First Uranium comments on results released June 17, 2009



    All amounts are in US dollars unless otherwise noted.

    TORONTO and JOHANNESBURG, June 18 /CNW/ - First Uranium Corporation
(TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company")
announced the filing of the Company's audited consolidated financial
statements for FY 2009 (the "Financial Statements") and related Management
Discussion and Analysis ("MD&A") on June 17, 2009. The Company's shareholders
have raised a number of questions, which are addressed below.

    Management's Outlook

    As reported on June 17, 2009, Gordon Miller, First Uranium's President
and Chief Executive Officer commented, "While not yet recording positive cash
flow and earnings, we are encouraged that our financial performance is headed
in the right direction and reflects our status as a gold producer at both
operations and that, with the start-up of uranium production, the majority of
our capital expenditures at the Ezulwini Mine are now behind us. We expect
that operating profit and cash flow will benefit from the completion of the
significant capital expenditure programs at the Ezulwini Mine in FY 2009,
which ended March 31, 2009, and at MWS in FY 2010, which ends March 31, 2010."

    MWS Capital Expenditure Projections

    Consistent with the use of proceeds described in our prospectus dated May
25, 2009, First Uranium has taken steps to accelerate construction of the
pressure leach portion of the uranium circuit at its Mine Waste Solutions
project ("MWS"). First Uranium also explained in its MD&A that it continues to
update its capital and operating cost expectations, which have risen from
estimates of approximately two years ago. The total capital cost of the MWS
project, inclusive of project acceleration, is expected to be approximately
$451.6 million, of which $129.6 million has been spent to date and $322
million remains to be spent.
    Further to the information provided in the Company's disclosure and
discussed on the conference call yesterday, there are several factors
underpinning the increase in capital costs:

    
    -   the previous pre-feasibility estimate compiled by RSV Kenyuka was
        base dated November 2007, and since then there have been significant
        escalations in construction materials, which have been calculated at
        approximately 12% annually;
    -   the decision to optimize the flotation circuit by introducing
        additional flotation cells to maximize both gold and uranium
        recoveries;
    -   the decision to introduce raft civil foundations as a result of
        recently concluded geotechnical work;
    -   the decision to accelerate the introduction of pressure leach; and
    -   the reluctance of the Department of Water Affairs to allow the
        establishment of our life of mine deposition tailings facility on a
        site adjacent to the project and the resultant incremental capital
        required to equip such a facility 13 kilometres from the project.
    

    First Uranium believes that the sequencing of construction, including
deferral of construction of the third uranium plant module, will allow
additional funding to be derived from future anticipated cash flows, which
combined with existing cash, will enable it to finance the MWS capital needs
without additional equity capital. Due to the prevailing uranium price
expectations, management plans to reconfigure the plant design and change the
mine plan to achieve approximately 91% of the previously planned life of mine
uranium production, resulting in a more efficient capital investment program
and optimized cash flow profile.

    Net Present Value ("NPV") Projections for the Company

    This measure does not have a standardized meaning prescribed by GAAP and
is, therefore, unlikely to be comparable to similar measures presented by
other issuers. Our financial reporting is contained in the MD&A and Financial
Statements filed on June 17, 2009.
    Based upon the assumptions and projections discussed below, the Company's
total NPV has decreased marginally from $1,565 million (as reported in the
press release of the Company dated November 11, 2008) to $1,482 million
(inclusive of the impact of the $125 million payment from the Gold Stream
Transaction).

    Ezulwini Mine Development and Production Projections

    Management has updated its outlook for future prices of uranium and gold
and for the weaker value of the U.S. dollar against the South African rand as
follows:

    
    Revised Metal Price and Foreign Exchange Rate Assumptions

                        FY     FY     FY     FY     FY     FY     FY    Long
                       2010   2011   2012   2013   2014   2015   2016   term
    Gold Price
     ($ per ounce)
    New                 925    952    930    884    846    797    788    788
    Old                 940    999    957    881    835    748    748    748

    Uranium
     ($ per pound)
    New                  52     62     69     69     64     56     53     50
    Old                  83     93     84     79     70     52     52     52

    Exchange Rate:
     (ZAR/$US)
    New                8.14   8.46   9.25   8.99   9.03   9.18   9.28   9.33
    Old                7.88   8.14   8.46   8.63   9.66   8.95   8.95   8.95
    

    The following chart illustrates the expected effect of the revised metal
price and foreign exchange rate assumptions, as well as slight adjustments to
reflect actual operating costs and spent capital costs, to the November 2008
technical report model on the NPV for the Ezulwini Mine.

    
    Revised life of mine ("LOM") project economics for the Ezulwini Mine
    -------------------------------------------------------------------------
                                           LOM as of   LOM as of   LOM as of
                                          April 2008   Nov. 2008   June 2009
                                         ------------------------------------

    Rock value per tonne milled ($/tonne)        $72        $147        $153

    Uranium Cash Cost ($/pound)                   33          25          23
    Gold Cash Cost ($/ounce)                     376         340         349

    Capital expenditures ($ million)            $220        $276        $275

    LOM production
    --------------
    Uranium (000 pounds)                      15,990      18,426      18,334
    Gold (000 ounces)                          5,211       5,805       5,786

    Average annual LOM production
    -----------------------------
    Uranium (000 pounds)                         952       1,117       1,146
    Gold (000 ounces)                            306         352         362

    Annual uranium production (000 pounds)
    --------------------------------------
      FY 2010                                    606         352         295
      FY 2011                                    691         647         611
      FY 2012                                    822         737         737

    Annual gold production (000 ounces)
    -----------------------------------
      FY 2010                                    243         141         141
      FY 2011                                    346         252         252
      FY 2012                                    375         281         281

    NPV(8) ($ million)                          $667        $924      $1,008
    -------------------------------------------------------------------------
    Notes:
    1.  Co-product costs assume that operating cash costs are split in
        proportion to the revenue earned from each product.
    2.  NPV is calculated using a nominal discount rate of 8%.
    3.  Capital expenditures estimates are exclusive of sustaining capital.
    4.  The NPV in the right-hand column was calculated using a start date of
        April 1, 2009.
    

    MWS Project Development and Production Projections

    At MWS, management previously estimated that the second gold plant module
and the first two uranium plant modules would commence commissioning in Q1
2010 (ending June 30, 2009) to be completed in Q2 2010 (ending September 30,
2009). Consistent with that commissioning schedule, the second gold plant
module is expected to produce gold on carbon by the end of Q2 2010. Production
of yellowcake from the first two uranium modules at MWS, however, is now
expected to commence in Q3 2010 (ending December 31, 2009) due to delays in
project design, which in turn postponed the procurement of certain
construction materials.
    In addition, other events have impacted the economics of MWS including:

    
    -   the revised outlook for metal prices and foreign exchange rates;
    -   the Gold Stream Transaction; and
    -   the decision to accelerate the implementation of the pressure leach
        circuit.
    

    For the final phase of construction, the Company has decided to defer
portions of the third uranium plant module until such time that higher uranium
prices are expected to occur. The new plan includes an immediate start to the
construction of the third gold plant module as well as the third stream of the
uranium flotation plant, which will be used to optimize flotation mass pull
and thereby uranium grades delivered to the plant. Inception of the third
stream of the uranium flotation plant is expected to ensure that planned life
of mine gold production will be realized in all material respects. Management
also plans to accelerate the change from an atmospheric leach process to a
pressure leach process concurrent with the commissioning of the third gold
plant module. The acceleration of the pressure leach process is expected to
enhance gold recoveries and reduce operating costs significantly.
    For the construction and operation of this final phase of the MWS plants
the Company has recently received updated capital and operating cost estimates
which are higher than the original estimate two years ago. The total capital
cost of the MWS plants, inclusive of the accelerated pressure leach process
and final completion of the third uranium plant is expected to be
approximately $451.6 million, of which $129.6 million has been spent to date
and $322 million remains to be spent. (See also "MWS Capital Expenditure
Projections" on page 2 of this news release.) The consent of South Africa's
national power utility, Eskom, to supply power to MWS has reduced the
projected operating costs in the short term by reducing the need to generate
power on site with diesel generators. However, this has been offset by
unexpected price increases, notably cyanide, projected over the life of the
project. As a result, the operating cash cost for MWS on a co-product basis is
expected to average $319 per ounce of gold and $25 per pound of uranium over
the life of the project.
    The following chart illustrates the expected impact of the above factors
on the NPV for MWS. The NPV in the right-hand column was calculated using a
start date of April 1, 2009. The November 2008 NPV, revised to include the
disclosed changes in metal price and exchange rates assumptions, cost
escalation and the change in the configuration of the final phase of the MWS
plants, results in a NPV of $474 million, inclusive of the $125 million paid
to the Company from the Gold Stream Transaction.

    
    Revised LOM project economics for MWS
    -------------------------------------------------------------------------
                                                       LOM as of
                                           LOM as of    November   LOM as of
                                          April 2008      2008     June 2009
                                         ------------------------------------
    Rock value per tonne reclaimed
     ($/tonne)                                 $8.17       $8.91       $7.70

    Uranium Cash Cost ($/pound)                   22          21          25
    Gold Cash Cost ($/ounce)                     347         279         319

    Capital expenditures ($ million)            $251        $254        $322

    LOM production
    --------------
    Uranium (000 pounds)                      19,749      19,444      17,141
    Gold (000 ounces)                          1,956       2,130       2,062

    Average annual LOM production
    -----------------------------
    Uranium (000 pounds)                       1,316       1,388       1,257
    Gold (000 ounces)                            130         141         139

    Annual uranium production (000 pounds)
    --------------------------------------
      FY 2010                                  1,077         855         457
      FY 2011                                  1,204       1,798       1,185
      FY 2012                                  1,910       2,171       1,241

    Annual gold production (000 ounces)
    -----------------------------------
      FY 2010                                    120         129          90
      FY 2011                                    161         196         175
      FY 2012                                    182         175         161

    NPV(8) ($ million)                          $414        $641        $349
    Inclusive of the $125 million
     paid to the Company from the
     Gold Stream Transaction ($ million)           -           -        $474
    -------------------------------------------------------------------------
    Notes:
    1.  Co-product costs assume that operating cash costs are split in
        proportion to the revenue earned from each product.
    2.  NPV is calculated using a real discount rate of 8%.
    3.  The NPV in the right-hand column was calculated using a start date of
        April 1, 2009.
    

    Summary spreadsheets for the related economics of the two operations have
been posted on the Company's website at www.firsturanium.com.

    Sovereign Risk

    While many of our competitors operate in Canada, the United States and
Australia, all of our current operations are in South Africa. Management and a
number of the directors have considerable experience doing business in South
Africa and have positive working relationships with authorities at all levels
in South Africa. We are bullish on South Africa as the leading jurisdiction in
Africa in which to work, live and do business.

    Technical Disclosure

    All updates to the technical disclosure in this news release relating to
the Ezulwini Mine have been reviewed and approved by Syd Caddy, EVP and Chief
Operating Officer of First Uranium. Mr. Caddy is a Fellow of the South African
Institute of Mining and Metallurgy and a "qualified person" under NI 43-101
with regard to these updates.
    All updates to the technical disclosure in this news release relating to
the MWS operation have been reviewed and approved by James Fisher, EVP
Corporate Development of First Uranium. Mr. Fisher is a Chartered Engineer, a
Fellow of The Institute of Materials, Minerals and Mining, a member of the
South African Institute of Mining and Metallurgy and a "qualified person"
under NI 43-101 with regard to these updates.

    Cautionary Language Regarding Forward-Looking Information

    This news release contains certain forward-looking statements.
Forward-looking statements include but are not limited to those with respect
to costs of production, capital expenditures, price of uranium and gold,
supply and price of sulphuric acid, the availability and price of electrical
power, the estimation of mineral resources and reserves, the realization of
mineral reserve estimates, the timing and amount of estimated future
production, costs and timing of development of new deposits, success of
exploration activities, permitting time lines, currency fluctuations,
requirements for additional capital, availability of financing on acceptable
terms, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses and title disputes or claims and
limitations on insurance coverage. In certain cases, forward-looking
statements can be identified by the use of words such as "goal", "objective",
"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 First Uranium to be materially
different from any future results, performance or achievement expressed or
implied by the forward-looking statements. Such risks and uncertainties
include, among others, the actual results of current exploration activities,
conclusions of economic evaluations, changes in project parameters as plans
continue to be refined, possible variations in grade and ore densities or
recovery rates, failure of plant, equipment or processes to operate as
anticipated, accidents, labour disputes or other risks of the mining industry,
delays in obtaining government approvals or financing or in completion of
development or construction activities, risks relating to the integration of
acquisitions, to international operations, to prices of uranium and gold.
Although First Uranium 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. It
is important to note, that: (i) unless otherwise indicated, forward-looking
statements indicate the Company's expectations as at the date of this news
release; (ii) actual results may differ materially from the Company's
expectations if known and unknown risks or uncertainties affect its business,
or if estimates or assumptions prove inaccurate; (iii) the Company cannot
guarantee that any forward-looking statement will materialize and,
accordingly, readers are cautioned not to place undue reliance on these
forward-looking statements; and (iv) the Company disclaims any intention and
assumes no obligation to update or revise any forward-looking statement even
if new information becomes available, as a result of future events or for any
other reason. In making the forward-looking statements in this news release,
First Uranium has made several material assumptions, including but not limited
to, the assumption that: (i) operating and capital cost estimates, metal
prices, exchange rates and discount rates applied in the preliminary economic
assessment for the Ezulwini Mine and the prefeasibility study for MWS are
achieved; (ii) approvals to transfer or grant, as the case may be, mining
rights or prospecting rights will be obtained; (iii) consistent supply of
sufficient power will be available to develop and operate the projects as
planned; (iv) mineral reserve and resource estimates are accurate; (v) the
technology used to develop and operate its two projects has, for the most
part, been proven and will work effectively; (vi) that labour and materials
will be sufficiently plentiful as to not impede the projects or add
significantly to the estimated cash costs of operations; (vii) that Black
Economic Empowerment ("BEE") investors will maintain their interest in the
Company and their investment in the Company's common shares to a sufficient
level to continue to support the Company's compliance with 2014 BEE
requirements; and (viii) that the innovative work on stabilizing the main
shaft at the Ezulwini Mine will be successful in maintaining a safe and
uninterrupted working environment until 2024.

    About First Uranium Corporation

    First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on its goal of
becoming a significant low-cost producer of uranium and gold through the
expansion of the underground development to feed the new uranium and gold
plants at the Ezulwini Mine and through the expansion of the plant capacity of
the Mine Waste Solutions tailings recovery facility, both in South Africa.
First Uranium also plans to grow production by pursuing value-enhancing
acquisition and joint venture opportunities in South Africa and elsewhere.

    
    First Uranium Corporation
    1240-155 University Avenue, Toronto, ON Canada M5H 3B7
    www.firsturanium.com
    





For further information:

For further information: Bob Tait, VP Investor Relations at
bob@firsturanium.ca or (416) 342-5639 (office) or (416) 558-3858 (mobile)

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