uranium one inc....industry operator, owning 100% of the outstanding common shares. on october 18,...

Uranium One Inc.

Audited Annual Consolidated Financial Statements For the years ended December 31, 2013 and 2012 (In U.S. dollars, tabular amounts in millions, except where indicated)

URANIUM ONE INC. Financial Statements 2

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements have been prepared by management and are in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Other information contained in this document has also been prepared by management and is consistent with the data contained in the consolidated financial statements. A system of internal control has been developed and is maintained by management to provide reasonable assurance that assets are safeguarded and financial information is accurate and reliable. The Board of Directors approves the consolidated financial statements and ensures that management discharges its financial reporting responsibilities. The Board’s review is accomplished principally through the Audit Committee, which is composed of non‐executive directors. The Audit Committee meets periodically with management and the auditors to review financial reporting and control matters. “Chris Sattler” “Julie Lam” Chris Sattler Julie Lam Chief Executive Officer Chief Financial Officer March 31, 2014 Toronto, Canada

CONSOLIDATED INCOME STATEMENTS For the years ended December 31, 2013 and 2012


YEAR ENDED

NOTES DEC 31, 2013 DEC 31, 2012

(NOTE 31) US$m US$mRevenues 386.4 353.4Cost of sales Operating expense (287.6) (314.2) Depreciation (35.7) (8.4)

Gross profit 63.1 30.8 Share of earnings from joint ventures 65.8 78.8General and administrative 4 (39.5) (45.7)Impairment of development projects 14 (67.8) (102.3)Exploration expense (2.6) (3.6)Care and maintenance (16.7) (1.5)

Operating (loss) / earnings 2.3 (43.5)Finance income 5 17.7 5.7Finance expense 5 (107.4) (62.6)Foreign exchange gain / (loss) 34.6 (10.6)Corporate development expense (17.5) (2.7)Gain on business combination 3 ‐ 17.2Other income / (expense), net 35.2 (4.5)

Loss before income taxes (35.1) (101.0)Current and deferred income tax (expense) / recovery 19 (6.2) 4.3

Net loss (41.3) (96.7)

Net loss per share

Basic (0.04) (0.10) Weighted average number of shares (millions)

Basic 958.4 957.2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) For the years ended December 31, 2013 and 2012 YEAR ENDED

NOTES DEC 31, 2013 DEC 31, 2012

(NOTE 31) US$m US$m

Other comprehensive income (loss) for the year

Items that may be reclassified subsequently to profit and loss

Unrealized loss recognized on translation of foreign operations (1) (53.8) (48.5)

Realized foreign currency translation gain on business combination (1) ‐ 6.6

Unrealized fair value adjustments on available for sale securities (1) ‐ (0.1)

Realized fair value of Ruble Bonds swap derivatives reclassified to income statement (1) (4.3) ‐

Unrealized foreign exchange gain (loss) on Ruble Bonds (1) 36.6 (18.0)

Unrealized fair value (loss) gain on Ruble Bonds swap derivative (1) (34.9) 24.1

Total other comprehensive loss for the year (56.4) (35.9)

Net loss (41.3) (96.7)

Total comprehensive loss (97.7) (132.6) (1) These amounts are shown net of tax of $nil.

See accompanying notes to the audited annual consolidated financial statements

CONSOLIDATED BALANCE SHEETS As at December 31, 2013 and 2012 and January 1, 2012


AS AT DEC 31, 2013

AS AT DEC 31, 2012

(NOTE 31)

AS ATJAN 1, 2012 (NOTE 31)

NOTES US$m US$m US$mASSETS Current assets Cash and cash equivalents 6 421.5 430.7 560.8Restricted cash 6 19.1 11.3 11.5Dividends receivable 9.6 ‐ 35.5Trade and other receivables 7 32.5 60.4 21.9Inventories 8 7.7 25.6 0.7Loans receivable 12 7.2 4.4 0.5Financial derivatives 26 1.3 0.9 0.8Other assets 13 ‐ 21.1 0.1

498.9 554.4 631.8

Non‐current assets Mineral interests, property, plant and equipment 9 211.6 277.9 228.0Investment in associate 10 47.7 47.7 ‐Investments in joint ventures 11 1,597.5 1,718.0 1,844.5Loans receivable 12 98.6 73.3 31.2Financial derivatives 26 0.9 8.9 ‐Other assets 13 45.9 45.0 47.6

2,002.2 2,170.8 2,151.3

Total assets 2,501.1 2,725.2 2,783.1

LIABILITIES Current liabilities Trade and other payables 15 51.2 67.8 34.8Current tax payable ‐ ‐ 11.4Interest bearing liabilities 16 14.2 3.0 2.9Convertible debentures 17 214.8 ‐ ‐Other liabilities 20 3.3 12.0 0.3

283.5 82.8 49.4

Non‐current liabilities � �Interest bearing liabilities 16 731.6 463.7 438.8Convertible debentures 17 23.6 231.1 214.4Provisions 18 30.7 63.6 59.4Deferred tax liabilities 19 1.2 ‐ ‐Financial derivatives 26 25.5 ‐ 16.3Other liabilities 20 31.7 17.0 11.2

844.3 775.4 740.1

Total liabilities 1,127.8 858.2 789.5

EQUITY � �Share capital 21 4,969.0 5,325.4 5,325.4Reserves 22 (21.6) 163.1 193.0Deficit (3,574.1) (3,621.5) (3,524.8)

1,373.3 1,867.0 1,993.6

Total equity and liabilities 2,501.1 2,725.2 2,783.1

Subsequent events see Notes 17 and 32.

Contingencies see Note 30.

See accompanying notes to the audited annual consolidated financial statements Approved on behalf of the board of directors: “Ian Telfer” “Andrew Adams” Ian Telfer Andrew Adams Chairman of the board Chairman of the audit committee

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2013 and 2012


NUMBER OF

SHARES SHARE

CAPITAL RESERVES (NOTE 22) DEFICIT TOTAL

(millions) US$m US$m US$m US$m

Balance as at January 1, 2012 957.2 5,325.4 193.0 (3,524.8) 1,993.6

Net loss for the year ‐ ‐ ‐ (96.7) (96.7)

Unrealized loss on translation of foreign operations (1) ‐ ‐ (48.5) ‐ (48.5)Reversal of other comprehensive income on acquisition of control (Note 3.2) (1) ‐ ‐ 6.6 ‐ 6.6

Unrealized fair value adjustments on available for sale securities (1) ‐ ‐ (0.1) ‐ (0.1)

Unrealized foreign exchange loss on Ruble Bonds (1) ‐ ‐ (18.0) ‐ (18.0)Unrealized fair value gain on Ruble Bonds swap derivative (1) ‐ ‐ 24.1 ‐ 24.1

Total comprehensive income ‐ ‐ (35.9) (96.7) (132.6)

Stock option expense ‐ ‐ 6.0 ‐ 6.0

Balance as at December 31, 2012 957.2 5,325.4 163.1 (3,621.5) 1,867.0

Net loss for the year ‐ ‐ ‐ (41.3) (41.3)

Unrealized loss on translation of foreign operations (1) ‐ ‐ (53.8) ‐ (53.8)

Realized fair value reclassified to income statement (1) ‐ ‐ (4.3) ‐ (4.3)

Unrealized foreign exchange gain on Ruble Bonds (1) ‐ ‐ 36.6 ‐ 36.6 Unrealized fair value loss on Ruble Bonds swap derivative(1) ‐ ‐ (34.9) ‐ (34.9)

Total comprehensive income ‐ ‐ (56.4) (41.3) (97.7)

Stock options expense ‐ ‐ 2.1 ‐ 2.1

Cancelation of stock option plan ‐ ‐ (130.4) 130.4 ‐

Cancelation of shares (Note 21) ‐ (16.8) ‐ ‐ (16.8)

Amounts paid to shareholders (Note 21) ‐ (339.6) ‐ (41.7) (381.3)

Balance as at December 31, 2013 957.2 4,969.0 (21.6) (3,574.1) 1,373.3 (1) These amounts are shown net of tax of $nil. See accompanying notes to the audited annual consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2013 and 2012


NOTES DEC 31, 2013 DEC 31, 2012

(NOTE 31) US$m US$m

Net loss (41.3) (96.7) Items not affecting cash: ‐ Share of earnings from joint ventures (65.8) (78.8)‐ Depreciation 35.7 8.4‐ Stock option expense 2.1 6.0‐ Impairment 67.8 102.3‐ Finance income (17.7) (5.7)‐ Finance expense 107.4 62.6‐ Gain on business combination ‐ (17.2)‐ Unrealized foreign exchange (gains) losses (34.6) 10.6‐ Current and deferred income tax expense (recovery) 6.2 (4.3)‐ Other (33.6) (13.3)Movement in non‐cash working capital 27.7 16.5

Operating cash flows before interest and tax 53.9 (9.6)Cash tax paid (5.2) (7.1)Cash interest paid (66.8) (44.8)

Cash flows used in operating activities (18.1) (61.5)

Additions of mineral interests, property, plant and equipment (30.9) (72.9)Additions to other assets (0.3) (11.6)Investment in associate ‐ (150.0)Release of letter of credit 8.4 ‐Joint venture charter capital contribution (9.0) (11.8)Loans to related parties (27.4) (39.6)Loans advanced to joint ventures ‐ (4.5)Loans repaid by joint ventures 3.7 ‐Interest received 12.0 3.2Interest received on restricted cash investment 2.4 ‐Dividends received 155.9 220.0Other ‐ 1.1

Cash flows from / (used in) investing activities 114.8 (66.1)

Senior Secured Notes issued, net of issue costs 284.4 ‐Revolving Credit facility transaction costs (6.7) ‐Redemption of Ruble Bonds Series 1 (359.4) ‐Issue of Ruble Bonds Series 2 380.7 ‐Share buy‐back (16.8) ‐Amounts paid to shareholders (381.3) ‐

Cash flows used in financing activities (99.1) ‐

Effects of exchange rate changes on cash and cash equivalents (6.8) (2.5)

Net decrease in cash and cash equivalents (9.2) (130.1)

Cash and cash equivalents at the beginning of the year 430.7 560.8

Cash and cash equivalents at the end of the year 421.5 430.7

See accompanying notes to the audited annual consolidated financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As at December 31, 2013 and 2012


1 NATURE OF OPERATIONS

Uranium One Inc. (“Uranium One”, and together with its subsidiaries and joint ventures collectively, the “Corporation”) is a Canadian corporation engaged through subsidiaries and joint ventures in the mining, production and sales of uranium, and in the acquisition, exploration and development of properties for the production of uranium in Kazakhstan, the United States, Australia and Tanzania. The Corporation’s head office address is 333 Bay Street, Suite 1710, Toronto, Ontario, Canada, M5H 2R2.

Uranium One is a controlled company, with Russia’s State Atomic Energy Company “Rosatom” (“Rosatom”), the Russian state‐owned nuclear industry operator, owning 100% of the outstanding common shares. On October 18, 2013, Uranium One was taken private pursuant to a plan of arrangement under an agreement with JSC Atomredmetzoloto (“ARMZ”) and, whereby a wholly owned subsidiary of ARMZ acquired all of the common shares that it and its affiliates did not already own for cash consideration of C$2.86 per share (the “Going Private Transaction”). Following the completion of the Going Private Transaction, and an internal reorganization by ARMZ’s parent corporation, Rosatom, in December 2013, Uranium One is now a wholly‐owned indirect subsidiary of Rosatom and is no longer controlled by ARMZ.

In Kazakhstan, the Corporation holds a 70% interest in the Betpak Dala joint venture, which owns the Akdala and South Inkai Uranium Mines, a 50% interest in the Karatau joint venture, which owns the Karatau Uranium Mine, a 50% interest in the Akbastau joint venture, which owns the Akbastau Uranium Mine, a 49.67% interest in the Zarechnoye joint venture, which owns the Zarechnoye Uranium Mine, a 30% interest in the Kyzylkum joint venture, which owns the Kharasan Uranium Mine, and a 19% interest in the SKZ‐U joint venture, which owns a sulphuric acid plant near Kharasan as an additional source of sulphuric acid for its operations. In the United States, the Corporation owns the Willow Creek uranium mine in Wyoming. The Corporation owns a 100% interest in the Honeymoon Uranium Project in Australia . The Corporation is the operator of the Mkuju River Project in Tanzania, and owns a 13.9% interest in Mantra Resources Pty Limited (“Mantra”), which owns the Mkuju River Project. The Corporation also owns, either directly or through joint ventures, uranium exploration properties in the western United States and South Australia.

The annual audited consolidated financial statements were approved on March 31, 2014 by the Board of Directors.

2 SIGNIFICANT ACCOUNTING POLICIES

STATEMENT OF COMPLIANCE The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

BASIS OF PREPARATION AND CONSOLIDATION The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

The consolidated financial statements have been prepared on the historical cost basis, except for the financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The consolidated financial statements include the accounts of Uranium One, its subsidiaries, and its investments in joint ventures and in associates. All intercompany balances, transactions, revenue and expenses have been eliminated.

The significant mining properties of Uranium One Inc. are listed below. All operating activities involve uranium mining and exploration. Each of the significant entities has a December 31 year end.

As at December 31,Entity Property Location 2013 2012

Subsidiairies (Consolidated) Uranium One USA Inc Willow Creek USA 100% 100%Uranium One Australia Pty Ltd Honeymoon Project Australia 100% 100% Interests in jointly controlled entities (Equity accounted) JSC Akbastau Akbastau Kazakhstan 50% 50%Betpak Dala LLP Akdala / South Inkai Kazakhstan 70% 70%Karatau LLP Karatau Kazakhstan 50% 50%JSC Kyzylkum Kharasan Kazakhstan 30% 30%JSC Zarechnoye Zarechnoye Kazakhstan 49.67% 49.67% Interests in associate (Equity accounted) Mantra Resources Pty Ltd Mkuju River Project Tanzania 13.9% 13.9%



2 SIGNIFICANT ACCOUNTING POLICIES (continued) FUNCTIONAL AND PRESENTATION CURRENCY The consolidated financial statements are presented in US dollars. The functional currency of Uranium One Inc. is the US dollar. Judgment is required to determine the functional currency of each entity in the consolidated group. These judgments are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances.

ADOPTION OF NEW INTERNATIONAL FINANCIAL REPORTING STANDARDS AND CHANGES IN ACCOUNTING POLICIES The following new IFRS has been applied for the first time in the current year:

IFRS 10, Consolidated financial statements IFRS 10 replaces the consolidation requirements in IAS 27, Consolidated and Separate Financial Statements, and SIC‐12 Consolidation ‐ Special Purpose Entities. The adoption of this new standard had no impact on the Corporation’s consolidated financial statements.

IFRS 11, Joint arrangements IFRS 11 supersedes IAS 31, Interests in Joint Ventures, and SIC‐13, Jointly Controlled Entities ‐ Non‐Monetary Contributions by Ventures.

Under IFRS 11, the Corporation classifies its interests in joint arrangements as either joint operations or joint ventures depending on the Corporation’s rights to the assets and obligations for the liabilities of the arrangements. When making this assessment, the Corporation considers the structure of the arrangements, the legal form of any separate vehicles, the contractual terms of the arrangements and other facts and circumstances. Previously, the structure of the arrangement was the sole focus of classification.

The Corporation has re‐evaluated its involvement in its joint arrangements and has accounted for the investments as joint ventures. As a result the investments are now accounted for by applying the equity method, compared to proportionate consolidation applied in the past. The change had a significant impact on the recognized assets and liabilities of the Corporation as well as the presentation of revenues, cost of sales and expenditures in the income statement.

The tables in Note 31 summarize the adjustments made to the Corporation’s comparative balance sheet, income statement and statements of cash flows. IFRS 12, Disclosure of interests in other entities IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. As a result of adopting IFRS 12, the Corporation has provided additional disclosures in Note 11. IFRS 13, Fair value measurement IFRS 13 is a new standard that defines fair value, sets out in a single IFRS framework for measuring fair value and requires disclosures about fair value measurements. IFRS 13 does not determine when an asset, a liability or an entity’s own equity instrument is measured at fair value. Rather, the measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value (with limited exceptions). As a result of adopting IFRS 13, the Corporation has provided additional disclosures in Note 26. There were no other impacts on the consolidated financial statements on adoption of this standard. IAS 28, Investments in associates and joint ventures IAS 28 was re‐issued by the IASB on May 12, 2011 in order to conform to changes as a result of the issuance of IFRS 10, IFRS 11, and IFRS 12. IAS 28 continues to prescribe the accounting for investments in associates, but is now the only source of guidance describing the application of the equity method. The amended IAS 28 was applied by all entities that are investors with joint control of, or significant influence over, an investee.

As a result of the adoption of IFRS 10 and 11 and IAS 28, the following accounting policies have been changed effective January 1, 2013:

SUBSIDIARIES Subsidiaries are entities controlled by the Corporation. The Corporation controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences. JOINT ARRANGEMENTS Joint arrangements are arrangements for which the Corporation has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements’ returns. They are classified and accounted for as follows: Joint operation When the Corporation has rights to the assets, and obligations for the liabilities, relating to an arrangement, it accounts for each of its assets, liabilities and transactions, including its share of those held or incurred jointly, in relation to the joint operation. Joint venture When the Group has rights only to the net assets of the arrangements, it accounts for its interest using the equity method.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) INVESTMENTS IN ASSOCIATES Associates are entities over which the Corporation has significant influence over the financial and operating policies of the investee. Investments in associates are accounted for using the equity method of accounting and are initially recognized at cost and subsequently increased or decreased to recognize the Corporation’s share of earnings and losses of the associate. The Corporation’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss. The carrying values of the investments are reviewed when indicators of impairment are present. BUSINESS COMBINATIONS Business combinations are accounted for by applying the acquisition method of accounting, whereby the purchase consideration of the combination is allocated to the identifiable net assets on the basis of fair value on acquisition. Mineral rights that can be reliably valued are recognized in the assessment of fair values on acquisition. Other potential mineral rights for which values cannot be reliably determined are not recognized. MEASUREMENT AND REPORTING CURRENCY Financial statements of subsidiaries, joint ventures and associates, are maintained in their functional currencies and converted to US dollars for consolidation of the Corporation’s results. The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The foreign currency transactions and balances of the Corporation’s subsidiaries, jointly controlled entities and associates are translated to the functional currency at the subsidiary, jointly controlled entity and associate level as follows: monetary assets and liabilities denominated in foreign currencies are revalued to the closing exchange rates at each reporting period. Non‐monetary assets and liabilities measured at historical cost are translated at the historical rate in effect on acquisition. Non‐monetary assets and liabilities measured at fair value are translated at the rate in effect when the fair value was determined. On translation to the presentation currency of entities with functional currencies other than the US dollar, income statement items are translated at average rates of exchange where this is a reasonable approximation of the exchange rate at the dates of the transactions. Balance sheet items are translated at closing exchange rates. Gains or losses on translation of foreign operations are recorded in the foreign currency translation reserve in equity. On disposal of a foreign entity, the deferred cumulative amount recognized in equity relating to that particular foreign operation is recognized in the consolidated income statement.

INVENTORIES Solutions and concentrates in process and finished concentrates are valued at the lower of average production cost and net realizable value. Production costs include the cost of raw materials, direct labour, mine‐site related overhead expenses and depreciation of mineral interests, property, plant and equipment. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Materials and supplies are valued at weighted average cost and recorded at the lower of acquisition and replacement cost. EXPLORATION AND EVALUATION EXPENDITURE Exploration and evaluation expenditure comprises costs that are directly attributable to:

• researching and analyzing existing exploration data; • conducting geological studies, exploratory drilling and sampling; • examining and testing extraction and treatment methods; and • activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource.

Exploration expenditure relates to the initial search for deposits with economic potential. Evaluation expenditure arises from a detailed assessment of deposits or projects that have been identified as having economic potential. Expenditure on exploration activity is not capitalized. Capitalization of evaluation expenditure commences when there is a high degree of confidence in the project’s viability and hence it is probable that future economic benefits will flow to the Corporation. The carrying values of capitalized amounts are reviewed when indicators of impairment are present. In the case of undeveloped projects there may be only inferred resources to form a basis for the impairment review. The review is based on the Corporation’s intentions for development of the undeveloped project. If a project does not prove viable, all irrecoverable costs associated with the project are charged to the consolidated income statement.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) DEVELOPMENT EXPENDITURE Development commences when technical feasibility and commercial viability has been demonstrated. Development expenditures are capitalized and classified as assets under construction. Development expenditure includes the pre‐commercial production costs, net of proceeds from the sale of extracted product during the development phase, and wellfield development costs. On completion of development, the completed assets included in assets under construction are reclassified as property, plant and equipment. MINERAL INTERESTS Mineral interests are recorded at cost less accumulated depreciation and accumulated impairment charges. Mineral interest costs include the purchase price of mineral properties. 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. Upon sale or abandonment of any mineral interest, the cost and related accumulated depreciation are written off and any gains or losses thereon are included in the consolidated income statement. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment charges. Plant and equipment includes its purchase price, any costs directly attributable to bringing plant and equipment to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated close down and restoration costs associated with dismantling and removing the asset. Upon sale or abandonment of any property, plant and equipment, the cost and related accumulated depreciation, are written‐off and any gains or losses thereon are included in the consolidated income statement.

DEPRECIATION OF MINERAL INTERESTS, PROPERTY, PLANT AND EQUIPMENT The carrying amounts of mineral interests, property, plant and equipment are depreciated to their estimated residual value over the estimated economic life of the specific assets to which they relate, or using the straight‐line method over their estimated useful lives indicated below. Estimates of residual values and useful lives are reassessed annually and any change in estimate is taken into account in the determination of remaining depreciation charges. Depreciation commences on the date when the asset is available for use.

• Mineral interests ‐ based on reserves on a unit of production basis • Assets under construction ‐ not depreciated • Property, plant and equipment ‐ 2 to 15 years straight‐line or on a unit of production basis • Buildings ‐ 6 to 40 years straight‐line or on a unit of production basis

GOODWILL Goodwill arising on a business acquisition, including goodwill resulting from the required deferred tax adjustment, is carried at cost as established at the date of acquisition of the business, less any accumulated impairment charges, if any. For the purposes of impairment testing, goodwill is allocated to the same cash generating unit as the assets acquired under the business combination through which it was created. IMPAIRMENT Formal impairment tests of cash generating units containing goodwill are carried out annually and at any other time whenever there is an indication of impairment. The Corporation reviews the carrying amounts of its tangible and intangible assets with finite and indefinite lives to determine whether there are any indications of impairment, at the end of each reporting period. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is determined as the higher of fair value less costs of disposal and the asset’s value in use. Fair value is defined as the amount that would be obtained from the sale, in an arm’s length transaction, between knowledgeable and willing parties. Fair value for mineral interests, property, plant and equipment is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset, including any expansion prospects, and its eventual disposal, using assumptions that an independent market participant may take into account. Value in use is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and its eventual disposal. Value in use is determined by applying assumptions specific to the Corporation’s continued use and cannot take into account future development. The Corporation’s weighted average cost of capital is used as a starting point for determining the discount rates, with appropriate adjustments for the risk profile of the countries in which the individual cash generating units operate and the specific risks related to the development of the project.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) Where the asset does not generate cash flows that are independent of other assets, the Corporation estimates the recoverable amount of the cash generating unit to which the asset belongs. If the carrying amount of an asset or cash generating unit exceeds its recoverable amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable amount. An impairment loss is recognized as an expense in the consolidated income statement.

The carrying values of non financial assets including investment in associate and joint ventures are reviewed for indicators of impairment at the end of each reporting period and for possible reversal of an impairment whenever events or changes in circumstance indicate that an impairment may have reversed. Where an impairment subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset or cash generating unit in prior years. A reversal of impairment is recognized as a gain in the consolidated income statement. BORROWING COSTS Borrowing costs directly relating to the financing of the acquisition, construction or production of qualifying assets are capitalized to the cost of those assets until such time as they are substantially ready for their intended use or sale. Where funds have been borrowed specifically to finance an asset, the amount capitalized is the actual borrowing costs incurred. Where the funds used to finance an asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to relevant general borrowings of the Corporation during the period.

Transaction costs related to the establishment of a loan facility are capitalized and amortized over the life of the facility using the effective interest method, or set off against fair value of debt. Other borrowing costs are recognized in the consolidated income statement in the period in which they are incurred. PROVISIONS Provisions are recognized when the Corporation has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows. ENVIRONMENTAL PROTECTION, REHABILITATION AND CLOSURE COSTS The mining, extraction and processing activities of the Corporation normally give rise to obligations for site closure or rehabilitation. A provision is made for close down, restoration and for environmental rehabilitation costs, which include the dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas, in the financial period when the related environmental disturbance occurs, based on the estimated future costs using information available at the balance sheet date.

At the time of establishing the provision, a corresponding asset is capitalized, where it gives rise to a future benefit, and depreciated over future production from the operations to which it relates. The provision is discounted to its present value using a risk free rate relevant to the jurisdiction in which the rehabilitation has to be performed. The unwinding of the discount is included in finance expense. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognized as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation.

The provision is reviewed at the end of each reporting period for changes to obligations, legislation or discount rates that impact estimated costs or lives of operations. The cost of the related asset is adjusted for changes in the provision resulting from changes in the estimated cash flows or discount rate and the adjusted cost of the asset is depreciated prospectively. Rehabilitation trust funds holding monies committed for use in satisfying environmental obligations are included within other assets on the consolidated balance sheet.

REVENUE Revenue from uranium sales is recognized when persuasive evidence of an arrangement exists, the risks and rewards of ownership pass to the purchaser, including delivery of the product, the selling price is fixed or determinable, and collectability is reasonably assured.

On deliveries to conversion facilities (“Converters”), the Converter credits the Corporation’s account for the volume of accepted uranium. Based on delivery terms in a sales contract with its customer, the Corporation instructs the Converter to transfer title of a contractually specified quantity of uranium to the customer’s account at the Converter. At this point, the Corporation invoices the customer and recognizes revenue for the uranium supplied.

On deliveries to locations other than Converters, as agreed with the customer, the Corporation delivers uranium to the agreed location. At this point, the Corporation invoices the customer and recognizes revenue for the uranium supplied. The Corporation does not recognize revenue in circumstances where it delivers borrowed material into contracts. CURRENT TAX Current tax for each taxable entity in the Corporation is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the balance sheet date, and includes adjustments to tax payable or recoverable in respect of previous years.

Uncertain income tax provisions are accounted for using the standards applicable to current tax so both liabilities and assets are recognized when probable and are measured at the amount expected to be paid to (or recovered from) the taxation authorities based on the Corporation’s best estimate.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) DEFERRED TAX Deferred tax is accounted for using the balance sheet liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred income tax liabilities are recognized for all taxable temporary differences except where the deferred income tax liability arises from the initial recognition of goodwill, or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss, or the deferred income tax liability is in respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognized for all deductible temporary differences and carry‐forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry‐forward of unused tax credits and losses can be utilized, except where the deferred income tax asset related to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. In respect of deductible temporary differences associated with investments in subsidiaries and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be utilized. To the extent that an asset not previously recognized fulfils the criteria for recognition, a deferred income tax asset is recorded. Deferred tax is measured on an undiscounted basis using the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, based on tax rates and tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and liabilities are offset when the Corporation has a legally enforceable right to offset them and when they relate to income taxes levied by the same taxation authority, and the Corporation intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax relating to items recognized directly in equity or in other comprehensive income are recognized in equity or in other comprehensive income and not in the consolidated income statement. Mining taxes and royalties are treated and disclosed as current and deferred taxes if they have the characteristics of an income tax. This is considered to be the case when they are imposed under government authority and the amount payable is calculated by reference to profit derived (revenue net of any allowable deductions) after adjustment for items comprising temporary differences. Current and deferred tax are recognized in the income statement, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax amounts are also recognized in other comprehensive income or directly in equity respectively. Current and deferred income taxes arising from business combinations are included in the accounting for the business combination.

STOCK BASED COMPENSATION The Corporation granted share‐based awards in the form of stock options to certain directors and employees. Stock options are equity‐settled. The fair value is charged to the consolidated income statement and credited to the related reserve account, over the stock option vesting period, after adjusting for the estimated number of awards that are expected to vest. The fair value of stock options at the grant date is estimated using the Black‐Scholes option pricing model. Management estimates the number of awards likely to vest at the time of the grant and at each reporting date up to the vesting date. Annually, the estimated forfeiture rate is reviewed to determine if an adjustment is necessary. Under Uranium One's Stock Option Plan, options granted were non‐assignable and were granted for a term not exceeding ten years. The plan was administered by the Board of Directors, which determined individual eligibility under the plan, the 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, is one‐third on the first anniversary of the grant date, one‐third on the second anniversary of the grant date and the remainder on the third anniversary of the grant date. The maximum number of shares of Uranium One that were issuable pursuant to the plan was limited to 7.2% of issued and outstanding shares. On October 18, 2013, with the completion of the Going Private Transaction all stock options were cancelled.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) NET EARNINGS / LOSS PER SHARE Net 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. The calculation of diluted earnings per share assumes that outstanding options and warrants that are dilutive to earnings per share are exercised and the proceeds are used to repurchase shares of Uranium One at the average market price of the shares for the period. The effect is to increase the number of shares used to calculate diluted earnings per share. The impacts of outstanding share options and warrants are excluded from the diluted share calculation for loss per share amounts when they are anti‐dilutive. The if‐converted method is used to compute the dilutive effect of convertible debt. The dilutive effect of contingently issuable shares is computed by comparing the conditions required for issuance of shares against those existing at the end of the period. FINANCIAL INSTRUMENTS 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 assets and liabilities initial recognition and classification Financial instruments are initially measured at fair value, which includes transaction costs for all financial instruments except for financial instruments at fair value through profit or loss. All financial assets are recognized on the trade date at market value, which is the date that the Corporation commits to purchase or sell the asset. Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘held‐to‐maturity’ investments, ‘available‐for‐sale’ financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or ‘other financial liabilities’. Financial assets and liabilities are classified as ‘at fair value through profit or loss’ when the financial asset and liability is either ‘held for trading’ or it is designated as ‘fair value through profit or loss’. Subsequent to initial recognition these instruments are measured as set out below: Available for sale investments After initial recognition, investments which are classified as available for sale are carried at fair value, with the fair value adjustments accounted for in other comprehensive income. When available for sale investments are sold or impaired, the cumulative fair value adjustment previously recorded in other comprehensive income is recognized in the consolidated income statement. Loans and receivables Loans and receivables are carried at amortized cost unless a provision has been recorded for uncollectability of these loans and receivables. A provision for impairment of loans and receivables is established when there is objective evidence that the Corporation may not be able to collect all amounts due according to the original terms of the loans and receivables. Impairment and uncollectability of financial assets An assessment is made at each reporting date to determine whether there is objective evidence that a financial asset or group of financial assets, other than those at fair value through profit or loss, 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 estimated recoverable amount, either directly or through the use of an allowance account and the resulting loss is recognized in the consolidated income statement. The carrying amount of financial assets are written off when the financial assets are considered irrecoverable. When there is uncertainty about the irrecoverability then an allowance account is created. When an available for sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to the consolidated income statement. With the exception of assets held for sale and available for sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases, the previously recognized impairment loss is reversed through income to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized. In respect of available for sale equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. Financial liabilities and equity instruments After initial recognition, financial liabilities, other than liabilities at fair value through profit or loss, are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any transaction costs and any discount on issuance or premium on settlement. Financial liabilities at fair value through profit or loss are recognized on the trade date at fair value, which is the date that the Corporation commits to the contract. After initial recognition, the liabilities are carried at fair value, with the fair value adjustments accounted for in the consolidated income statement.

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



2 SIGNIFICANT ACCOUNTING POLICIES (continued) Interest bearing liabilities Interest bearing liabilities are recognized initially at the proceeds received, net of transaction costs incurred. Interest bearing liabilities are subsequently measured at amortized cost using the effective interest method. Any difference between proceeds (net of transaction costs) and the redemption value is recognized in the consolidated 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. Compound instruments The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual agreement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non‐convertible instruments. This amount is recorded as a liability on an amortized cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the total proceeds received for the instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured.

Embedded derivatives Derivatives may be embedded in contracts or financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not clearly and closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand‐alone derivative, and the combined contract is not held for trading or designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in gains or losses on derivatives in the consolidated income statement. The host instrument may be designated as a financial asset or financial liability at fair value through profit or loss, unless the embedded derivative does not significantly modify the cash flows that otherwise would be required by the contract, or it is clear with little or no analysis when a similar hybrid instrument is first considered that separation of the embedded derivative is prohibited. In this case, the entire hybrid contract is measured at fair value, rather than only the embedded derivative.

Hedge accounting The Corporation designates certain hedging instruments, which include derivatives, embedded derivatives and non‐derivatives in respect of foreign currency risk, as either fair value hedges or cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges. At the inception of the hedge relationship, the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions, is documented. Furthermore, at the inception of the hedge and on an ongoing basis, the Corporation documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk. Fair value hedges Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk are recognized in the line of the consolidated income statement relating to the hedged item. Hedge accounting is discontinued when the Corporation revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized to profit or loss from that date. Cash flow hedges The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading reserves. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the “Other” line item on the consolidated income statement. Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognized in profit or loss, in the same line of the consolidated income statement as the recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non‐financial asset or a non‐financial liability, the gains and losses previously recognized in other comprehensive income and accumulated in equity are transferred from equity and included in the initial measurement of the cost of the non‐financial asset or non‐financial liability. Any unrealized gain or loss recognized at inception of a hedging instrument due to the hedging instrument having a fair value at inception is recognized in the consolidated balance sheet and offset against the fair value of the hedging instrument. The Corporation will recognize the unrealized gain or loss in profit or loss as part of the ineffective portion of the cash flow hedging relationship at maturity.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) Hedge accounting is discontinued when the Corporation revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized in the consolidated income statement when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in the consolidated income statement. Hedges of net investments in foreign operations Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehensive income and accumulated under the heading of reserves. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included in the “Other” line item in the consolidated income statement. Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the foreign currency translation reserve are reclassified to profit or loss on the disposal of the foreign operation.

NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED At the date of authorization of the annual audited consolidated financial statements for the year ended December 31, 2013 the following standard, which is applicable to the Corporation, was issued but not yet effective. The previous effective date of January 1, 2015 has been removed by IASB. The Corporation will evaluate the impact of the change in its financial statements based on the characteristics of its financial instruments at the time of adoption.

IFRS 9, Financial instruments IFRS 9, “Financial Instruments” will replace IAS 39, Financial Instruments: Recognition and Measurement for classification and measurement of financial assets and liabilities.

IFRS 9 requires all recognized financial assets to be subsequently measured at amortized cost or fair value. Debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. A fair value option is provided for financial instruments otherwise measured at amortized cost.

This standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRIC 21, Levies IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.

The Interpretation includes guidance illustrating how the Interpretation should be applied. IFRIC 21 is effective for annual periods beginning on or after 1 January 2014. Management is in the process of determining the impact of this new IFRIC on the Corporation’s consolidated financial statements.

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The preparation of consolidated financial statements in conformity with IFRS 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 consolidated financial statements. Actual results may differ from those estimates. Information about areas of judgment and key sources of uncertainty and estimation is contained in the accounting policies and / or the notes to the consolidated financial statements.

The following are the key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Recoverability of trade receivables and investments A provision is made against accounts that in the estimation of management may be impaired. The recoverability assessment of a trade receivable is based on a range of factors including the age of the receivable and the creditworthiness of the customer. The provision is assessed monthly with a detailed formal review of balances and security being conducted quarterly. Determining the recoverability of an account involves estimation as to the likely financial condition of the customer and their ability to subsequently make payment. To the extent that future events impact the financial condition of the customers, these provisions could vary significantly. Investments in securities are reviewed for impairment at the end of each reporting period. When the fair value of the investment falls below the Corporation's carrying value, and it is considered to be significant or prolonged, an impairment charge is recorded to the consolidated income statement for the difference between the investment's carrying value and its estimated fair value at the time. In making the determination as to whether a decline is considered prolonged, the Corporation considers such factors as the duration and extent of the decline, the investee's financial performance, and the Corporation's ability and intention to retain its investment for a period that will be sufficient to allow for any anticipated recovery in the investment's market value. Differing assumptions could affect whether an investment is impaired in any period or the amount of the impairment.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) Net realizable value of inventories In determining the net realizable value of inventories, the Corporation estimates the selling prices, based on published market rates, cost of completion and cost to sell. To the extent that future events impact the saleability of inventory these provisions could vary significantly. Estimated reserves, resources and exploration potential Reserves are estimates of the amount of product that can be extracted from the Corporation’s properties, considering both economic and legal factors. Calculating reserves and estimates requires decisions on assumptions about geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, prices and exchange rates. Estimating the quantity and / or grade of reserves requires the analysis of drilling samples and other geological data. Estimates of reserves may change from period to period as the economic assumptions used to estimate reserves change from period to period, and because additional geological data is generated during the course of operations. Changes in reported reserves may affect the Corporation’s financial position in a number of ways, including the following:

• Asset carrying values may be affected due to changes in estimated future cash flows; • Depreciation and amortization charged in the consolidated income statement may change where such charges are determined

by the units of production basis, or where the useful economic lives of assets change; and • The carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.

Impairment of mineral interests, property, plant and equipment For the purpose of determining the recoverable amount of assets or cash generating units, estimates are made of the discount rate. Future cash flow estimates are based on expected production and sales volumes, commodity prices (considering current and historical prices, price trends and related factors), reserves, operating costs, restoration and rehabilitation costs and future capital expenditures. The Corporation’s management is required to make these estimates and assumptions which are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the asset may be impaired and the impairment would be recognized in the consolidated income statement. Expected economic lives of, estimated future operating results and net cash flows from mineral interests In applying the units of production method, depreciation is normally calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based on proven and probable reserves. In assessing the life of a mine for accounting purposes, mineral resources are only taken into account where there is a high degree of confidence of economic extraction. The Corporation’s operating result and net cash flow forecasts are based on the best estimates of expected future revenues and costs, including the future cash costs of production, capital expenditure, close down and restoration. These may include net cash flows expected to be realized from extraction, processing and sale of mineral resources that do not currently qualify for inclusion in proven and probable ore reserves. Such non reserve material is included where there is a high degree of confidence in its economic extraction. This expectation is usually based on preliminary drilling and sampling of areas of mineralization that are contiguous with existing reserves. The mine plan takes account of all relevant characteristics of the ore body, ore grades, chemical and metallurgical properties of the ore impacting on process recoveries and capacities of processing equipment that can be used. The mine plan is therefore the basis for forecasting production output in each future year and for forecasting production costs. The Corporation’s cash flow forecasts are based on estimates of future commodity prices. These long term commodity prices, for most commodities, are derived from an analysis of the marginal costs of the producers of these commodities. These assessments often differ from current price levels and are updated periodically. In some cases, prices applying to some part of the future sales volumes of a cash generating unit are predetermined by existing sales contracts. The effects of such contracts are taken into account in forecasting future cash flows. There are numerous uncertainties inherent in estimating ore reserves, and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being re‐estimated.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) Fair value of financial instruments For financial instruments that have fair values that cannot be reasonably approximated by their carrying values, the fair values of those financial instruments must be estimated. As much as possible, the fair values of those financial instruments have been estimated by reference to quoted market prices for actual or similar instruments where available and disclosed accordingly. The fair values of other financial instruments are measured using valuation models. These models require a variety of observable market inputs, market prices, forward price curves, yield curves and discount rates. Valuation methodologies and assumptions are reviewed on an ongoing basis. A significant change in this assessment may result in unrealized losses being recognized in net income. The fair value of the cross‐currency interest rate swap is based on credit risk adjusted discounted cash flows. These require the Corporation’s management to make assumptions and estimates regarding US dollar exchange rates, interest rates and credit spreads. Some of the inputs to the valuation model are based on unobservable market data. The model is sensitive to assumptions and estimates made by the Corporation’s management and changes in these inputs could result in different values being recognized on the consolidated balance sheet and through profit or loss as part of the ineffectiveness of the cash flow hedging relationship.

Fair value of stock‐based compensation The Corporation determines the fair value of options granted using the Black‐Scholes option pricing model. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate and, therefore, the existing models do not necessarily provide a reliable measure of the fair value of the Corporation’s stock options. Fair value of assets and liabilities acquired in business combinations Business combinations are accounted for by applying the acquisition method of accounting, whereby the purchase consideration of the combination is allocated to the identifiable net assets on the basis of fair value on acquisition. The amount of goodwill initially recognized is dependent on the allocation of the purchase price to the fair value of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and liabilities is based, to a considerable extent, on management’s judgment. Allocation of the purchase price affects the results of the Corporation as finite lived intangible assets are amortized, whereas indefinite lived intangible assets, including goodwill, are not amortized and could result in differing amortization charges based on the allocation to indefinite lived and finite lived intangible assets. Reclamation and closure cost obligations Reclamation and closure cost obligation provisions represent management’s best estimate of the present value of the future costs. Significant estimates and assumptions are made in determining the amount of reclamation and closure cost obligation provisions. Those estimates and assumptions deal with uncertainties such as: requirements of the relevant legal and regulatory framework; the magnitude of possible contamination; determination of the appropriate discount rate; and the timing, extent and costs of required restoration and rehabilitation activity. These uncertainties may result in future actual expenditures differing from the amounts currently provided. The following are the critical judgments that have a significant effect on the consolidated financial statements:

Impairment of mineral interests, property, plant and equipment Judgment is involved in assessing whether there is any indication that an asset or cash generating unit may be impaired. This assessment is made based on an analysis of, amongst other factors, changes in the market or business environment, events that have transpired that have impacted the asset or cash generating unit, and information from internal reporting. Impairment testing is done at the cash generating unit level. Some of the Corporation’s joint ventures have multiple mining areas and management must exercise judgment in determining what constitutes a cash generating unit and the degree of aggregation of various assets. This impacts the impairment analysis performed, as the results of the impairment analysis might differ based on the composition of the various cash generating units. Commencement of commercial operations Determining when a project has commenced commercial operations involves judgment. Management performs this assessment on an ongoing basis for each development project. Amongst the criteria that are evaluated are: the level of production relative to design capacity and the sustainability of this level; the period of time since the start of uranium production; and, an assessment of the sustainability of profitable operations. These factors can be subjective and no one factor by itself is necessarily indicative. Management exercises judgment in evaluating these factors based on its knowledge of the project’s operations. This assessment impacts the balance sheet and income statement, as upon commencement of commercial operations, development expenditures cease to be capitalized, revenue is recognized from any sales when the appropriate criteria have been met, and the assets included in assets under construction are reclassified to property, plant and equipment. Determination of joint control The Corporation conducts the majority of its operations through joint ownership interests. Judgment is needed to assess whether these interests meet the definition of joint control, as opposed to an investment interest. Management makes this determination based on an analysis of the contracts with the other venturers, including assessing whether unanimous consent is required on financial and operating decisions.



2 SIGNIFICANT ACCOUNTING POLICIES (continued) Taxation The provision for income taxes and composition of income tax assets and liabilities require management’s judgment as to the types of arrangements considered to be a tax on income in contrast to an operating cost. The application of income tax legislation also requires judgments in order to interpret the various legislation and apply those findings to the Corporation’s transactions. Management judgment and estimates are required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized in the consolidated balance sheet. Judgments are made as to whether future taxable profits will be available in order to recognize certain deferred tax assets. Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, reserves, operating costs, and other capital management transactions. These judgments and assumptions are subject to risk and uncertainty, therefore there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on the consolidated balance sheet and the benefit of other tax losses and temporary differences not yet recognized.

Functional currency Judgment is required to determine the functional currency of each entity. These judgments are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances.

EXCHANGE RATES The following exchange rates to the US dollar have been applied in these annual audited consolidated financial statements:

AVERAGE AVERAGE CLOSING CLOSING

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DEC 31, 2013 DEC 31, 2012 DEC 31, 2013 DEC 31, 2012Canadian dollar 1.03 1.00 1.07 1.00Australian dollar 1.03 0.97 1.13 0.96Russian ruble 31.89 31.16 32.80 30.49Kazakh tenge 152.14 149.12 153.61 150.74Euro 0.75 0.78 0.73 0.76

3 BUSINESS COMBINATION

(a) Option agreement to acquire Mantra Resources Ltd Following the announcement on December 15, 2010 that ARMZ had entered into a definitive agreement to acquire all of the issued shares of Mantra (then known as “Mantra Resources Limited”), Uranium One and ARMZ entered into an option agreement to allow Uranium One to acquire Mantra from ARMZ. Mantra's core asset is the Mkuju River Project in Tanzania. On March 21, 2011, Mantra and ARMZ revised the terms of their agreement, which also resulted in a revised option agreement between Uranium One and ARMZ. On June 7, 2011, ARMZ completed the acquisition of Mantra, and Uranium One became the operator of Mantra’s Mkuju River Project in Tanzania pursuant to an operating agreement entered into with ARMZ and Mantra. As operator of the project, Uranium One is also responsible to provide funding for the project, and consequently entered into a loan agreement with Mantra on June 6, 2011. The loan agreement is guaranteed by ARMZ and provides for a loan of $150 million which will increase after receipt of a special mining license for the Mkuju River Project. Drawdowns of $79.4 million have been made against the facility up to December 31, 2013 (2012: $47.6 million). Pursuant to the revised agreement with ARMZ, Uranium One had a call option to acquire Mantra from ARMZ, exercisable at any point up to June 7, 2012, with the ability to extend the term of the option until June 7, 2013 provided that Uranium One partially exercised its call option and acquired approximately 15% of the shares of Mantra for $150 million before January 31, 2012. The agreement also provided ARMZ with a put option to sell Mantra to Uranium One at the end of the option term if all conditions precedent, including minority shareholder approval, have been met. The transaction fell outside of the scope of IAS 39, financial instruments: recognition and measurement and did not meet the recognition criteria of IFRS 3, business combinations for consolidation at December 31, 2012. The total purchase price to be paid by Uranium One will be equal to ARMZ’s acquisition cost of Mantra (approximately $1.0 billion), plus any additional expenditures contributed by ARMZ to Mantra or its properties and interest thereon at a rate of 2.65% per annum. On January 16, 2012, Uranium One elected to pay $150 million to ARMZ which extended the term of the Mantra purchase option from June 7, 2012 to June 7, 2013 and resulted in Uranium One acquiring a 13.9% stake in Mantra from ARMZ, which is equity accounted. The acquisition was completed on March 15, 2012 following receipt of the necessary regulatory approvals. On December 9, 2013, Uranium One gave notice to ARMZ of the termination of the option agreement, which termination will be effective as of June 10, 2014.



3 BUSINESS COMBINATION (continued) (b) Acquisition of Honeymoon Uranium Project In February 2012, Mitsui & Co., Ltd (“Mitsui”), the owner of the remaining 49% of the Honeymoon Uranium Project, notified the Corporation of its decision to withdraw from the project. The parties agreed on the terms of Mitsui's withdrawal, and the transaction closed after the receipt of applicable Australian regulatory approval during September 2012. On closing, Mitsui paid $12.5 million less cash contributed to the joint venture between April 1, 2012 and the closing date of the transaction, resulting in net proceeds to the Corporation of $0.9 million. The transaction was accounted for in accordance with IFRS 3 ‐ business combinations, requiring that the Corporation account for the transaction as if it disposed of its 51% holding and then re‐acquired 100% of the interest. The re‐acquisition of the assets and liabilities was accounted for at fair value on the date of acquisition. As the Corporation was required to account for its 51% interest as if it is disposed, the foreign currency translation reserve was also reversed. The transaction resulted in a gain as Mitsui surrendered its interest for no value. The Corporation has been capitalizing development expenditures incurred on the Honeymoon project before and since acquisition. Had this transaction closed on January 1, 2012, additional exploration expenses of $1.2 million would have been included in the income statement. The aggregate fair values of assets acquired and liabilities assumed were as follows on acquisition date:

US$m

Purchase price: Cash received (0.9)Material received (2.2)Realized foreign currency translation gain on business combination (6.6)Gain on acquisition 17.2

7.5

Net assets acquired: 49% Cash and cash equivalents 2.5Trade and other receivables 0.5Inventories – materials and supplies 0.8Mineral interests, property, plant and equipment 26.9Other non‐current assets 1.9Trade and other payables (2.2)Unfavorable contract – current portion (1.4)Asset retirement obligations (3.0)Unfavorable contract – long term portion (18.5)

7.5

4 GENERAL AND ADMINISTRATIVE

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Salaries, benefits and directors’ fees 24.9 25.6General office expenses 2.4 3.1Travel expenses 1.7 3.3Stock option expenses (Note 22) 2.1 6.0Restructuring costs ‐ 2.2Other expenses 8.4 5.5

39.5 45.7



5 FINANCE INCOME AND EXPENSE

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Finance income Interest income 17.7 5.7 17.7 5.7 Finance expense Convertible debentures interest (Note 17) (36.5) (24.0) Interest expense on Ruble Bonds (Note 26) (32.8) (31.6)

Interest expense on revolving credit facility (Note 16) (27.7) ‐ Interest expense on Senior Secured Notes (Note 16) (1.0) ‐ Amortization of transaction costs (Note 16) (4.5) (1.4) Accretion on contingent payments (Note 18) (3.6) (4.0) Accretion on environmental, rehabilitation and closure costs (0.8) (1.1) Other (0.5) (0.5)

(107.4) (62.6)

Net finance costs (89.7) (56.9)

6 CASH AND CASH EQUIVALENTS

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Cash and cash equivalents (1)

Cash 206.7 199.3Short‐term deposits ‐ 231.4Deposits held in trust 214.8 ‐

421.5 430.7Restricted cash (2)

Restricted cash 19.1 11.3 19.1 11.3

Cash and cash equivalents including restricted cash 440.6 442.0

(1) Cash and cash equivalents includes cash and highly liquid investments that are readily convertible to cash with a maturity of less than 90 days at the date of acquisition.

(2) Restricted cash consists primarily of collateral deposits, including an amount held in an escrow account pending satisfaction of

regulatory requirements (Note 18). 7 TRADE AND OTHER RECEIVABLES

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Trade receivables 21.1 55.1Value added tax 1.1 0.4Prepayments and advances 3.5 4.3Other receivables 6.8 0.6

32.5 60.4 The average credit period extended for sales is 30 days. There are no trade receivables that are past due. No allowance for doubtful accounts has been recognized in relation to any outstanding balances and no expense has been recognized in respect of bad or doubtful debts due.



8 INVENTORIES

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Finished uranium concentrates 4.9 18.8Solutions and concentrates in process 1.3 4.6

Product inventory 6.2 23.4 Materials and supplies 1.5 2.2

7.7 25.6

9 MINERAL INTERESTS, PROPERTY, PLANT AND EQUIPMENT

DECEMBER 31, 2013 MINERAL

INTERESTS

PROPERTY, PLANT AND EQUIPMENT

DEVELOPMENT EXPENDITURE TOTAL

US$m US$m US$m US$mCost Balance at January 1 107.0 127.8 76.3 311.1Additions ‐ 4.9 38.5 43.4Currency translation adjustments taken to reserves ‐ (8.3) (5.3) (13.6)Transfers ‐ 1.8 (1.8) ‐

At the end of the year 107.0 126.2 107.7 340.9

Accumulated depreciation and impairment Balance at January 1 (4.7) (28.5) ‐ (33.2)Charge for the year (3.9) (24.4) ‐ (28.3)Impairment (Note 14) (2.2) (40.1) (25.5) (67.8)

At the end of the year (10.8) (93.0) (25.5) (129.3)

Carrying value at December 31, 2013 96.2 33.2 82.2 211.6

DECEMBER 31, 2012 (NOTE 31) MINERAL

INTERESTS

PROPERTY, PLANT AND EQUIPMENT

DEVELOPMENT EXPENDITURE TOTAL

US$m US$m US$m US$mCost Balance at January 1 106.6 92.4 40.2 239.2Additions ‐ 29.4 34.2 63.6Business combination 1.1 ‐ 20.8 21.9Disposals ‐ (0.5) ‐ (0.5)Transfers to inventory ‐ ‐ (18.6) (18.6)Currency translation adjustments taken to reserves (0.7) 5.4 0.8 5.5Transfers ‐ 1.1 (1.1) ‐

At the end of the year 107.0 127.8 76.3 311.1

Accumulated depreciation Balance at January 1 ‐ (11.2) ‐ (11.2)Charge for the year (4.7) (23.3) ‐ (28.0)Business combination ‐ 5.0 ‐ 5.0Disposals ‐ 0.2 ‐ 0.2Currency translation adjustments taken to reserves ‐ 0.8 ‐ 0.8

At the end of the year (4.7) (28.5) ‐ (33.2)

Carrying value at December 31, 2012 102.3 99.3 76.3 277.9



10 INVESTMENT IN ASSOCIATE

On March 15, 2012, Uranium One paid $150 million to ARMZ to extend the term of the Mantra purchase option from June 7, 2012 to June 7, 2013 and to acquire a 13.9% stake in Mantra from ARMZ. On December 9, 2013, Uranium One gave notice to ARMZ of the termination of the option agreement, which termination will be effective as of June 10, 2014. Although the Corporation owns less than 20% of the equity shares of Mantra, it exercises significant influence by virtue of an agreement which appoints the Corporation as operator of the Mkuju River project, and the Corporation applies equity accounting to its investment as a result.

Summarized information in respect to Mantra is set out below:

DEC 31, 2013 DEC 31, 2012 US$m US$mTotal assets 1,430.4 1,430.4Total liabilities (351.3) (351.3)

Net assets 1,079.1 1,079.1

Corporation’s share of net assets of associate 150.0 150.0

Accumulated impairment – January 1 (102.3) ‐

Impairment (Note 14) ‐ (102.3)

Corporation’s share of net assets 47.7 47.7

Since its acquisition on March 15, 2012, Mantra has been capitalizing development and evaluation expenditures incurred on the Mkuju River Project.

11 INVESTMENTS IN JOINT VENTURES

The Corporation owns the following interests subject to joint control as a result of governing contractual agreements. These interests are accounted for under the equity method:

COUNTRY OF

INCORPORATION PRINCIPALACTIVITY

OWNERSHIPINTEREST

DEC 31, 2013 DEC 31, 2012(NOTE 31)

US$m US$m Akbastau JSC Kazakhstan Uranium mining 50% 613.4 620.2Betpak Dala LLP Kazakhstan Uranium mining 70% 467.8 531.7Karatau LLP Kazakhstan Uranium mining 50% 326.2 372.3Zarechnoye JSC Kazakhstan Uranium mining 49.67% 91.9 105.2Kyzylkum LLP Kazakhstan Uranium mining 30% 85.5 78.0SKZ‐U LLP Kazakhstan Sulphuric acid plant 19% 12.7 10.6

1,597.5 1,718.0

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m

Movement in investment in joint ventures Balance at January 1 1,718.0 1,844.5Share of net income 65.8 78.8Dividends (165.5) (184.3)Charter capital contributions 9.0 11.8Foreign exchange and other adjustments (29.8) (32.8)

At the end of the year 1,597.5 1,718.0



11 INVESTMENTS IN JOINT VENTURES (continued)

The joint ventures assets and liabilities are as follows, on a 100% basis(1):

AS AT DECEMBER 31, 2013 AKBASTAU BETPAK DALA KARATAU ZARECHNOYE KYZYLKUM SKZ‐U TOTAL

US$m US$m US$m US$m US$m US$m US$mCurrent assets Cash 2.2 13.9 1.8 1.3 34.8 9.1 63.1Inventories 12.6 80.1 30.2 20.2 9.0 3.0 155.1Other 42.9 32.0 44.5 25.9 34.1 12.4 191.8

57.7 126.0 76.5 47.4 77.9 24.5 410.0

Non‐current assets Mineral interests, property, plant and equipment 1,180.9 665.0 847.3 240.1 402.8 181.1 3,517.2

Goodwill 222.7 ‐ ‐ 35.3 ‐ ‐ 258.0Other 35.4 12.3 17.1 7.4 2.6 19.2 94.0

1,439.0 677.3 864.4 282.8 405.4 200.3 3,869.2

Total assets 1,496.7 803.3 940.9 330.2 483.3 224.8 4,279.2

Current liabilities Current portion of interest bearing liabilities 37.0 ‐ 43.0 63.3 0.1 13.0 156.4

Other 9.2 16.9 38.6 13.1 7.5 ‐ 85.3

46.2 16.9 81.6 76.4 7.6 13.0 241.7

Non‐current liabilities Non‐current portion of interest bearing liabilities ‐ ‐ 57.1 ‐ 135.9 113.0 306.0

Deferred tax liabilities 209.1 99.1 137.6 31.1 46.2 2.2 525.3Provisions 8.3 19.0 12.2 4.9 6.7 ‐ 51.1Other 6.0 ‐ ‐ 32.5 2.1 30.0 70.6

223.4 118.1 206.9 68.5 190.9 145.2 953.0

Total liabilities 269.6 135.0 288.5 144.9 198.5 158.2 1,194.7

Net assets 1,227.1 668.3 652.4 185.3 284.8 66.6 3,084.5

Uranium One’s share of net assets Ownership % 50% 70% 50% 49.67% 30% 19%

Attributable share of net assets 613.4 467.8 326.2 91.9 85.5 12.7 1,597.5

(1) Balances presented are on a 100% basis except wherever the Corporation’s attributable share is noted.




AS AT DECEMBER 31, 2012 AKBASTAU BETPAK DALA KARATAU ZARECHNOYE KYZYLKUM SKZ‐U TOTAL

US$m US$m US$m US$m US$m US$m US$mCurrent assets Cash 13.1 3.6 2.3 2.0 3.4 3.1 27.5Inventories 22.8 85.6 35.4 23.0 6.7 1.9 175.4Other 71.7 114.4 32.2 25.3 51.9 5.8 301.3

107.6 203.6 69.9 50.3 62.0 10.8 504.2

Non‐current assets Mineral interests, property, plant and equipment 1,217.5 690.7 898.5 264.7 404.1 183.0 3,658.5

Goodwill 226.9 ‐ ‐ 36.0 ‐ ‐ 262.9Other 7.2 8.1 7.1 7.0 3.0 24.8 57.2

1,451.6 698.8 905.6 307.7 407.1 207.8 3,978.6

Total assets 1,559.2 902.4 975.5 358.0 469.1 218.6 4,482.8

Current liabilities Current portion of interest bearing liabilities 47.5 ‐ ‐ 46.6 0.1 7.3 101.5

Other 7.4 18.2 23.8 17.9 20.3 5.9 93.5

54.9 18.2 23.8 64.5 20.4 13.2 195.0

Non‐current liabilities Non‐current portion of interest bearing liabilities 36.1 ‐ 50.0 38.3 131.4 118.9 374.7

Deferred tax liabilities 222.2 109.1 149.0 37.0 48.3 1.0 566.6Provisions 4.3 15.5 8.2 6.5 5.7 ‐ 40.2Other 1.4 ‐ ‐ ‐ 3.4 30.2 35.0

264.0 124.6 207.2 81.8 188.8 150.1 1,016.5

Total liabilities 318.9 142.8 231.0 146.3 209.2 163.3 1,211.5

Net assets 1,240.3 759.6 744.5 211.7 259.9 55.3 3,271.3

Uranium One’s share of net assets

Ownership % 50% 70% 50% 49.67% 30% 19%

Attributable share of net assets 620.2 531.7 372.3 105.2 78.0 10.6 1,718.0




The joint ventures revenue, cost of sales, earnings from mine operations, expenses and net earnings / (loss) are as follows, on a 100% basis(1):

YEAR ENDED

AKBASTAU BETPAK DALA KARATAU ZARECHNOYE KYZYLKUM SKZ‐U TOTAL

CORPORATION’SATTRIBUTABLE

SHARE DECEMBER 31, 2013 US$m US$m US$m US$m US$m US$m US$m US$mRevenue 150.2 291.0 193.2 88.8 68.2 ‐ 791.4 440.0Operating expenses (55.5) (131.2) (59.4) (59.8) (37.6) ‐ (343.5) (190.5)Depreciation (60.2) (77.2) (78.6) (49.2) (18.9) ‐ (284.1) (153.5)

Gross profit / (loss) 34.5 82.6 55.2 (20.2) 11.7 ‐ 163.8 96.0 Interest income 0.2 0.8 0.2 ‐ 0.1 ‐ 1.3 0.8Interest expense (4.8) (1.0) (6.2) (5.9) (5.6) (4.3) (27.8) (11.6)Expenses and other income (2.3) (0.8) (6.0) (0.1) (2.9) 20.9 8.8 (1.4)Foreign exchange (loss) / gain (0.4) 1.7 (1.7) (1.1) (1.3) (3.0) (5.8) (1.4)Earnings / (loss) before income taxes 27.2 83.3 41.5 (27.3) 2.0 13.6 140.3 82.4

Current and deferred income tax (expense) / recovery (5.9) (15.8) (8.4) 4.4 (1.2) (1.2) (28.1) (16.6)

Net earnings / (loss) 21.3 67.5 33.1 (22.9) 0.8 12.4 112.2 65.8

Uranium One’s ownership % 50% 70% 50% 49.67% 30% 19% Attributable share of net earnings / (loss) 10.7 47.3 16.6 (11.4) 0.2 2.4 65.8

Dividends paid 11.8 147.1 94.0 ‐ ‐ ‐ 252.9

(1) Balances presented are on a 100% basis except wherever the Corporation’s attributable share is noted.

YEAR ENDED

AKBASTAU BETPAK DALA KARATAU ZARECHNOYE KYZYLKUM SKZ‐U TOTAL

CORPORATION’SATTRIBUTABLE

SHARE DECEMBER 31, 2012 US$m US$m US$m US$m US$m US$m US$m US$mRevenue 137.3 343.5 264.5 102.2 71.1 ‐ 918.6 513.4Operating expenses (35.9) (122.3) (62.9) (52.4) (42.6) ‐ (316.1) (173.8)Depreciation (42.9) (76.6) (84.3) (40.4) (18.3) ‐ (262.5) (142.8)

Gross profit 58.5 144.6 117.3 9.4 10.2 ‐ 340.0 196.8 Interest income 0.1 1.9 0.2 0.1 (0.2) ‐ 2.1 1.5Interest expense (6.1) (1.0) (0.6) (6.1) (5.8) ‐ (19.6) (8.8)Expenses and other income (2.2) (2.3) (1.5) (171.9) 0.9 7.5 (169.5) (87.1)Foreign exchange (loss) / gain (1.4) 0.1 0.3 (1.2) (2.1) (2.4) (6.7) (2.2)Earnings / (loss) before income taxes 48.9 143.3 115.7 (169.7) 3.0 5.1 146.3 100.2

Current and deferred income tax (expense) / recovery (9.8) (28.7) (21.7) 28.4 2.9 (2.7) (31.6) (21.4)

Net earnings / (loss) 39.1 114.6 94.0 (141.3) 5.9 2.4 114.7 78.8

Uranium One’s ownership % 50% 70% 50% 49.67% 30% 19% Attributable share of net earnings / (loss) 19.5 80.2 47.0 (70.2) 1.8 0.5 78.8

Dividends paid 20.4 148.3 204.4 7.6 ‐ ‐ 380.7



12 LOANS RECEIVABLE

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Loans to related parties Mantra 79.4 47.6

79.4 47.6

Loans to joint ventures SKZ‐U 26.4 30.1

26.4 30.1 Current portion 7.2 4.4Non‐current portion 98.6 73.3

Total 105.8 77.7

(i) MANTRA LOAN The Corporation made a loan available to Mantra to provide project financing for construction and commissioning of the Mkuju River Project. The loan bears interest at 7.74% per annum. The loan has no fixed repayment terms and is guaranteed by ARMZ.

DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance 47.6 6.1Additions during the year 27.4 39.6Interest accrued 4.4 1.9

Balance at the end of the year 79.4 47.6 Less: current portion ‐ ‐

Long term portion 79.4 47.6

(ii) SKZ‐U LOAN The Corporation made loans available to SKZ‐U LLP (“SKZ‐U”), a joint venture in which the Corporation has a 19% interest, pursuant to its obligation to provide project financing in the amount of $31.0 million for construction and commissioning of a sulphuric acid plant. The loans bear interest at LIBOR plus 6% per annum, with interest payable on a semi‐annual basis between 2013 and 2017. The loans are unsecured and the final payment is March 15, 2017.

DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance 30.1 25.6Additions during the year ‐ 4.5Principal received (3.7) ‐Interest accrued 1.9 1.9Interest received (1.9) (1.9)

Balance at the end of the year 26.4 30.1 Less: current portion (7.2) (4.4)




13 OTHER ASSETS

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Current Purchased uranium concentrates (1) ‐ 12.4Borrowed uranium concentrates (2) ‐ 8.7

‐ 21.1

Non‐current Asset retirement funds (3) 44.9 44.7Other 1.0 0.3

45.9 45.0 (1) The Corporation purchased uranium concentrates from third parties and joint ventures during 2012, the material purchased was delivered

in full into sales contracts during 2013. (2) The Corporation entered into an uranium concentrates borrowing agreement in 2008. The Corporation returned the borrowed material

by September 30, 2013 to settle the contract. (3) The Corporation has posted letters of credit as collateral for asset retirement obligations of subsidiaries in the United States of America

and Australia.

14 IMPAIRMENT

The recoverable amount of each cash‐generating unit (“CGU”) is determined based on its fair value less cost of disposal, calculated as the present value of the estimated future cash flows, using assumptions such as production volumes, uranium prices, capital expenditures, cash costs of production and discount rate. The same methodology is used for impairment testing of investment in associate and joint ventures, except that the recoverable amount for the investment in associate and joint ventures is determined by estimating the fair value less cost of disposal of the project. Key Assumptions

Production volumes Annual production volumes are estimated based on resource estimates, operational considerations and licensing constraints.

Uranium prices Uranium prices are based on market‐observable data and gradually increased to $68 per pound U3O8 in the long term.

Discount rate The discount rate used for impairment testing is the real, post tax weighted average cost of capital. The discount rate is further adjusted for political and development risk based on the jurisdiction in which the CGU or investment resides. The discount rates for 2013 were 10% (2012 9.9%) for the USA and Kazakhstan projects and 11.5% for Mantra (2012 11.9%) and Honeymoon (2012 11.4%).

The tables below provide the details of the impairments recognized by the Corporation in 2013 and 2012:

DECEMBER 31, 2013 Carrying amount

US$m Impairment of mineral interests, property, plant and equipment (Note 9) 67.8

Total 67.8 Honeymoon CGU The impairment of $67.8 million was recognized on the Honeymoon Project due to continuing difficulties in the production process, issues in attaining design capacity and high operating costs. A discount rate of 11.5% was applied. The Honeymoon Project was placed on care and maintenance during the fourth quarter of 2013.



14 IMPAIRMENT (continued)

DECEMBER 31, 2012 (NOTE 31) Carrying amount

US$m Impairment of investment in associate (Note 10) 102.3

Total 102.3

Investment in Associate The impairment was due to the decrease in the estimated value of the Mkuju River Project in Tanzania. The decrease in the long term uranium prices, together with increased capital expenditure experienced in the industry, and delays in the expected initial production mainly due to permitting delays, were the main drivers decreasing the value of the project. A discount rate of 11.9% was applied.

All other CGU’s Any adverse changes in the key assumptions for all the other CGU’s could have associated impacts on certain other inputs into the long term plans, which may offset, to a certain extent, the impact of the adverse change.

15 TRADE AND OTHER PAYABLES

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Trade payables 13.9 50.5Accruals 16.4 13.7Value added, withholding and other taxes payable 19.2 1.5Other 1.7 2.1

51.2 67.8

16 INTEREST BEARING LIABILITIES

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Ruble Bonds 467.1 466.7Senior Secured Notes 285.4 Revolving credit facilities (6.7) ‐

745.8 466.7 Current portion 14.2 3.0Non‐current portion 731.6 463.7

Total 745.8 466.7



16 INTEREST BEARING LIABILITIES (continued) (i) RUBLE BONDS DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance 466.7 441.7Issued 380.7 ‐Interest accrued 45.2 44.7Interest paid (34.3) (43.7)Redeemed (359.4) ‐Fair value adjustment relating to hedged risk (Note 26) (0.2) ‐Amortization of transaction costs (2) 2.2 1.4Foreign exchange (gain) / loss (33.8) 22.6

467.1 466.7 Less: current portion (14.2) (3.0)


Fair value of Ruble Bonds(1) 460.6 468.5 (1) The fair value was calculated using quoted market prices. (2) Consists of amortization of transaction costs of $4.5 million, net of capitalized transaction costs on Series 2 Ruble Bonds of $2.3 million.

On December 7, 2011, the Corporation carried out an offering and issuance of Series 1 Ruble Bonds having an aggregate principal amount of $463.5 million (RUB 14.3 billion) repayable five years from the date of issuance. The Series 1 Ruble Bonds bear interest at a Ruble rate of 9.75%, payable semi‐annually from the date of issue. On August 23, 2013, the Corporation completed a public offering in Russia of seven‐year ruble‐denominated Series 2 Ruble Bonds for gross proceeds of $380.7 million (RUB12.5 billion) with a ruble interest rate of 10.25%; and simultaneous public offering to repurchase, through the facilities of the Moscow Exchange, $359.4 million (RUB11.8 billion) of the Company’s outstanding $435.5 million (RUB14.3 billion) aggregate principal amount five‐year Series 1 Ruble Bonds with a ruble interest rate of 9.75%. This redemption resulted in $76.1 million (RUB 2.5 billion) of the principal of the Series 1 Ruble Bonds remaining outstanding. The Ruble Bonds are direct, unsecured, non‐convertible, interest‐bearing obligations of the Corporation, subordinated to any present or future secured obligations, and ranking equally with all other unsecured indebtedness. In addition, effective October 1, 2013, the Corporation designated a number of derivatives as hedging instruments against the Series 1 and Series 2 Ruble Bonds – see Note 26 Fair value measurement. (ii) SENIOR SECURED NOTES DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance ‐ ‐Issued 300.0 ‐Interest accrued 1.0 ‐Transaction costs (15.6) ‐

285.4 ‐ Less: current portion ‐ ‐

Long term portion 285.4 ‐ On December 13, 2013, Uranium One Investments Inc. (“U1 Investments”), a 100% owned subsidiary of Uranium One, completed an offering of US$300 million aggregate principal amount of non‐convertible 6.25% Senior Secured Notes due 2018 (the “Senior Secured Notes”). The Senior Secured Notes will mature on December 13, 2018 and U1 Investments will pay interest semi‐annually on June 13 and December 13 of each year. U1 Investments is entitled to redeem all or a portion of the Senior Secured Notes on or after December 13, 2016. The Senior Secured Notes are guaranteed by Uranium One and certain of its subsidiaries and secured by pledges of certain of their assets.



16 INTEREST BEARING LIABILITIES (continued) (iii) REVOLVING CREDIT FACILITIES

DEC 31, 2013 DEC 31, 2012 US$m US$mUranium One Holdings N.V. credit facility ‐ ‐Bank credit facility (6.7) ‐

(6.7) ‐ Current portion ‐ ‐Non‐current portion (6.7) ‐

Total (6.7) ‐

(I) URANIUM ONE HOLDINGS N.V. CREDIT FACILITY DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance ‐ ‐Issued 1,450.0 ‐Interest accrued 27.7 Interest paid (27.7) ‐Repaid (1,450.0)

‐ ‐ Less: current portion ‐ ‐

Long term portion ‐ ‐ On March 25, 2013, the Corporation arranged a three year, $1.45 billion revolving unsecured credit facility with an ARMZ affiliate. Drawings under the facility bear interest at the rate of 3.3%. Interest is payable monthly. The agreement included certain provisions with regards to accelerated payment. On March 26, 2013, the Corporation drew down the facility in full and on October 21, 2013, the Corporation repaid $1.2 billion of the facility. The balance of the facility was repaid on November 5, 2013 and the facility was cancelled on November 14, 2013. (II) BANK REVOLVING CREDIT FACILITY DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance ‐ ‐Transaction costs (6.7) ‐

(6.7) ‐

Less: current portion ‐ ‐

Long term portion (6.7) ‐ On December 20, 2013, U1 Investments entered into a three year US$120 million revolving credit facility agreement (the “Revolving Credit Facility”) with a syndicate of lenders. The Revolving Credit Facility is guaranteed by Uranium One and certain of its subsidiaries, and secured by pledges of certain of their assets. Drawings under the facility bear interest at the rate of 4.0% plus LIBOR and is payable quarterly. An annual fee of 2.0% is charged on the undrawn amount each year. Letters of credit can be issued under the facility at a fee of 0.25% per annum and will bear interest of 4.0% per year. Financing fees of $6.7 million were incurred and relate to upfront costs and other costs incurred associated with establishing the credit facility, and are expensed over the term of the facility. The Corporation has not yet drawn down any funds under the Revolving Credit Facility.

In connection with the Senior Secured notes and the Revolving Credit Facility described above, the Corporation is required to comply with certain financial covenants. The most restrictive covenants are those that apply to the Revolving Credit Facility. The primary covenants for this facility are: (i) a minimum Interest Cover Ratio of 3.0 : 1 for the life of the facility and (ii) a maximum Net Leverage Ratio that is initially set at 1 : 4.0 and changes to 1 : 3.5 in 2015 and 1 : 3.0 in 2016.

As at December 31, 2013, the Corporation is in compliance with these covenants.



17 CONVERTIBLE DEBENTURES 2010 Debentures On March 12, 2010, the Corporation issued convertible unsecured subordinated debentures for gross proceeds of C$260 million ($253.3 million), (the “2010 Debentures”). The 2010 Debentures have a March 13, 2015 maturity date, with interest payable at a rate of 5.0% per annum, payable semi‐annually. The 2010 Debentures are convertible into common shares of the Corporation at a conversion price of C$3.15 per common share, being a rate of 317.46 common shares per C$1,000 principal.

The debentures had a cash settlement option which was accounted for as an embedded derivative. The Corporation allocated the fair value of the debentures to the individual liability and derivative components by establishing the derivative component and then allocating the balance remaining, after subtracting the fair value of the derivative from the face value, to the liability component. The embedded derivative was designated as a financial liability carried at fair value through profit or loss. On October 12, 2010, the Corporation received all necessary Kazakh regulatory approvals to allow the conversion of the 2010 Debentures into common shares of Uranium One at the option of the holders of the 2010 Debentures and as a result the cash settlement option was cancelled. The embedded derivative was reclassified as equity on cancellation of the cash settlement option.

On November 15, 2013, the Corporation made an offer to purchase the C$260 million aggregate principal amount of the 2010 Debentures in accordance with the terms of the trust indenture governing the debentures, as required by the trust indenture due to the completion of the Going Private Transaction. As a result of the change in the estimated cash flows an additional charge of $15.6 million was recorded in the year ended December 31, 2013. The effective annual interest rate is 10.93%. On January 2, 2014 the Corporation completed the repurchase of C$227,461,000 ($214.8 million as valued on December 31, 2013) of the aggregate principal amount of its 2010 Debentures. This represents 87.49% of the outstanding aggregate principal amount of the 2010 Debentures, and 12.51%, or $23.6 million (as valued on December 31, 2013) principal amount remains outstanding. The table below provides a breakdown of the liability and derivative allocation on initial recognition of the 2010 Debentures:

2010 Debentures US$mLiability 211.6Transaction costs (12.4)Net liability 199.2 Derivative liability 41.7Net derivative liability 41.7 Net proceeds 240.9

The table below indicates the movement in the liability:

DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance 231.1 214.4Interest accrued 36.5 24.0Coupon interest payments (12.4) (12.9)Foreign exchange (loss) gain (16.8) 5.6

Liability as at the end of the year 238.4 231.1 Current portion (214.8) ‐

Non‐current portion 23.6 231.1

Fair value of convertible debentures 244.9 264.9



18 PROVISIONS

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Environmental protection, rehabilitation and closure costs 30.7 22.4Provision for contingent payments ‐ 41.2

30.7 63.6 (I) Environmental protection, rehabilitation and closure costs

Provision is made for close down, restoration and for environmental rehabilitation costs, which include the dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas, in the financial period when the related environmental disturbance occurs, based on the estimated future costs using information available at the balance sheet date.

DEC 31, 2013 DEC 31, 2012Assumptions: Payable in years 8‐15 9‐14Inflation rate 2.7%‐3.0% 2.7%‐3.0%Discount rate 3.7%‐5.5% 3.7%‐5.5%

Security of $44.9 million (2012: $44.7 million) for environmental protection, rehabilitation and closure costs has been provided in the form required by the relevant country’s authorities (Note 13).

II) Provision for contingent payments

Betpak Dala acquisition As part of the original acquisition of the interest in Betpak Dala on November 7, 2005, the Corporation assumed a liability for a bonus payment payable in cash based on uranium reserves discovered on the South Inkai property in excess of 66,000 tonnes over the life of the project. The payment is based on the state‐certified uranium reserves in excess of 66,000 tonnes multiplied by 70% of 6.25% (being an effective 4.375%) of the average spot price of U3O8 for the month in which the reserves exceed such threshold. As security for the bonus payment, the Corporation has pledged its participatory interest in Betpak Dala (including the shares of a subsidiary) and its share of uranium products produced by Betpak Dala. Kyzylkum acquisition As part of the original acquisition of the interest in Kyzylkum on November 7, 2005, the Corporation assumed a liability for a bonus payment, which is due upon commencement of commercial production, as determined by the acquisition agreement. The seller initially had an option, exercisable until October 31, 2006, to elect to receive this bonus payment as a cash payment of $24 million or receive 15,476,000 shares of UrAsia Energy Ltd. (“UrAsia Energy”). The seller elected under the terms of the arrangement, to receive 15,476,000 shares of UrAsia Energy upon commencement of commercial production. The entitlement to 15,476,000‐bonus payment shares of UrAsia Energy was converted to an entitlement to 6,964,200 Uranium One shares as part of the UrAsia Energy acquisition in 2007. Commercial production was determined to have commenced at the end of 2012, but the exercise of the warrants was delayed due to the lack of co‐operation from the seller in satisfying certain regulatory requirements. To comply with both the contractual and the regulatory requirements, on September 4, 2013, the Corporation issued the 6,964,200 shares into escrow pending satisfaction of the regulatory requirements. On October 18, 2013, the 6,964,200 Uranium One shares were sold to a wholly owned subsidiary of ARMZ for $18.4 million on the completion of the Going Private Transaction and included as part of other liabilities (Note 20). These funds have been placed into an escrow account pending satisfaction of regulatory requirements. The fair value of the contingently issuable shares was not included as part of the purchase price for Kyzylkum as commencement of commercial production could not be reasonably determined. An additional bonus payment of 30% of 12.5% (being an effective 3.75%) of the weighted average spot price of U3O8 will be paid on state‐certified uranium reserves in excess of 55,000 tonnes of U3O8 discovered on the Kharasan property as and when certified by the government of Kazakhstan.

The tables below show the movement in the provisions:

DECEMBER 31, 2013

(I) Environmental, rehabilitation and

closure costs (II) Provision for

contingent payments Total US$m US$m US$mBalance at January 1, 2013 22.4 41.2 63.6Additions 8.2 ‐ 8.2Reductions ‐ (44.8) (44.8)Accretion 0.8 3.6 4.4Foreign exchange (0.7) ‐ (0.7)

Balance at December 31, 2013 30.7 ‐ 30.7



18 PROVISIONS (continued) As at December 31, 2013, the Corporation reversed the provision for the contingent payment, as based on the current exploration plan, there is no expectation that the thresholds stated above will be exceeded. The reversal was recorded in the “other income (expense)” line in the consolidated income statement.

DECEMBER 31, 2012 (NOTE 31)

(I) Environmental, rehabilitation and

closure costs (II) Provision for

contingent payments Total US$m US$m US$mBalance at January 1, 2012 20.6 38.8 59.4Accretion 1.1 4.0 5.1Reductions ‐ (1.6) (1.6)Reductions arising from payments (2.3) ‐ (2.3)Business combination (Note 3.2) 2.9 ‐ 2.9Foreign exchange 0.1 ‐ 0.1

Balance at December 31, 2012 22.4 41.2 63.6

19 INCOME TAX

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Current income tax expense / (recovery) 5.0 (4.3)Deferred income tax expense 1.2 ‐

Income tax expense / (recovery) 6.2 (4.3)

Reconciliation between the tax expense and accounting profit for the year:

DEC 31, 2013 DEC 31, 2012 US$m US$mLoss before income taxes (35.1) (101.0)Canadian federal and provincial income tax rates 26.5% 26.5%

Expected income tax recovery (9.3) (26.8) Permanent differences, including non‐deductible impairment charges 9.5 28.8Change in temporary differences not recognized 37.6 19.8Effect of share of profit of equity accounting (17.4) (20.9)Differences in tax rates in foreign jurisdictions (5.6) ‐Withholding taxes 3.9 5.3Reversal of foreign tax reserve ‐ (10.6)Reversal of contingent liability (11.3) ‐Other (1.2) 0.1

Income tax expense / (recovery) 6.2 (4.3)

Effective tax rate (17.66%) 4.26%

Reconciliation of the deferred tax balance movement:

DEC 31, 2013 DEC 31, 2012 US$m US$mBalance at January 1 ‐ ‐Income tax expense recorded in the income statement 1.2 ‐

Balance at December 31 1.2 ‐

The significant components of the Corporation’s deferred income tax liabilities are as follows:

DEC 31, 2013 DEC 31, 2012US$m US$m

Deferred income tax liabilities Other (1.2) ‐

Net deferred income tax liabilities (1.2) ‐



19 INCOME TAX (continued) Deductible temporary differences and unused tax credits for which no deferred tax assets have been recognized are attributable to the following:

DEC 31, 2013 DEC 31, 2012US$m US$m

Mineral interests property, plant and equipment 104.0 73.0Net operating loss 308.8 295.9Capital loss 33.2 33.3Other 35.0 1.9

Total 481.0 404.1

The aggregate amount of taxable temporary differences associated with investment in subsidiaries, associate and joint ventures, for which deferred tax liabilities have not been recognized, as at December 31, 2013 is $556.0 million (2012: $419.4 million). Tax loss carry‐forwards Canada and provincial tax jurisdictions At December 31, 2013, the Corporation had Canadian federal and provincial net operating loss carry‐forwards totaling $84.1 million that expire from 2030 through 2033 (2012: $98.4 million). The Corporation also had capital losses totaling $5.7 million with no expiry (2012: $5.8 million). No deferred tax assets have been recognized with respect to these operating or capital losses. United States federal and state tax jurisdictions At December 31, 2013, the Corporation had United States federal and state net operating loss carry‐forwards totaling $84.9 million that expire from 2020 through 2033. (2012: $74.4 million). The Corporation also had capital losses totaling $27.5 million that expire in 2015 (2012: $27.5 million). No deferred tax assets have been recognized with respect to these operating or capital losses. Kazakhstan tax jurisdictions At December 31, 2013, the Corporation had Kazakhstan net operating loss carry‐forwards totaling $31.4 million that expires from 2019 through 2023 (2012: $25.4 million). No deferred tax assets have been recognized with respect to those losses. Australia tax jurisdictions At December 31, 2013, the Corporation had Australian net operating loss carry‐forwards totaling $60.7 million with no expiry (2012: $59.4 million). No deferred tax assets have been recognized on these losses. Europe tax jurisdictions At December 31, 2013, the Corporation had European net operating loss carry‐forwards totaling $47.7 million that expires from 2018 through 2022 as well as losses with no expiry (2012: $38.3 million). No deferred tax assets have been recognized on these losses.

20 OTHER LIABILITIES

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Current Uranium concentrates loan (1) ‐ 8.7Unfavorable contracts (2) 2.7 2.6Other 0.6 0.7

3.3 12.0

Non‐current Unfavorable contracts (2) 13.3 17.0Bonus payment (Note 18) 18.4 ‐

31.7 17.0 (1) On September 22, 2008, the Corporation entered into a loan agreement to borrow 200,000 pounds of U3O8 to be repaid on

September 30, 2010. The maturity of the loan was subsequently extended to September 30, 2013 and the contract was settled on this date.

(2) The Corporation has legacy sales contracts for Honeymoon with unfavorable terms. With the withdrawal of Mitsui & Co. (the Corporation’s former joint venture partner in the Honeymoon project), the Corporation is required to account for these contracts at their realizable values. Production from Honeymoon will be used to deliver into these contracts.



21 SHARE CAPITAL NUMBER OF VALUE OF SHARES SHARES US$mCommon shares on December 31, 2011 and 2012 957,189,036 5,325.4Issue of shares 6,964,200 ‐Shares cancelled (6,964,200) (16.8)Distribution to shareholders ‐ (339.6)

Common shares on December 31, 2013 957,189,036 4,969.0

Until December 13, 2013, the Corporation was authorized to issue an unlimited number of common shares, of which 957,189,036 were issued and outstanding as at that date. On that date, the Corporation amended its articles to divide the existing class of common shares into a series of shares, with a first series designated as “Common Shares, Series A” and a second series designated as “Common Shares”, and to provide that all the existing class of common shares be designated as Common Shares, Series A unless the holder of such shares elects otherwise, in which case they shall be designated as Common Shares. The rights, privileges and restrictions attaching to each series of common shares are identical. The holders of both series of common shares are entitled to one vote for each share held on all matters to be voted on by such holders, are entitled to receive pro rata such dividends as may be declared by the Board of Directors on such series of shares out of funds legally available therefor, and to receive pro rata the remaining property of the Corporation on a liquidation, dissolution or winding‐up of the Corporation.

22 RESERVES

DEC 31, 2013

US$m

DEC 31, 2012(NOTE 31)

US$m

Equity settled employee benefits reserve Balance at the beginning of the year 128.3 122.3Stock options expense 2.1 6.0Cancellation of stock option plan (130.4) ‐

Balance at the end of the year ‐ 128.3

Equity component of convertible debentures Balance at the beginning of the year 67.0 67.0

Balance at the end of the year 67.0 67.0

Foreign currency translation reserve Balance at the beginning of the year (36.2) 5.7Exchange fluctuations on translation of foreign operations (53.8) (48.5)Business combination ‐ 6.6

Balance at the end of the year (90.0) (36.2)

Cash flow hedging reserve Balance at the beginning of the year 4.1 (2.0)Realized fair value reclassified to income statement (4.3) ‐Foreign exchange 36.6 (18.0)Revaluation (34.9) 24.1

Balance at the end of the year 1.5 4.1

Available for sale securities reserve Balance at the beginning of the year (0.1) ‐Unrealized fair value adjustments on available for sale securities ‐ (0.1)

Balance at the end of the year (0.1) (0.1)

Total reserves (21.6) 163.1



22 RESERVES (continued) Cash flow hedging reserve The cash flow hedging reserve represents the cumulative effective of a portion of the gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in the fair value of the hedging instruments that are recognized and accumulated under the cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects net earnings. Equity settled employee benefits reserve The following is a summary of options granted under the stock‐based compensation plan: NUMBER OF WEIGHTED AVERAGE OPTIONS EXERCISE PRICE C$Outstanding options as at January 1, 2012 13,496,537 6.64Granted options 4,219,262 3.16Forfeited options (2,175,731) 4.96Expired options (1,356,675) 14.28

Outstanding options as at December 31, 2012 14,183,393 5.13

Cancelled options (13,832,219) 5.20Exercised options (336,488) 2.19Expired options (14,686) 3.90

Outstanding options as at December 31, 2013 ‐ ‐

There were no share options granted during the year (the weighted average fair value of the share options granted during 2012 was C$1.42). Options were priced using the Black‐Scholes option pricing model. Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the effects of non‐transferability, exercise restrictions, and behavioral considerations. Expected volatility is based on the historical share price volatility over the past 5 years. The weighted average share price for options exercised in 2013 was C$3.32. There were no options exercised in 2012. The Corporation’s stock option and restricted share plan remain in place, however, no restricted share rights were outstanding in 2013, and all outstanding stock options were cancelled on the completion of the Going Private Transaction on October 18, 2013, such that no stock options to purchase Common Shares were outstanding as of December 31, 2013. On December 31, 2013, the Corporation reversed the entire reserve against accumulated deficit. The following table summarizes stock options outstanding at December 31, 2012:

OPTIONS OUTSTANDING OPTIONS EXERCISABLERANGE OF EXERCISE PRICES

NUMBER OUTSTANDING AS AT DEC 31, 2012

WEIGHTED AVERAGE

REMAINING LIFE

WEIGHTED AVERAGE

EXERCISE PRICE

NUMBER EXERCISABLE AS AT DEC 31, 2012

WEIGHTED AVERAGE

REMAINING LIFE

WEIGHTED AVERAGE

EXERCISE PRICE C$ (YEARS) C$ (YEARS) C$

1.90 to 3.50 4,098,389 4.18 3.10 127,860 3.55 2.563.51 to 4.76 5,283,186 2.99 4.59 3,601,132 2.97 4.594.77 to 7.79 2,308,818 3.19 6.34 1,159,234 3.20 6.367.80 to 9.90 2,362,500 3.91 8.32 2,362,500 3.91 8.329.91 to 11.78 130,500 4.01 11.78 130,500 4.01 11.78

14,183,393 3.53 5.13 7,381,226 3.34 6.15

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

DEC 31, 2012

Risk free interest rate 1.27% ‐ 1.50%Expected dividend yield 0%Expected volatility of the Uranium One's share price 70%Expected life 1.75 – 3.75 years



23 BASIC AND DILUTED WEIGHTED‐AVERAGE NUMBER OF SHARES OUTSTANDING

DEC 31, 2013

US$m DEC 31, 2012

US$m Basic weighted‐average number of shares outstanding 958.4 957.2Effect of dilutive securities: ‐ Stock options ‐ ‐

Basic weighted‐average number of shares outstanding 958.4 957.2

For the years ended December 31, 2013 and 2012, stock options were not included in the diluted weighted average number of shares outstanding as they were anti‐dilutive.

24 CASH FLOW INFORMATION

DEC 31, 2013

US$m DEC 31, 2012

US$m Movement in non‐cash working capital Decrease / (increase) in trade and other receivables 39.6 (39.5)Decrease / (increase) in inventories 11.5 26.4Increase / (decrease) in trade and other liabilities (23.4) 29.6

27.7 16.5

25 CAPITAL DISCLOSURES

The Corporation’s objectives when managing capital are to:

(i) Maintain a flexible capital structure which optimizes the cost of capital at an acceptable level of risk; (ii) Continue the development and exploration of its mineral properties; and (iii) Support any expansion plans.

In the management of capital, the Corporation includes equity, interest bearing liabilities and convertible debentures. The Corporation manages its capital structure and makes adjustments to it when the economic and risk conditions of the underlying assets require change. In order to maintain or adjust the capital structure, the Corporation may issue new shares, issue new debt, and/or issue new debt to replace existing debt with different characteristics. The Corporation has in place a rigorous planning and budgeting process to help determine the funds required to ensure the Corporation has the appropriate liquidity to meet its operating and growth objectives. The Corporation monitors the following in this respect: total debt as a percentage of total capitalization and net debt as a percentage of total capitalization.

DEC 31, 2013

US$m DEC 31, 2012

US$m Total debt (interest bearing liabilities and convertible debentures) 984.2 697.8Net debt (total debt less cash, receivables, and current portion of loans receivable) 494.3 191.0Total capitalization (total equity) 1,373.3 1,867.0 Total debt as a percentage of capitalization 72% 37%Net debt as a percentage of capitalization 36% 10%



26 FAIR VALUE MEASUREMENT (I) DESIGNATION AND VALUATION OF FINANCIAL INSTRUMENTS The following tables summarize the designation and fair value hierarchy under which the Corporation’s financial instruments are valued.

AS AT DECEMBER 31, 2013

DESIGNATION OF FINANCIAL ASSETS LOANS AND RECEIVABLES

FAIR VALUE THROUGH PROFIT

AND LOSS TOTAL NOTES US$m US$m US$mCash and cash equivalents including restricted cash 6 440.6 ‐ 440.6 Trade receivables 7 21.1 ‐ 21.1Loans receivable 12 105.8 ‐ 105.8Financial derivative assets 26 ‐ 2.2 2.2Asset retirement funds 13 44.9 ‐ 44.9

Total 612.4 2.2 614.6

AS AT DECEMBER 31, 2012 (NOTE 31)

DESIGNATION OF FINANCIAL ASSETS

LOANS AND RECEIVABLES

FAIR VALUE THROUGH PROFIT

AND LOSS TOTAL NOTES US$m US$m US$mCash and cash equivalents including restricted cash 6 442.0 ‐ 442.0 Trade receivables 7 55.1 ‐ 55.1Loans receivable 12 77.7 ‐ 77.7Purchased uranium concentrates 13 ‐ 12.4 12.4Borrowed uranium concentrates 13 ‐ 8.7 8.7Financial derivative assets 26 ‐ 9.8 9.8Asset retirement funds 13 44.7 ‐ 44.7

Total 619.5 30.9 650.4 AS AT DECEMBER 31, 2013

DESIGNATION OF FINANCIAL LIABILITIES

HELD AT FAIR VALUE THROUGH PROFIT

OR LOSS

FINANCIAL LIABILITIES AT

AMORTIZED COST

TOTAL NOTES US$m US$m US$mTrade payables 15 ‐ 13.9 13.9Interest bearing liabilities 16 14.0 731.8 745.8Convertible debentures 17 ‐ 238.4 238.4Financial derivatives liabilities 26 25.5 ‐ 25.5Other 20 ‐ 19.0 19.0

Total 39.5 1,003.1 1,042.6

AS AT DECEMBER 31, 2012 (NOTE 31)

DESIGNATION OF FINANCIAL LIABILITIES

HELD AT FAIR VALUE THROUGH PROFIT

OR LOSS

FINANCIAL LIABILITIES AT

AMORTIZED COST

TOTAL NOTES US$m US$m US$mTrade payables 15 ‐ 50.5 50.5Interest bearing liabilities 16 ‐ 466.7 466.7Convertible debentures 17 ‐ 231.1 231.1Provisions for contingent payments 18 ‐ 41.2 41.2Uranium concentrates loan 20 8.7 ‐ 8.7Other 20 ‐ 0.7 0.7

Total 8.7 790.2 798.9

The carrying value of the financial assets and liabilities that are presented in the tables above, generally approximate their fair values, except for the Ruble Bonds and 2010 Debentures, whose fair values are disclosed in notes 16 and 17.



26 FAIR VALUE MEASUREMENT (continued) Fair value hierarchy The Corporation categorizes each of its fair value measurements in accordance with a fair value hierarchy. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. For financial instruments that are recognized at fair value on a recurring basis, the Corporation determines whether transfers have occurred between levels in the hierarchy by re‐assessing their classification (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. Assets / (liabilities) measured at fair value on a recurring basis include:

AS AT DECEMBER 31, 2013 FAIR VALUE HIERARCHY OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

LEVEL 1US$m

LEVEL 2US$m

LEVEL 3 US$m

TOTALUS$m

Available for sale securities 0.3 ‐ ‐ 0.3Financial derivative assets ‐ ‐ 2.2 2.2Financial derivative liabilities ‐ ‐ (25.5) (25.5)

Total 0.3 ‐ (23.3) (23.0) AS AT DECEMBER 31, 2012 (NOTE 31) FAIR VALUE HIERARCHY OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

LEVEL 1US$m

LEVEL 2US$m

LEVEL 3 US$m

TOTALUS$m

Available for sale securities 0.3 ‐ ‐ 0.3Purchased uranium concentrates ‐ 12.4 ‐ 12.4Borrowed uranium concentrates ‐ 8.7 ‐ 8.7Uranium concentrates loan ‐ (8.7) ‐ (8.7)Financial derivative assets ‐ ‐ 9.8 9.8

Total 0.3 12.4 9.8 22.5 Transfers between Level 1 and Level 2, and transfers in and out of Level 3 are assumed to occur at the end of the period. There were no transfers for the period ended December 31, 2013. The fair value of available‐for‐sale investments is determined based on a market approach reflecting the closing price of each particular security at the consolidated balance sheet date. The closing price is a quoted market price obtained from the exchange that is the principal active market for the particular security, and therefore available‐for‐sale investments are classified within Level 1 of the fair value hierarchy.

Fair value assets and liabilities classified as Level 2 are valued using pricing models or discounted cash flow (DCF) models. These models require a variety of observable inputs including market prices, forward price curves, yield curves and credit spreads. These inputs are obtained from or verified with the market where possible. Where inputs are based on unobservable market data, and the input is significant to the fair value, fair value assets and liabilities are classified as Level 3. Derivative instruments are valued using pricing models or DCF models. These models require a variety of observable inputs including market prices, forward price curves and yield curves. These inputs are obtained from or verified with the market where possible. The significant unobservable input used in the fair value measurement of the Corporation’s Level 3 fair value assets and liabilities is credit spread, which represents either the counterparty credit risk (for assets) or non‐performance risk of the Corporation (for liabilities).



26 FAIR VALUE MEASUREMENT (continued) The table below shows a reconciliation of level 3 fair value measurements of financial liabilities / (assets): DEC 31, 2013 DEC 31, 2012 US$m US$mOpening balance 29.2 54.5Additions 20.4 ‐Unrealized loss (gain) recognized in other comprehensive income 40.8 (25.3)Unrealized gain recognized in profit or loss (1) (0.1) ‐Interest accrued on swap (12.4) (13.1)Interest received 11.5 11.8Foreign exchange (gain) loss (6.7) 1.3 82.7 29.2Unrealized loss due to unobservable inputs at inception (2) (59.4) (39.0)

23.3 (9.8) Current portion (asset) (1.3) (0.9)Non‐current portion (asset) (0.9) ‐Non‐current portion (asset) / liability 25.5 (8.9)

(1) Relates to fair value liabilities held at the end of the reporting period recognized in the “Other” line item in the consolidated income statement. (2) No amounts recognized for this balance in the consolidated income statement for the period ended December 31, 2013.

Financial derivatives A summary of derivative instruments are as follows:

As at DEC 31, 2013 As at DEC 31, 2012 (Asset) / Liability

US$m (Asset) / Liability

US$m Used for hedging Cross currency interest rate swaps (Note 26(II)) ‐ Cash flow hedge (1), (2) 15.3 (9.8) ‐ Fair value hedge (3) (0.1) ‐ Forward strip contracts (Note 26(II)) ‐ Cash flow hedge (3) ‐ ‐ Other Cross currency interest rate swaps (Note 26(II)) 8.1 ‐

23.3 (9.8)

Fair value of derivative assets

Current (1.3) (0.9)Non‐current (0.9) (8.9)

(2.2) (9.8)

Fair value of derivative liabilities

Current ‐ ‐ Non‐current 25.5 ‐

25.5 ‐

Total fair value of derivatives 23.3 (9.8)�

(1) The maximum term over which Accumulated Other Comprehensive Income will be reclassified to net earnings is 7 years. (2) Ineffectiveness in the amount of a $0.4 million gain arising from cash flow hedges is recorded in the “Other income / (expense)” line item in the consolidated income

statement for the for the year ended December 31, 2013. (3) The fair value movement attributable to the hedged item (RUB 455 million of the Series 2 Bonds) was $0.2 million.



26 FAIR VALUE MEASUREMENT (continued)

CROSS CURRENCY INTEREST RATE SWAPS

Original cross currency interest rate swap The Corporation originally issued Series 1 Ruble Bonds having an aggregate principal amount of RUB 14.3 billion ($463.5 million) on December 7, 2011 (Note 16). At the same time the Corporation entered into a cross currency interest rate swap, which economically converted the Series 1 Ruble Bonds into a synthetic US dollar borrowing by fixing the Corporation’s principal and interest payments in US dollar terms and, while the hedging relationship was in force, the Corporation was not economically exposed to any ruble currency risks. The swap has a US$ fixed exchange rate of $1.00 = RUB 30.855 and results in a US$ fixed interest rate of 6.74% on the principal amount of $463.5 million. For accounting purposes, the original swap was designated as a cash flow hedge and the Corporation applied a hedge ratio of 80% to the debt, resulting in the Swap covering 80% of the foreign currency risk inherent in the interest and principal payments on the RUB 14.3 billion borrowing.

On August 23, 2013, the Corporation repurchased and cancelled RUB 11.8 billion of the Series 1 Ruble Bonds, resulting in the original swap being de‐designated from the hedging relationship. On October 1, 2013, 17% or RUB 2.5 billion of the original swap was designated as a cash flow hedge against 80% of the remaining RUB 2.5 billion Series 1 Ruble Bonds.

On October 1, 2013, 54% or RUB 7.7 billion of the original swap together with two forward strips were also designated as a cash flow hedge against a portion (RUB 6.9 billion or a 90% hedge relationship) of the foreign exchange risk arising from the Series 2 semi – annual ruble interest payments from October 1, 2013 to February 14, 2017 and the principal payment. The remaining 29% of the original swap was not designated in a hedging relationship.

Newly entered cross currency interest rate swaps designated as hedges On September 18 and 23, 2013, the Corporation entered into a number of cross currency interest rate swaps and forward strip contracts with the economic objective of managing the foreign exchange and interest rate risks of the Corporation. On October 1, 2013, these instruments / combinations of instruments were designated as hedging instruments against portions of the Series 2 Ruble Bonds (Note 16). The cross currency interest rate swaps and the associated hedging relationships are as follows: (a) A cross currency interest rate swap with a notional amount of RUB 455 million / $14.1 million (fixed at an exchange rate of $1.00 = RUB

32.2) to convert a portion of the Series 2 Ruble Bonds into a synthetic US dollar floating borrowing (3 month US LIBOR plus a spread of 5%). This swap was designated as a fair value hedge to hedge a portion (RUB 455 million or a 100% hedge relationship) of the foreign exchange risk arising from the Series 2 semi‐annual ruble interest payments and ruble principal amount due at maturity starting from October 1, 2013 to August 14, 2020.

(b) A cross currency interest rate swap with a notional amount of RUB 245 million / $7.7 million (fixed at an exchange rate of $1.00 = RUB 31.8) to convert a portion Series 2 Ruble Bonds into a synthetic US dollar borrowing. This swap was designated as a cash flow hedge to hedge a portion (RUB 196 million or an 80% hedge relationship) of the foreign exchange risk arising from the Series 2 semi‐annual ruble interest payments and ruble principal amount due at maturity starting from October 1, 2013 to August 11, 2020.

(c) A cross currency interest rate swap with a notional value of RUB 4.1 billion / $129.8 million (fixed at an exchange rate of $1.00 = RUB 31.8) and effective date of November 30, 2016, to convert a portion of the Series 2 Ruble Bonds into a synthetic US dollar borrowing, at a fixed rate of 7.5%. This swap was designated as a cash flow hedge to hedge a portion (RUB 3.3 Billion or an 80% hedge relationship) of the foreign exchange risk arising from the Series 2 Semi‐annual ruble interest payments and ruble principal amount due at maturity starting November 30, 2016 to August 11, 2020.

FORWARD STRIP CONTRACTS

On September 18 and 23, 2013, the Corporation entered into a number of cross currency interest rate swaps and forward strip contracts with the economic objective of managing the foreign exchange and interest rate risks of the Corporation. The forward strip contracts and associated hedging relationship is as follows:

Forward strip contracts with notional values of RUB 29.4 million / $0.8 million (fixed at an exchange rate of $1.00 = RUB 35.0) to fix RUB 29.4 million of the total interest payments of the Series 2 Ruble Bonds into US dollars. On October 1, 2013, these forward strip contracts, together with 54% or RUB 7.7 billion of the original cross currency interest rate swap entered into on December 7, 2011, were designated as a cash flow hedge against a portion of the foreign exchange risk arising from the Series 2 semi – annual ruble interest payments from October 1, 2013 to February 14, 2017 and the principal payment (see Note 16.1).

CROSS CURRENCY INTEREST RATE SWAPS NOT DESIGNATED IN ANY HEDGE RELATIONSHIPS

On September 18, 2013, the Corporation entered into a cross currency interest rate swap with a notional amount of RUB 7.7 billion / $238.2 million (fixed at an exchange rate of $1.00 = RUB 32.2) and effective date of February 17, 2017, to convert a portion (RUB 7.7 billion) of the Series 2 Ruble Bonds into a synthetic US dollar floating borrowing (3 month US LIBOR interest rate plus a spread of 4.85%). As noted in Note 16, on August 23, 2013, the Corporation redeemed RUB 11.8 billion of the series 1 Ruble Bonds, resulting in the original swap being de‐designated from the hedging relationship. Management decided not to designate 29% or RUB 4.1 billion of the original swap in any hedging relationship.



26 FAIR VALUE MEASUREMENT (continued) The following table illustrates the movement in the Ruble Bonds and the Swap, and the effect of the application of hedge accounting on the financial results.

DECEMBER 31, 2013

RUBLE BONDS (NOTE 16)

SWAP (ASSET) / LIABILITY

(NOTE 26)

CASH FLOW HEDGING RESERVE

(NOTE 22)

INCOME STATEMENT

(LOSS) / GAIN US$m US$m US$m US$mOpening balance 466.7 (9.8) 4.1 ‐Issued 380.7 ‐ ‐ ‐Interest accrued 45.2 (12.4) ‐ (32.8)Interest paid (34.3) 11.5 ‐ ‐Repaid (359.4) ‐ ‐ ‐Transaction costs, amortized 2.2 ‐ ‐ (2.2)Fair value adjustment relating to hedged risk (Note 26) (0.2) ‐ ‐ 0.2Unrealized gain recognized in the income statement ‐ 0.1 ‐ (0.1)Realized fair value reclassified to income statement ‐ ‐ (4.3) 4.3Foreign exchange (33.8) (6.7) 36.6 3.9Revaluation of the swaps ‐ 40.6 (34.9) (5.7)

Closing balance 467.1 23.3 1.5 (32.4) DECEMBER 31, 2012

RUBLE BONDS (NOTE 16)

SWAP (ASSET) / LIABILITY

(NOTES 26)

CASH FLOW HEDGING RESERVE

(NOTE 22)

INCOME STATEMENT

(LOSS) / GAIN US$m US$m US$m US$mOpening balance 441.7 15.5 (2.0)Transaction costs, amortized 1.4 ‐ ‐ (1.4)Interest accrued 44.7 (13.1) ‐ (31.6)Interest paid (43.7) 11.8 ‐Foreign exchange 22.6 1.3 (18.0) (5.9)Revaluation of the swaps ‐ (25.3) 24.1 1.2

Closing balance 466.7 (9.8) 4.1 (37.7)

(II) FOREIGN EXCHANGE RISK The foreign exchange risk relates to the risk that the value of financial commitments, recognized assets or liabilities will fluctuate due to changes in foreign currency rates. The Corporation is primarily exposed to foreign currency risk through the following monetary assets and monetary liabilities denominated in currencies other than US dollars as at December 31, 2013 and 2012:

MONETARY ASSETS MONETARY LIABILITIES

DEC 31, 2013 DEC 31, 2012 DEC 31, 2013 DEC 31, 2012 US$M US$M US$M US$MCanadian dollar 270.8 2.6 238.5 231.2Australian dollar 2.5 10.4 0.2 0.8Kazakhstan tenge 4.4 1.6 ‐ ‐Euro 0.5 0.3 ‐ 0.4Ruble 17.5 0.1 467.1 466.7

295.7 15.0 705.8 699.1



26 FAIR VALUE MEASUREMENT (continued)

The following table shows the effect on earnings and other comprehensive income after tax as at December 31, 2013 and 2012 of a 10% appreciation in the foreign currencies against the US dollar on the above‐mentioned financial and non‐financial assets and liabilities of the Corporation.

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m Other comprehensive income 189.0 199.3 Net earnings ‐ ‐

A 10% depreciation in exchange rates would have the exact opposite effect on other comprehensive income and net earnings. (III) CREDIT RISK Credit risk is primarily associated with trade receivables, and to a lesser extent, cash and cash equivalents, restricted cash, loans receivable and asset retirement funds.

The Corporation closely monitors its financial assets and does not have any significant concentration of credit risk. The Corporation sells its products exclusively to organizations with strong credit ratings. Cash and cash equivalents are comprised of financial instruments issued by international financial institutions and companies with high investment‐grade ratings. These investments mature at various dates.

The Corporation entered into a cross currency interest rate swap for the outstanding Ruble Bonds. The Corporation is exposed to counterparty credit risk in situations where the fair value of the Swap is in the Corporation’s favour.

The Corporation's maximum exposure to credit risk at the balance sheet date is as follows:

DEC 31, 2013 DEC 31, 2012

NOTES US$m (NOTE 31)

US$m Cash and cash equivalents and restricted cash 6 440.6 442.0 Trade receivables 7 21.1 55.1 Loans receivable 12 105.8 77.7 Financial derivative asset 26 2.2 9.8 Asset retirement fund 13 44.9 44.7

614.6 629.3

(IV) LIQUIDITY RISK The Corporation has a cash forecast and budgeting process in place to assist with the determination of funds required to support the Corporation's operating requirements on an ongoing basis and its expansion plans. The Corporation manages liquidity risk through the management of its capital structure and financial leverage as outlined in Note 25.

The following table summarizes the contractual maturities of the Corporation's significant financial liabilities and capital commitments, including contractual obligations:

LESS THAN 1 TO 3 4 TO 5 AFTER 5 1 YEAR YEARS YEARS YEARS TOTAL Operating lease obligations 1.8 2.0 ‐ ‐ 3.8 Capital commitments (1) 35.9 ‐ ‐ ‐ 35.9 Trade and other payables (1) 51.2 ‐ ‐ ‐ 51.2 Interest bearing liabilities (1) 65.1 206.4 415.4 459.0 1,145.9 Interest payable on financial liabilities (1) 15.2 ‐ ‐ ‐ 15.2 Financial derivatives (1):

Inflows (46.4) (896.7) (60.4) (459.0) (1,462.5)Outflows 34.1 891.5 38.3 432.3 1,396.2

2010 Debentures (1) 216.3 31.9 ‐ ‐ 248.2

373.2 235.1 393.3 432.3 1,433.9 (1) Cash flows are converted at year end closing exchange rates.



26 FAIR VALUE MEASUREMENT (continued) The Corporation has interests in joint ventures, and is responsible for partial funding of these joint ventures pursuant to the terms of the joint venture agreements. The Corporation does not have direct liquidity risk for liquidity of these joint ventures. The Corporation can only utilize cash generated by the joint ventures when the joint ventures pay dividends.

Operating leases relate to leases of land and office space with terms between 1 and 4 years. The Corporation does not have an option to purchase the lease land at the expiry of the lease periods. The lease payments recognized as an expense include the minimum lease payments of $1.4 million, (2012: $1.2 million), offset with‐sublease payments received of $0.1 million (2012: $0.1 million).

(V) INTEREST RATE RISK

The Corporation is exposed to interest rate risk on its outstanding borrowings and short‐term investments. The risk is managed by monitoring and raising the majority of debt under central borrowing programs. The Corporation has entered into a cross currency interest rate swap to convert a certain portion of its Ruble Bonds into US dollar fixed interest rate exposure.

A 100 basis point change in the interest rate would decrease the Corporation's net earnings as follows:

DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m

A 100 basis point appreciation in interest rates, with all other variables held constant 4.6 4.7

A 100 basis point depreciation in the interest rate would have the exact opposite effect on net earnings. (VI) COMMODITY PRICE RISK

The Corporation is exposed to price risk with respect to commodity prices. The Corporation does not hedge its exposure to price risk, other than having market related pricing structures in the long‐term sales contracts, which the Corporation has entered into. Increases in uranium prices would have a positive impact on profitability given that the majority of the Corporation's sales contracts are priced based on market values for uranium.

27 SUBSIDIARIES Details on the Corporation’s significant directly owned subsidiaries as at December 31, 2013 are as follows:

SUBSIDIARIES COUNTRY OF INCORPORATION PRINCIPAL ACTIVITY STAGE INTEREST

Uranium One Americas, Inc United States of America Uranium mining Production 100%

Uranium One USA Inc United States of America Uranium mining Production 100%

Uranium One Australia Australia Uranium mining Care & maintenance 100%



28 SEGMENTED INFORMATION Information reported to the Corporation’s chief operating decision maker for the purposes of resource allocation and assessment of segment performance is primarily by operating mine or mineral property and its location. The following financial information is presented by operating segment and is reconciled to these condensed consolidated financial statements. The proportionate share of the Corporation's reportable operating segments is summarized in the table below:

(a) YEAR ENDED DECEMBER 31, 2013:

REVENUES(1) OPERATING

EXPENSE

DEPRECIATION EXPLORATION

EXPENSE

NET FINANCE

COSTS

INCOME TAX (EXPENSE) / RECOVERY

NET EARNINGS /

(LOSS) US$m US$m US$m US$m US$m US$m US$m

Kazakhstan Akbastau Mine 75.1 (27.7) (30.2) ‐ (2.3) (3.0) 10.6 Akdala Mine 89.4 (32.3) (20.4) ‐ (0.1) (5.7) 31.2 South Inkai Mine 140.6 (59.8) (33.9) ‐ (0.1) (5.3) 42.3 Karatau Mine 96.6 (29.7) (39.4) ‐ (3.0) (4.2) 16.4 Zarechnoye Mine 44.1 (29.7) (24.5) ‐ (2.9) 2.2 (11.4)Kharasan Mine 25.4 (11.3) (5.7) ‐ (2.4) (0.6) 7.6

United States Willow Creek Mine 68.0 (32.1) (35.1) ‐ (0.7) ‐ 2.1 ISR projects ‐ ‐ ‐ (1.0) ‐ ‐ (0.5)Conventional mining projects ‐ ‐ ‐ ‐ ‐ ‐ (2.2)

Australia Honeymoon Project (2) ‐ ‐ ‐ (1.6) 0.3 ‐ (79.8)

Corporate and other(3) 120.0 (88.3) ‐ (89.3) (6.2) (57.6)

Sub‐total (5) 659.2 (310.9) (189.2) (2.6) (100.5) (22.8) (41.3)

Attributable to joint ventures(4) (440.0) 190.5 153.5 ‐ 10.8 16.6 ‐ Intercompany purchases from joint ventures 167.2 (167.2) ‐ ‐ ‐ ‐ ‐

386.4 (287.6) (35.7) (2.6) (89.7) (6.2) (41.3)

(1) Excluding the “Corporate and other” segment, revenues represent the Corporation’s proportionate share of sales from its operations. In addition, the gross profit of material sold by the Corporation is allocated back to the operations from which the material was sourced, above the sub‐total line. The Corporation then eliminates its proportionate share of the joint ventures’ revenues. The cost of material sold by the Corporation which was sourced from its joint ventures is added back in the line described as “intercompany purchases from joint ventures”, in order to properly reflect revenue on a gross basis.

(2) The Honeymoon Project was placed on care and maintenance during the year ended December 31, 2013. (3) Corporate and other includes Toronto head office and other administrative offices. The revenue and associated cost of sales of material that has not been

sourced from one of the Corporation’s operations is shown as part of the corporate and other segment. (4) Represents the elimination of the Corporation’s proportionate share of the joint ventures’ revenues and related expenses. (5) The sub‐total line captures the revenues and related expenses that management of the Corporation focuses on to monitor and evaluate performance of its

business, and is consistent with the results that would be reported under proportionate consolidation accounting.



28 SEGMENTED INFORMATION (continued) (b) YEAR ENDED DECEMBER 31, 2012 (NOTE 31):

REVENUES(1)OPERATING

EXPENSE

DEPRECIATION EXPLORATION

EXPENSE

NET FINANCE

COSTS

INCOME TAX(EXPENSE) / RECOVERY

NET EARNINGS

/ (LOSS) US$m US$m US$m US$m US$m US$m US$m

Kazakhstan Akbastau Mine 69.1 (18.0) (21.5) ‐ (2.9) (4.9) 20.9 Akdala Mine 116.7 (30.0) (22.2) ‐ 0.2 (11.2) 53.0 South Inkai Mine 156.2 (55.6) (31.9) ‐ 0.5 (8.9) 59.2 Karatau Mine 133.6 (31.4) (42.4) ‐ (0.2) (10.8) 47.2 Zarechnoye Mine 51.3 (26.0) (20.1) ‐ (3.0) 14.1 (69.7)Kharasan Mine(2) 21.4 (12.8) (5.5) ‐ (1.7) 0.4 2.3

United States Willow Creek Mine (3) 14.6 (13.1) (7.6) ‐ (0.3) ‐ (6.3)ISR projects ‐ ‐ ‐ (0.9) ‐ ‐ (1.6)Conventional mining projects ‐ ‐ ‐ (0.7) ‐ ‐ (2.1)

Australia Honeymoon Project ‐ ‐ ‐ (2.0) (0.4) ‐ 15.7

Corporate and other (4) 60.8 (58.0) ‐ ‐ (56.4) 4.3 (215.3)

Sub‐total (5) 623.7 (244.9) (151.2) (3.6) (64.2) (17.0) (96.7)Attributable to joint ventures (6) (513.4) 173.8 142.8 ‐ 7.3 21.3 ‐ Intercompany purchases from joint ventures 243.1 (243.1) ‐ ‐ ‐ ‐ ‐

353.4 (314.2) (8.4) (3.6) (56.9) 4.3 (96.7)

(1) Excluding the “Corporate and other” segment, revenues represent the Corporation’s proportionate share of sales from its operations. In addition, the gross profit of material sold by the Corporation is allocated back to the operations from which the material was sourced, above the sub‐total line. The Corporation then eliminates its proportionate share of the joint ventures’ revenues. The cost of material sold by the Corporation which was sourced from its joint ventures is added back in the line described as “intercompany purchases from joint ventures”, in order to properly reflect revenue on a gross basis.

(2) The Kharasan Mine was successfully commissioned during the period ended September 30, 2012. (3) The Willow Creek Mine was successfully commissioned during the period ended June 30, 2012. The mine was previously disclosed within ISR projects. (4) Corporate and other includes Toronto head office and other administrative offices. The revenue and associated cost of sales of material that has not been

sourced from one of the Corporation’s operations is shown as part of the corporate and other segment. (5) Represents the elimination of the Corporation’s proportionate share of the joint ventures’ revenues and related expenses. (6) The sub‐total line captures the revenues and related expenses that management of the Corporation focuses on to monitor and evaluate performance of its




28 SEGMENTED INFORMATION (continued) AS AT DECEMBER 31, 2013:

MINERAL INTERESTS PROPERTY, PLANT TOTAL DEFERRED TAX TOTAL CAPITAL

AND EQUIPMENT ASSETS LIABILITIES LIABILITIES ADDITIONS

US$m US$m US$m US$m US$m Kazakhstan

Akbastau Mine 590.5 748.4 104.6 134.8 21.2 Akdala Mine 110.6 141.8 14.7 10.8 14.4 South Inkai Mine 354.9 420.5 54.7 83.7 28.3 Karatau Mine 423.7 470.5 68.8 144.3 25.0 Zarechnoye Mine 119.3 164.0 15.4 72.0 14.5 Kharasan Mine 155.2 187.7 14.3 89.6 4.3

United States Willow Creek Mine 107.8 168.7 ‐ 17.7 11.0 ISR projects 60.0 63.7 ‐ 0.5 2.3 Conventional mining projects 21.8 30.9 ‐ 6.3 0.1

Australia Honeymoon Project (1) 13.5 22.0 ‐ 25.4 30.0

Corporate and other(2) 8.5 591.5 1.2 1,051.3 ‐

Sub‐total (3) 1,965.8 3,009.7 273.7 1,636.4 151.1 Attributable to joint ventures (1,754.2) (508.6) (272.5) (508.6) (107.7)

211.6 2,501.1 1.2 1,127.8 43.4

(1) The Honeymoon Project was placed on care and maintenance during the year ended December 31, 2013. (2) Corporate and other includes Toronto head office and other administrative offices. (3) The sub‐total line captures the revenues and related expenses that management of the Corporation focuses on to monitor and evaluate performance of its

business, and is consistent with the results that would be reported under proportionate consolidation accounting. AS AT DECEMBER 31, 2012 (NOTE 31):

MINERAL INTERESTS PROPERTY, PLANT TOTAL DEFERRED TAX TOTAL CAPITAL

AND EQUIPMENT ASSETS LIABILITIES LIABILITIES ADDITIONS US$m US$m US$m US$m US$m Kazakhstan

Akbastau Mine 608.8 779.6 111.1 159.5 22.6 Akdala Mine 113.8 176.2 18.0 13.0 12.6 South Inkai Mine 369.7 455.5 58.4 87.0 23.6 Karatau Mine 449.3 487.8 74.5 115.5 17.8 Zarechnoye Mine 131.5 177.8 18.4 72.7 16.9 Kharasan Mine (1) 156.0 182.3 14.6 93.8 16.0

United States Willow Creek Mine (2) 118.7 159.8 ‐ 14.2 29.4 ISR projects 57.7 61.4 ‐ 0.5 1.0 Conventional mining projects 22.0 39.2 ‐ 6.1 ‐

Australia Honeymoon Project 70.6 82.0 ‐ 29.9 29.4

Corporate and other (3) 8.8 635.9 ‐ 778.3 3.8

Sub‐total (4) 2,106.9 3,237.5 295.0 1,370.5 173.1

Attributable to joint ventures (1,829.0) (512.3) (295.0) (512.3) (109.5)

277.9 2,725.2 ‐ 858.2 63.6

(1) The Kharasan Mine was successfully commissioned during the period ended September 30, 2012. (2) The Willow Creek Mine was successfully commissioned during the period ended June 30, 2012. The mine was previously disclosed within ISR projects. (3) Corporate and other includes Toronto head office and other administrative offices. (4) The sub‐total line captures the revenues and related expenses that management of the Corporation focuses on to monitor and evaluate performance of its




29 RELATED PARTY TRANSACTIONS Transactions with related parties OPERATING ACTIVITIES SALES (1) PURCHASES (2) DEC 31, 2013 DEC 31, 2012 DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m US$m (NOTE 31)

US$m ARMZ and affiliates 269.0 119.5 68.4 84.7

269.0 119.5 68.4 84.7

OUTSTANDING BALANCES TRADE RECEIVABLES TRADE PAYABLES DEC 31, 2013 DEC 31, 2012 DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m US$m (NOTE 31)

US$m ARMZ and affiliates 5.0 10.3 1.0 0.6Joint ventures ‐ ‐ ‐ 22.5

5.0 10.3 1.0 23.1

LOANS

LOANS FROM RELATED PARTIES INTEREST ON LOANS FROM

RELATED PARTIES DEC 31, 2013 DEC 31, 2012 DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m US$m (NOTE 31)

US$m ARMZ affiliates 7.1 2.7 0.5 0.2

7.1 2.7 0.5 0.2

LOANS TO RELATED PARTIES

INTEREST ON LOANS TO RELATED PARTIES

DEC 31, 2013 DEC 31, 2012 DEC 31, 2013 DEC 31, 2012

US$m (NOTE 31)

US$m US$m (NOTE 31)

US$m Mantra 73.0 45.7 6.4 2.0SKZ‐U 26.4 30.1 ‐ ‐

99.4 75.8 6.4 2.0 (1) Certain of the joint ventures made sales to ARMZ in the amount of $269.0 million in 2013 (2012: $119.5 million). Revenues and cost of sales associated with

these transactions are included in the joint venture segments disclosed in Note 28. (2) The Corporation purchased materials from ARMZ and delivered into its contracts. These transactions amounted to $65.6 million in 2013

(2012: $67.8 million). Revenue and cost of sales associated with these transactions are disclosed in the line “Corporate and other” in Note 28. The remaining balance of purchases is comprised of transaction between ARMZ affiliates and certain joint ventures.

The Corporation purchases material from certain of its joint ventures. The value of these transactions was $167.2 million in 2013 (2012: $243.1 million).

Sales to and purchases from related parties are made pursuant to arm’s length transactions at market prices and on normal commercial

terms. Outstanding balances at year end are unsecured and settlement occurs in cash. Except for the Mantra loan described in Note 12, no guarantees are provided to or received from any related party receivables or payables. No allowance for doubtful accounts has been recognized in relation to any outstanding balances and no expense has been recognized in

respect of bad or doubtful debts due from related parties.



29 RELATED PARTY TRANSACTIONS (continued) Compensation of key management personnel

The compensation of directors and other key members of management personnel during the year was as follows:

DEC 31, 2013

US$m DEC 31, 2012

US$m Short term benefits 4.9 4.9Short term incentive 1.5 2.1Retention payments 4.3 0.8Share based payments 4.0 2.7Termination benefits 2.9 1.8

17.6 12.3

30 CONTINGENCIES Uranium One Americas, Inc. (previously Energy Metals Corporation) acquisition The Corporation assumed all of the obligations of Uranium One Americas, Inc. and its subsidiaries arising under certain option and joint venture agreements with third parties. At December 31, 2013, the assumed obligations under the contingent share rights agreements were a total of 57,500 common shares (2012: 57,500 common shares). Uranium One has the option to settle this agreement by either issuing shares or a cash payment. Uranium One will exercise its option to cash settle the agreement if it is exercised and the amount due under this agreement is $400,000. No contingent shares were issued or lapsed during the years ended December 31, 2013 and 2012.



31 IFRS 11 ADOPTION


The Corporation has re‐evaluated its involvement in its joint arrangements and has reclassified the investments as joint ventures. As a result of the reclassification, the investments are now recognized by applying the equity method, compared to proportionate consolidation applied in the past. The change had a significant impact on the recognized assets, liabilities of the Corporation.

The following tables summarize the adjustments and reclassifications made to the Corporation’s balance sheet, income statement and cash flows.

INCOME STATEMENT RECONCILIATION FOR YEAR ENDED DECEMBER 31, 2012

PRE‐IFRS 11IFRS 11

REALLOCATION RECLASSIFICATIONS(1)AFTER IFRS 11

US$m US$m US$m US$mRevenues 562.9 (270.3) 60.8 353.4Cost of sales

Operating expense (186.9) (69.3) (58.0) (314.2)Depreciation (151.2) 142.8 ‐ (8.4)

Earnings from mine operations 224.8 (196.8) 2.8 30.8 Share of results from joint ventures ‐ 78.8 ‐ 78.8General and administrative (45.7) ‐ ‐ (45.7)Impairment (196.3) 94.0 ‐ (102.3)Exploration expense (3.6) ‐ ‐ (3.6)Care and maintenance (1.5) ‐ ‐ (1.5)

Operating loss (22.3) (24.0) 2.8 (43.5)Finance income 7.2 (1.5) ‐ 5.7Finance expense (71.4) 8.8 ‐ (62.6)Foreign exchange loss (12.8) 2.2 ‐ (10.6)Corporate development expense (2.7) ‐ ‐ (2.7)Gain on Business Combination 17.2 ‐ ‐ 17.2Other 5.1 (6.8) (2.8) (4.5)

Loss before income taxes (79.7) (21.3) ‐ (101.0)Current and deferred income tax expense / (recovery) (17.0) 21.3 ‐ 4.3

Net loss (96.7) ‐ ‐ (96.7)



31 IFRS 11 ADOPTION (continued) BALANCE SHEET RECONCILIATION JANUARY 1, 2012

PRE‐IFRS 11 IFRS 11

REALLOCATION RECLASSIFICATIONS(1)AFTER IFRS 11

US$m US$m US$m US$mASSETS Current assets Cash and cash equivalents 607.5 (46.7) ‐ 560.8Restricted cash 11.5 ‐ ‐ 11.5Dividends receivable ‐ 35.5 ‐ 35.5Trade and other receivables 138.1 (116.2) ‐ 21.9Inventories 91.2 (90.5) ‐ 0.7Loans receivable 0.5 ‐ ‐ 0.5Financial derivatives ‐ ‐ 0.8 0.8Other assets 1.1 (0.2) (0.8) 0.1

849.9 (218.1) ‐ 631.8

Non‐current assets Mineral interests, property, plant and equipment 2,205.3 (1,977.3) ‐ 228.0Goodwill 150.7 (150.7) ‐ ‐Investments in joint ventures ‐ 1,844.5 ‐ 1,844.5Loans receivable 26.3 4.9 ‐ 31.2Other assets 71.1 (23.5) ‐ 47.6

2,453.4 (302.1) ‐ 2,151.3

Total assets 3,303.3 (520.2) ‐ 2,783.1

LIABILITIES Current liabilities Trade and other payables 58.3 (23.5) ‐ 34.8Current tax payable 11.4 ‐ ‐ 11.4Interest bearing liabilities 52.1 (49.2) ‐ 2.9Other liabilities 13.2 (12.9) ‐ 0.3

135.0 (85.6) ‐ 49.4

Non‐current liabilities Interest bearing liabilities 516.3 (77.5) ‐ 438.8Convertible debentures 214.4 ‐ ‐ 214.4Provisions 79.5 (20.1) ‐ 59.4Deferred tax liabilities 336.9 (336.9) ‐ ‐Financial derivatives ‐ ‐ 16.3 16.3Other liabilities 27.6 (0.1) (16.3) 11.2

1,174.7 (434.6) ‐ 740.1

Total liabilities 1,309.7 (520.2) ‐ 789.5

EQUITY Share capital 5,325.4 ‐ ‐ 5,325.4Reserves 193.0 ‐ ‐ 193.0Deficit (3,524.8) ‐ ‐ (3,524.8)

1,993.6 ‐ ‐ 1,993.6

Total equity and liabilities 3,303.3 (520.2) ‐ 2,783.1



31 IFRS 11 ADOPTION (continued) BALANCE SHEET RECONCILIATION DECEMBER 31, 2012


REALLOCATION

RECLASSIFICATIONS(1) AFTER IFRS 11

US$m US$m US$m US$mASSETS Current assets Cash and cash equivalents 443.5 (12.8) ‐ 430.7Restricted cash 11.3 ‐ ‐ 11.3Trade and other receivables 199.3 (138.9) ‐ 60.4Inventories 128.5 (102.9) ‐ 25.6Loans receivable 4.4 ‐ ‐ 4.4Financial derivatives ‐ ‐ 0.9 0.9Other assets 22.4 (0.4) (0.9) 21.1

809.4 (255.0) ‐ 554.4

Non‐current assets Mineral interests, property, plant and equipment 2,106.9 (1,829.0) ‐ 277.9Goodwill 131.3 (131.3) ‐ ‐Investment in associate 47.7 ‐ ‐ 47.7Investments in joint ventures ‐ 1,718.0 ‐ 1,718.0Loans receivable 67.6 5.7 ‐ 73.3Financial derivatives ‐ ‐ 8.9 8.9Other assets 74.6 (20.7) (8.9) 45.0

2,428.1 (257.3) ‐ 2,170.8

Total assets 3,237.5 (512.3) ‐ 2,725.2

LIABILITIES Current liabilities Trade and other payables 87.8 (20.0) ‐ 67.8Current tax payable 1.3 (1.3) ‐ ‐Interest bearing liabilities 51.3 (48.3) ‐ 3.0Other liabilities 12.9 (0.9) ‐ 12.0

153.3 (70.5) ‐ 82.8

Non‐current liabilities Interest bearing liabilities 587.7 (124.0) ‐ 463.7Convertible debentures 231.1 ‐ ‐ 231.1Provisions 85.6 (22.0) ‐ 63.6Deferred tax liabilities 295.0 (295.0) ‐ ‐Other liabilities 17.8 (0.8) ‐ 17.0

1,217.2 (441.8) ‐ 775.4

Total liabilities 1,370.5 (512.3) ‐ 858.2

EQUITY Share capital 5,325.4 ‐ ‐ 5,325.4Reserves 163.1 ‐ ‐ 163.1Deficit (3,621.5) ‐ ‐ (3,621.5)

1,867.0 ‐ ‐ 1,867.0

Total equity and liabilities 3,237.5 (512.3) ‐ 2,725.2

(1) Upon finalizing the IFRS adjustments, the Corporation reclassified certain balances on the consolidated income statement and balance sheet to conform to the current presentation of the consolidated financial statements. These reclassifications had no impact on the net loss for the comparative periods. The Corporation has determined that these amounts were not material to its consolidated financial statements for any prior interim or annual periods.



31 IFRS 11 ADOPTION (continued) CASH FLOW STATEMENT RECONCILIATION FOR THE YEAR ENDED DECEMBER 31, 2012


REALLOCATION RECLASSIFICATIONS AFTER IFRS 11 US$m US$m US$m US$m

Net loss (96.7) ‐ ‐ (96.7) Items not affecting cash: ‐Share of results from joint ventures (78.8) ‐ (78.8)‐ Depreciation 151.2 (142.8) ‐ 8.4‐ Stock option expense 6.0 ‐ ‐ 6.0‐ Impairment 196.3 (94.0) ‐ 102.3‐ Finance income (7.2) 1.5 ‐ (5.7)‐ Finance expense 71.4 (8.8) ‐ 62.6‐ Gain on business combination (17.2) ‐ ‐ (17.2)‐ Unrealized foreign exchange loss / (gain) 9.1 1.5 ‐ 10.6‐ Current income tax expense 53.6 (57.9) ‐ (4.3)‐ Deferred tax recovery (36.6) 36.6 ‐ ‐‐ Other (5.7) (7.6) ‐ (13.3)Movement in non‐cash working capital (24.3) 40.8 ‐ 16.5

Operating cash flows before interest and tax 299.9 (309.5) ‐ (9.6)Cash tax paid (68.1) 61.0 ‐ (7.1)Cash interest paid (51.4) 6.6 ‐ (44.8)

Cash flows from / (used in) operating activities 180.4 (241.9) ‐ (61.5)

Additions of mineral interests, property, plant and equipment

(165.9) 93.0 ‐ (72.9)

Cash payments for other assets (34.9) 23.3 ‐ (11.6)Investment in associate (150.0) ‐ ‐ (150.0)Joint venture charter capital contribution ‐ (11.8) ‐ (11.8)Loans to related parties (39.6) ‐ ‐ (39.6)Loans advanced to joint ventures (3.6) (0.9) ‐ (4.5)Interest received 6.0 (2.8) ‐ 3.2Dividends received ‐ 220.0 ‐ 220.0Other 3.5 (2.4) ‐ 1.1

Cash flows (used in) / from investing activities (384.5) 318.4 ‐ (66.1)

External loans received by joint ventures, net of issue costs

77.2 (77.2) ‐ ‐

External loans repaid by joint ventures (32.4) 32.4 ‐ ‐Settlement of unfavorable contract (7.8) 7.8 ‐ ‐Advances received 3.6 (3.6) ‐ ‐

Cash flows from financing activities 40.6 (40.6) ‐ ‐

Effects of exchange rate changes on cash and cash equivalents

(0.7) (1.8) ‐ (2.5)

Net (decrease) / increase in cash and cash equivalents (164.2) 34.1 ‐ (130.1)

Cash and cash equivalents at the beginning of the year 619.0 (58.2) ‐ 560.8

Cash and cash equivalents at the end of the year 454.8 (24.1) ‐ 430.7



32 EVENTS AFTER REPORTING PERIOD

i) On January 2, 2014, the Corporation completed the repurchase of C$227,461,000 of the aggregate principal amount of its 2010 Debentures, representing 87.49% of the outstanding aggregate principal amount of the 2010 Debentures, pursuant to its offer to repurchase the 2010 Debentures announced on November 15, 2013. The repurchased debentures have been canceled with the remaining portion being held until its maturity on March 13, 2015.

ii) On February 11, 2014, The National Bank of Kazakhstan stated that the Tenge will trade at US$ 1.00 = KZT 185.00, within a range of 3 Tenge on either side of the target rate, a devaluation of 19% from the previous target rate of US$1.00 = KZT 150.00. The functional currency of the Kazakhstan joint ventures is the Tenge. As such, the Corporation incurs most of its operating costs in Tenge while its revenues are denominated in US$. The Tenge devaluation is anticipated to have an effect on the Corporation and the amount recorded in its foreign currency translation reserve.

iii) On March 6, 17 and 20, United States President Obama issued Executive Orders imposing visa restrictions and freezing the property and

interests in property in the U.S. of certain persons designated under those Orders as contributing to the situation in Ukraine. The European Union has adopted regulations imposing similar restrictions on certain designated persons considered responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. The Government of Canada has imposed similar sanctions pursuant to the Special Economic Measures (Russia) Regulations of March 17, which were amended on March 19 and again on March 21. As most recently amended, these regulations generally freeze the assets of certain designated persons and prohibit any person in Canada or any Canadian citizen outside Canada from, among other things, dealing in any property of any designated person, facilitating financial transactions relating to such dealings or providing goods or financial or related services to or for the benefit of designated persons. To date, the US, EU and Canada have under the foregoing orders and regulations designated a number of Russian and Ukrainian nationals, and the US and Canada have designated one Russian financial institution. The Corporation’s operations have not been impacted by the foregoing orders or regulations or any designations made thereunder and the Corporation continues to carry on business as usual.

iv) On March 26, 2014, the Special Inter‐District Economic Court for the City of Astana (Republic of Kazakhstan) issued an order having the effect of invalidating the original transfers in 2004 and 2005 from Kazatomprom to the Company’s Betpak Dala and Kyzylkum joint ventures of the subsoil use contracts for the Akdala, South Inkai and Kharasan fields. While the proceedings before the Court were held behind closed doors and only limited information has been made available, Uranium One understands that the ruling was made orally in proceedings brought by the State Prosecutor of the Saryark District of the City of Astana against Betpak Dala, Kyzylkum and Kazatomprom, among other parties, and relates to events which occurred two to three years before Uranium One acquired its interest in the two joint ventures. Under Kazakh law, the order is automatically stayed and may not be enforced for a period of 15 days and such additional time as it may take to hear an appeal therefrom and is also subject to further appeals. Both joint ventures intend to vigorously defend themselves in the Kazakhstan courts and plan to file notices appealing the order. The Company considers the lawsuit to be without merit. Neither Uranium One nor its shareholders are parties to the proceedings. Kazatomprom, the Company’s Kazakh state‐owned joint venture partner in Kazakhstan, has, however, assured the Company and its shareholders that their legal rights and economic interests will be fully preserved. The Company and its shareholders are now in discussions with Kazatomprom with a view to obtaining new subsoil use rights to the Akdala, South Inkai and Kharasan fields in the event that the order becomes effective. While those discussions are underway, and in order to mitigate the impact on the Company’s interests, Kazatomprom, Betpak Dala and Kyzylkum are putting in place temporary arrangements designed to ensure that, notwithstanding the court order, Betpak Dala and Kyzylkum carry on normal business operations and the rate of return to the Company from existing operations is unaffected during this period. The Company’s shareholder, Uranium One Holding N.V., and Kazatomprom have signed protocols to this effect and are taking the steps necessary to ensure that scheduled production and deliveries to customers are not affected. The Company and its shareholders have reserved their rights to take all such steps, and exercise all such remedies available to them, including proceedings under international investment treaties, as they may consider necessary or advisable to protect their legal rights and economic interests in this matter.

URANIUM ONE INC Management’s Discussion and Analysis 1

Management’s Discussion and Analysis Year Ended December 31, 2013 Set out below is a review of the activities, results of operations and financial condition of Uranium One Inc. (“Uranium One”) and its subsidiaries and joint ventures (collectively, the “Corporation”) for the year ended December 31, 2013, together with certain trends and factors that are expected to impact its 2014 financial year. Information herein is presented as of March 31, 2014 and should be read in conjunction with the audited annual consolidated financial statements of the Corporation for the year ended December 31, 2013 and the notes thereto (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 International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”) (“IFRS” or “GAAP”). All amounts are in US dollars and tabular amounts are in millions, except where otherwise indicated. Canadian dollars are referred to herein as C$, Russian Rubles are referred to herein as Rubles or RUB, and Australian dollars are referred to herein as A$. The functional currency of Uranium One is the US dollar. All references herein to pounds are pounds of U3O8. The common shares of Uranium One were listed on the Toronto and Johannesburg stock exchanges (“TSX“ and “JSE”, respectively) until October 21 and 22, 2013, respectively. Uranium One’s unsecured convertible subordinated debentures due March 13, 2015 are listed on the TSX, its unsecured Ruble‐denominated bonds are listed on the Moscow Exchange in Russia and its senior secured notes are listed on the Luxembourg Stock Exchange. Additional information about the Corporation and its business and operations can be found in its continuous disclosure documents. These documents, including the Corporation’s annual information form, are filed with Canadian securities regulatory authorities and 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 and Other Information”.


Highlights

OPERATIONAL • Total attributable production during 2013 was a record 13.2 million pounds, 8% higher than total attributable production of

12.2 million pounds during 2012.

• The average total cash cost per pound sold of produced material was $16 per pound during 2013 compared to $16 per pound during 2012.

FINANCIAL • Attributable sales volumes of produced material for 2013 were 13.6 million pounds sold from the Corporation’s operations and joint

ventures compared to 11.7 million pounds sold during 2012.

• Headline revenue was $386.4 million in 2013, compared to $353.4 million in 2012. This includes revenue from produced and purchased material.

• Attributable revenues consistent with the Corporation’s segment reporting, which includes revenues from its interests in joint ventures, amounted to $659.2 million in 2013, compared to $623.7 million in 2012.

• The average realized sales price of produced material during 2013 was $40 per pound, compared to $48 per pound in 2012. The average

spot price in 2013 was $38 per pound compared to $49 per pound in 2012.

• Gross profit was $63.1 million during 2013, compared to gross profit of $30.8 million in 2012.

• Gross profit, including the Corporation’s share of gross profit from joint ventures, totaled $159.1 million in 2013, a 30.1% decrease compared to $227.6 million in 2012, primarily due to a decrease of 20% in the price of U3O8.

• The net loss for 2013 was $41.3 million or $0.04 per share, compared to net losses of $96.7 million or $0.10 per share for 2012.

• The adjusted net earnings for 2013 were $16.3 million or $0.02 per share, compared to adjusted net earnings of $65.1 million or $0.07 per share for 2012.

• During the third quarter of 2013, the carrying value of Honeymoon was written down by $67.8 million. The Corporation impaired the Honeymoon project due to continuing difficulties in the production process and issues in attaining design capacity, combined with high mine operation costs. Subsequently, the Corporation announced the suspension of production at its Honeymoon Project during the fourth quarter, and the Honeymoon operation was placed on a care and maintenance (C&M) program.

• During the fourth quarter of 2013 the Corporation distributed $381.3 million to its shareholders and did a share buy‐back of $16.8 million for a total distribution of $398.1 million.

CORPORATE • On January 13, 2013, the Corporation entered into a definitive agreement with JSC Atomredmetzoloto (“ARMZ”) under which the

Corporation would be taken private pursuant to a Plan of Arrangement (the “Going Private Transaction”). On March 7, 2013, the Corporation received security holder approval for the proposed Plan of Arrangement. The transaction was completed on October 18, 2013. All of the publicly held common shares of the Corporation not already owned by subsidiaries of ARMZ (which indirectly owned 51.4% of the Corporation’s outstanding common shares) were acquired by a subsidiary of ARMZ for a cash consideration of C$2.86 per share. Following the completion of the Going Private Transaction, and an internal reorganization by ARMZ’s parent corporation, Russia’s State Atomic Energy Company “Rosatom” (“Rosatom”) in December 2013, Uranium One is now a wholly‐owned indirect subsidiary of Rosatom and is no longer controlled by ARMZ.

• On August 23, 2013, the Corporation repurchased RUB 11.8 billion (US$359.4 million) aggregate principal amount of its 9.75% Series 1 Ruble Bonds due November 30, 2016. The Corporation also issued RUB 12.5 billion (US$380.7 million) aggregate principal amount of 10.25% Series 2 Ruble Bonds due August 20, 2020. This redemption resulted in RUB 2.5 billion (US$76.1 million) of the principal of the Series 1 Ruble Bonds remaining outstanding. The Corporation entered into six derivatives in October 2013 to economically hedge the Series 2 Ruble Bonds.

• On November 5, 2013, Uranium One announced an update of the existing mineral resource and reserve estimates for its operations, which showed that as at June 30, 2013, the total attributable proven and probable reserves at the Corporation’s operations in Kazakhstan, the United States, Australia and Tanzania increased by 139% compared to previous estimates, from 61.005 million lbs U3O8 (23,465 tonnes U) to 145.924 million lbs U3O8 (56,129 tonnes U), while the total attributable measured and indicated resources increased by 98%, from 111.641 million lbs U3O8 (42,942 tonnes U) to 221.079 million lbs U3O8 (85,038 tonnes U). The update included new resource and reserve estimates for the Corporation’s Akbastau and Karatau uranium mines in Kazakhstan based on the application of 3D modeling techniques to an extensive database of drilling information which was made available to the Corporation for the first time, which showed that (i) at Akbastau, the Corporation’s attributable share of proven and probable reserves increased by 354%, from 9.047 million lbs U3O8 (3,480 t U) to 41.12 million lbs U3O8 (15,817.5 t U), while the Company’s attributable share of measured and indicated resources increased by 286%, from 15.919 million lbs U3O8 (6,125 t U) to 61.476 million lbs U3O8 (23,647 t U), and (ii) at Karatau, the Corporation’s attributable share of proven and probable reserves increased by 674%, from 8.730 million lbs U3O8 (3,358 t U) to 67.52 million lbs U3O8 (25,971 t U), while the


Company’s attributable share of measured and indicated resources increased by 586%, from 12.102 million lbs U3O8 (4,661 t U) to 82.984 million lbs U3O8 (31,920 t U).

• On December 9, 2013, Uranium One gave notice to ARMZ of the termination of the Mantra Resources option agreement in respect of the

Mkuju River Project, which termination will be effective as of June 10, 2014.

• On December 13, 2013, the Corporation’s wholly‐owned subsidiary Uranium One Investments Inc. (“U1 Investments”) completed an offering, on a private placement basis to qualified institutional buyers in the U.S. and Europe, of $300.0 million aggregate principal amount of non‐convertible 6.25% Senior Secured Notes due December 13, 2018 (“Senior Secured Notes”). U1 Investments will pay interest semi‐annually on June 13 and December 13 of each year and is entitled to redeem all or a portion of the Senior Secured Notes on or after December 13, 2016. The Senior Secured Notes are guaranteed by Uranium One and certain of its subsidiaries and secured by pledges of certain of their assets. Net proceeds from this offering were made available to the Corporation for the repurchase of its 2010 Debentures and for general corporate purposes.

• On December 20, 2013 U1 Investments entered into a three year US$120 million revolving credit facility agreement (the “Revolving Credit Facility”) with a syndicate of lenders. The Revolving Credit Facility is guaranteed by Uranium One and certain of its subsidiaries, and secured by pledges of certain of their assets.

• On January 2, 2014, the Corporation completed the repurchase of C$227,461,000 aggregate principal amount of its outstanding 5.0% convertible unsecured subordinated debentures due March 13, 2015 (“2010 Debentures”), representing 87.49% of the outstanding aggregate principal amount of the 2010 Debentures, pursuant to an offer to repurchase the 2010 Debentures commenced on November 15, 2013, as required by the indenture governing the 2010 Debentures as a result of the completion of the Going Private Transaction. The repurchased 2010 Debentures have been cancelled.

• On January 6, 2014, the Corporation appointed Juliana L. Lam as Executive Vice President and Chief Financial Officer. Julie brings with her extensive senior‐level international financial management experience in diverse industries such as mining, manufacturing, services and distribution.

• On March 16, 2014, the Corporation appointed Feroz Ashraf as Executive Vice President and Chief Operating Officer. Feroz brings over 34 years of experience in the resource sector, including mining and metallurgy, oil and gas, and related downstream industries.

• On February 11, 2014, The National Bank of Kazakhstan stated that the Tenge will trade at US$ 1.00 = KZT 185.00, within a range of 3 Tenge on either side of the target rate, a devaluation of 19% from the previous target rate of US$1.00 = KZT 150.00. The functional currency of the Kazakhstan joint ventures is the Tenge. As such, the Corporation incurs most of its operating costs in Tenge while its revenues are denominated in US$. The Tenge devaluation is anticipated to have an effect on the Corporation and the amount recorded in its foreign currency translation reserve.

• The United States, European Union and Canada have recently issued orders or adopted regulations imposing sanctions in the form of visa restrictions and asset freezes on the property of certain designated persons considered to be responsible for the events in Ukraine. To date, the US, EU and Canada have designated a number of Russian and Ukrainian nationals, and the US and Canada have designated one Russian financial institution. The Corporation’s operations have not been impacted by the foregoing orders or regulations or any designations or determinations made thereunder and the Corporation continues to carry on business as usual.

• On March 26, the Special Inter‐District Economic Court for the City of Astana (Republic of Kazakhstan) issued an order having the effect of invalidating the original transfers in 2004 and 2005 to the Betpak Dala and Kyzylkum joint ventures of the subsoil use contracts for the Akdala, South Inkai and Kharasan fields. The order is being appealed by the joint ventures and is subject to a stay while the appeal is being heard. The Company and its shareholders are currently in discussions with Kazatomprom with a view to obtaining new subsoil use rights in the event that the order becomes effective. Kazatomprom, Betpak Dala and Kyzylkum are putting in place temporary arrangements designed to ensure that, notwithstanding the court order, Betpak Dala and Kyzylkum carry on normal business operations and the rate of return to the Company from existing operations is unaffected during this period. The Company’s shareholder, Uranium One Holding N.V., and Kazatomprom have signed protocols to this effect and are taking the steps necessary to ensure that scheduled production and deliveries to customers are not affected.

Outlook

• Total attributable production for 2014 is expected to be 12.4 million pounds.

• During 2014, the average cash cost per pound sold of produced material is expected to be approximately $18 per pound.

• The Corporation expects attributable sales of produced material to be approximately 12.4 million pounds in 2014.

• The Corporation expects to incur attributable capital expenditures in 2014 of $65 million for wellfield development and $8 million for plant and equipment, totalling $73 million for its assets in Kazakhstan and the United States.

• In 2014, general and administrative expenses, excluding non‐cash items, are expected to be approximately $32 million and exploration expenses are expected to be $1 million.


Key Statistics TOTAL ATTRIBUTABLE PRODUCTION Q4 2013 Q4 2012 FY 2013 FY 2012

Attributable commercial production (lbs)

Akdala 457,900 588,100 1,856,500 1,992,600

South Inkai 888,200 797,100 3,694,300 3,403,200

Karatau 766,900 779,500 2,749,200 2,775,500

Akbastau 480,600 393,000 1,948,500 1,563,200

Zarechnoye 298,200 339,800 1,201,800 1,216,200

Kharasan 189,700 127,700 586,700 244,800

Willow Creek 162,500 198,300 940,000 480,600

Subtotal 3,244,000 3,223,500 12,977,000 11,676,100

Attributable production during commissioning (lbs)

Kharasan ‐ ‐ ‐ 209,300

Willow Creek ‐ ‐ ‐ 140,300

Honeymoon(1) ‐ 96,600 246,400 220,800

Subtotal ‐ 96,600 246,400 570,400

Total attributable production 3,244,000 3,320,100 13,223,400 12,246,500

FINANCIAL Q4 2013 Q4 2012 FY 2013 FY 2012

Attributable production (lbs) (2) 3,244,000 3,223,500 12,997,000 11,676,100

Attributable sales (lbs) (2) – Produced material 3,347,900 5,136,000 13,565,200 11,694,800

Average realized sales price ($ per lb) (4) – Produced material 40 44 40 48

Average total cash cost per pound sold ($ per lb)(4) – Produced material 16 17 16 16

Revenues ($ millions) – as reported on consolidated income statement (3) 106.2 100.9 386.4 353.4

Attributable revenues ($ millions)(3),(4) 190.7 227.6 659.2 623.7

Gross profit ($ millions) – as reported on consolidated income statement (3) 40.4 14.2 63.1 30.8

Attributable gross profit ($ millions) (3), (4) 53.4 76.6 159.1 227.6

Net earnings (loss) ($ millions) 21.2 (68.8) (41.3) (96.7)

Net earnings (loss) per share – basic and diluted ($ per share) 0.02 (0.07) (0.04) (0.10)

Adjusted net (loss) earnings ($ millions)(4) (27.2) 33.3 16.3 65.1

Adjusted net (loss) earnings per share – basic ($ per share)(4) (0.03) 0.03 0.02 0.07

Notes: (1) Honeymoon production represents concentrates in process that require further processing in order to become uranium concentrates that can be

converted into a saleable product. (2) Attributable production and attributable sales are from assets owned and joint ventures in commercial production during the period. (3) Comparative information has been restated with the adoption of IFRS 11 – Joint arrangements on January 1, 2013. (4) The Corporation has included the following non‐GAAP performance measures: average realized sales price per pound – produced material, average total

cash cost per pound sold – produced material, attributable revenues, attributable gross profit, adjusted net earnings (loss) and adjusted net earnings (loss) per share. See the section on “Non‐GAAP Measures”.


Overview Uranium One is a Canadian corporation engaged through subsidiaries, associates and joint ventures in the mining, production and sales of uranium, and in the acquisition, exploration and development of properties for the production of uranium in Kazakhstan, Tanzania, the United States and Australia. Following the Going Private Transaction, the common shares of Uranium One are currently 100.0% owned by subsidiaries of Russia’s State Atomic Energy Company “Rosatom” (“Rosatom”), the Russian state‐owned nuclear industry operator. In Kazakhstan, the Corporation holds a 70% interest in the Betpak Dala joint venture, which owns the Akdala and South Inkai Uranium Mines, a 50% interest in the Karatau joint venture, which owns the Karatau Uranium Mine, a 50% interest in the Akbastau joint venture, which owns the Akbastau Uranium Mine, a 49.67% interest in the Zarechnoye joint venture, which owns the Zarechnoye Uranium Mine, a 30% interest in the Kyzylkum joint venture, which owns the Kharasan Uranium Mine, and a 19% interest in the SKZ‐U joint venture, which owns a sulphuric acid plant near Kharasan as an additional source of sulphuric acid for its operations. In the United States, the Corporation owns the Willow Creek uranium mine and projects in the Powder River and Great Divide basins in Wyoming. The Corporation owns a 100% interest in the Honeymoon Uranium Project in Australia. The Corporation is the operator of the Mkuju River Project in Tanzania, and owns a 13.9% interest in Mantra Resources Pty Limited (“Mantra”), which owns the Mkuju River Project. The Corporation also owns, either directly or through joint ventures, uranium exploration properties in the western United States and South Australia. The following are the Corporation’s principal mineral properties and operations (discussed in more detail below):

OPERATING MINES

ENTITY MINE LOCATION STATUS OWNERSHIP

Betpak Dala LLP Akdala Uranium Mine Kazakhstan Producing 70% J.V. interest

Betpak Dala LLP South Inkai Uranium Mine Kazakhstan Producing 70% J.V. interest

Karatau LLP Karatau Uranium Mine Kazakhstan Producing 50% J.V. interest

JSC Akbastau Akbastau Uranium Mine Kazakhstan Producing 50% J.V. interest

JSC Zarechnoye Zarechnoye Uranium Mine Kazakhstan Producing 49.67% J.V. interest

Kyzylkum LLP Kharasan Uranium Mine Kazakhstan Producing 30% J.V. interest

Uranium One U.S.A., Inc. Willow Creek Uranium Mine USA Producing 100% interest

DEVELOPMENT PROJECTS

ENTITY PROJECT LOCATION STATUS OWNERSHIP

Uranium One Australia (Pty) Ltd. Honeymoon Uranium Project Australia Care and Maintenance 100% interest

Mantra Resources Pty Ltd Mkuju River Project Tanzania Feasibility study 13.9% interest


Review of Operations AKDALA URANIUM MINE ‐ KAZAKHSTAN Akdala is an operating in situ recovery (“ISR”) uranium mine located in the Chu‐Sarysu basin in the Suzak region, South Kazakhstan province, Kazakhstan, owned indirectly as to 70% by the Corporation through the Betpak Dala joint venture, a Kazakh registered limited liability partnership (“Betpak Dala”). The other 30% interest is owned by JSC NAC Kazatomprom (“Kazatomprom”), a Kazakh state‐owned company engaged in the mining and exporting of uranium in Kazakhstan. Pursuant to the terms of its subsoil use contract, the current production capacity of the Akdala Mine is 2,600,000 pounds (1,000 tonnes uranium (“U”)) per year. Production: Production from Akdala was 2,652,200 pounds (1,020 tonnes U) during 2013, of which 1,856,500 pounds (714 tonnes U) was attributable to the Corporation. Operations: The following is a summary of the operational statistics (100%) for Akdala over the last four quarters:

TOTAL WELLS COMPLETED (INCLUDING PRODUCTION

WELLS)

AVERAGE NUMBER OF PRODUCTION WELLS IN

OPERATION

AVERAGE FLOW RATE (m3/hour)

CONCENTRATION IN SOLUTION (mg U/l)

PRODUCTION (lbs)

Q1 2013 38 277 2,230 59 672,600Q2 2013 87 262 2,090 62 726,600Q3 2013 74 263 2,158 49 598,900Q4 2013 40 284 2,248 49 654,100

A total of 239 wells were installed during 2013, compared to the budget of 239. The program for 2014 provides for the installation of 249 wells to achieve the production target for the year. Five new production blocks were acidified and two new blocks were placed into production during 2013. Construction of a satellite plant to facilitate treatment of solutions from production blocks located approximately 15 kilometres to the east of the current central processing facilities in an area known as Letniy commenced in 2012. The satellite plant started operating in December of 2013; however, construction work will be fully completed in 2014. Production from new well fields in the Letniy area has already commenced. Capital expenditure incurred in 2013 was $20.6 million on a 100% basis, compared to the budget of $26.9 million. The difference relates to delays in construction of the satellite plant and to the postponement of exploration (due to delays in getting the exploration design approved by the Government of Kazakhstan). Also, the expenditure of $1.9 million for exploration was postponed by one year, as approved by the Supervisory Board of the Betpak Dala joint venture in January 2013 when the 2013 budget was reviewed. $12.9 million was spent on the construction of the satellite plant and fixed asset purchases, with the balance spent on wellfield development.


AKDALA URANIUM MINE ‐ continued Financial information: The following table shows the attributable production, sales and production cost trends for Akdala over the prior eight quarters:

(ALL FIGURES ARE THE CORPORATION’S ATTRIBUTABLE SHARE)

3 MONTHS ENDED

DEC 31, 2013

SEP 30, 2013

JUN 30, 2013

MAR 31, 2013

DEC 31, 2012

SEP 30, 2012

JUN 30, 2012

MAR 31, 2012

Production in lbs 457,900 419,200 508,600 470,800 588,100 494,400 473,100 437,000

Sales in lbs 501,700 1,146,800 358,700 307,200 690,200 582,100 294,000 724,400

Inventory in lbs 448,400 494,900 1,225,300 1,078,300 916,600 1,021,100 1,111,300 935,200

Revenues ($ millions) (1) 16.3 43.6 16.4 13.1 32.4 29.3 15.7 39.3

Operating expense ($ millions) (1) 7.6 15.2 4.9 4.6 9.4 7.6 3.9 9.1

Operating expense ($/lb sold) 15 13 14 15 14 13 13 13

Depreciation ($ millions) (1) 4.5 9.8 3.2 2.9 6.2 5.8 2.9 7.3

Depreciation ($/lb sold) 9 9 9 9 9 10 10 10 Note: (1) The Corporation applies equity accounting for its investments in joint ventures. Its share of earnings and expenses of the joint ventures is reflected

in the “share of earnings from joint ventures” line in the consolidated income statement. Revenues include the gross profits of material sold by the Corporation from material sourced from this joint venture.

Uranium revenues are recorded upon delivery of product to utilities and intermediaries and do not occur evenly throughout the year, as delivery times are at the contracted discretion of customers within a given quarter or other delivery period. Changes in revenues, net earnings/loss and cash flow are therefore affected primarily by fluctuations in contracted deliveries of product from quarter to quarter, as well as by changes in the price of uranium. Operating expenses are directly related to the quantity of U3O8 sold and the total operating expenses are lower in periods when the quantity of U3O8 sold is lower. There is a corresponding build‐up of inventory in periods when the quantity of U3O8 sold is lower than production. The cash cost per pound sold (noted in the table above as “Operating expense ($/lb sold”)) was $14 for 2013, below the Corporation’s guidance of $15 per pound sold. The Corporation expects the cash cost per pound sold for 2014 to be $16.


SOUTH INKAI URANIUM MINE ‐ KAZAKHSTAN South Inkai is an operating ISR uranium mine located in the Chu‐Sarysu basin in the Suzak region, South Kazakhstan province, Kazakhstan, owned indirectly as to 70% by the Corporation through the Betpak Dala joint venture. The other 30% interest is held by Kazatomprom. Pursuant to the terms of its subsoil use contract, the current production capacity of the South Inkai mine is 5,200,000 pounds (2,000 tonnes U) per year. Production: Production from South Inkai was 5,277,600 pounds (2,030 tonnes U) in 2013, of which 3,694,300 pounds (1,421 tonnes U) was attributable to the Corporation. Operations: The following is a summary of the operational statistics (100%) for South Inkai over the last four quarters:


WELLS)

AVERAGE NUMBER OF PRODUCTION WELLS

IN OPERATION



PRODUCTION (lbs)

Q1 2013 147 509 4,022 55 1,138,400Q2 2013 203 528 4,191 63 1,502,100Q3 2013 159 502 3,952 61 1,368,100Q4 2013 109 513 4,016 53 1,269,000 A total of 618 wells were installed during 2013, compared to the budget of 621. The program for 2014 provides for the installation of 497 wells to achieve the production target for the year. Acidification of nine new production blocks was completed during the year and eight blocks were placed into production during 2013. Capital expenditure incurred in 2013 was $40.1 million on a 100% basis, compared to the budget of $53.9 million. The difference is due to delays with the dryer expansion and construction of accommodation, mainly from permitting delays. $14.7 million were spent on the installation of dryers and fixed assets purchases, with the balance spent on wellfield development. Financial information: The following table shows the attributable production, sales and production cost trends for South Inkai over the prior eight quarters:


3 MONTHS ENDED

DEC 31, 2013

SEP 30, 2013

JUN 30, 2013

MAR 31, 2013

DEC 31, 2012

SEP 30, 2012

JUN 30, 2012

MAR 31, 2012

Production in lbs 888,200 957,700 1,051,500 796,900 797,100 903,400 923,700 779,000

Sales in lbs 184,400 1,586,100 1,305,400 254,500 1,530,200 767,800 273,800 458,600

Inventory in lbs 1,430,500 726,700 1,355,100 1,609,000 1,066,600 1,799,700 1,664,100 1,014,100





Depreciation ($/lb sold) 21 9 10 11 11 11 10 10 Note: (1) The Corporation applies equity accounting for its investments in joint ventures. Its share of earnings and expenses of the joint ventures is reflected in the “share of earnings from joint ventures” line in the consolidated income statement. Revenues include the gross profits of material sold by the Corporation from material sourced from this joint venture.

The cash cost per pound sold (noted in the table above as “Operating expense ($/lb sold”)) was $18 for 2013, below the Corporation’s guidance of $19 per pound sold. The Corporation expects the cash cost per pound sold for 2014 to be $18.


KARATAU URANIUM MINE ‐ KAZAKHSTAN Karatau is an operating ISR uranium mine located in the Chu‐Sarysu basin in the Suzak region, South Kazakhstan province, Kazakhstan, owned indirectly as to 50% by the Corporation through the Karatau joint venture. The other 50% interest is held by Kazatomprom. Pursuant to the terms of its subsoil use contract, the current production capacity of the Karatau Mine is 5,200,000 pounds (2,000 tonnes U) per year. Production: Production from Karatau was 5,498,300 pounds (2,115 tonnes U) in 2013, of which 2,749,200 pounds (1,057 tonnes U) was attributable to the Corporation. Operations: The following is a summary of the operational statistics (100%) for Karatau over the last four quarters:


WELLS)

AVERAGE NUMBER OF PRODUCTION

WELLS IN OPERATION



PRODUCTION (lbs)

Q1 2013 38 180 1,404 170 1,240,000Q2 2013 87 200 1,393 168 1,328,200Q3 2013 119 239 1,466 167 1,396,400Q4 2013 85 252 1,424 179 1,533,700 A total of 329 wells were installed during 2013, compared to the budget of 333. The program for 2014 provides for the installation of 341 wells to achieve the production target for the year. Acidification of seven new production blocks was completed during the year and six blocks were placed into production during 2013. Capital expenditure incurred in 2013 was $48.0 million on a 100% basis, compared to the budget of $51.8 million. The difference is due to the deferral of the expansion of the plant. $13.7 million was spent on construction activities and fixed asset purchases and the remainder for wellfield development. Financial information: The following table shows the attributable production, sales and production costs for Karatau over the prior eight quarters:


3 MONTHS ENDED

DEC 31, 2013

SEP 30, 2013

JUN 30, 2013

MAR 31, 2013

DEC 31, 2012

SEP 30, 2012

JUN 30, 2012

MAR 31, 2012


Sales in lbs 852,400 1,067,000 395,700 432,100 1,134,700 808,400 678,500 326,500

Inventory in lbs 488,500 574,000 943,500 675,100 487,200 842,400 928,500 983,300





Depreciation ($/lb sold) 14 14 16 14 14 14 14 14 Note: (1) The Corporation applies equity accounting for its investments in joint ventures. Its share of earnings and expenses of the joint ventures is reflected

in the “share of earnings from joint ventures” line in the consolidated income statement.

Depreciation for the quarters ended June 30, 2013 and December 31, 2012 includes an adjustment to the depreciation rate for that and previous quarters, due to an increase in the reserve base used for depreciation calculations. The cash cost per pound sold (noted in the table above as “Operating expense ($/lb sold”))was $11 for 2013, below the Corporation’s guidance of $13 per pound sold. The Corporation expects the cash cost per pound sold for 2014 to be $11.


AKBASTAU URANIUM MINE ‐ KAZAKHSTAN Akbastau is an operating ISR uranium mine located in the Chu‐Sarysu basin in the Suzak region, South Kazakhstan province, Kazakhstan, owned indirectly as to 50% by the Corporation through the Akbastau joint venture. The other 50% interest is held by Kazatomprom. Pursuant to the terms of its subsoil use contract, the current production capacity of the Akbastau Mine is 4,011,000 pounds of U3O8 (1,543 tonnes U) per year from sections 1, 3, and 4 of the Budenovskoye deposit; the maximum approved production capacity of 5,067,00 pounds of U3O8 or 1,949 tonnes of U is to be reached in year 2017 . Akbastau is currently in pilot production from all three sections and plans to commence industrial production following receipt of required regulatory approvals. Akbastau is adjacent to the Karatau mine, which is licensed to mine section 2 within the southern subfield of the Budenovskoye deposit. Akbastau entered into a toll processing agreement with Karatau, under which all of the solutions mined at Akbastau are currently processed at Karatau. Production: Production from Akbastau was 3,897,000 pounds (1,499 tonnes U) in 2013, of which 1,948,500 pounds (749 tonnes U) was attributable to the Corporation. Operations: The following is a summary of the operational statistics (100%) for Akbastau over the last four quarters:


WELLS)


IN OPERATION



PRODUCTION (lbs)

Q1 2013 50 137 946 188 924,600Q2 2013 71 138 745 241 1,028,200Q3 2013 104 121 777 222 983,000Q4 2013 39 142 853 188 961,200 A total of 264 wells were installed during 2013, compared to the budget of 274. The program for 2014 provides for the installation of 161 wells to achieve the production target for the year. Acidification of nine new production blocks was completed during the year and eight blocks were placed into production during 2013. Capital expenditure incurred in 2013 was $40.9 million on a 100% basis, compared to the budget of $42.0 million. $17.4 million was spent on construction activities and fixed assets purchases and the remainder for wellfield development. Financial information: The following table shows the attributable production, sales and production costs for Akbastau over the prior eight quarters: (ALL FIGURES ARE THE CORPORATION’S ATTRIBUTABLE SHARE)

3 MONTHS ENDED

DEC 31, 2013

SEP 30, 2013

JUN 30, 2013

MAR 31, 2013

DEC 31, 2012

SEP 30, 2012

JUN 30, 2012

MAR 31, 2012


Sales in lbs 541,100 1,048,300 351,000 210,600 924,000 282,100 170,000 193,800

Inventory in lbs 212,600 273,100 829,900 666,800 415,100 946,100 882,700 663,200





Depreciation ($/lb sold) 14 14 15 13 13 15 15 12 Note: (1) The Corporation applies equity accounting for its investments in joint ventures. Its share of earnings and expenses of the joint ventures is

reflected in the “share of earnings from joint ventures” line in the consolidated income statement. The cash cost per pound sold was (noted in the table above as “Operating expense ($/lb sold”))$13 for 2013, compared to the Corporation’s guidance of $13 per pound sold. The Corporation expects the cash cost per pound sold for 2014 to be $13.


ZARECHNOYE URANIUM MINE ‐ KAZAKHSTAN Zarechnoye is an operating ISR uranium mine located in the Syr Darya basin in the Otrar district, South Kazakhstan province, Kazakhstan. The Corporation has a 49.67% indirect interest in the Zarechnoye uranium mine through its 49.67% interest in the Zarechnoye joint venture. Kazatomprom owns a 49.67% share of the Zarechnoye joint venture and the remaining shareholding is held by a Kyrgyz company. Pursuant to the terms of its subsoil use contract, the current production capacity of the Zarechnoye Mine is 2,522,000 pounds (970 tonnes U) per year. Production: Production from Zarechnoye was 2,419,500 pounds (931 tonnes U) in 2013, of which 1,201,800 pounds (462 tonnes U) was attributable to the Corporation. Operations: The following is a summary of the operational statistics (100%) for Zarechnoye over the past four quarters:


WELLS)


IN OPERATION



PRODUCTION (lbs)

Q1 2013 134 207 2,911 44 643,800Q2 2013 151 210 2,940 39 627,100Q3 2013 164 213 2,899 35 548,200Q4 2013 147 214 2,948 36 600,400 A total of 596 wells were installed during 2013, compared to the budget of 596 (as adjusted in December 2013 from 609). The program for 2014 provides for the installation of 468 wells to achieve the production target for the year. Acidification of eighteen new production blocks was completed during the year and sixteen blocks were placed into production during 2013. Capital expenditure incurred in 2013 was $30.6 million on a 100% basis, compared to the budget of $33.4 million. The difference is mainly due to the savings of construction material in wellfield development. $1.9 million was spent on construction activities and fixed asset purchases and the remainder for wellfield development. Financial information: The following table shows the attributable production, sales and production costs for Zarechnoye over the prior eight quarters: (ALL FIGURES ARE THE CORPORATION’S ATTRIBUTABLE SHARE)

3 MONTHS ENDED

DEC 31, 2013

SEP 30, 2013

JUN 30, 2013

MAR 31, 2013

DEC 31, 2012

SEP 30, 2012

JUN 30, 2012

MAR 31, 2012


Sales in lbs 387,400 284,900 353,800 176,900 389,200 318,400 283,100 106,100

Inventory in lbs 198,900 293,500 310,100 357,000 218,300 273,600 284,400 279,100


Operating expense ($ millions) (1) (2) 8.0 8.4 8.7 4.6 9.5 7.5 6.5 2.5


Depreciation ($ millions) (1) (2) 7.1 7.1 6.9 3.4 7.2 5.9 5.1 1.9

Depreciation ($/lb sold) 18 25 20 19 19 19 18 18 Note: (1) The Corporation applies equity accounting for its investments in joint ventures. Its share of earnings and expenses of the joint ventures is

reflected in the “share of earnings from joint ventures” line in the consolidated income statement. (2) $1.3 million of operating expense and $1.2 million of depreciation for the three months ended September 30, 2013 relates to a net realizable

adjustment taken against the September 30, 2013 carrying value of inventory. Up to Q2 2012, depreciation included fair value adjustments arising from acquisition date purchase price allocations. Zarechnoye was acquired on December 27, 2010. The cash cost per pound sold (noted in the table above as “Operating expense ($/lb sold”)) was $25 for 2013, lower than the Corporation’s guidance of $26 per pound sold. The Corporation expects the cash cost per pound sold for 2014 to be $26.


KHARASAN URANIUM MINE ‐ KAZAKHSTAN Kharasan is an operating ISR uranium mine located in the Syr Darya basin in the Suzak region, South Kazakhstan province, Kazakhstan. The Corporation has an indirect 30% interest in the Kharasan Uranium Mine through its 30% interest in the Kyzylkum joint venture (“Kyzylkum”), a Kazakh registered limited liability partnership. Kazatomprom has a 30% interest in Kyzylkum and Energy Asia (BVI) Ltd., which is owned by a consortium of Japanese utilities and a trading company, has the remaining 40% interest in Kyzylkum. Pursuant to the terms of its subsoil use contract, the production capacity of the Kharasan Mine is 7,800,000 pounds (3,000 tonnes U) per year, with a current installed capacity of 2,600,000 pounds (1,000 tonnes U) per year. Production: Production from Kharasan was 1,955,800 pounds (752 tonnes U) in 2013, of which 586,700 pounds (226 tonnes U) was attributable to the Corporation. Operations: The following is a summary of the operational statistics for Kharasan (on a 100% basis) over the last four quarters:


WELLS)


IN OPERATION



PRODUCTION (lbs)

Q1 2013 73 171 1,039 68 360,300Q2 2013 66 181 1,123 71 451,300Q3 2013 30 186 1,163 78 511,700Q4 2013 ‐ 180 1,118 95 632,500 A total of 169 wells were installed during 2013, compared to the budget of 195. The original program for 2013 provided for the installation of 195 wells to achieve the production target for the year but this program was later reduced to 169 wells when it became apparent that the production plan can be met with a lesser number of new wells. The reduction in the drilling program was approved by the Supervisory Board of the Kyzylkum joint venture. The program for 2014 provides for the installation of 337 wells to achieve the production target for the year. Acidification of eight new production blocks was completed during the year and six blocks were placed into production during 2013. Capital expenditure incurred in 2013 was $24.9 million on a 100% basis, compared to the budget of $29 million. The difference is due to reductions in the wellfield development and exploration expenditures that were approved by the Supervisory Board of Kyzylkum during 2013. $2 million was spent on construction activities and fixed asset purchases and the remainder for wellfield development. Financial information: The following table shows the attributable production, sales and production costs for Kharasan since reaching commercial production as of July 1, 2012: (ALL FIGURES ARE THE CORPORATION’S ATTRIBUTABLE SHARE)

3 MONTHS ENDED

DEC 31, 2013

SEP 30, 2013

JUN 30, 2013

MAR 31, 2013

DEC 31, 2012

SEP 30, 2012

Production in lbs 189,700 153,500 135,400 108,100 127,700 117,100

Sales in lbs 245,600 222,800 75,500 ‐ 362,700 107,000

Inventory in lbs 85,400 143,500 214,400 154,800 48,400 285,700

Revenues ($ millions) (1) 14.9 7.6 2.9 ‐ 16.5 4.9

Operating expense ($ millions) (1) 4.4 4.6 2.3 ‐ 9.8 3.0

Operating expense ($/lb sold) 18 21 30 ‐ 27 28

Depreciation ($ millions) (1) 2.6 2.5 0.6 ‐ 4.3 1.2

Depreciation ($/lb sold) 11 11 8 ‐ 12 11 Note: (1) The Corporation applies equity accounting for its investments in joint ventures. Its share of earnings and expenses of the joint ventures is

reflected in the “share of earnings from joint ventures” line in the consolidated income statement. Revenues include the gross profits of material sold by the Corporation from material sourced from this joint venture.

The cash cost of production per pound sold (noted in the table above as “Operating expense ($/lb sold”)) was $21 for 2013, lower than the Corporation’s guidance of $30 per pound sold in 2013. The Corporation expects the cash cost per pound sold for 2014 to be $24.


WILLOW CREEK URANIUM MINE – UNITED STATES Willow Creek is an operating ISR uranium mine located in Johnson and Campbell Counties in the Powder River Basin of Wyoming, U.S.A. The mine includes the licensed and permitted Irigaray ISR central processing plant, the Christensen Ranch satellite ISR facility and associated uranium ore bodies, collectively referred to as the Willow Creek Mine. The current design capacity of Willow Creek is 1,300,000 pounds (500 tonnes U) per year. The Corporation plans to expand the processing capacity at the Willow Creek central plant in line with the U.S. Nuclear Regulatory Commission (“NRC”) licensed capacity of 2,500,000 pounds (962 tonnes U) per year by incorporating a vacuum dryer that was purchased for use at the Corporation’s Moore Ranch project. The Willow Creek Mine was successfully commissioned and commercial operations commenced on May 1, 2012. Production: Production from Willow Creek was 940,000 pounds (362 tonnes U) in 2013. Operations: The following is a summary of the operational statistics for Willow Creek over the last four quarters:


WELLS)


IN OPERATION



PRODUCTION (lbs)

Q1 2013 296 502 1,251 36 240,100Q2 2013 40 525 1,333 38 283,400Q3 2013 1 569 1,441 31 254,000Q4 2013 ‐ 551 1,439 29 162,500 A total of 337 wells were installed during 2013, compared to the budget of 581. All well installation and wellfield construction activities were suspended at the end of Q2 due to continued low uranium prices. Production from existing wellfields at Willow Creek has continued. Resumption of construction activities is expected by 2015 pending higher market prices. Capital expenditure incurred in 2013 was $13.6 million, compared to the budget of $19 million. Capital expenditure in 2014 is expected to be approximately $0.6 million, to be spent on sustaining capital, and there will be no wellfield development for the year. Financial information: The following table shows the attributable production, sales and production costs for Willow Creek since reaching commercial production as of May 1, 2012: (ALL FIGURES ARE THE CORPORATION’S ATTRIBUTABLE SHARE)

3 MONTHS ENDED

DEC 31, 2013

SEP 30, 2013

JUN 30, 2013

MAR 31, 2013

DEC 31, 2012

SEP 30, 2012

JUN 30, 2012

Production in lbs 162,500 254,000 283,400 240,100 198,300 186,400 95,900

Sales in lbs 635,300 615,000 25,000 ‐ 105,000 ‐ 184,200

Inventory in lbs 182,200 656,100 1,030,300 761,500 517,500 452,600 267,000

Revenues ($ millions) (1) 41.9 25.1 1.0 ‐ 5.2 ‐ 9.4

Operating expense ($ millions) (2) (3) 12.3 14.8 3.3 1.7 4.9 1.6 6.6

Operating expense ($/lb sold) 19 24 ‐ ‐ 47 ‐ 36

Depreciation ($ millions) (2) (3) 14.7 15.3 3.5 1.6 3.6 1.2 2.8

Depreciation ($/lb sold) 23 25 ‐ ‐ 34 ‐ 15 Note: (1) Revenues include gross profits earned by the Corporation in respect of Willow Creek production delivered into sales contracts held by the

Corporation. (2) Operating expense and depreciation of Willow Creek includes net realizable value adjustments of $1.8 million on the carrying value of the

inventory during 2013. (3) $1.3 million of operating expense and $0.5 million of depreciation for the three months ended September 30, 2013 relates to the reversal of a

net realizable adjustment on the September 30, 2013 carrying value of inventory.

The cash cost per pound sold (noted in the table above as “Operating expense ($/lb sold”)), excluding net realizable value adjustments, was $24 for 2013. The Corporation expects the cash cost per pound sold for 2014 to be $28.


Review of Development Projects HONEYMOON URANIUM PROJECT ‐ AUSTRALIA The Honeymoon Uranium Project is an ISR uranium development project located in South Australia, approximately 75 kilometres northwest of the city of Broken Hill, New South Wales. The Corporation owns 100% of the Honeymoon Uranium Project. The Project was in the commissioning stage, prior to being put into care and maintenance in 2013. The Project has a design capacity of 880,000 pounds (339 tonnes U) per year. Production in commissioning: Production in commissioning from Honeymoon in the first three quarters of 2013 was 246,400 lbs U3O8 (95 tonnes U). In the fourth quarter of 2013 the only production was of “concentrates in process” that require further processing in order to become saleable uranium concentrates. Operations: The following is a summary of the operational statistics for Honeymoon (on a 100% basis) over the last four quarters:


WELLS)


IN OPERATION



PRODUCTION (lbs)

Q1 2013 ‐ 17 408 49 80,600Q2 2013 ‐ 18 385 52 84,700Q3 2013 ‐ 35 664 36 81,100Q4 2013 ‐ 31 355 25 ‐ No wells were installed during the fourth quarter as the wellfield development program for 2013 had been previously suspended during the third quarter. During the fourth quarter, the Honeymoon Project was put into care and maintenance (C&M) and the process of ramping down operations began. A plan has been developed to ensure that the operations at Honeymoon will be fully in C&M by the target date March 31, 2014. The ramp‐down process will involve removal of all in‐process product from the system, removal of all reagents (except certain processing reagents) and pulling out all wellfield pumps. All product is expected to be removed from site by March 31, 2014. Some mobile equipment, rolling stocks and reagents will remain at site.


CORPORATE GOING PRIVATE TRANSACTION AND REVOLVING CREDIT FACILITY On January 13, 2013, the Corporation entered into a definitive agreement (the “Arrangement Agreement”) with ARMZ under which the Corporation would be taken private (the “Going Private Transaction”) pursuant to a plan of arrangement (the “Plan of Arrangement”). The implementation of the Plan of Arrangement was approved by the Corporation’s shareholders at a special shareholders’ meeting held on March 7, 2013. The Ontario Superior Court of Justice granted a final order approving the Plan of Arrangement on March 18, 2013. Following the receipt of all necessary regulatory approvals, on October 18, 2013 the Plan of Arrangement was completed and, as a result, ARMZ, through its affiliates, came to own 100.0% of the Corporation’s outstanding common shares (“Common Shares”). Under the Plan of Arrangement, a wholly owned subsidiary of ARMZ acquired all of the Common Shares that it and its affiliates did not already own for cash consideration of CDN$2.86 per share. The Going Private Transaction provided total consideration to minority shareholders of approximately C$1.3 billion, and implied an equity value for Uranium One of approximately C$2.8 billion. Following the completion of the Going Private Transaction, and an internal reorganization by ARMZ’s parent corporation Rosatom in December 2013, Uranium One is now a wholly‐owned indirect subsidiary of Rosatom and is no longer controlled by ARMZ. On March 25, 2013, the Corporation arranged a three year, $1.45 billion unsecured revolving credit facility with an ARMZ affiliate. The drawings under the facility bore interest at the rate of 3.3% per annum. On March 26, 2013, the Corporation drew down the facility in full and on October 21, 2013, the Corporation repaid $1.2 billion of the facility. The remaining balance was re‐paid on November 5, 2013 and the facility was cancelled on November 14, 2013. RUBLE BOND REFINANCING

On August 23, 2013, the Corporation completed an offering of RUB 12.5 billion (US$380.7 million) aggregate principal amount of Series 2 Ruble Bonds, and repurchased RUB 11.8 billion (US$359.4 million) aggregate principal amount of its Series 1 Ruble Bonds by way of a public offer to the holders of the Series 1 Ruble Bonds. This redemption resulted in RUB 2.5 billion (US$76.1 million) of the principal of the Series 1 Ruble Bonds remaining outstanding. The Corporation entered into six derivatives in October 2013 to economically hedge the Series 2 Ruble Bonds. SENIOR SECURED NOTES FINANCING

On December 13, 2013, Uranium One Investments Inc. (“U1 Investments”), a 100% owned subsidiary of Uranium One, completed an offering of US$300 million aggregate principal amount of non‐convertible 6.25% Senior Secured Notes due 2018 (the “Senior Secured Notes”). The Senior Secured Notes will mature on December 13, 2018 and U1 Investments will pay interest semi‐annually on June 13 and December 13 of each year. U1 Investments is entitled to redeem all or a portion of the Senior Secured Notes on or after December 13, 2016. The Senior Secured Notes are guaranteed by Uranium One and certain of its subsidiaries and secured by pledges of certain of their assets. The net proceeds of the offering were made available to Uranium One for the repurchase of its 2010 Debentures and for general corporate purposes. The Senior Secured Notes were sold in a private placement to qualified institutional buyers in the United States and outside the United States to certain non‐U.S. persons. The Senior Secured Notes have been listed on the Official List of the Luxembourg Stock Exchange and admitted to trading on the Euro MTF Market. 2010 DEBENTURES REPURCHASE On January 2, 2014 the Corporation completed the repurchase of C$227,461,000 (US$214.8 million as valued at December 31,2013) of the aggregate principal amount of its 5.0% convertible unsecured subordinated debentures due March 13, 2015 (the “2010 Debentures”), representing 87.49% of the outstanding aggregate principal amount of the 2010 Debentures, pursuant to its offer to repurchase the 2010 Debentures commenced on November 15, 2013, as required by the indenture governing the 2010 Debentures as a result of the completion of the Going Private Transaction. The repurchased 2010 Debentures have been cancelled. As a result of the completion of the Going Private Transaction, the remaining 2010 Debentures are no longer convertible into Common Shares. REVOLVING CREDIT FACILITY On December 20, 2013, U1 Investments entered into a three year US$120 million revolving credit facility agreement (the “Revolving Credit Facility”) with a syndicate of lenders. The Revolving Credit Facility is guaranteed by Uranium One and certain of its subsidiaries, and secured by pledges of certain of their assets. The Corporation has not yet drawn down any funds under the Revolving Credit Facility.


OPTION AGREEMENT TO ACQUIRE MANTRA

Uranium One and ARMZ are parties to a put/call agreement which allows either Uranium One to acquire Mantra from ARMZ, or ARMZ to sell Mantra to Uranium One. Mantra’s core asset is the Mkuju River Project in Tanzania. Uranium One owns 13.9% of the Project.

As operator of the Mkuju River Project, Uranium One is responsible for providing funding for the project. In connection therewith, Uranium One entered into a loan agreement with Mantra on June 6, 2011. Drawdowns of $27.4 million were made against the facility during 2013, bringing the total funds extended by the Corporation to Mantra, including interest of $6.3 million, to $79.4 million since June 2011. The loan bears interest of 7.74% per annum. The loan has no fixed repayment terms and is guaranteed by ARMZ.

Under the terms of the option agreement, the total purchase price, including the $150 million already paid, for 100% of the Mantra shares would be equal to ARMZ’s original acquisition cost of Mantra (approximately $1.0 billion), together with any additional expenditures contributed by ARMZ to Mantra or its properties, and interest thereon at a rate of 2.65% per annum.

On December 9, 2013, Uranium One gave notice to ARMZ of the termination of the option agreement, which will be effective as of June 10, 2014. MKUJU RIVER PROJECT The Mkuju River Project is a large scale uranium development project located in southern Tanzania. Current activity at the Project is focused on licensing and permitting. In October 2012, the Tanzanian Ministry of the Environment issued an environmental impact assessment certificate to Mantra in respect of the Mkuju River Project, and in April 2013, the Tanzanian Government issued a Special Mining License to Mantra for the Project. Negotiations with the Tanzanian Government on the terms of a mine development agreement and other required Tanzanian approvals are continuing. SITUATION IN UKRAINE On March 6, 17 and 20, United States President Obama issued Executive Orders imposing visa restrictions and freezing the property and interests in property in the U.S. of certain persons designated under those Orders as contributing to the situation in Ukraine. The European Union has adopted regulations imposing similar restrictions on certain designated persons considered responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. The Government of Canada has imposed similar sanctions pursuant to the Special Economic Measures (Russia) Regulations of March 17, which were amended on March 19 and again on March 21. As most recently amended, these regulations generally freeze the assets of certain designated persons and prohibit any person in Canada or any Canadian citizen outside Canada from, among other things, dealing in any property of any designated person, facilitating financial transactions relating to such dealings or providing goods or financial or related services to or for the benefit of designated persons. To date, the US, EU and Canada have under the foregoing orders and regulations designated a number of Russian and Ukrainian nationals, and the US and Canada have designated one Russian financial institution. The Corporation’s operations have not been impacted by the foregoing orders or regulations or any designations made thereunder and the Corporation continues to carry on business as usual. KAZAKHSTAN SITUATION On March 26, 2014, the Special Inter‐District Economic Court for the City of Astana (Republic of Kazakhstan) issued an order having the effect of invalidating the original transfers in 2004 and 2005 from Kazatomprom to the Company’s Betpak Dala and Kyzylkum joint ventures of the subsoil use contracts for the Akdala, South Inkai and Kharasan fields. While the proceedings before the Court were held behind closed doors and only limited information has been made available, Uranium One understands that the ruling was made orally in proceedings brought by the State Prosecutor of the Saryark District of the City of Astana against Betpak Dala, Kyzylkum and Kazatomprom, among other parties, and relates to events which occurred two to three years before Uranium One acquired its interest in the two joint ventures. Under Kazakh law, the order is automatically stayed and may not be enforced for a period of 15 days and such additional time as it may take to hear an appeal therefrom and is also subject to further appeals. Both joint ventures intend to vigorously defend themselves in the Kazakhstan courts and plan to file notices appealing the order. The Company considers the lawsuit to be without merit. Neither Uranium One nor its shareholders are parties to the proceedings. Kazatomprom, the Company’s Kazakh state‐owned joint venture partner in Kazakhstan, has, however, assured the Company and its shareholders that their legal rights and economic interests will be fully preserved. The Company and its shareholders are now in discussions with Kazatomprom with a view to obtaining new subsoil use rights to the Akdala, South Inkai and Kharasan fields in the event that the order becomes effective. While those discussions are underway, and in order to mitigate the impact on the Company’s interests, Kazatomprom, Betpak Dala and Kyzylkum are putting in place temporary arrangements designed to ensure that, notwithstanding the court order, Betpak Dala and Kyzylkum carry on normal business operations and the rate of return to the Company from existing operations is unaffected during this period. The Company’s shareholder, Uranium One Holding N.V., and Kazatomprom have signed protocols to this effect and are taking the steps necessary to ensure that scheduled production and deliveries to customers are not affected. The Company and its shareholders have reserved their rights to take all such steps, and exercise all such remedies available to them, including proceedings under international investment treaties, as they may consider necessary or advisable to protect their legal rights and economic interests in this matter.


URANIUM MARKET After falling throughout much of the first half of 2013, the spot uranium price continued to find some downside support during the fourth quarter of 2013, trading in a narrow range of between $34.50 and $36.25 per pound. The spot price began the year at $42.75 per pound and ended at $34.50. Spot market volume for the year, as reported by UxC, maintained an active pace reaching 50.4 million pounds for the 12 month period. By comparison, 2012 saw 42.6 million pounds traded (the record annual volume was 55.8 million pounds in 2011). Continuing into early 2014, the spot price remains range‐bound, however is testing the lower end, currently trading at around $34.00 to $34.50 per pound. On the supply side, global production rationalization, such as has been announced by Uranium One in Australia and the United States and ARMZ in Russia, should begin to manifest in less material being made available to the spot market in the coming months. Other notable developments have contributed to this reduction in supply such as the operational difficulties at two of the world’s largest mines located in Australia and Namibia. One producer has announced that it will cease production at one of its operations which is expected to remove over 3 million pounds per year from the market. Elsewhere in Africa, maintenance shutdowns, civil unrest and royalty pressures in Niger (a country which supplies 8% of world supply) have also added to supply uncertainties. UxC’s recent conclusion that 50% of global mine production costs exceed the current spot price levels would support an eventual reversal of global production increases that have been seen in recent years with Kazakhstan being the notable example, having increased output by a further 8% in 2013. UxC reports that global production in 2013 totaled just over 153 million pounds U3O8, only a slight increase over the 2012 figure of 152 million pounds. Additionally, consolidation activity such as the Chinese acquisition of a 25% stake in the Langer Heinrich mine in Namibia continues to direct market supplies to sovereign, national nuclear programs and away from the spot market. Finally, 2013 saw the much publicized end to the US/Russia Highly Enriched Uranium Agreement (for the conversion of nuclear warheads into reactor fuel which represented the largest source of secondary supply to the market in recent years). On the demand side, we continue to see ambitious growths plans being realized in China. New reactor building activity is also gaining momentum in the United Kingdom. Rosatom’s twenty reactors either ordered or under construction in export markets around the world, illustrate the growth of nuclear power in emerging markets. Finally, the displacement of supplies to the Japanese market should begin to ease as that country moves forward on reactor restarts in 2014.


Review of Financial Results SUMMARY OF QUARTERLY RESULTS

(US DOLLARS IN MILLIONS EXCEPT PER SHARE AND PER LB AMOUNTS)

3 MONTHS ENDED

DEC 31, 2013

SEP 30,2013

JUN 30,2013

MAR 31, 2013

DEC 31,2012

SEP 30, 2012

JUN 30,2012

MAR 31,2012

$ $ $ $ $ $ $ $

Revenues (1) 106.2 137.7 119.7 22.8 100.9 77.8 101.9 72.8

Attributable revenues (1), (3) 190.7 231.8 174.1 62.6 227.6 142.7 157.5 95.9

Net earnings (loss) 21.2 (63.6) 10.6 (9.5) (68.8) (61.6) 29.2 4.5 Basic and diluted earnings (loss) per share(2) 0.02 (0.07) 0.01 (0.01) (0.07) (0.06) 0.03 0.00

Total assets 2,501.1 4,110.5 4,132.8 4,139.2 2,725.2 2,696.4 2,791.3 2,861.5 Notes: (1) Comparative information has been restated with the adoption of IFRS 11 – Joint arrangements on January 1, 2013 and an immaterial reclassification

adjustment to conform to the current presentation of the consolidated financial statements. (2) The basic and diluted earnings/loss per share are computed separately for each quarter presented and therefore may not add up to the basic and diluted

earnings / loss per share calculated for a full year. (3) See the section on “Non‐GAAP Measures”.

The average realized uranium price per pound sold relative to the average spot price per pound, and the relationship between volumes sold and inventory, over the last eight quarters are as follows:

The Corporation, in line with its marketing strategy, enters into sales contracts with pricing mechanisms that ensure that average realized sales prices per pound are highly correlated to the spot price. Pricing in the Corporation’s sales contracts normally reference market prices at the time of delivery, although some contracts reference average market prices for a defined period preceding the delivery date, which can be up to 3 months prior to delivery for certain contracts. This, and the fact that spot prices and deliveries are not uniform across the period, will produce average realized sales prices which can be above or below the average spot price for the period, but will largely track that benchmark. The Corporation’s sales volumes are largely determined by the terms of long term sales contracts with customers and the delivery schedules which customers are allowed to select each given year. These sales are supplemented by spot sales whose timing is at the discretion of the Corporation. Earnings fluctuate in line with sales volume, but are also affected by a mixture of fixed and variable costs, including general and administration cost, foreign exchange, impairment charges and taxation.

‐

2.0

4.0

6.0

8.0

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

Lbs of U3O8

('Millions)

Sales Inventory

30

35

40

45

50

55 $/lb of U3O8

Realized Price ($/Lb) Average Price ($/Lb)


NON‐GAAP MEASURES ADJUSTED NET EARNINGS The Corporation has included the following non‐GAAP performance measures throughout this document: adjusted net earnings and adjusted net earnings per share. Adjusted net earnings and adjusted net earnings per share do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures reported by other companies. The Corporation believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Corporation’s performance and ability to generate cash flow. This is provided as additional information and should not be considered in isolation, or as a substitute for, measures of performance prepared in accordance with IFRS. Adjusted net earnings is calculated by adding back restructuring costs, impairments, cost of suspension of operations, gains/losses from the sale of assets, non‐hedge derivative gains and losses and the effect of the tax rate adjustment on deferred tax liabilities to net earnings. Corporate development expenditure relates to one‐off project costs and in the current period mainly relates to costs incurred in the going private transaction. These items are added back due to their inherent volatility and/or infrequent occurrence. The following table provides a reconciliation of adjusted net earnings / loss to the financial statements:

(US DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) 3 MONTHS ENDED YEAR ENDED

DEC 31, 2013$ MILLIONS

DEC 31, 2012 $ MILLIONS



Net earnings (loss) 21.2 (68.8) (41.3) (96.7)Reversal of provision for contingent payments (44.8) (1.6) (44.8) (1.6)Impairment charges (net of deferred taxes) ‐ 102.3 67.8 181.4 Gain on business combination ‐ ‐ ‐ (17.2)2010 Debentures accelerated interest ‐ ‐ 15.6 ‐ Corporate development expenditure 4.9 0.1 17.5 2.7 Restructuring costs 1.8 0.7 3.9 2.2 Non‐hedge derivative (gains) losses, net of tax (10.3) 0.6 (2.4) 4.7

Non‐recurring income tax recovery adjustment ‐ ‐ ‐ (10.4)

Adjusted net (loss) earnings (27.2) 33.3 16.3 65.1

Adjusted net (loss) earnings per share – basic ($) and diluted (0.03) 0.03 0.02 0.07 Weighted average number of shares (millions) – basic and diluted 958.4 957.2 958.4 957.2

ATTRIBUTABLE REVENUES AND ATTRIBUTABLE GROSS PROFIT The Corporation monitors and evaluates performance of its business by using these additional non‐GAAP measures, which are consistent with the results that would be reported under proportionate consolidation accounting. The Corporation believes that, in addition to conventional measures prepared in accordance with IFRS, the Corporation and certain investors use this information to evaluate the Corporation’s performance and ability to generate cash flow. This is provided as additional information and should not be considered in isolation, or as a substitute for measures of performance prepared in accordance with IFRS. ATTIBUTABLE REVENUES: Attributable revenues is determined as shown in note 28(a) of the audited annual consolidated financial statements. This note disclosures segmented information which incorporates the revenues of the Corporation under proportionate consolidation. The following table provides a reconciliation of attributable revenues to the financial statements

(US DOLLARS IN MILLIONS) 3 MONTHS ENDED YEAR ENDED





Revenues 106.2 100.9 386.4 353.4 Attributable revenues from joint ventures 91.7 205.0 440.0 513.4 Intercompany purchases from joint ventures (7.2) (78.3) (167.2) (243.1)Attributable revenues 190.7 227.6 659.2 623.7


ATTRIBUTABLE GROSS PROFIT: Attributable gross profit is disclosed in the tables of uranium sales, inventory and operating costs on pages 23 and 24. The following table provides a reconciliation of attributable gross profit to the financial statements:

(US DOLLARS IN MILLIONS) 3 MONTHS ENDED YEAR ENDED





Gross profit 40.4 14.2 63.1 30.8 Attributable revenues from joint ventures 91.7 205.0 440.0 513.4 Attributable operating expenses from joint ventures (40.9) (79.8) (190.5) (173.8)Attributable depreciation from joint ventures (37.8) (62.8) (153.5) (142.8)Attributable gross profit 53.4 76.6 159.1 277.6

AVERAGE REALIZED SALES PRICE PER POUND AND CASH COST PER POUND SOLD The Corporation has included the following non‐GAAP performance measures throughout this document: average realized sales price per pound of produced material and cash cost per pound sold of produced material. The Corporation reports total cash costs on a sales basis. In the uranium mining industry, these are common performance measures but do not have any standardized meaning, and are non‐GAAP measures. The Corporation believes that, in addition to conventional measures prepared in accordance with IFRS, the Corporation and certain investors use this information to evaluate the Corporation’s performance and ability to generate cash flow. This is provided as additional information and should not be considered in isolation, or as a substitute for, measures of performance prepared in accordance with IFRS. As in previous periods, average realized sales price per pound of produced material and cash cost per pound sold of produced material are calculated as follows:

(i) Average realized sales price per pound of produced material: Revenues – produced material (See tables on pages 23 and 24) divided by attributable sales pounds sold – produced material (See tables on pages 23 and 24).

(ii) Cash cost per pound sold of produced material: Operating expenses – produced material (See tables on pages 23 and 24) divided by attributable sales pounds sold – produced material (See tables on pages 23 and 24).


RESULTS OF OPERATIONS AND DISCUSSION OF FINANCIAL POSITION SELECTED FINANCIAL INFORMATION The Corporation’s consolidated financial statements and the financial data set out below have been prepared in accordance with IFRS. Uranium One and its operating subsidiaries use the United States dollar, the Kazakhstan tenge, the Australian dollar and the Canadian dollar as measurement currencies.

(US DOLLARS IN MILLIONS EXCEPT PER SHARE AND PER LB AMOUNTS) YEAR ENDED




Revenues (1) 386.4 353.4 288.0 Attributable revenues from segment reporting 659.2 623.7 818.4 Net (loss) earnings (41.3) (96.7) 88.4 Adjusted net earnings (3) 16.3 65.1 113.7 Cash flows from (used in) operating activities (18.1) (61.5) 169.7 Cash dividends received 155.9 184.3 129.6 Net (losses) earnings per share (0.04) (0.10) 0.09 Adjusted net earnings per share (3) 0.02 0.07 0.12 Product inventory carrying value(2) 6.2 23.4 ‐ Product inventory carrying value for equity accounted joint ventures 77.6 89.0 77.0 Total assets 2,501.1 2,725.2 2,783.1 Long term financial liabilities 844.3 775.4 740.1 Average realized uranium sales price per pound – produced material(4) 40 48 54 Average spot price per pound 38 49 57

Attributable sales volume – produced material 13,565,200 11,694,800 9,881,400 Attributable production volume 12,997,000 11,676,100 10,057,200 Attributable inventory 3,046,500 3,669,700 3,120,200

Notes: (1) Comparative information has been restated with the adoption of IFRS 11 – Joint arrangements on January 1, 2013. (2) Inventory is attributable to mines that are in commercial production. Revenue from production during commissioning of the Corporation’s development

projects is credited against capital expenditures. (3) Adjusted net earnings and adjusted net earnings per share are non‐GAAP measures. The definition and reconciliation of these non‐GAAP measures is

included in the section called “Non‐GAAP measures”. (4) For calculation of this metric see footnote 3 in Uranium Sales, inventory and operating costs tables on pages 23 and 24.


RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 2013 URANIUM SALES, INVENTORY, AND OPERATING COSTS The Corporation had attributable sales of produced material of 3,347,900 pounds during Q4 2013, compared to 5,136,000 pounds in Q4 2012. The Corporation’s attributable share of revenue from sales of produced material in Q4 2013 was $190.7 million, compared to $227.6 million in Q4 2012. The decrease in revenue is due to a 9% decrease in the average realized uranium price per pound compared to Q4 2012. The average realized price per pound sold in Q4 2013 was $40 per pound. Gross profit was $27.1 million in Q4 2013 after the deduction of operating expenses of $53.2 million ($16 per pound sold) and depreciation and depletion charges of $52.5 million ($16 per pound sold). Gross profit for Q4 2013 was in line with gross profit for Q4 2012, with the reduction in the realized sales price per pound offsetting the increase in the pounds sold. NET EARNINGS / LOSS Net earnings in Q4 2013 were $21.2 million, or $0.02 per share, compared to net losses of $68.8 million, or $0.07 per share in Q4 2012.


YEAR ENDED DECEMBER 31, 2013 URANIUM SALES, INVENTORY AND OPERATING COSTS TABLE The Corporation’s uranium sales, costs of uranium sales and gross profit were as follows in 2013 and 2012:

2013

AKDALA SOUTH INKAI KARATAU AKBASTAU ZARECHNOYE KHARASAN WILLOW

CREEK CORPORATE AND OTHER(2)

TOTAL / AVERAGE

Attributable Revenues ($ millions) (1) 89.4 140.6 96.6 75.1 44.1 25.4 68.0 120.0 659.2 Attributable sales volumes (lb ‘000) – Produced material 2,314.4 3,330.4 2,747.2 2,151.0 1,203.0 543.9 1,275.3 ‐ 13,565.2 Attributable sales volumes (lb ‘000) – Purchased material ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,256.8 2,256.8

Operating expenses ($ millions) – Produced material 32.3 59.8 29.7 27.7 29.7 11.3 32.1 ‐ 222.6 Operating expenses ($ millions) – Purchased material ‐ ‐ ‐ ‐ ‐ ‐ ‐ 88.3 88.3 Average realized sales price ($/lb sold) – Produced material(3) 39 42 35 35 37 47 53 ‐ 40 Operating expenses ($/lb sold) – Produced material(4) 14 18 11 13 25 21 25 ‐ 16 Depreciation ($ millions) 20.4 33.9 39.4 30.2 24.5 5.7 35.1 ‐ 189.2Depreciation ($/lb sold) 9 10 14 14 20 10 28 ‐ 14

Attributable Gross profit ($ millions) 36.7 46.9 27.5 17.2 (10.1) 8.4 0.8 31.7 159.1

Less share of gross profit from joint ventures ($ millions) (31.0) (27.0) (27.5) (17.2) 10.1 (3.4) ‐ ‐ (96.0)

Gross profit per consolidated income statement 5.7 19.9 ‐ ‐ ‐ 5.0 0.8 31.7 63.1 Notes:

(1) Excluding the "Corporate and Other" segment, revenues represent the Corporation’s proportionate share of sales from its operations. In addition, the gross profit of material sold by the Corporation is allocated back to the operations from which the material was sourced.

(2) The revenue and associated cost of sales of material that has not been sourced from one of the Corporation’s operations is shown as part of the corporate and other segment. (3) Represents the average realized sales price per lb of sales by the Corporation from material produced from its operations and is calculated as follows: "Revenues ($ millions)

minus revenue in "Corporate and other" divided by "Attributable sales volumes (lb ‘000) ‐ Produced material". (4) Represents the Corporation's cash cost per lb sold of material produced from its operations calculated as follows: "Operating expenses ($ millions) ‐ Produced material" divided by

"Attributable sales volume (lb '000) ‐ Produced material”.


2012

AKDALA SOUTH INKAI KARATAU AKBASTAU ZARECHNOYE KHARASAN WILLOW

CREEK CORPORATE AND OTHER (2)

TOTAL / AVERAGE

Attributable Revenues ($ millions) (1) 116.7 156.2 133.6 69.1 51.3 21.4 14.6 60.8 623.7 Attributable sales volumes (lb ‘000) – Produced material 2,290.7 3,030.4 2,948.1 1,569.9 1,096.8 469.7 289.2 ‐ 11,694.8 Attributable sales volumes (lb ‘000) – Purchased material ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,155.0 1,155.0

Operating expenses ($ millions) – Produced material 30.0 55.6 31.4 18.0 26.0 12.8 13.1 ‐ 186.9 Operating expenses ($ millions) – Purchased material ‐ ‐ ‐ ‐ ‐ ‐ ‐ 58.0 58.0 Average realized sales price ($/lb sold) – Produced material(3) 51 52 45 44 47 46 50 ‐ 48 Operating expenses ($/lb sold) – Produced material(4) 13 18 11 11 24 27 45 ‐ 16 Depreciation ($ millions) 22.2 31.9 42.4 21.5 20.1 5.5 7.6 ‐ 151.2 Depreciation ($/lb sold) 10 11 14 14 18 12 26 ‐ 13

Attributable Gross profit ($ millions) 64.5 68.7 59.8 29.6 5.2 3.1 (6.1) 2.8 227.6

Less share of gross profit from joint ventures ($ millions) (53.4) (47.9) (58.6) (29.2) (4.6) (3.1) ‐ ‐ (196.8)

Gross profit per consolidated income statement ($ millions) 11.1 20.8 1.2 0.4 0.6 ‐ (6.1) 2.8 30.8 Notes:

(1) Excluding the "Corporate and Other" segment, revenues represent the Corporation’s proportionate share of sales from its operations. In addition, the gross profit of material sold by the Corporation is allocated back to the operations from which the material was sourced.

(2) The revenue and associated cost of sales of material that has not been sourced from one of the Corporation’s operations is shown as part of the corporate and other segment. (3) Represents the average realized sales price per lb of sales by the Corporation from material produced from its operations and is calculated as follows: "Revenues ($ millions) minus

revenue in "Corporate and other" divided by "Attributable sales volumes (lb ‘000) ‐ Produced material". (4) Represents the Corporation's cash cost per lb sold of material produced from its operations calculated as follows: "Operating expenses ($ millions) ‐ Produced material" divided by

"Attributable sales volume (lb '000) ‐ Produced material”. The average realized sales price of produced material during 2013 was $40 per pound compared to $48 per pound in 2012. The closing and average spot price in 2013 was $35 and $38 per pound, respectively. Revenue, including the revenue of joint ventures, of $659.2 million in 2013 increased by 6% compared to the $623.7 million in 2012, due to a increase in the sales volume from 11,694.8 Lbs to 13,565.2 lbs. The sales mix for 2013 was 16% for Akbastau,17% for Akdala, 25% for South Inkai,20% for Karatau, 9% for Zarechnoye, 4% for Kharasan and 9% for Willow Creek, compared to 2012 in which Akbastau contributed 13% of the sales, Akdala 20%, South Inkai 27%, Karatau 25%, Zarechnoye 9%, Kharasan 4% and Willow Creek 2%. The sales mix is expected to align with the production ratio of each mine over time, considering the effect of long term contracts on inventory build‐up. In 2013 $1.3 million of operating expense and the $0.5 million of depreciation for Willow Creek relates to a net realizable value adjustment taken against the carrying value of the inventory. Operating expenses per pound sold for produced material were $16 per pound in 2013 and 2012. There is possible volatility in operating expenses due to the timing of the acidification of new wellfields. Sulphuric acid use is higher during the initial acidification process, and the sulphuric acid cost per pound is higher during these periods. The Corporation carries inventory at the weighted average cost of production, calculated at various stages of the production process. As a result, the weighted average cost increases during periods with higher levels of acidification. Attributable inventory decreased from 3,669,700 pounds at December 31, 2012 to 3,046,500 pounds at December 31, 2013.


GENERAL AND ADMINISTRATIVE EXPENSE The main drivers of the cash component of general and administrative expenses are compensation, consulting and advisor fees, travel expenses and office rent. Non‐cash stock options expenses are normally a significant contributor to general and administrative expenditure, as a significant contributing factor to Uranium One’s future success is its ability to attract and retain qualified and competent personnel. General and administrative expense, including stock option expenses of $2.1 million, was $39.5 million in 2013, compared to $45.7 million, including stock option expenses of $6.0 million in 2012. All outstanding stock options were cancelled on the completion of the Going Private Transaction, such that no stock options to purchase Common Shares were outstanding as of December 31, 2013 or are outstanding now. The general and administrative expense for 2013 includes salaries and directors’ fees of $24.9 million, consulting and advisor fees of $5.0 million, office rent of $2.0 million and travel expenses of $1.7 million. EXPLORATION The Corporation has a significant resource base and does not rely on exploration success for current and future production activities. Exploration expenditure is therefore purely discretionary. The Corporation determines its discretionary exploration expenditure each year during its planning cycle. Exploration expenditure relates to exploration programs undertaken on the Corporation’s tenures in the United States, Canada and Australia and was $2.6 million during 2013, compared to $3.6 million during 2012. IMPAIRMENT The Corporation impaired the Honeymoon Project due to continuing difficulties in the production process and issues in attaining design capacity combined with high mine operation costs. The carrying value of Honeymoon was therefore written down by $67.8 million during the year ended 2013. In 2012, the carrying value of the equity investment in Mantra was written down by $102.3 million. SHARE OF EARNINGS FROM JOINT VENTURES Earnings from joint ventures mainly consist of revenue, cost of sales, finance income and expenses and taxation of the joint ventures and represent the Corporation’s share thereof. Uranium sales, inventory and operating costs Revenue of $440.0 million in 2013 decreased by 14% compared to the $513.4 million in 2012, due to decreases in the average realized sales price. Operating expenses per pound sold of produced material were $16 per pound in 2013 and in 2012. Attributable inventory decreased from 3,152,200 pounds at December 31, 2012 to 2,864,300 pounds at December 31, 2013. Finance income and expense Interest accrued on the Corporation’s proportionate share of joint venture debt facilities was $10.3 million in 2013, compared to $7.2 million in 2012. Income taxes The current income tax expense for 2013 of $33.9 million mainly consists of income tax paid and payable in Kazakhstan on profits from the Corporation’s mines. For 2012 $58.0 million of current income tax expense was recorded. The deferred income tax recovery in 2013 of $17.3 million consists of the recovery of deferred income tax liabilities of the Kazakh mines. This recovery is due to the depletion of the deferred income tax liabilities that were created on the acquisition of the mines in Kazakhstan, and was based on the excess purchase price paid on acquisition. For 2012 a $36.6 million deferred income tax recovery was recorded.

FINANCE INCOME AND EXPENSE Finance income was $17.7 million in 2013 and $5.7 million in 2012. In addition to the interest earned on loans to joint ventures and associates, interest is earned on funds held on deposit by the Corporation. Interest accrued on the Corporation’s 2010 Debentures was $36.5 million in 2013, compared to $24.0 million in 2012. The Corporation recognized $15.6 million of accelerated interest after the announcement of the Going Private Transaction. Accretion of contingent payment liabilities of $3.6 million in 2013 and $4.0 million in 2012 relates to payments linked to exploration targets at South Inkai and Kharasan. Interest accrued on the Ruble Bonds was $39.3 million in 2013, net of a $5.9 million credit accrued on the cross currency interest rate swap, compared to interest accrued of $31.6 million, net of a $13.1 million credit accrued on the cross currency interest rate swap in 2012. For the year ended December 31, 2013 The Corporation accrued interest on the revolving credit facility and on the Senior Secured Notes of $27.7 million and $1.0 million, respectively. FOREIGN EXCHANGE Foreign exchange gains during 2013 consist of $3.9 million on the Ruble Bonds, $16.8 million on the 2010 Debentures, and foreign exchange gains of $13.9 million on cash balances, deposits and other items, compared to a foreign exchange loss of $10.6 million in 2012. INCOME TAXES The current income tax expense for 2013 of $5.0 million mainly consists of withholding tax paid and payable on dividends from the Corporation’s joint ventures in Kazakhstan. For 2012 a $4.3 million current income tax recovery was recorded. The deferred income tax expense in 2013 of $1.2 million consists of the recognition of deferred income tax liabilities. NET EARNINGS The net losses for 2013 were $41.3 million or $0.04 per share, compared to net losses of $96.7 million or $0.10 per share for 2012.


FINANCIAL CONDITION CASH AND CASH EQUIVALENTS On December 31, 2013, the Corporation had cash and cash equivalents, including restricted cash, of $440.6 million, compared to $442.0 million at December 31, 2012. BORROWED AND PURCHASED URANIUM CONCENTRATES In 2008, the Corporation borrowed 200,000 pounds pursuant to a uranium loan agreement to provide the Corporation with flexibility to meet its long‐term contractual obligations in terms of future uranium sales contracts and mitigate the risk of delivery delays. The loan agreement was amended in July 2011 and the 200,000 pounds of material were returned in the third quarter of 2013 upon the termination of the agreement. INVENTORIES The value of inventories as at December 31, 2013 decreased to $7.7 million from $25.6 million held at December 31, 2012. Finished uranium concentrates and solutions and concentrates in process decreased by $17.2 million, due to the increase in sales volumes in 2013. Materials and supplies decreased by $0.7 million in 2013. As at December 31, 2013 the Corporation had attributable inventory of 0.2 million pounds, including approximately 0.1 million pounds held at conversion facilities. Sales of product are normally completed at conversion facilities when material is transferred to customers by way of a book transfer. The product on hand at conversion facilities as at December 31, 2013 is committed for delivery under existing sales contracts or spot sales subsequent to quarter end. Shipping times for finished product can be up to four months, depending on the distance between the mine site and conversion facility, where sales are completed through transfer of legal title and ownership. A summary of the Corporation’s inventory carried at December 31, 2013 is as follows:

CATEGORY LOCATION LBS

In process Mine sites ‐In process External processing facilities ‐Finished product ready to be shipped Mine sites 0.1Finished product ready to be shipped External processing facilities ‐Finished product in transit In transit ‐Finished product at conversion facility Conversion facilities 0.1

Total inventory 0.2

Production during commissioning of the Corporation’s development projects is not accounted for as inventory. Attributable material produced and on hand from the Corporation’s development projects at December 31, 2013 was 501,314 pounds. MINERAL INTERESTS, PROPERTY PLANT AND EQUIPMENT The reporting values of mineral interests, property plant and equipment decreased by $66.3 million during 2013. The movement for 2013 mainly consists of:

• Additions of $43.4 million; and • Currency translation adjustments of $13.6 million; • Depreciation of $28.3 million; and • Impairment of $67.8 million.

INVESTMENT IN ASSOCIATE On March 15, 2012, Uranium One paid $150 million to ARMZ to acquire a 13.9% stake in Mantra from ARMZ. At December 31, 2012, the carrying value of the investment was written down by $102.3 million. Increased capital expenditure experienced in the industry, delays in the expected initial production, mainly from permitting delays, and lower uranium prices are the main reasons for the write down. Although the Corporation owns less than 20% of the equity shares of Mantra, it exercises significant influence by virtue of an agreement which appoints the Corporation as operator of the Mkuju River Project, and the Corporation applies equity accounting to its investment as a result. INVESTMENT IN JOINT VENTURES The balances and movement in underlying assets and liabilities of the investment in joint ventures, on an attributable basis, include the following: Cash On December 31, 2013, the joint ventures had cash and cash equivalents attributable to the Corporation’s share of $24.6 million, compared to $12.9 million at December 31, 2012. Inventory The value of inventories as at December 31, 2013 decreased to $90.8 million from $102.8 million held at December 31, 2012. Finished uranium concentrates and solutions and concentrates in process decreased by $11.4 million, due to an increase in the sales volume during the year. As at December 31, 2013 the joint ventures had attributable inventory of 2.8 million pounds, including approximately 0.5 million pounds held at conversion facilities.


A summary of the Corporation’s attributable inventory held through joint venture interest and carried at December 31, 2013 is as follows:

CATEGORY LOCATION LBS’millions

In process Mine sites 0.3In process External processing facilities 0.6Finished product ready to be shipped Mine sites 0.3Finished product ready to be shipped External processing facilities 0.3Finished product in transit In transit 0.8Finished product at conversion facility Conversion facilities 0.5

Total inventory 2.8

Mineral interests, property plant and equipment The reporting values of mineral interests, property plant and equipment decreased by $79.6 million in 2013. The movement for 2013 mainly consists of:

• Additions of $109.7 million; offset by • Currency translation adjustments of $40.0 million; • Depreciation of $145.2 million; and • Impairment of $4.2 million. Current and long term portion of joint venture debt Kyzylkum had loans outstanding of $36.9 million, $44.1 million and $55.3 million from the Japan Bank for International Cooperation (“JBIC”), Citibank and Kazatomprom, respectively. At December 31, 2013, the Corporation’s share of such loans is $40.8 million, which is classified as long term debt. In addition to the $26.4 million loan from the Corporation, SKZ‐U has loans outstanding of $23.5 million, $23.5 million and $80.2 million from Sumitomo Mitsui Banking Corporation, Mizuho Corporate Bank and JBIC, respectively. At December 31, 2013, the Corporation’s share of such loans is $24.1 million, of which $2.6 million is classified as long term debt. At December 31, 2013, Akbastau had a loan outstanding of $37.5 million from Kazfinance. The Corporation’s share of this loan is $18.8 million, which is classified as short term debt. At December 31, 2013, Zarechnoye had loans outstanding of $7.0 million, $19.0 million, $37.3 million and $32.5 million from Sberbank, Eurasian Development Bank, Kazfinance and Akbastau, respectively. The Corporation’s share of these loans is $31.6 million, which is classified as short term debt. At December 31, 2013, Karatau had loans outstanding of $50.0 million and $50.1 million from Halyk Bank and Eurasian Development Bank respectively. The Corporation’s share of the loan is $50.1 million, of which $28.6 million is classified as long term debt.

LOANS RECEIVABLE The Corporation received $3.7 million of principal from SKZ‐U during 2013, bringing the total loan to $26.4 million before accrued interest of $1.9 million, as part of its obligation to provide project financing for the construction and commissioning of the sulphuric acid plant in Kazakhstan. The Corporation received interest of $1.9 million during 2013. The Corporation made loans available to Mantra pursuant to its obligation to provide project financing for construction and commissioning of the Mkuju River Project. The Corporation advanced an additional $27.4 million during 2013, bringing the total loan to $73.1 million, before accrued interest of $6.3 million. On December 9, 2013, Uranium One gave notice to ARMZ of the termination of the Mantra Resources option agreement in respect of the Mkuju River Project, which termination will be effective as of June 10, 2014. RUBLE BONDS AND DERIVATIVES On December 7, 2011, the Corporation raised $463.5 million (RUB 14.3 billion) through the issuance of five‐year Series 1 Ruble Bonds with a ruble interest rate of 9.75% and converted the Ruble cash flows into US dollars through a cross currency interest rate swap (“Swap”). On August 23, 2013, the Corporation completed a public offering in Russia of seven‐year ruble‐denominated Series 2 Ruble Bonds for gross proceeds of US$380.7 million (RUB12.5 billion) with a Ruble interest rate of 10.25%; and a simultaneous public offering to repurchase, through the facilities of the Moscow Exchange, US$359.4 million (RUB11.8 billion) of the Company’s outstanding Series 1 Ruble Bonds. In connection with the offering, the Corporation entered into six additional derivatives to economically hedge the Ruble Bonds. The Swap effectively converts the remaining Series 1 Ruble Bonds into a synthetic US dollar borrowing by fixing the Corporation’s principal and interest payments in US dollar terms and while the Swap is in force, the Corporation is not exposed to any Ruble currency risks. For accounting purposes, the Corporation will recognize certain foreign exchange gains or losses in the income statement during the term of the Series 1 Ruble Bonds and Swap at each reporting period. The cumulative effect of Ruble/US dollar currency movements on the income statement is expected to be zero over the full term of the Series 1 Ruble Bonds and the Swap. The Swap has a U.S. Dollar fixed rate of U.S. $1.00 = RUB30.855.


On September 18 and 23, 2013, the Corporation entered into a number of cross currency interest rates swaps and forward strip contracts with the economic objective of managing the foreign exchange and interest rate risks of the Corporation. On October 1, 2013, these instruments / combinations of instruments were designated as hedging instruments against portions of the Series 2 Ruble Bonds. The cross currency interest rates swaps and the associated hedging relationships are as follows: (a) A cross currency interest rate swap with a notional amount of RUB 455 million / $14.1 million (fixed at an exchange rate of $1.00 = RUB

32.2) to convert a portion of the Series 2 Ruble Bonds into a synthetic US dollar floating borrowing (3 month US LIBOR plus a spread of 5%). This swap was designated as a fair value hedge to hedge a portion (RUB 455 million or a 100% hedge relationship) of the foreign exchange risk arising from the Series 2 semi‐annual ruble interest payments and ruble principal amount due at maturity starting from October 1, 2013 to August 14, 2020.

(b) A cross currency interest rate swap with a notional amount of RUB 245 million / $7.7 million (fixed at an exchange rate of $1.00 = RUB 31.8) to convert a portion Series 2 Ruble Bonds into a synthetic US dollar borrowing. This swap was designated as a cash flow hedge to hedge a portion (RUB 196 million or an 80% hedge relationship) of the foreign exchange risk arising from the Series 2 semi‐annual ruble interest payments and ruble principal amount due at maturity starting from October 1, 2013 to August 11, 2020.

(c) A cross currency interest rate swap with a notional value of RUB 4.1 billion / $129.8 million (fixed at an exchange rate of $1.00 = RUB 31.8) and effective date of November 30, 2016, to convert a portion of the Series 2 Ruble Bonds into a synthetic US dollar borrowing, at a fixed rate of 7.5%. This swap was designated as a cash flow hedge to hedge a portion (RUB 3.3 Billion or an 80% hedge relationship) of the foreign exchange risk arising from the Series 2 Semi‐annual ruble interest payments and ruble principal amount due at maturity starting November 30, 2016 to August 11, 2020.

On October 1, 2013, 54% or RUB 7.7 billion of the original Swap together with two forward strips were also designated as a cash flow hedge against a portion (RUB 6.9 billion or a 90% hedge relationship) of the foreign exchange risk arising from the Series 2 semi – annual ruble interest payments from October 1, 2013 to February 14, 2017 and the principal payment. The remaining 29% of the original Swap was not designated in a hedging relationship. On September 18, 2013, the Corporation also entered into a cross currency interest rate swap with a notional amount of RUB 7.7 billion / $238.2 million (fixed at an exchange rate of $1.00 = RUB 32.2) and effective date of February 17, 2017, to convert a portion (RUB 7.7 billion) of the Series 2 Ruble Bonds into a synthetic US dollar floating borrowing (3 month US LIBOR interest rate plus a spread of 4.85%). This swap has not been designated as being in a hedging relationship. Interest expense of $32.8 million was recognized in 2013, which consists of an interest expense of $45.2 million related to the Ruble Bonds Series 1 and Series 2 offset by $12.4 million interest expense credit on the Swap. The interest on the Swap creates an effective interest rate, before taking transaction costs into account, of 6.74% in US dollar terms. Net foreign exchange gains of $3.9 million were recognized in the income statement, consisting of foreign exchange losses of $33.8 million on translation of the Ruble Bonds to the closing US dollar rate on the reporting date, offset by the fair value changes in the Swap of $36.6 million. A fair value loss of $34.9 million was recorded against the fair value hedge reserve in equity. On the redemption of the Ruble Bonds Series 1 the Corporation reclassified fair value losses of $4.3 million to the income statement, bringing the total equity movement to $5.6 million. Hedge ineffectiveness of $5.9 million was recognized in other income. NON‐CURRENT LIABILITIES The outstanding amount on the Corporation’s 2010 Debentures increased mainly due to the accelerated interest accrued, offset by the interest payment and foreign currency gains due to the weakening of the Canadian dollar against the US dollar since December 31, 2012. The 2010 Debentures are denominated in Canadian dollars and mature on March 13, 2015. The Corporation repurchased and cancelled 87.49% of the outstanding aggregate principal amount of the 2010 Debentures on January 2, 2014. The amount outstanding on the Corporation’s Ruble Bonds increased because of the issue of RUB 12.5 billion Series 2 Ruble Bonds on August 23, 2013, and interest accrued offset by the repurchase of RUB 11.8 billion Series 1 Bonds, interest payments and foreign exchange loss. The Corporation arranged a three year $1.45 billion revolving unsecured facility with an affiliate of ARMZ on March 26, 2013, the Corporation drew down the facility in full and on October 21, 2013 the Corporation repaid $1.2 billion of the facility. The remaining balance of $250 million was repaid on November 14, 2013. On December 13, 2013, the Corporation issued $300 million of 6.25% Senior Secured Notes due December 13, 2018 with interest payable semi‐annually in June and December. A portion of the proceeds from the Senior Secured Notes was used to repurchase the 2010 Debentures on January 2, 2014. On December 20, 2013, the Corporation entered into a three year $120 million revolving credit facility with a syndicate of lenders. There have been no drawdowns on the revolving credit facility. EQUITY Changes in shareholders’ equity during 2013 consist mainly of: • Net losses of $41.3 million; • Amounts distributed to shareholders of $381.3 million; • Exchange loss on translation of foreign operations of $53.8 million; • Share buy‐back of $16.8 million; • Stock options expense of $2.1 million; and • Revaluation net gain of the cash flow hedging reserve of $1.7 million.


LIQUIDITY AND CAPITAL RESOURCES WORKING CAPITAL AND CASH GENERATED FROM OPERATIONS At December 31, 2013 the Corporation had working capital of $215.4 million. Included in this amount are cash, cash equivalents and restricted cash of $440.6 million. Cash held by the Corporation’s joint venture operations, is applied to the business of the joint ventures and cash flows between the Corporation and the joint ventures normally only occur through loans or capital contributions to the joint ventures and dividends paid by the joint ventures. Cash in excess of the working capital requirements from the Corporation’s joint ventures is distributed to the Corporation through the payment of dividends. The interest earned on the Corporation’s cash balances will be applied to existing commitments in respect of the Corporation’s development projects and other current commitments. The Corporation earns revenue from the sale of uranium from its mines in Kazakhstan and the United States. Additional sales revenue will be earned from uranium sales when the Corporation’s development projects are commissioned. Refer to Results of Operations and Discussion of Financial Position ‐ Uranium sales, inventory and operating costs for a discussion on inventory levels and the relationship between contracted sales and inventory. Uranium is sold into the spot market as well as under forward long‐term delivery contracts. Contracted deliveries are planned to be filled from the Corporation’s mining operations. The ability to deliver contracted product is therefore dependent upon the continued operation of the mining operations as planned. The Corporation has entered into market‐related sales contracts with price mechanisms that reference the market price in effect at or near the time of delivery. In addition, the Corporation has negotiated floor price protection in many of its sales contracts. CURRENT AND FUTURE SOURCES OF FUNDING On March 25, 2013, the Corporation entered into a three year, unsecured revolving credit facility with an ARMZ affiliate for $1.45 billion. Drawn amounts bear interest at 3.3% per annum. The Corporation has convertible debentures, Ruble Bonds, Senior Secured Notes and a Revolving Credit Facility outstanding as at December 31, 2013 that were issued to raise funds for general corporate purposes. In addition, the Corporation’s joint ventures in Kazakhstan have amounts outstanding on several debt facilities. The unsecured ARMZ revolving credit facility has a term of three years and interest of 3.3% is payable on amounts drawn down. On March 26, 2013, the Corporation drew down the entire facility. On October 21, 2013, the Corporation repaid $1.2 billion of the facility and the remainder of the facility was completely repaid on November 5, 2013. The facility was cancelled on November 14, 2013. The 2010 Debentures have a face value of C$260 million and mature on March 13, 2015, with interest payable at a rate of 5.0% per annum, payable semi‐annually in arrears being funded from internal resources. Within 30 days of completion of the Going Private Transaction, the Corporation was required to make an offer to purchase the C$260 million aggregate principal amount of the 2010 Debentures in accordance with the terms of the trust indenture governing the debentures. The Corporation commenced such an offer on November 15, 2013, and completed it on January 2, 2014 with the repurchase and cancellation of C$227,461,000 of the aggregate principal amount of the 2010 Debentures, representing 87.49% of the outstanding aggregate principal amount of the 2010 Debentures. The remaining outstanding 2010 Debentures are no longer convertible into shares of the Corporation. On August 23, 2013, the Corporation partially repurchased the Series 1 Ruble Bonds which resulted in a reduced Series 1 Ruble Bond amount outstanding of RUB2.5 billion that will mature on November 30, 2016, with interest payable in Rubles at a rate of 9.75% per annum, payable semi‐annually in arrears and being funded from internal resources. The Swap fixed the US dollar principal amount of the Series 1 Ruble Bonds at $81.0 million, and the interest at a US dollar rate of 6.74%. The Corporation also issued RUB12.5 billion aggregate principal amount of Series 2 Ruble Bonds that will mature on August 20, 2020 with interest payable in Rubles at a rate of 10.25% per annum, payable semi‐annually in arrears and being funded from internal sources. The Derivatives fixed the US dollar principal amount of the Series 2 Ruble Bonds at $389.9 million and the interest at a US dollar rate of 7.5% on a principal of $137.6 million, LIBOR plus 5% on a principal of $14.1 million and LIBOR plus 4.85% on a principal of $238.2 million after November 2016. On December 13, 2013, the Corporation issued $300 million of 6.25% Senior Secured Notes due December 13, 2018 to qualified institutional buyers in the U.S.A. and Europe. In addition, on December 20, 2013, the Corporation entered into a three year $120 million revolving credit facility with a syndicate of lenders. There have been no drawdowns on the revolving credit facility. The Corporation and its joint venture partners in Kyzylkum made a total of $30.0 million in capital contributions to the joint venture in 2013, with further capital contributions planned for 2014. The Corporation’s share of the capital contribution in 2013 was $9.0 million, with the other joint venture partners contributing proportionally to their ownership interests. The proceeds received by Kyzylkum were used to service its debt repayments and to fund capital and operational expenditure. On December 31, 2013, the principal amount of the outstanding facilities held by Akbastau, Karatau, Kyzylkum and Zarechnoye was $37.5 million, $100.1 million, $136.3 million and $95.8 million, respectively. The Corporation’s share of these facilities was $154.5 million. On December 31, 2013, SKZ‐U had loans outstanding of $126.0 million, in addition to the loan outstanding from Uranium One in the amount of $25.9 million to finance the construction of a sulphuric acid plant in Kazakhstan. In addition to the factors described under “Risks and Uncertainties” below, Uranium One’s ability to raise capital is highly dependent on the commercial viability of its projects and the underlying price of uranium. Other risk factors, including the Corporation’s ability to develop its projects into commercially viable mines, international uranium industry competition, public acceptance of nuclear power and governmental regulation can also adversely affect Uranium One’s ability to raise additional funding. There is no assurance that additional sources of funding, if required, will be forthcoming. Please refer to “Risks and Uncertainties”.


CONTRACTUAL OBLIGATIONS The following table summarizes the contractual maturities of the Corporation's significant financial liabilities and capital commitments, including contractual obligations:

LESS THAN 1 TO 3 4 TO 5 AFTER 5 1 YEAR YEARS YEARS YEARS TOTAL Operating lease obligations 1.8 2.0 ‐ ‐ 3.8 Capital commitments (1) 35.9 ‐ ‐ ‐ 35.9 Trade and other payables (1) 51.2 ‐ ‐ ‐ 51.2 Interest bearing liabilities (1) 65.1 206.4 415.4 459.0 1,145.9 Interest payable on financial liabilities (1) 15.2 ‐ ‐ ‐ 15.2 Financial derivatives (1):

Inflows (46.4) (896.7) (60.4) (459.0) (1,462.5)Outflows 34.1 891.5 38.3 432.3 1,396.2

2010 Debentures (1) 216.3 31.9 ‐ ‐ 248.2

373.2 235.1 393.3 432.3 1.433.9

(1) Cash flows are converted at year end closing exchange rates.

COMMITMENTS AND CONTINGENCIES Due to the size, complexity and nature of the Corporation’s operations, various legal and tax matters arise in the ordinary course of business. The Corporation accrues for such items when a liability is both probable and the amount can be reasonably estimated. In the opinion of management, these matters will not have a material effect on the consolidated financial statements of the Corporation. The Corporation incurs expenditures to maintain and increase its production capacity, which mostly consist of its capital expenditure budget as outlined in the “Outlook” section. In accordance with a loan agreement between Uranium One and Mantra dated June 6, 2011, Uranium One has agreed to provide a credit facility to fund the development of the Mkuju River Project and other Mantra exploration activities. The credit facility is guaranteed by ARMZ. On December 9, 2013, Uranium One gave notice to ARMZ of the termination of the option agreement, which will be effective as of June 10, 2014. The United States, European Union and Canada have recently issued orders or adopted regulations imposing sanctions in the form of visa restrictions and asset freezes on the property of certain designated persons considered to be responsible for the events in Ukraine. To date, the US, EU and Canada have designated a number of Russian and Ukrainian nationals, and the US and Canada have designated one Russian financial institution. The Corporation’s operations have not been impacted by the foregoing orders or regulations or any designations or determinations made thereunder and the Corporation continues to carry on business as usual. On March 26, the Special Inter‐District Economic Court for the City of Astana (Republic of Kazakhstan) issued an order having the effect of invalidating the original transfers in 2004 and 2005 to the Betpak Dala and Kyzylkum joint ventures of the subsoil use contracts for the Akdala, South Inkai and Kharasan fields. The order is being appealed by the joint ventures and is subject to a stay while the appeal is being heard. The Company and its shareholders are currently in discussions with Kazatomprom with a view to obtaining new subsoil use rights in the event that the order becomes effective. Kazatomprom, Betpak Dala and Kyzylkum are putting in place temporary arrangements designed to ensure that, notwithstanding the court order, Betpak Dala and Kyzylkum carry on normal business operations and the rate of return to the Company from existing operations is unaffected during this period. The Company’s shareholder, Uranium One Holding N.V., and Kazatomprom have signed protocols to this effect and are taking the steps necessary to ensure that scheduled production and deliveries to customers are not affected. RELATED PARTIES The following significant related party transactions and balances are included in the Corporation’s results as at December 31, 2013:

• Zarechnoye had an outstanding loan as of December 31, 2012 with Uranium One Holding N.V. formerly Effective Energy N.V., an indirect wholly owned subsidiary or Rosatom. This loan was repaid in 2013.

• The Corporation and its joint ventures had sales of $269.0 million to ARMZ and ARMZ or Rosatom affiliates, on market related terms; • On December 31, 2013, the Corporation had outstanding trade receivables of $5.0 million with ARMZ and ARMZ or Rosatom affiliates; and • The Corporation advanced $27.4 million to Mantra during 2013, as part of its obligation to fund the capital expenditure of Mantra. Mantra

owed $79.4 million, including accrued interest of $4.4 million, to the Corporation at December 31, 2013; • The Corporation acquired finished product of $65.6 million from ARMZ. The material was purchased for delivery into a contract that was due

and for which the Corporation could not deliver using production from its operations due to a mis‐match between production and sales (sales volumes are not uniform over the year).

OFF‐BALANCE SHEET ARRANGEMENTS The Corporation has no off‐balance sheet arrangements.


OUTSTANDING SHARE DATA As of December 31, 2013 and March 31, 2014, there were issued and outstanding 957,189,036 Common Shares. 6,964,000 Common Shares were issued in 2013 in connection with the exercise of a certain warrant. These shares were duly acquired by an affiliate of ARMZ pursuant to the Going Private Transaction, and were subsequently cancelled. The Corporation had contingent obligations for the issuance to third parties of 57,500 common shares under certain property options and joint venture agreements. These obligations can be satisfied at the Corporation’s discretion by either the issuance of shares or by the payment in cash of US$ 400,000. Consequently, the Corporation intends to settle these arrangements in cash and not issue shares. As of March 31, 2014, there were C$32,524,000 aggregate principal amount of the 2010 Debentures outstanding. On January 2, 2014, the Corporation completed the repurchase of C$227,461,000 of the aggregate principal amount of its 2010 Debentures, representing 87.49% of the outstanding aggregate principal amount of the 2010 Debentures, pursuant to its offer to repurchase the 2010 Debentures commenced on November 15, 2013, as required under the indenture that governs the 2010 Debentures as a result of the completion of the Going Private Transaction. The repurchased 2010 Debentures have been cancelled. The remaining outstanding 2010 Debentures are no longer convertible into shares of the Corporation.

DIVIDENDS Holders of common shares are entitled to receive dividends if 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, the Canada Business Corporations Act and under the Revolving Credit Facility Agreement and the indenture governing the Senior Secured Notes (subject to certain exceptions). The Revolving Credit Facility Agreement and the Senior Secured Notes indenture also restrict the ability of certain of Uranium One’s subsidiaries to pay dividends (subject to certain exceptions). These restrictions are not expected to adversely affect the Corporation’s ability to meet its obligations.


CRITICAL JUDGEMENTS AND ESTIMATES The preparation of consolidated financial statements in conformity with IFRS 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 consolidated financial statements. Actual results may differ from those estimates. Information about areas of judgment and key sources of uncertainty and estimation is contained in the accounting policies and/or the notes to the consolidated financial statements.

The following are the key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Recoverability of trade receivables and investments A provision is made against accounts that in the estimation of management may be impaired. The recoverability assessment of trade receivable is based on a range of factors including the age of the receivable and the creditworthiness of the customer. The provision is assessed monthly with a detailed formal review of balances and security being conducted at year‐end. Determining the recoverability of an account involves estimation as to the likely financial condition of the customer and their ability to subsequently make payment. To the extent that future events impact the financial condition of the customers, these provisions could vary significantly. Investments in securities are reviewed for impairment at the end of each reporting period. When the fair value of the investment falls below the Corporation's carrying value, and it is considered to be significant or prolonged, an impairment charge is recorded to the consolidated income statement for the difference between the investment's carrying value and its estimated fair value at the time. In making the determination as to whether a decline is considered prolonged, the Corporation considers such factors as the duration and extent of the decline, the investee's financial performance, and the Corporation's ability and intention to retain its investment for a period that will be sufficient to allow for any anticipated recovery in the investment's market value. Differing assumptions could affect whether an investment is impaired in any period or the amount of the impairment. Net realizable value of inventories In determining the net realizable value of inventories, the Corporation estimates the selling prices, based on published market rates, cost of completion and cost to sell. To the extent that future events impact the saleability of inventory these provisions could vary significantly. Estimated reserves, resources and exploration potential Reserves are estimates of the amount of product that can be extracted from the Corporation’s properties, considering both economic and legal factors. Calculating reserves and estimates requires decisions on assumptions about geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, prices and exchange rates. Estimating the quantity and/or grade of reserves requires the analysis of drilling samples and other geological data. Estimates of reserves may change from period to period as the economic assumptions used to estimate reserves change from period to period, and because additional geological data is generated during the course of operations. Changes in reported reserves may affect the Corporation’s financial position in a number of ways, including the following: • Asset carrying values may be affected due to changes in estimated future cash flows; • Depreciation and amortization charged in the consolidated income statement may change where such charges are determined by the units of

production basis, or where the useful economic lives of assets change; and • The carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits. Impairment of mineral interests, property, plant and equipment For the purpose of determining the recoverable amount of assets or cash generating units, estimates are made of the discount rate. Future cash flow estimates are based on expected production and sales volumes, commodity prices (considering current and historical prices, price trends and related factors), reserves, operating costs, restoration and rehabilitation costs and future capital expenditures. The Corporation’s management is required to make these estimates and assumptions which are subject to risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the asset may be impaired and the impairment would be recognized in the consolidated income statement. Expected economic lives of, estimated future operating results and net cash flows from mineral interests In applying the units of production method, depreciation is normally calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based on proven and probable reserves. In assessing the life of a mine for accounting purposes, mineral resources are only taken into account where there is a high degree of confidence of economic extraction. The Corporation’s operating result and net cash flow forecasts are based on the best estimates of expected future revenues and costs, including the future cash costs of production, capital expenditure, close down and restoration. These may include net cash flows expected to be realized from extraction, processing and sale of mineral resources that do not currently qualify for inclusion in proven and probable ore reserves. Such non reserve material is included where there is a high degree of confidence in its economic extraction. This expectation is usually based on preliminary drilling and sampling of areas of mineralization that are contiguous with existing reserves. The mine plan takes account of all relevant characteristics of the ore body, ore grades, chemical and metallurgical properties of the ore impacting on process recoveries and capacities of processing equipment that can be used. The mine plan is therefore the basis for forecasting production output in each future year and for forecasting production costs.


The Corporation’s cash flow forecasts are based on estimates of future commodity prices. These long term commodity prices, for most commodities, are derived from an analysis of the marginal costs of the producers of these commodities. These assessments often differ from current price levels and are updated periodically. In some cases, prices applying to some part of the future sales volumes of a cash generating unit are predetermined by existing sales contracts. The effects of such contracts are taken into account in forecasting future cash flows. There are numerous uncertainties inherent in estimating ore reserves, and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being re‐estimated. Fair value of financial instruments For financial instruments that have fair values that cannot be reasonably approximated by their carrying values, the fair values of those financial instruments must be estimated. As much as possible, the fair values of those financial instruments have been estimated by reference to quoted market prices for actual or similar instruments where available and disclosed accordingly. The fair values of other financial instruments are measured using valuation models. These models require a variety of observable market inputs such as market prices, forward price curves, yield curves and discount rates. Valuation methodologies and assumptions are reviewed on an ongoing basis. A significant change in this assessment may result in unrealized losses being recognized in net income. The fair value of the cross‐currency interest rate swap is based on credit risk adjusted discounted cash flows. These require the Corporation’s management to make assumptions and estimates regarding US dollar exchange rates, interest rates and credit spreads. Some of the inputs to the valuation model are based on unobservable market data. The model is sensitive to assumptions and estimates made by the Corporation’s management and changes in these inputs could result in different values being recognized on the consolidated balance sheet and through profit or loss as part of the ineffectiveness of the cash flow hedging relationship. Fair value of stock‐based compensation The Corporation determines the fair value of options granted using the Black‐Scholes option pricing model. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate and, therefore, the existing models do not necessarily provide a reliable measure of the fair value of the Corporation’s stock options. Fair value of assets and liabilities acquired in business combinations Business combinations are accounted for by applying the acquisition method of accounting, whereby the purchase consideration of the combination is allocated to the identifiable net assets on the basis of fair value on acquisition. The amount of goodwill initially recognized is dependent on the allocation of the purchase price to the fair value of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and liabilities is based, to a considerable extent, on management’s judgment. Allocation of the purchase price affects the results of the Corporation as finite lived intangible assets are amortized, whereas indefinite lived intangible assets, including goodwill, are not amortized and could result in differing amortization charges based on the allocation to indefinite lived and finite lived intangible assets. Reclamation and closure cost obligations Reclamation and closure cost obligation provisions represent management’s best estimate of the present value of the future costs. Significant estimates and assumptions are made in determining the amount of reclamation and closure cost obligation provisions. Those estimates and assumptions deal with uncertainties such as: requirements of the relevant legal and regulatory framework; the magnitude of possible contamination; determination of the appropriate discount rate; and the timing, extent and costs of required restoration and rehabilitation activity. These uncertainties may result in future actual expenditures differing from the amounts currently provided. The following are the critical judgments that have a significant effect on the consolidated financial statements: Impairment of mineral interests, property, plant and equipment Judgment is involved in assessing whether there is any indication that an asset or cash generating unit may be impaired. This assessment is made based on an analysis of, amongst other factors, changes in the market or business environment, events that have transpired that have impacted the asset or cash generating unit, and information from internal reporting. Impairment testing is done at the cash generating unit level. Some of the Corporation’s joint ventures have multiple mining areas and management must exercise judgment in determining what constitutes a cash generating unit and the degree of aggregation of various assets. This impacts the impairment analysis performed, as the results of the impairment analysis might differ based on the composition of the various cash generating units. Commencement of commercial operations Determining when a project has commenced commercial operations involves judgment. Management performs this assessment on an ongoing basis for each development project. Amongst the criteria that are evaluated are: the level of production relative to design capacity and the sustainability of this level; the period of time since the start of uranium production; and an assessment of the sustainability of profitable operations. These factors can be subjective and no one factor by itself is necessarily indicative. Management exercises judgment in evaluating these factors based on its knowledge of the project’s operations. This assessment impacts the balance sheet and income statement, as upon commencement of commercial operations, development expenditures cease to be capitalized, revenue is recognized from any sales when the appropriate criteria have been met, and the assets included in assets under construction are reclassified to property, plant and equipment.


Determination of joint control The Corporation conducts the majority of its operations through joint ownership interests. Judgment is needed to assess whether these interests meet the definition of joint control, as opposed to an investment interest. Management makes this determination based on an analysis of the contracts with the other venturers, including assessing whether unanimous consent is required on financial and operating decisions. Taxation The provision for income taxes and composition of income tax assets and liabilities require management’s judgment as to the types of arrangements considered to be a tax on income in contrast to an operating cost. The application of income tax legislation also requires judgments in order to interpret the various legislation and apply those findings to the Corporation’s transactions. Management judgment and estimates are required in assessing whether deferred tax assets and certain deferred tax liabilities are recognized in the consolidated balance sheet. Judgments are made as to whether future taxable profits will be available in order to recognize certain deferred tax assets. Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, reserves, operating costs, and other capital management transactions. These judgments and assumptions are subject to risk and uncertainty, therefore there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on the consolidated balance sheet and the benefit of other tax losses and temporary differences not yet recognized. Functional currency Judgment is required to determine the functional currency of each entity. These judgments are continuously evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances.

ADOPTION OF NEW INTERNATIONAL FINANCIAL REPORTING STANDARDS The following new IFRS has been applied for the first time in the current year:

IFRS 10, Consolidated financial statements IFRS 10 replaces the consolidation requirements in IAS 27, Consolidated and Separate Financial Statements, and SIC‐12 Consolidation ‐ Special Purpose Entities. The adoption of this new standard had no impact on the Corporation’s consolidated financial statements.

IFRS 11, Joint arrangements IFRS 11 supersedes IAS 31, Interests in Joint Ventures, and SIC‐13, Jointly Controlled Entities ‐ Non‐Monetary Contributions by Ventures.


The Corporation has re‐evaluated its involvement in its joint arrangements and has accounted for the investments as joint ventures. As a result the investments are now accounted for by applying the equity method, compared to proportionate consolidation applied in the past. The change had a significant impact on the recognized assets and liabilities of the Corporation as well as the presentation of revenues, cost of sales and expenditures in the income statement.

The tables in Note 31 of the Corporation’s audited annual consolidated financial statements summarize the adjustments made to the comparative balance sheet, income statement and statements of cash flows. IFRS 12, Disclosure of interests in other entities IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. As a result of adopting IFRS 12, the Corporation has provided additional disclosures in Note 11 of its audited annual consolidated financial statements. IFRS 13, Fair value measurement IFRS 13 is a new standard that defines fair value, sets out in a single IFRS framework for measuring fair value and requires disclosures about fair value measurements. IFRS 13 does not determine when an asset, a liability or an entity’s own equity instrument is measured at fair value. Rather, the measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value (with limited exceptions). As a result of adopting IFRS 13, the Corporation has provided additional disclosures in Note 26 of the its audited annual consolidated financial statements. There were no other impacts on the consolidated financial statements on adoption of this standard. IAS 28, Investments in associates and joint ventures IAS 28 was re‐issued by the IASB on May 12, 2011 in order to conform to changes as a result of the issuance of IFRS 10, IFRS 11, and IFRS 12. IAS 28 continues to prescribe the accounting for investments in associates, but is now the only source of guidance describing the application of the equity method. The amended IAS 28 was applied by all entities that are investors with joint control of, or significant influence over, an investee.


NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED At the date of authorization of the annual audited consolidated financial statements for the year ended December 31, 2013 the following standard, which is applicable to the Corporation, was issued but not yet effective. The previous effective date of January 1, 2015 has been removed by IASB, and early adoption is permitted. The Corporation will evaluate the impact of the change in its financial statements based on the characteristics of its financial instruments at the time of adoption.

IFRS 9, Financial instruments IFRS 9, “Financial Instruments” will replace IAS 39, Financial Instruments: Recognition and Measurement for classification and measurement of financial assets and liabilities. IFRS 9 requires all recognized financial assets to be subsequently measured at amortized cost or fair value. Debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. A fair value option is provided for financial instruments otherwise measured at amortized cost. This standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39.

IFRIC 21, Levies IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. The Interpretation includes guidance illustrating how the Interpretation should be applied. IFRIC 21 is effective for annual periods beginning on or after 1 January 2014. Management is in the process of determining the impact of this new IFRIC on the Corporation’s consolidated financial statements.

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: macroeconomic conditions and global financial markets may have a substantial material adverse effect on the Corporation’s business; as a wholly‐owned subsidiary of a Russian state‐owned company, the Corporation may be adversely affected by economic sanctions that may be imposed on its shareholders, affiliates or third parties with which the Corporation deals; 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 any of its development projects will become operating mines, or that any of its operations on care and maintenance will become operational, or that currently producing mines will remain commercially viable if uranium prices keep falling; no assurances can be given that future mineral production estimates will be achieved; mineral rights and tenures may not be granted or renewed on satisfactory terms and may be revoked, altered or challenged by third parties (and have been in the case of certain mines); the Government of Kazakhstan has pre‐emptive and other rights to acquire the Corporation’s properties in Kazakhstan or their production; limited supply of desirable mineral lands for acquisition; risks and problems associated with completing and integrating acquisitions; competition in marketing uranium, or for mineral properties or operating requirements like drilling equipment; competition from other sources of energy and public acceptance of nuclear energy; sensitivity of revenues to uranium prices and the volatility of the same; labour relations; extreme weather events; the capital requirements to complete the Corporation’s current projects and expand its operations are substantial; the integration of acquisitions; currency fluctuations; Russian ruble currency exchange risk; restrictions of the Russian banking system; swap counterparty risk; related party transactions and potential conflicts of interest; the Corporation’s operations and activities are subject to environmental risks; government regulation may adversely affect the Corporation; the risks of obtaining and maintaining necessary licences and permits; risks associated with foreign operations including, in relation to Kazakhstan; the risk of future sulphuric acid constraints; a change in ownership that breaches covenants in the Ruble Bonds; potential obligations under the Mantra put/call option agreement; and the Corporation is dependent on third party service providers; the Corporation is significantly leveraged; the Corporation is subject to covenants which limit its operating and financial flexibility and create the risk of substantial liability in the event of default; and the Corporation has outstanding debt that bears interest at floating rates. The Corporation’s risk factors are discussed in detail in its Annual Information Form for the year ended December 31, 2013, which is available under the Corporation’s profile on SEDAR at www.sedar.com, and should be reviewed in conjunction with these documents.


STOCK OPTION AND RESTRICTED SHARE PLANS Under the Corporation’s stock option plan (as amended and re‐approved on May 7, 2013), 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 5.0% 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 the lesser of (i) 1.0% of the total number of common shares outstanding on a non‐diluted basis, and (ii) an annual equity award value of $100,000 per director (provided, however, that this limitation shall not apply to the initial grant of stock options under the plan to newly appointed or newly elected directors of the Corporation). Under the Corporation’s restricted share plan, restricted share rights exercisable for common shares of Uranium One at the end of a restricted period, for no additional consideration, may be 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. There were no restricted share rights outstanding on December 31, 2013 or December 31, 2012. During the year ended December 31, 2013, stock options activity was as follows: • No options were granted during the period; • 336,488, options were exercised; • 13,832,219 options were cancelled pursuant to the Plan of Arrangement upon the completion of the Going Private Transaction; and • 14,686 options expired.

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 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 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 the reports the Corporation files or submits under Canadian securities laws, is recorded, processed, summarized and reported accurately and within the time periods specified.


INTERNAL CONTROLS AND PROCEDURES The Corporation’s management, under the supervision of, and with the participation of its Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting. The Corporation’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. As at the end of the period covered by this management’s discussion and analysis, management evaluated the design and operating effectiveness of the Corporation’s internal control over financial reporting based on Internal Controls‐ Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, the 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 internal control over financial reporting was designed and operating effectively. There have been no material changes in the Corporation’s internal control over financial reporting during the year ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

LIMITATIONS OF CONTROLS AND PROCEDURES The Corporation’s management, including the Chief Executive Officer and the Chief Financial Officer, believes that any disclosure controls and procedures and internal controls over financial reporting, no matter how well designed and operated, can have inherent limitations, and is not capable of preventing all errors and fraud therefore, even those systems determined to be effective can provide only reasonable assurance that the objectives of the control system is met.

OUTLOOK During 2014, the Corporation is focused on ensuring that the Akdala, South Inkai, Karatau and Zarechnoye mines remain at full production capacity, continuing the ramp‐up in production at Akbastau and Kharasan, controlling costs at its operations and remaining a reliable supplier of U3O8 to the nuclear fuel industry. The Corporation’s attributable production estimate for 2014 is 12.4 million pounds and is made up as follows:

OPERATION STATUS TOTAL ESTIMATED 2014 PRODUCTION (MILLIONS OF LBS)

OWNERSHIP %

ESTIMATED ATTRIBUTABLE PRODUCTION

(MILLIONS OF LBS) Akdala Producing 2.6 70% 1.8 South Inkai Producing 5.2 70% 3.6 Karatau Producing 5.2 50% 2.6 Akbastau Producing 4.0 50% 2.0 Zarechnoye Producing 2.3 49.67% 1.1 Kharasan Producing 2.2 30% 0.7 Willow Creek Producing 0.6 100% 0.6

Total 22.1 12.4 During 2014, the average cash cost per pound sold is expected to be $18 per pound and is made up as follows:

MINE 2014 ‐ ESTIMATED

AVERAGE CASH COST ($/LB)

Akdala 16 South Inkai 18 Karatau 11 Akbastau 13 Zarechnoye 26 Kharasan 24 Willow Creek 28

Weighted average 18 The Corporation’s strategy is to remain exposed to the uranium price. Material is sold at market related prices at the time of delivery, except for contracts for 1.7 million pounds which will be sold at an average fixed price of $42 per pound (subject to escalation). For 2014, the Corporation expects to sell approximately 12.4 million attributable pounds, excluding sales during commissioning.


The Corporation’s estimated capital expenditures per project for 2014 are expected to be as follows:

MINE / PROJECT

2014 ‐ ESTIMATED CAPITAL EXPENDITURE IN $ MILLIONS

WELLFIELD DEVELOPMENT

PLANT AND EQUIPMENT AND

OTHERTOTAL OWNERSHIP

%TOTAL

100% ATTRIBUTABLE

Kazakhstan

Akdala 9 2 11 70% 8South Inkai 27 3 30 70% 21Karatau 22 1 23 50% 12Akbastau 13 1 14 50% 7Zarechnoye 26 2 28 49.67% 14Kharasan 29 2 31 30% 9SKZ‐U ‐ 3 3 19% 1

Subtotal – Kazakhstan 127 14 141 72

United States

Willow Creek and the Powder River Basin ‐ 1 1 100% 1

Subtotal – United States ‐ 1 1 1

Total 127 15 142 73

Capital expenditure in 2014, on an attributable basis, comprises the following expenditures: • Akdala: wellfield development and resource definition drilling; • South Inkai: wellfield development, resource definition drilling and sustaining capital, as well as $1 million for the expansion of the drying facility

to process Akdala production; • Karatau: wellfield development, resource definition drilling, and sustaining capital; • Akbastau: wellfield development, resource definition drilling, and sustaining capital; • Zarechnoye: wellfield development, resource definition drilling, and sustaining capital; • Kharasan: wellfield development, resource definition drilling, and sustaining capital.

Other estimated expenditures by the Corporation in 2014 are expected to be as follows:

ITEM 2014 – ESTIMATED IN $ MILLIONS

General and administrative (excluding stock based compensation) 32Exploration 1


FORWARD‐LOOKING STATEMENTS AND OTHER INFORMATION This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains certain forward‐looking statements. Forward‐looking statements include but are not limited to those with respect to the price of uranium, 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, market conditions, corporate plans, objectives and goals, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, the timing and potential effects of proposed transactions, title disputes or claims, 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, availability of sulphuric acid in Kazakhstan, possible changes to the tax code in Kazakhstan, accidents, labour disputes or other risks of the mining industry, delays in obtaining government approvals or financing or in completion of development or construction activities, risks relating to the completion of transactions or integration of acquisitions, to international operations, to prices of uranium 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, 2013 which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document. Although Uranium One has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward‐looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward‐looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward‐looking statements. Except as required under applicable securities laws, Uranium One undertakes no obligation to update publicly or revise any forward looking statements, whether as a result of new information, future events, or otherwise. 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, provide the date of each resource or reserve estimate, details of the key assumptions, methods and parameters used in the estimates, details of quality and grade or quality of each resource or reserve and a general discussion of the extent to which the estimate may be materially affected by any known environmental, permitting, legal, taxation, socio‐political, marketing, or other relevant issues. The technical reports also provide information with respect to data verification in the estimation. This document and the Corporation’s other publicly filed documents use the terms “measured”, "indicated" and "inferred" resources as defined in accordance with National Instrument 43‐101 ‐ Standards of Disclosure for Mineral Projects. United States investors are advised that while these terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that all or any part of the mineral deposits in these categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility and it cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Investors are cautioned not to assume that all or any part of an inferred resource exists or is economically or legally mineable. Mineral resources are not mineral reserves and do not have demonstrated economic viability. 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, New Business and Technical Services of the Corporation, a qualified person for the purposes of NI 43‐101.

uranium one inc....industry operator, owning 100% of the outstanding common shares. on october 18,...

Documents