First Uranium Corporation updates the use of proceeds from the proposed sale of Mine Waste Solutions and Ezulwini Gold Mines

TORONTO and JOHANNESBURG, June 6, 2012 /CNW/ - On March 2, 2012, First Uranium Corporation (TSX: FIU) (JSE: FUM) (ISIN: CA33744R1029) ("FIU" or the "Company") announced an agreement to sell Mine Waste Solutions and its subsidiaries ("MWS") to AngloGold Ashanti Limited ("AGA") and an agreement to sell Ezulwini Gold Mine and related assets ("Ezulwini") to Gold One International Limited ("Gold One") (collectively, the "Transactions").

In that announcement and in a follow up news release dated April 19, 2012, the Company provided an expected Pro Forma Use of Proceeds from the completion of the Transactions and an update, as at April 19, 2012, with respect thereto.  Subsequently, the Company has continued to expend funds for sustaining capital required for its operations and has experienced operating losses at the Ezulwini operations and cash flow at the MWS operations has been negatively impacted by underperformance due to clay handling issues.   Consequently, the Company has drawn down the US$10 million loan facility provided by Gold One under the terms of that agreement and this amount plus interest is repayable in full upon the earlier of the termination of the Gold One Agreement and the closing of the transaction with Gold One.  The negative impact of the operating losses on the expected Pro Forma Use of Proceeds have been offset primarily by favourable movements in spot foreign exchange rates, which are still subject to change upon closing of the Transactions.

The Company has updated the expected Pro Forma Use of Proceeds provided in the earlier announcements and replaced it with the following:

Pro Forma Use of Proceeds

Upon completion of the Transactions, the Company will receive an aggregate of US$405 million in cash at closing of which US$30 million will be held in escrow accounts. The Company now expects that it will make the following initial payments(1) to security holders from the proceeds received on the closing of the Transactions, after deducting approximately US$19 million in operating and transaction related costs(2):

      (in million of US$)
       
Notes        $154.9
       
Debentures 
    $140.7
(including interest from December 31, 2011 to March 2, 2012)
       
Gold One Loan 
    $10.2
(including interest)
       
Shareholders   
    $50.2
(represents approximately Cdn$0.22 per share)

(1)      These amounts are approximate and subject to change due to, among other things, currency fluctuations (conversion rates for the above dollar values were based on the Bank of Canada noon rate as of June 4, 2012) and results of operations.
(2)      These amounts include, among other things, retention and severance payments, payments owing to Vulisango (Proprietary) Limited (the Company's Black Empowerment Partner) upon termination of the Management Agreement with Vulisango dated August 25, 2011, corporate costs to sustain the Company to the end of the escrow period and payments to financial, legal and other advisors.

The balance of the funds held in escrow will be disbursed following the release of the escrow accounts. Assuming no claims are made, the amount available for distribution will be US$30 million which the Company intends to distribute as soon as legally permissible as follows:

      (in million of US$)
       
Debentures       $4.3
       
Shareholders  
    $25.7
(represents approximately Cdn$0.11 per share)

Therefore, based on the above assumptions and calculations, as of the date hereof, the Company anticipates that the total distribution to shareholders could equal approximately Cdn$0.33 per share.  These amounts are approximate and remain subject to further change.

If you have any questions about the information contained in the management information circulars or require assistance with voting your securities, please contact Kingsdale Shareholder Services Inc. by telephone at 1-866-581-1571 toll-free in North America, or at 1-416-867-2272 outside of North America (collect calls accepted), or by email at contactus@kingsdaleshareholder.com.

About First Uranium Corporation

First Uranium Corporation operates the Ezulwini Mine, an underground mining operation, and Mine Waste Solutions, a tailings recovery facility. Both operations are situated in South Africa.

Cautionary Language Regarding Forward-Looking Information

This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release are forward-looking statements (or forward-looking information). The Company's plans involve various estimates and assumptions and its business and operations are subject to various risks and uncertainties. For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form and most recent Management Discussion and Analysis on file with the Canadian provincial securities regulatory authorities on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements, including without limitation, the statements regarding the proposed transactions with Gold One International Limited and AngloGold Ashanti Limited. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein, except in accordance with applicable securities laws.

www.firsturanium.com

SOURCE First Uranium Corporation

For further information:

John Hick or Mary Batoff
(416) 306‐3072
mary@firsturanium.ca

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