------------------------------------------------------------
                                                        June 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------
    Undiscounted and uninflated amount of
     estimated cash flows ($'000)                        30,452        4,284
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Payable in years                                   4 - 10.5       4 - 18
    -------------------------------------------------------------------------
    Inflation rate                                 2.69% - 7.00%        7.00%
    -------------------------------------------------------------------------
    Discount rate                                  7.39% - 14.5%       12.00%
    -------------------------------------------------------------------------

    Funding of $13.9 million of these obligations has been provided in Asset
    Retirement Funds in Kazakhstan, South Africa and the United States.


    15  SHARE CAPITAL

    -------------------------------------------------------------------------
    Common shares                 Number of shares           Value of shares
    -------------------------------------------------------------------------
                               Jun 30,      Dec 31,      Jun 30,      Dec 31,
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
                   Note                                   $'000        $'000
    -------------------------------------------------------------------------
    UrAsia Energy
     - movement
     from January 1,
     2007 to
     April 20,
     2007
    -------------------------------------------------------------------------
    Opening balance
     of common
     shares in
     issue                480,240,704  479,722,871      613,607      612,941
    -------------------------------------------------------------------------
    Exercise of
     warrants                 481,000      268,000           82           48
    -------------------------------------------------------------------------
    Exercise of
     stock options          1,866,807      249,833        7,601          618
    -------------------------------------------------------------------------
    Closing balance
     of issued and
     outstanding
     shares on
     April 20,
     2007                 482,588,511  480,240,704      621,290      613,607
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Uranium One -
     Movement from
     April 20, 2007
     to June 30,
     2007
    -------------------------------------------------------------------------
    Conversion of
     UrAsia Energy
     shares to
     Uranium One
     shares at a
     ratio of 0.45    3   217,164,830                   621,290
    -------------------------------------------------------------------------
    Shares of
     Uranium One
     owned by
     Uranium One
     shareholders
     at
     acquisition          138,129,435                 1,709,647
    -------------------------------------------------------------------------
    Exercise of
     stock options
     and restricted
     shares                 3,180,386                    35,201
    -------------------------------------------------------------------------
    U.S. Energy
     asset purchase
     consideration    4     6,607,605                    99,401
    -------------------------------------------------------------------------
    Shares issued
     for services
     rendered                 124,379                     1,694
    -------------------------------------------------------------------------
    Closing balance
     of issued and
     outstanding
     shares               365,206,635  480,240,704    2,467,233      613,607
    -------------------------------------------------------------------------


    16  CONTRIBUTED SURPLUS

    The following table details the movements of contributed surplus during
    the period:
    -------------------------------------------------------------------------
    Movement for the 6
     months ended
     June 30, 2007           Warrants   Restricted      Options        TOTAL
    -------------------------------------------------------------------------
                                            shares
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    As at January 1, 2007           -            -       31,286       31,286
    -------------------------------------------------------------------------
    Issued on business
     acquisition               26,407          853       34,782       62,042
    -------------------------------------------------------------------------
    Share options expensed          -            -       10,541       10,541
    -------------------------------------------------------------------------
    Share options exercised         -            -      (23,006)     (23,006)
    -------------------------------------------------------------------------
    Restricted shares
     expensed                       -        2,569            -        2,569
    -------------------------------------------------------------------------
    Restricted shares
     exercised                      -         (853)           -         (853)
    -------------------------------------------------------------------------
    As at June 30, 2007        26,407        2,569       53,603       82,579
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Movement for the 5
     months ended
     December 31, 2006       Warrants   Restricted      Options        TOTAL
    -------------------------------------------------------------------------
                                            shares
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    As at August 1, 2006            -            -        9,307        9,307
    -------------------------------------------------------------------------
    Share options expensed          -            -       22,162       22,162
    -------------------------------------------------------------------------
    Share options exercised         -            -         (183)        (183)
    -------------------------------------------------------------------------
    As at December 31, 2006         -            -       31,286       31,286
    -------------------------------------------------------------------------

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

    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------
    Risk free interest rate                               4.14%        3.80%
    -------------------------------------------------------------------------
    Expected dividend yield                                  0%           0%
    -------------------------------------------------------------------------
    Expected volatility of Uranium One's share price        69%          46%
    -------------------------------------------------------------------------
    Expected life                                       5 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
                                                      Number of     exercise
                                                        options        price
    -------------------------------------------------------------------------
                                                                       Cdn $
    -------------------------------------------------------------------------
    Balance as at August 1, 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
    -------------------------------------------------------------------------
    Granted subsequent to April 20, 2007              1,310,400        16.59
    -------------------------------------------------------------------------
    Exercised subsequent to April 20, 2007           (3,116,519)        5.28
    -------------------------------------------------------------------------
    Forfeiture of share options subsequent to
     April 20, 2007                                     (57,198)       13.09
    -------------------------------------------------------------------------
    Outstanding options as at June 30, 2007          13,290,935         8.43
    -------------------------------------------------------------------------

    The stock option compensation expense for the three and six months ended
    June 30, 2007 was $7.0 and $10.4 million (July 31, 2006: $1.6 million and
    $5.0 million) for the Uranium One options and $0.1 million for the
    Aflease Gold options for the three and six months ended June 30, 2007. As
    at June 30, 2007, the aggregate unexpensed fair value of unvested stock
    options granted amounted to $13.1 million.

    The following table summarizes certain information about Uranium One's
    stock options outstanding at June 30, 2007:

    -------------------------------------------------------------------------
                            Options outstanding          Options exercisable
    -------------------------------------------------------------------------
                                 Weight  Weight               Weight  Weight
                                    -ed     -ed                  -ed     -ed
                        Number  average average      Number  average average
                   outstanding   remain    exer exercisable   remain    exer
                         as at     -ing   -cise       as at     -ing   -cise
                   ----------------------------------------------------------
    Range of Exercise
     Prices             Jun 30,    life   price      Jun 30,    life   price
    -------------------------------------------------------------------------
    US$                   2007   (years)  Cdn $        2007   (years)  Cdn $
    -------------------------------------------------------------------------
    1.33 to 2.74       507,684    3.09    1.73       151,354     3.09   1.62
    -------------------------------------------------------------------------
    3.03 to 4.76     2,996,267    4.02    4.06     2,362,163     4.02   4.06
    -------------------------------------------------------------------------
    5.00 to 7.79     2,452,703    7.49    7.06     1,695,341     7.49   7.08
    -------------------------------------------------------------------------
    8.32 to 9.90     4,279,903    5.88    8.35     3,924,321     5.88   8.34
    -------------------------------------------------------------------------
    11.78 to 12.93     749,849    7.90   12.33       249,917     4.39  12.23
    -------------------------------------------------------------------------
    14.12 to 15.63     792,929    7.13   14.61       231,333     6.78  15.36
    -------------------------------------------------------------------------
    16.59 to 16.87   1,511,600    3.71   16.63       250,000     4.83  16.84
    -------------------------------------------------------------------------
                    13,290,935    5.78    8.43     8,864,429     5.61   7.38
    -------------------------------------------------------------------------

    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
    -------------------------------------------------------------------------
                                                         Jun 30,      Dec 31,
                                                           2007         2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Restricted shares issued on business
     combination (note 3)                               404,231            -
    -------------------------------------------------------------------------
    Exercised during the period                         (64,112)           -
    -------------------------------------------------------------------------
    Total restricted shares outstanding
     at the end of the period                           340,119            -
    -------------------------------------------------------------------------

    Of the outstanding number of Restricted shares, the grant date of 92,123
    Restricted shares was December 8, 2006 and grant date of 247,996
    Restricted shares was June 7, 2006. Restricted shares will not expire
    while the participant is in the employ of the Corporation.

    The Restricted share expense for both the three and six months ended June
    30, 2007 was $2.6 million. As at June 30, 2007 the aggregate unexpensed
    fair value of unvested restricted shares granted amounted to $2.5
    million.

    -------------------------------------------------------------------------
    Warrants                         Number of
                                     warrants              Allocated value
    -------------------------------------------------------------------------
                               Jun 30,      Dec 31,      Jun 30,      Dec 31,
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
                                                          $'000        $'000
    -------------------------------------------------------------------------
    Issued on business
     combination (note 3)   2,731,619            -       26,407            -
    -------------------------------------------------------------------------
    At the end of the
     period                 2,731,619            -       26,407            -
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                    Number of               Average exercise
                                     warrants                          price
    -------------------------------------------------------------------------
                               Jun 30,      Dec 31,      Jun 30,      Dec 31,
    -------------------------------------------------------------------------
    Warrants comprise:           2007         2006         2007         2006
    -------------------------------------------------------------------------
    2008 Warrants           2,431,619            -         3.55            -
    -------------------------------------------------------------------------
    Series D Warrants         300,000            -         6.95            -
    -------------------------------------------------------------------------
    Total                   2,731,619            -         3.92            -
    -------------------------------------------------------------------------

    Series D warrants represents 150,000 warrants that expire on
    September 16, 2007 and 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.


    17  FOREIGN EXCHANGE LOSSES

    -------------------------------------------------------------------------
                                 3 months ended             6 months ended
    -------------------------------------------------------------------------
    A summary of the
     foreign exchange gain
     /(loss) by item is as
     follows:                  Jun 30,      Jul 31,      Jun 30,      Jul 31,
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
                                $'000        $'000        $'000        $'000
    -------------------------------------------------------------------------
    Unrealized foreign
     exchange loss on
     future income tax
     liability                 (6,177)     (28,578)     (14,777)     (42,602)
    -------------------------------------------------------------------------
    Foreign exchange gain
    /(loss) on other items        197         (129)       1,366        1,492
    -------------------------------------------------------------------------
                               (5,980)     (28,707)     (13,411)     (41,110)
    -------------------------------------------------------------------------


    18  BASIC LOSS PER SHARE AND DILUTED LOSS PER SHARE

    -------------------------------------------------------------------------
                                 3 months ended             6 months ended
    -------------------------------------------------------------------------
                               Jun 30,      Jul 31,      Jun 30,      Jul 31,
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
    Basic and diluted
     loss per share ($)         (0.04)       (0.15)       (0.02)       (0.20)
    -------------------------------------------------------------------------
    is calculated based
     on a net loss for
     the period of
     ($'000)                  (13,694)     (32,165)      (5,723)     (44,233)
    -------------------------------------------------------------------------
    and a weighted
     average number of
     shares outstanding
     of                   332,955,827  217,164,830  275,380,193  217,164,830
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    For the three and six month periods ended June 30, 2007 and July 31,
    2006, the impact of outstanding share options and warrants was excluded
    from the diluted share calculation because it was anti-dilutive for
    earnings per share purposes.


    19  SEGMENTED INFORMATION

    The Corporation's reportable operating segments are summarized in the
    table below (alphabetically by country):

    For the three months ended June 30, 2007:
    -------------------------------------------------------------------------
                                                     Operating  Depreciation
                                   Country  Revenue   expenses   & depletion
    -------------------------------------------------------------------------
    Honeymoon Uranium Project
     and exploration             Australia        -          -           (93)
    -------------------------------------------------------------------------
    Exploration - Pitchstone        Canada        -          -             -
    -------------------------------------------------------------------------
    Akdala Uranium Mine         Kazakhstan   23,265     (2,058)       (1,738)
    -------------------------------------------------------------------------
    South Inkai Uranium
     Project                    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kharasan Uranium Project    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kyrgyzstan exploration      Kyrgyzstan        -          -           (20)
    -------------------------------------------------------------------------
    Dominion Uranium Project  South Africa        -          -             -
    -------------------------------------------------------------------------
    Modder East Gold Project  South Africa        -          -            (3)
    -------------------------------------------------------------------------
    Shootaring Canyon
     Uranium Mill            United States        -          -           (80)
    -------------------------------------------------------------------------
    Exploration              United States        -          -            (7)
    -------------------------------------------------------------------------
    Corporate and other                           -          -           (83)
    -------------------------------------------------------------------------
    Total                                    23,265     (2,058)       (2,024)
    -------------------------------------------------------------------------


    -----------------------------------------------------------------
                              Exploration   Net profit       Capital
                              expenditure       /(loss)  expenditure
    -----------------------------------------------------------------
    Honeymoon Uranium Project
     and exploration                 (418)        (896)        5,452
    -----------------------------------------------------------------
    Exploration - Pitchstone         (542)        (542)            -
    -----------------------------------------------------------------
    Akdala Uranium Mine                 -       10,933         2,016
    -----------------------------------------------------------------
    South Inkai Uranium
     Project                            -          126        11,441
    -----------------------------------------------------------------
    Kharasan Uranium Project            -         (635)        7,186
    -----------------------------------------------------------------
    Kyrgyzstan exploration           (549)        (857)           46
    -----------------------------------------------------------------
    Dominion Uranium Project         (353)         397        39,560
    -----------------------------------------------------------------
    Modder East Gold Project            -          (10)        1,564
    -----------------------------------------------------------------
    Shootaring Canyon
     Uranium Mill                      (8)        (314)            -
    -----------------------------------------------------------------
    Exploration                    (2,120)      (2,310)            -
    -----------------------------------------------------------------
    Corporate and other              (968)     (19,644)          766
    -----------------------------------------------------------------
    Total                          (4,958)     (13,694)       68,031
    -----------------------------------------------------------------


    For the six months ended June 30, 2007:
    -------------------------------------------------------------------------
                                                     Operating  Depreciation
                                   Country  Revenue   expenses   & depletion
    -------------------------------------------------------------------------
    Honeymoon Uranium Project
     and exploration             Australia        -          -           (93)
    -------------------------------------------------------------------------
    Exploration - Pitchstone        Canada        -          -             -
    -------------------------------------------------------------------------
    Akdala Uranium Mine         Kazakhstan   64,995     (9,101)       (6,597)
    -------------------------------------------------------------------------
    South Inkai Uranium
     Project                    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kharasan Uranium Project    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kyrgyzstan exploration      Kyrgyzstan        -          -           (20)
    -------------------------------------------------------------------------
    Dominion Uranium Project  South Africa        -          -             -
    -------------------------------------------------------------------------
    Modder East Gold Project  South Africa        -          -            (3)
    -------------------------------------------------------------------------
    Shootaring Canyon
     Uranium Mill            United States        -          -           (80)
    -------------------------------------------------------------------------
    Exploration              United States        -          -            (7)
    -------------------------------------------------------------------------
    Corporate and other                           -          -           (83)
    -------------------------------------------------------------------------
    Total                                    64,995     (9,101)       (6,883)
    -------------------------------------------------------------------------

    -----------------------------------------------------------------
                              Exploration   Net profit       Capital
                              expenditure       /(loss)  expenditure
    -----------------------------------------------------------------
    Honeymoon Uranium Project
     and exploration                 (418)        (898)        5,452
    -----------------------------------------------------------------
    Exploration - Pitchstone         (542)        (542)            -
    -----------------------------------------------------------------
    Akdala Uranium Mine                 -       24,062         3,442
    -----------------------------------------------------------------
    South Inkai Uranium
     Project                            -          126        19,013
    -----------------------------------------------------------------
    Kharasan Uranium Project            -       (2,029)        7,186
    -----------------------------------------------------------------
    Kyrgyzstan exploration         (2,008)      (2,337)           46
    -----------------------------------------------------------------
    Dominion Uranium Project         (353)         397        39,560
    -----------------------------------------------------------------
    Modder East Gold Project            -          (10)        1,564
    -----------------------------------------------------------------
    Shootaring Canyon
     Uranium Mill                      (8)        (314)            -
    -----------------------------------------------------------------
    Exploration                    (2,120)      (2,310)            -
    -----------------------------------------------------------------
    Corporate and other              (968)     (21,868)        8,461
    -----------------------------------------------------------------
    Total                          (6,417)      (5,723)       84,724
    -----------------------------------------------------------------


    As at June 30, 2007:
    -------------------------------------------------------------------------
                                        Mineral
                                       property,
                                      plant and         Total          Total
                         Country      equipment        assets    liabilities
    -------------------------------------------------------------------------
    Honeymoon Uranium
     Project and
     exploration       Australia        212,439       235,081         54,959
    -------------------------------------------------------------------------
    Exploration -
     Pitchstone           Canada         27,235        26,505          2,700
    -------------------------------------------------------------------------
    Akdala Uranium
     Mine             Kazakhstan        203,375       261,051         93,361
    -------------------------------------------------------------------------
    South Inkai
     Uranium Project  Kazakhstan        424,261       432,236        207,197
    -------------------------------------------------------------------------
    Kharasan Uranium
     Project          Kazakhstan        156,407       166,749         73,405
    -------------------------------------------------------------------------
    Kyrgyzstan
     exploration      Kyrgyzstan            442         1,422            231
    -------------------------------------------------------------------------
    Dominion Uranium       South
     Project              Africa      2,222,267     2,376,557        921,613
    -------------------------------------------------------------------------
    Modder East Gold       South
     Project              Africa        113,025       255,880         51,911
    -------------------------------------------------------------------------
    Shootaring Canyon     United
     Uranium Mill         States         45,611        57,421          6,886
    -------------------------------------------------------------------------
                          United
    Exploration           States         67,391        69,861          2,918
    -------------------------------------------------------------------------
    Corporate and
     other                               36,165       364,413        181,819
    -------------------------------------------------------------------------
    Total                             3,508,618     4,247,176      1,597,000
    -------------------------------------------------------------------------



    For the three months ended July 31, 2006:
    -------------------------------------------------------------------------
                                                     Operating  Depreciation
                                   Country  Revenue   expenses   & depletion
    -------------------------------------------------------------------------
    Akdala Uranium Mine         Kazakhstan    2,922     (1,886)       (3,286)
    -------------------------------------------------------------------------
    South Inkai Uranium
     Project                    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kharasan Uranium Project    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kyrgyzstan exploration      Kyrgyzstan        -          -             -
    -------------------------------------------------------------------------
    Corporate and other                           -        256            (8)
    -------------------------------------------------------------------------
    Total                                     2,922     (1,630)       (3,294)
    -------------------------------------------------------------------------

    ----------------------------------------------------------------
                             Exploration   Net profit       Capital
                             expenditure       /(loss)  expenditure
    ----------------------------------------------------------------
    Akdala Uranium Mine                -        2,119         3,620
    ----------------------------------------------------------------
    South Inkai Uranium
     Project                           -      (24,237)            -
    ----------------------------------------------------------------
    Kharasan Uranium Project           -       (6,058)        2,168
    ----------------------------------------------------------------
    Kyrgyzstan exploration        (1,562)      (1,459)           48
    ----------------------------------------------------------------
    Corporate and other                -       (2,530)            -
    ----------------------------------------------------------------
    Total                         (1,562)     (32,165)        5,836
    ----------------------------------------------------------------



    For the six months ended July 31, 2006:
    -------------------------------------------------------------------------
                                                     Operating  Depreciation
                                   Country  Revenue   expenses   & depletion
    -------------------------------------------------------------------------
    Akdala Uranium Mine         Kazakhstan   17,305     (6,988)       (4,252)
    -------------------------------------------------------------------------
    South Inkai Uranium
     Project                    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kharasan Uranium Project    Kazakhstan        -          -             -
    -------------------------------------------------------------------------
    Kyrgyzstan exploration      Kyrgyzstan        -          -             -
    -------------------------------------------------------------------------
    Corporate and other                           -          -           (18)
    -------------------------------------------------------------------------
    Total                                    17,305     (6,988)       (4,270)
    -------------------------------------------------------------------------

    ----------------------------------------------------------------
                             Exploration   Net profit       Capital
                             expenditure       /(loss)  expenditure
    ----------------------------------------------------------------
    Akdala Uranium Mine                -       (3,625)        7,024
    ----------------------------------------------------------------
    South Inkai Uranium
     Project                           -      (24,237)            -
    ----------------------------------------------------------------
    Kharasan Uranium Project           -       (8,425)        2,176
    ----------------------------------------------------------------
    Kyrgyzstan exploration        (2,648)      (2,626)          288
    ----------------------------------------------------------------
    Corporate and other                -       (5,320)            -
    ----------------------------------------------------------------
    Total                         (2,648)     (44,233)        9,488
    ----------------------------------------------------------------


    As at December 31, 2006:
    -------------------------------------------------------------------------
                                        Mineral
                                       property,
                                      plant and         Total          Total
                         Country      equipment        assets    liabilities
    -------------------------------------------------------------------------
    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
    -------------------------------------------------------------------------
    Kyrgyzstan
     exploration       Kyrgyzstan           353         1,271            166
    -------------------------------------------------------------------------
    Corporate and
     other                                  953       120,989          3,394
    -------------------------------------------------------------------------
    Total                               768,887       971,618        355,929
    -------------------------------------------------------------------------


    20. 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 at
    a 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 June 30, 2007, Micawber 397 has not paid any
    part of the purchase price.

    21  SUBSEQUENT EVENT

    Energy Metals Corporation

    On June 3, 2007, Uranium One and Energy Metals Corporation ("EMC")
    entered into a definitive arrangement agreement whereby Uranium One
    agreed to acquire all of the outstanding common shares and options to
    purchase common shares of EMC. The shareholders of EMC will receive
    1.15 Uranium One common shares for each EMC common share held on closing
    of the transaction. Each EMC stock option, which previously gave the
    holder the right to acquire common shares of EMC, will be exchanged for
    1.15 stock options which gives the holder the right to acquire common
    shares of Uranium One on the same basis as the shareholders of EMC, with
    all other terms of such options (such as term and expiry) remaining
    unchanged. The shareholders of EMC approved the arrangement at a Special
    Meeting held on July 31, 2007, and the transaction closed on August 10,
    2007, after receipt of, among other items, court approval and certain
    regulatory approvals. As a result of the transaction, EMC shareholders
    will hold approximately 21 percent of the issued Uranium One shares.

    The cost of acquisition includes the fair value of the issuance of
    99.3 million Uranium One common shares at $15.06 per share, plus
    7.8 million stock options of EMC, of which 5.6 million are exercisable at
    the date of acquisition, exchanged for those of Uranium One with an
    average exercise price of $5.47 per share and a fair value of
    $72.5 million, plus Uranium One's estimated transaction costs of
    $8.0 million, providing a total preliminary purchase price of
    $1,575.2 million.

    The value of the Uranium One common shares to be issued was calculated
    using the weighted average share price of Uranium One's shares two days
    before, the day of, and two days after the date of the announcement of
    the arrangement. The following assumptions were used for the Black-
    Scholes option pricing model for fair valuation of the stock options:

    Risk free interest rate                                            4.70%
    Expected volatility                                                  55%
    Expected life                                            0.8 - 5.0 years
    Dividend rate                                                        Nil

    The excess of the purchase consideration over the adjusted book values of
    EMC's assets and liabilities has been presented as "unallocated purchase
    price" in the table below. The fair value of all identifiable assets and
    liabilities acquired as well as any goodwill arising upon the acquisition
    will be determined through an independent valuation as at the date of
    closing of the transaction. Therefore, it is likely that the fair values
    of assets and liabilities acquired will vary from the book values shown
    in the table below and the differences may be material.

    On completion of the valuation, with corresponding adjustments to the
    carrying amounts of mining interests, or on recording of any finite life
    intangible assets on acquisition, these adjustments will impact the
    measurement of amortization recorded in the consolidated statements of
    operations of the combined company for periods after the date of
    acquisition. No adjustments have been reflected in the table below for
    any changes in future tax assets or liabilities that would result from
    recording EMC's identifiable assets and liabilities at fair value as the
    process of estimating the fair value of identifiable assets and
    liabilities is not complete.

    Based on the March 31, 2007 balance sheet of EMC, the preliminary
    allocation of the purchase price, summarized in the table below, is
    subject to change:
    -------------------------------------------------------------------------
                                                                       $'000
    -------------------------------------------------------------------------
    Purchase price:
    -------------------------------------------------------------------------
    99.3 million shares of Uranium One                             1,494,700
    -------------------------------------------------------------------------
    Options of Uranium One                                            72,500
    -------------------------------------------------------------------------
    Acquisition costs                                                  8,000
    -------------------------------------------------------------------------
                                                                   1,575,200
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Net assets required:
    -------------------------------------------------------------------------
    Cash and cash equivalents                                         76,500
    -------------------------------------------------------------------------
    Marketable securities                                             31,800
    -------------------------------------------------------------------------
    Other current assets                                               2,100
    -------------------------------------------------------------------------
    Mining interests                                                 128,300
    -------------------------------------------------------------------------
    Other non-current assets                                           5,900
    -------------------------------------------------------------------------
    Accounts payable and accrued liabilities                          (1,400)
    -------------------------------------------------------------------------
    Asset retirement obligations                                      (2,300)
    -------------------------------------------------------------------------
    Future income tax liability                                      (28,500)
    -------------------------------------------------------------------------
    Unallocated purchase price                                     1,362,800
    -------------------------------------------------------------------------
                                                                   1,575,200
    -------------------------------------------------------------------------
    
    %SEDAR: 00005203E




For further information:

For further information: Neal Froneman, Chief Executive Officer, Tel:
+27-11-482-3605; Chris Sattler, Senior Vice President, Investor Relations,
Tel: (416) 350-3657

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Uranium One Inc.

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