First Uranium reports production and financial results for the three and
twelve months ended March 31, 2010

    
            All amounts are in US dollars unless otherwise noted.

    The Management Discussion & Analysis ("MD&A") for FY 2010 has been
    appended to this release.

    For the F2010 Financial Statements, please see the Company's website,
    www.firsturanium.com under "Investor Centre/Annual Reports".
    

TORONTO and JOHANNESBURG, June 18 /CNW/ - First Uranium Corporation (TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company") today announced its financial results for the three- and twelve-month periods ended March 31, 2010 ("Q4 2010" and "FY 2010", respectively). References to "Q1 2011" refer to the Company's three-month period ending June 30, 2010.

HIGHLIGHTS

    
    Key developments in Q4 2010 and Q1 2011 to-date include:
    -   Environmental authorization ("EA") for the new Tailings Storage
        Facility ("TSF") at Mine Waste Solutions ("MWS") reinstated;
    -   Successful recapitalization program raises cash proceeds of
        C$150 million;
    -   Penalty payment of $42 million and completion tests under MWS gold
        stream transaction restructured and outstanding loan to Simmer & Jack
        Mines, Limited ("Simmer and Jack"), settled;
    -   Deon van der Mescht appointed President and Chief Executive Officer
        of the Company ("CEO");
    -   Long-awaited new order water user license ("WUL") for MWS granted by
        the Department of Water Affairs ("DWA") on June 15, 2010;
    -   Transfer of the new order mining right pertaining to the Ezulwini
        Mine from Simmer and Jack to the Ezulwini Mining Company was
        registered; and
    -   Sale of first shipment of uranium out of Ezulwini Mine.
    

The financial crisis that was precipitated by the unexpected withdrawal of the EA for the new TSF at MWS early in January 2010, was resolved during the quarter with the re-instatement of the EA, and the conclusion of a recapitalization program in April 2010 which resulted in a cash injection of C$150 million. As part of the recapitalization program, the board and management were also restructured resulting in the appointment of Deon van der Mescht as President and CEO of First Uranium, and Peter Surgey as Chairman of the Board.

On the permitting front, the long-awaited WUL for the MWS project was granted on June 15, 2010 by the DWA, which concludes the major permitting issues surrounding this project. Additionally, the Department of Mineral Resources (DMR) registered the transfer of the new order mining right for Ezulwini Mine from Simmer and Jack to the Ezulwini Mining Company.

Post the recapitalization, Ezulwini Mine continues to ramp up production. The new management team at the mine is focused on completing a detailed review of the mine plan by July 2010. During FY 2010, 26,965 ounces of gold were sold from the Ezulwini Mine and its first shipment of 22,500 pounds of uranium was sold in Q4 2010.

Although the gold production at MWS had been negatively impacted by the withdrawal of the EA, gold recoveries continued to improve through the year, allowing the operation to return in excess of 100% cash operating margins. During FY 2010, 62,019 ounces of gold were sold from MWS which exceeded the mine's plan.

"While the quarter got off to a disappointing start, I am pleased to report that the initial problems have largely been resolved thanks to the successful recapitalization program and the fact that two key permits for MWS, namely the EA and the Water Use License were reinstated and granted, respectively. This effectively gives the green light to accelerate the expansion program of this highly profitable operation," commented Deon van der Mescht, President and Chief Executive Officer of First Uranium. "Now that these uncertainties have been addressed, we will be able to deliver value to our shareholders by meeting our near-term production goals, with careful control of the costs."

The following table provides a brief review of the Company's performance:

    
    Overview
    -------------------------------------------------------------------------
                                    Q4 2010    Q4 2009    FY 2010    FY 2009
    -------------------------------------------------------------------------
    Ezulwini Mine
      Tonnes Milled (000)               130        109        425        233
      Ounces of Gold Sold(a)          8,327      4,267     26,965     10,678
      Average Selling Price
       per Ounce ($)                  1,404        917      1,149        920
      Average Cash Cost per
       Ounce($)(b)                    2,929      2,032      2,858      1,941
      Pounds of Uranium Produced     20,638          -     44,399          -
      Pounds of Uranium Sold         22,500          -     22,500          -
    -------------------------------------------------------------------------
    Mine Waste Solutions
      Tonnes Reclaimed (000)          3,232      1,693     11,071      6,995
      Average Gold Recovery
       Grade(g/t)                      0.19       0.19       0.19       0.19
      Percentage Gold Recovered         56%        46%        51%        47%
      Ounces of Gold Sold            18,505     10,417     62,019     42,857
      Average Selling Price per
       Ounce ($)                        889        948        985        881
      Average Cash Cost per
       Ounce($)(b)                      402        379        392        397
    -------------------------------------------------------------------------
    Summary of Consolidated
      Financial Results
    (in thousands of dollars,
     except per share amounts)

      Revenue
      -  Ezulwini Mine(a)            12,104      3,915     31,393      9,825
      -  MWS                         16,457      9,872     61,067     37,771
                                  -------------------------------------------
                                     28,561     13,787     92,460     47,596
                                  -------------------------------------------
      Cost of Sales (including
       amortization)
      -  Ezulwini Mine(a)           (26,330)    (8,829)   (82,269)   (20,883)
      -  MWS                        (10,162)    (4,288)   (27,827)   (17,933)
                                  -------------------------------------------
                                    (36,492)   (13,117)  (101,789)   (38,816)
                                  -------------------------------------------
      Gross (loss) profit
      -  Ezulwini Mine              (14,226)    (4,914)   (50,876)   (11,058)
      -  MWS                          6,295      5,584     33,240     19,938
                                  -------------------------------------------
                                     (7,931)       670    (17,636)     8,780
                                  -------------------------------------------

      Operating loss(c)             (15,904)    (5,668)   (47,100)   (17,247)
      Loss for the period           (26,041)   (10,722)   (92,178)   (16,342)
      Basic and diluted loss
       per common share               (0.14)     (0.08)     (0.56)     (0.12)
      Cash flow (utilized in)
       generated from operations     13,515    (11,005)   (34,855)   (11,745)
      Cash flow from investing
       activities                   (31,646)   (36,913)  (229,665)  (211,896)
      Cash flow from financing
       activities                         -    120,907    162,692    170,907
    -------------------------------------------------------------------------
    Notes:
    (a) For the six months ended September 30, 2009, the costs of production
        from the Ezulwini Mine were capitalized and related proceeds of sales
        credited against capital. Thereafter, the gold processing plant at
        the Ezulwini Mine was regarded as ready for commercial use from an
        accounting perspective, and accordingly, from October 1, 2009 the
        revenues and related costs derived from the gold processing plant
        were included in the Company's financial results.
    (b) Cash cost per Ounce is defined as total cash costs divided by ounces
        of gold sold. Total cash costs exclude amortization expense and
        inventory purchase accounting adjustments. For further information on
        this non-GAAP performance measure see page 14 of the Company's FY
        2010 MD&A.
    (c) This is a non-GAAP measurement. Operating loss is loss before
        interest income, interest and accretion expenses, fair value gain or
        loss on derivative liability, foreign exchange gain or loss and
        income tax charges.
    

The information contained in this news release is qualified in its entirety by the information contained in the Company's audited consolidated financial statements for the year ended March 31, 2010 and the related MD&A.

Financial Results: Release and Conference Call

First Uranium will conduct a conference call with investors to discuss the information in this news release at 10 a.m. local Toronto time and 4 p.m. local Johannesburg time on Tuesday 22nd June, 2010.

The conference call will be available simultaneously to all interested analysts, investors and media. Callers may dial 1 800 319-4610 (Canada and the US) or 0800 981 705 (South Africa). Callers from other international locations may call +1 604 638-5340.

The call will be webcast at https://services.choruscall.com/links/firsturanium100622.html and available for replay shortly after the call for 90 days.

A telephone replay of the conference call will be available for 30 days. To access the replay, callers may dial 1 800 319-6413 (Canada and the US). Callers from other international locations may access the replay by dialing +1 604 638-9010 (Canada). Access to the replay will require the code 2128, followed by the number sign.

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 operations 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 including, without limitation, statements regarding the timing and amount of estimated future production, processing and development plans and future plans and objectives of First Uranium are forward-looking statements (or forward-looking information) that involve various estimates, assumptions, risks and uncertainties. For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form 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. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein, except in accordance with applicable securities laws.

Non-GAAP Measures

The Company believes that in addition to conventional measures prepared in accordance with Canadian GAAP, the Company and certain investors and analysts use certain other non-GAAP financial measures to evaluate the Company's performance including its ability to generate cash flow and profits from its operations. The Company has included certain non-GAAP measures in this document. Non-GAAP measures do not have any standardized meaning prescribed under Canadian GAAP, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP. Readers are advised to read all GAAP accounting disclosures presented in the Company's financial statements for more detail.

    
    FIRST URANIUM CORPORATION

    MANAGEMENT'S DISCUSSION AND ANALYSIS
    of the financial results
    for the year ended
    March 31, 2010
    

Management's discussion and analysis of the unaudited consolidated financial condition and results of operations for the year ended March 31, 2010

This Management's Discussion and Analysis ("MD&A") of the consolidated financial position and results of operations reviews the activities, audited consolidated results of operations and financial condition of First Uranium Corporation and its subsidiaries ("First Uranium" or the "Corporation") as at and for the year ended March 31, 2010, together with certain trends and factors that are expected to have an impact in the future. The following abbreviations are used to describe the periods under review throughout this MD&A:

    
    -------------------------------------------------------------------------
    Abbreviation   Period                 Abbreviation   Period
    -------------------------------------------------------------------------
    FY 2009        April 1, 2008 to       FY 2010        April 1, 2009 to
                    March 31, 2009                        March 31, 2010
    Q1 2009        April 1, 2008 to       Q1 2010        April 1, 2009 to
                    June 30, 2008                         June 30, 2009
    Q2 2009        July 1, 2008 to        Q2 2010        July 1, 2009 to
                    September 30, 2008                    September 30, 2009
    Q3 2009        October 1, 2008 to     Q3 2010        October 1, 2009 to
                    December 31, 2008                     December 31, 2009
    Q4 2009        January 1, 2009 to     Q4 2010        January 1, 2010 to
                    March 31, 2009                        March 31, 2010
    FY 2011        April 1, 2010 to       Q1 2011        April 1, 2010 to
                    March 31, 2011                        June 30, 2010
    -------------------------------------------------------------------------
    

This MD&A is intended to supplement and complement the audited consolidated financial statements for the year ended March 31, 2010 and the notes thereto (collectively the "Financial Statements") which have been prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"). Information contained in this MD&A is current as at June 17, 2010, unless otherwise indicated.

The reporting currency for the Corporation is the US dollar, and all amounts in the following discussion are in US dollars ("$"), except where otherwise indicated.

This MD&A includes certain forward-looking statements. Please read the cautionary note at the end of this document.

Financial Condition

During FY 2010, the Corporation relied, in part, on cash generated from the operations to fund the significant capital expenditure obligations to complete construction and commissioning of the current capital projects at Mine Waste Solutions ("MWS"). The slower build-up of production at the Ezulwini Mine during the year, delays in commissioning additional plant modules at both the Ezulwini Mine and MWS, along with increased capital requirements have resulted in less cash being generated by the Corporation than previously anticipated.

In an effort to improve the Corporation's financial position, the Corporation entered into various financing arrangements during FY 2010. In June 2009, First Uranium raised $92.6 million net cash proceeds with a bought deal financing, finalized a one-year term credit facility of ZAR160 million ($20.5 million) with Simmer and Jack Mines, Limited ("Simmer & Jack") in August 2009 (the "Facility with Simmer & Jack") and in December 2009, raised $49.6 million net cash proceeds from a gold stream transaction relating to the Ezulwini Mine.

The Corporation's requirement to raise capital to fund both the Ezulwini Mine's operating losses and the remaining capital expenditure program at MWS became increasingly critical during the latter part of Q3 2010 and into Q4 2010. The Corporation was actively engaged in exploring additional financing options.

The financing initiative was interrupted by a change in status of the Corporation's Environmental Authorization ("EA") for the new Tailings Storage Facility ("TSF") designed to accommodate future tailings deposition capacity requirements at MWS, including a withdrawal of the EA in January 2010. In February 2010, after extensive engagement with the North West Provincial Government's Department of Agriculture, Conservation, Environment and Rural Development ("NWDACERD"), First Uranium received notice from NWDACERD that the EA had been reinstated and amended allowing MWS to recommence planning activities for the construction of the new TSF (see Permitting at MWS section in this MD&A).

The withdrawal and subsequent reinstatement of the EA not only interrupted construction activities for the new TSF but, combined with the slower production build up at the Ezulwini Mine, also disrupted financing options, severely compromising First Uranium's financial position. The Corporation revised the Ezulwini Mine plan and the capital programme at MWS and also curtailed future development expenditures as part of a company-wide program to conserve cash.

The Board of Directors of the Corporation formed a Special Committee to review the financial position of First Uranium and to review and advise the Corporation on the various strategic alternatives that were available at that time.

On March 12, 2010, the Corporation entered into a heads of agreement for a private placement offering (the "Offering") of a minimum of Cdn$125 million and maximum of Cdn$150 million in secured convertible notes due March 31, 2013 (the "Notes"). The Notes consist of:

    
    (i)   Cdn$40 million in South African Rand ("ZAR") denominated Notes (the
          "Rand Notes") to be purchased by Simmer & Jack;
    (ii)  Cdn$20 million in Canadian dollar ("Cdn$") denominated Notes (the
          "Canadian Notes") to be purchased by Gold Wheaton Corporation
          ("GW"); and
    (iii) a minimum of Cdn$65 million and maximum of Cdn$90 million Canadian
          Notes to be offered to accredited investors by RBC Capital Markets
          Inc. acting as exclusive placement agent for the Corporation.
    

In connection with the Offering and in addition to the $40 million Rand Notes, Simmer & Jack agreed to exchange the Facility with Simmer & Jack plus accrued and unpaid interest for an equivalent value of Rand Notes (see Related Party Transactions section in this MD&A).

Also in connection with the Offering, GW agreed to settle the $42 million completion penalty obligation pursuant to the MWS Gold Stream Transaction with the issuance of 14 million common shares in First Uranium to GW and a commitment by the Corporation to complete construction of the third gold plant module at MWS and satisfaction of the technical completion tests prior to September 1, 2011 (see Commitments and Contingencies section in this MD&A).

Changes to management and the board of directors were conditions of the Offering. These changes included the appointment of Deon van der Mescht as Interim President and Chief Executive Officer ("CEO"). On March 16, 2010, the Corporation received the resignation of Gordon Miller as President, Chief Executive Officer and a director of the Corporation and appointed Deon van der Mescht, formerly CEO of Simmer & Jack as Interim President and CEO of the Corporation. On March 31, 2010 Nigel Brunette resigned as Chairman of the Board of Directors. The board was restructured on closing of the Offering with the resignation of three incumbent directors and the appointment of three nominees of Simmer & Jack and one nominee from GW.

On April 26, 2010, the Offering of the Notes was concluded and the Corporation received Cdn$150 million in cash.

As a result of the Cdn$150 million gross proceeds raised from the Offering, the Corporation is in a position to fund its operations under the revised plans. The Corporation plans to rely, in part, on cash generated from the operations to fund its capital expenditure obligations. To reduce the risk of requiring further funding going forward, the Corporation is currently undergoing a detailed review of all areas within the business to optimize cash flow.

Subsequent to the Offering, senior management within the organisation were restructured. With the Offering concluded, and with a restructured management team in place, the Corporation will focus on underground development and work to achieve increased production at the Ezulwini Mine and attain optimal output from gold and uranium facilities at both operations. At the Ezulwini Mine, management is reviewing the historical performance of the mine in detail with the intention of understanding the reasons for underperformance against past plans. The mine plan is also being reviewed using a bottom-up approach to ensure buy-in from production staff and to identify critical activities which need to be addressed in a timely manner in order to meet planned objectives. At MWS, the operations are being optimized to ensure maximum cash generation while the remaining capital programme is being re-structured to manage peak funding risk.

Business Overview

First Uranium Corporation has been focused on becoming a significant, low-cost producer of gold and uranium. Both the Ezulwini Mine and MWS are located in South Africa.

First Uranium went public in December 2006, raising net proceeds of $177.7 million from the sale of 33 million common shares. In May 2007, an additional $130.6 million (net of expenses) was raised from the sale of senior unsecured convertible debentures ("the Debentures").

In November 2008, the Corporation signed a definitive agreement with GW, whereby GW acquired the right to receive 25% of the life-of-mine gold production from MWS (the "MWS Gold Stream Transaction") for proceeds of $125.0 million. In February 2009, the Corporation completed a bought deal private placement (the "Private Placement") and raised net proceeds of $47.6 million by issuing 20.5 million units at a price per unit of Cdn$3.00 that consisted of one common share of First Uranium (a "Unit Share") and one-half of one common share purchase warrant (a "Warrant"), each full Warrant being exercisable to acquire one common share of First Uranium at a purchase price of Cdn$4.15 for a period of 24 months following the closing date.

In June 2009, the Corporation completed a bought deal financing (the "Bought Deal") and raised gross proceeds of Cdn$106.8 million through the issuance of 15,250,000 common shares at a price per share of Cdn$7.00. In August 2009, the Corporation finalized the Facility with Simmer & Jack. In December 2009, the Corporation signed a second definitive agreement with GW, whereby GW acquired the right to receive 7% of life-of-mine gold production from the Ezulwini Mine (the "Ezulwini Gold Stream Transaction") for proceeds of $50.0 million.

As discussed earlier in this MD&A, in March 2010 First Uranium entered into a heads of agreement for the Offering of the Notes. The Offering was concluded on April 26, 2010 and the Corporation received gross proceeds of Cdn$150 million, settled the Facility with Simmer & Jack and restructured the GW penalty obligation and completion tests.

The common shares and the Debentures are listed on the Toronto Stock Exchange (the "TSX"). In addition, the common shares are listed on the Johannesburg Stock Exchange (the "JSE"). The Corporation intends to apply to have the Canadian Notes listed on the TSX after the expiry of a four-month hold period dating from the closing in escrow of the Notes on April 8, 2010. No assurance can be given that the TSX will accept the Canadian Notes for listing on the exchange.

As of June 17, 2010, Simmer & Jack owned 34% of the common shares of First Uranium.

Summary of Quarterly Results

The table below sets out selected financial data for the periods indicated (as derived from First Uranium's consolidated financial statements):

    
    -------------------------------------------------------------------------
                                      (Loss)   Basic &
    Fiscal Quarters Ended            income    diluted
    (thousands of                   for the      (loss)            Long-term
     dollars, except                  three   earnings      Total     liabil-
     per share amounts)  Revenue     months  per share     assets      ities
    -------------------------------------------------------------------------
    March 31, 2010        28,561    (26,041)     (0.14)   684,643   (287,785)
    December 31, 2009     31,979    (14,432)     (0.09)   695,581   (264,446)
    September 30, 2009    19,025    (18,441)     (0.11)   658,989   (252,591)
    June 30, 2009         12,895    (33,264)     (0.22)   640,672   (245,800)
    March 31, 2009        13,787    (10,722)     (0.08)   566,472   (239,162)
    December 31, 2008     16,458      1,281       0.01    439,721   (159,396)
    September 30, 2008    10,546     (1,106)     (0.01)   395,188   (132,817)
    June 30, 2008          6,805     (5,795)     (0.04)   394,416   (131,741)
    -------------------------------------------------------------------------
    

Operations Overview

Mine Waste Solutions

MWS is a uranium and gold tailings recovery operation located in the western portion of the Witwatersrand Basin, approximately 160 kilometres from Johannesburg. MWS consists of 14 tailings deposits from three gold and uranium mines that operated for 50 years of which the Buffelsfontein No. 2 and No. 4 tailings dams are currently being mined. These tailings represent in excess of 349 million tonnes of mineral resources, including inferred resources, of which 323 million are mineable reserves estimated to contain 55 million pounds of uranium and 2.9 million ounces of gold. The tailings dams are spread over an area that stretches approximately 13.5 kilometres north-south and 14 kilometres east-west and cover an area of approximately 1,100 hectares. The tailings dams are mined hydraulically with high-pressure water cannons.

In December 2008, First Uranium entered into the MWS Gold Stream Transaction with GW pursuant to which GW paid MWS $125 million upfront. In addition GW will make an ongoing payment equal to the lesser of $400 per ounce (the Fixed Price) (subject to an annual inflation adjustment of 1 percent, starting in the fourth year after following receipt of the first payment) and the prevailing spot price per ounce at the time the gold delivered by MWS under the contract.

Pursuant to the MWS Gold Stream Transaction, MWS was obliged to deliver a minimum of 20,000 ounces of gold into the transaction during calendar year 2009, such deliveries to be comprised of at least 5,000 ounces per quarter (the 2009 Guaranteed Ounces). The 2009 Guaranteed Ounces were satisfied in full as at December 31, 2009 (see Note 11.1 to the Financial Statements).

The table below sets out certain selected operational data of MWS per quarter for FY 2010:

    
    -------------------------------------------------------------------------
    Quarterly Production
     Summary                     Q1 2010  Q2 2010  Q3 2010  Q4 2010  FY 2010
    -------------------------------------------------------------------------
    Tonnes reclaimed (000s)        1,835    2,476    3,528    3,232   11,071
    Average gold recovery
     grade (grams/tonne)            0.18     0.17     0.19     0.19     0.19
    Percentage gold recovered        44%      47%      58%      56%      51%
    Ounces of gold produced       11,007   13,422   21,891   19,693   66,013
    Ounces of gold sold (total)   10,676   11,739   21,099   18,505   62,019
    Ounces of gold delivered
     into MWS Gold Stream
     Transaction                   7,460    4,817    5,510    4,982   22,769
    Average gold selling price
     per ounce ($)                   905    1,007    1,096      889      985
    Average Cash Cost per ounce
     of gold sold ($) (as defined
     in note a on page 14)          (338)    (467)    (368)    (402)    (392)
    -------------------------------------------------------------------------
    

During Q1 2010, MWS commenced commissioning of the second gold plant module, continued construction of the first two uranium plant modules and finalized the plans for construction and commissioning of the third gold plant module.

During Q2 2010, MWS commissioned the second reclamation station that feeds ore to the second gold plant module and also commenced construction of the third gold plant module.

During Q3 2010, MWS completed the commissioning of the second gold plant module, increasing the processing capacity of the first two gold plant modules from 633,000 tonnes of tailings per month to 1.3 million tonnes. The additional production from the second gold plant module resulted in tonnage throughput increasing by 43% from 2.5 million tonnes in Q2 2010 to 3.5 million tonnes in Q3 2010. Gold production during Q3 2010 increased by 63% from 13,422 ounces of gold in Q2 2010 to 21,891 ounces of gold in Q3 2010. Construction of the first two uranium plant modules and the third gold plant module continued.

During Q4 2010, tonnage throughput decreased by 8% to 3.2 million tonnes and gold production by 10% to 19,693 ounces of gold from Q3 2010 due to uncharacteristically high seasonal rainfall affecting density delivered to the plant as well as decreased grade delivered from the Buffelsfontein No. 2 tailings dam.

The 58% increase in tonnage throughput and the 54% increase in gold production year over year as per the Consolidated Results of Operations table on page 14 is primarily attributable to the additional production from the second gold plant module, offset slightly by the diminished grade from the Buffelsfontein No. 2 tailings dam which feeds the first gold plant module.

At the start of Q4 2010, the construction of the third gold plant module was progressing ahead of schedule and scheduled for completion in May 2010, however, the Corporation had to suspend construction of the third gold plant module due to the withdrawal of the EA for the TSF on January 18, 2010. The withdrawal of the EA compromised to a large extent the Corporation's financing efforts and triggered the need for a company-wide program to conserve capital. As a result of suspending construction and the subsequent actions to reduce the Corporation's capital commitments related to the third gold plant module, First Uranium was placed in a position where it could no longer complete construction of the third gold plant module by June 1, 2010 (the Construction Completion date pursuant to the original terms of the MWS Gold Stream Transaction). Pursuant to terms of the Offering, GW agreed to settle the completion penalty in respect of the MWS Gold Stream Transaction with the issuance of shares in First Uranium to GW and a commitment by the Corporation to complete construction of the third gold plant module at MWS and satisfaction of the technical completion tests prior to September 1, 2011 (see Commitments and Contingencies section in this MD&A).

Subsequent to extensive discussions with NWDACERD, the EA was reinstated in February 2010, however, the uncertainties and delays precipitated by the withdrawal of the EA and the resultant financial pressure placed on the Corporation caused management to revise the MWS business plan and to update the technical report for MWS, which was filed onto SEDAR on March 19, 2010.

Construction of the first two uranium plant modules was substantially completed during January 2010, however, in terms of the revised business plan, management decided to delay the commissioning of the two uranium plant modules until the successful commissioning of the third gold plant module so as to manage the projected corporate peak funding risk.

Under the revised business plan upon which the associated technical report is based, it was anticipated that the MWS No. 5 tailings dam (the current tailings deposition facility) would provide sufficient tailings deposition capacity for one gold plant module until the end of December 2011. However, with the recent recapitalization of the Corporation (including the re-structuring of the GW completion test), and the updated report on the structural integrity of MWS No. 5 tailings dam, management has decided to continue utilizing two gold plant modules with two-stream deposition, albeit at reduced throughput of 975 ktpm until the end of May 2011. See the Outlook section of this MD&A for a summary of the production forecast for FY 2011 and FY 2012 under the two-stream deposition plan compared to the production forecasts set out in the technical report.

On June 15, 2010, the Corporation received approval for a new order water user license from the Department of Water Affairs ("DWA"). The approval allows MWS to consider bringing forward the seven-month construction schedule of the TSF. The revised plan upon which the technical report is based, assumed that MWS would receive approval of the new order license by the end of September 2010. By bringing forward the construction schedule of the TSF, MWS would have more time available to satisfy the revised GW construction completion and Technical Completion Test discussed earlier in this MD&A.

During FY 2010, management performed and concluded test work to finalize heat and oxygen control elements within the pressure leach process. The outcome of the test work was integrated into the historical Cost Budget Estimate ("CBE") of the pressure leach process and the revised CBE was finalized during Q4 2010. The test work highlighted a significant requirement for oxygen. A market survey indicated that supply of oxygen could not be easily secured, which will necessitate the requirement for an oxygen plant, consequently the CBE has increased from $34 million to $61 million. The increase in capital is offset by a significant reduction in operating cost as oxygen will not be purchased from a third party supplier. As with the decision to defer the commissioning of the uranium plant, the pressure leach capital programme has been re-scheduled to commence from January 2012.

Ezulwini Mine

The Ezulwini Mine is located approximately 40 kilometres from Johannesburg on the outskirts of the town of Westonaria in the Gauteng Province, South Africa. The Ezulwini Mine is an underground mine constructed in the 1960s with historical production of approximately 14 million pounds of uranium and 12 million ounces of gold until it was put on care-and-maintenance in 2001, which was its status when the Corporation acquired the mine in 2006. The mine has two separate tabular ore bodies about 400 metres apart. The Upper Elsburg ("UE") ore body, where most of the mining has been done to date, is a gold only deposit. The Middle Elsburg ("ME") ore body is a gold and uranium deposit and is relatively unexploited.

The Ezulwini Mine is part of the Ezulwini mining right, which includes certain surface and underground assets, acquired by the Ezulwini Mining Company (Proprietary) Limited ("EMC"). When First Uranium acquired EMC from Simmer & Jack in December 2006, Simmer & Jack was the registered owner of the Ezulwini mining right. Consequently EMC and Simmer & Jack entered into an agreement (the "Ezulwini Mining Right Agreement") pursuant to which Simmer & Jack agreed to take the necessary steps to obtain all ministerial approvals in order to effect the ceding of the Ezulwini mining right from Simmer & Jack to EMC. On March 20, 2008, the Department of Mining and Minerals ("DMR") consented to the ceding of the Ezulwini mining right to EMC. On April 22, 2010, the Corporation registered the cession of the mining right in the name of EMC.

In November 2009, First Uranium entered into the Ezulwini Gold Stream Transaction with GW pursuant to which GW paid the Ezulwini Mine $50 million upfront. In addition GW will make an ongoing payment equal to the lesser of $400 per ounce (the Fixed Price) (subject to an annual inflation adjustment of 1 percent, starting in the fourth year after the upfront payment) and the prevailing spot price per ounce, at the time the gold is delivered under the contract.

Pursuant to the Ezulwini Gold Stream Transaction, the Ezulwini Mine is obliged to deliver a minimum of 16,500 and 19,500 ounces of gold into the transaction during calendar years 2010 (the 2010 Guaranteed Ounces) and 2011 (the 2011 Guaranteed Ounces) respectively, such deliveries to be comprised of at least 4,125 and 4,875 ounces per quarter respectively (see Note 11.2 to the Financial Statements).

Pursuant to the Ezulwini Gold Stream Transaction, the Ezulwini Mine granted to GW a special bond over certain plant and equipment and a pledge of 7% of the gold production from the Ezulwini Mine. First Uranium has guaranteed the obligations owed by the Ezulwini Mine to GW.

The table below sets out certain selected operational data of the Ezulwini Mine per quarter for FY 2010:

    
    -------------------------------------------------------------------------
    Quarterly Production
     Summary                     Q1 2010  Q2 2010  Q3 2010  Q4 2010  FY 2010
    -------------------------------------------------------------------------
    Tonnes hoisted                64,965   98,831  117,164  130,822  411,782
    Tonnes milled                 92,468   94,599  108,503  129,532  425,102
    Average gold recovery
     grade (grams/tonne)             1.3      2.5      2.8      2.4      2.3
    Ounces of gold produced        3,794    7,952   10,685    7,526   29,957
    Ounces of gold sold (total)    3,378    7,047    8,213    8,327   26,965
    Ounces of gold delivered
     into Ezulwini Gold Stream
     Transaction                       -        -      102    2,571    2,673
    Average gold selling price
     per ounce ($)                   957    1,022    1,078    1,404    1,149
    Average Cash Cost per ounce
     of gold sold ($)(as defined
     in note a on page 14)        (3,545)  (2,689)  (2,648)  (2,929)  (2,858)
    Pounds of uranium
     ("U(3)O(8)") produced             -        -   23,761   20,638   44,399
    Pounds of U(3)O(8) sold            -        -        -   22,500   22,500
    -------------------------------------------------------------------------
    

The establishment of the Ezulwini Mine, which was substantially completed during Q4 2009, included the rehabilitation and re-engineering of the mine's main shaft through the installation of a floating steel tower and the construction of a 200,000 tonne per month gold plant and a 100,000 tonne per month uranium plant. With the capital intensive projects substantially completed, management turned its focus at the start of FY 2010 on underground mine development to accelerate the amount of ore being fed to the gold and uranium plants. The primary objective is to increase available mineable faces ("face length") to allow a higher rate of mining in the future. The build-up of production at the Ezulwini Mine as planned is key to the success of this operation. To ensure the build-up and production ramp-up is realistic and achievable, management is currently reviewing a detailed 'bottom-up' production plan. This detailed review of the plan is expected to be completed by the end of June 2010.

The Ezulwini Mine has yet to build up sufficient production to generate positive operating cash flow. The production build-up to date has progressed much slower than originally anticipated due to a number of factors including:

    
    -   The estimation of gold available compared to the gold accounted for
        was significantly below expectations, a relationship better known as
        the mine call factor. The planned mine call factor for the year was
        87% whereas the mine achieved a factor of lower than 70% during the
        first nine months of the year.
    -   The face length creation proceeded as planned but the start-up and
        conversion from development to stoping was slower than anticipated.
        Significant improvements are expected in FY 2011.
    -   The face length utilization was relatively low during the year due to
        the newly appointed mining teams as well as inadequate face
        equipping. Special attention is being paid to the training of crews
        and equipping of panels, thus mining readiness is expected to improve
        in the forthcoming year.
    -   During the fiscal year, some seismic activity occurred in the shaft
        pillar which caused delays but more importantly required special
        attention to resolve it in a safe manner. The extra precautions and
        diligence paid to rock engineering issues resulted in slower than
        anticipated performance in FY 2010. The majority of the engineering
        issues are now resolved, thus improved mining performance is
        expected.
    

Due to the lower production achieved, management reviewed the actual mine call factors achieved by the mine during the first nine months of the year. One of the issues identified was in the primary evaluation of gold and uranium estimation as well as mining techniques resulting in cross mining of various stratigraphic units. Based on the results of the review, management changed its focus to extracting higher grade ore from the ME gold and uranium ore-body. Opening up and development work was reduced to a minimum while refinancing discussions were being held and the focus went on to maximizing the potential of the face length being mined by increasing the pay limit used for mining decisions. The mine call factor at the Ezulwini Mine proved to be problematic during Q2 2010 and Q3 2010 and necessitated an additional review of the valuation methods used. This resulted in lower grades being forecasted in the revised plan, but better mining efficiencies being achieved, thereby increasing the mine call factor from 64% in Q3 2010 to 78% in Q4 2010.

Although the Ezulwini gold plant is capable of working to design specification, the plant was not utilized optimally during FY 2010. Utilization of the gold plant was on average approximately 25% to 50% of design capacity during the year. The under-utilisation of the plant is in accordance with the plan as the build-up of the Ezulwini Mine is only expected to reach peak production in two years' time. The underground production has been less than originally planned, which resulted in lower mill utilization and lower gold production. As the underground development increases, the mine production and mill throughput will increase, and thus gold production will improve. It is expected that metallurgical processes will further improve when operations are running at design capacity.

During Q1 2010, the Ezulwini Mine commissioned the first of two streams of its 100,000 tonne per month uranium plant. The mine calcined its first batch of yellowcake through a third-party calciner producing 23,761 pounds of uranium at the end of Q3 2010. This first container of uranium was shipped to an overseas converter on February 10, 2010. The Corporation sold 22,500 pounds of uranium to an overseas converter on March 9, 2010. A second container of uranium was shipped overseas on April 2, 2010.

In May 2010, First Uranium settled a dispute with the Engineering Procurement and Construction Management ("EPCM") contractor over the construction of the Ezulwini gold and uranium plant project. The terms of the settlement are subject to the approval of the respective boards, and negotiating and signing of the formal documentation. The EPCM contractor experienced delays in the completion and commissioning of the uranium plant and as a result, First Uranium claimed a reduction in the performance margin payable to the EPCM contractor.

The plant is still experiencing some commissioning issues, which include corrosion, due to the design and material selection. Management is in the process of resolving these issues. The uranium plant, however, is operational and has been modified to effectively treat the current tonnages delivered from underground. A project engineer has also been engaged to ensure focus on addressing the challenges in the uranium plant.

Permitting at MWS

In July 2009, a new order mining right for MWS was approved by the DMR. The execution of the mining license is subject to certain conditions which MWS is in the process of satisfying including providing financial assurance for rehabilitation liabilities to the satisfaction of the DMR.

The expansion of the MWS operations and the future realization of the MWS assets is dependent on the addition of a new life-of-mine TSF. The TSF is designed to store all of the future tailings depositions for the remaining life of the operation. The older tailings deposits are to be rehabilitated once the tailings from each such deposit are reprocessed.

MWS received the EA to construct the TSF from the NWDACERD in July 2009 on property that is owned by MWS and located to the south-east of the town of Stilfontein. After the EA was received, three appeals were lodged with the offices of the MEC for the Northwest Province. In reaction to the appeals, the MEC subsequently advised MWS that the EA was being suspended pending the outcome of the appeal process governed by the National Environmental Management Act ("NEMA"). In October 2009, the NWDACERD notified MWS that it intended to withdraw the EA. MWS submitted its response to the appeals on November 5, 2009 to NWDACERD. In December 2009, the Corporation secured the withdrawals of two of three previously filed third-party appeals and was advised that the third appeal would also be withdrawn. On January 18, 2010, MWS received notice from the NWDACERD of its withdrawal of the EA.

On February 10, 2010, after extensive engagement with NWDACERD the EA was reinstated. The notice, however, contained conflicting and ambiguous references to the location of the tailings site and consequently the Corporation was not in a position to move forward. First Uranium received notice from NWDACERD on February 25, 2010 that the reinstated EA had been amended to correctly describe the project location, including the site of the TSF south-east of the town of Stilfontein. The reinstated EA also allows MWS to recommence planning activities for the construction of the TSF, subject to sufficient availability of finance.

On June 15, 2010, the DWA approved the Corporation's application for a new order water user license. The new order water user license was required before construction activities on the TSF could recommence.

Market Overview

During the latter half of FY 2010, the financial markets improved, as demonstrated by the easing of credit risk spreads, lower levels of volatility in many markets and some improvement in investor confidence. While access to equity was selectively available, other forms of capital, including debt financing on acceptable terms remained difficult to obtain.

Gold

The price of gold is subject to volatile price movements over short periods of time, especially in the current market environment, and is affected by numerous industry and macro-economic factors. Gold price volatility remained high in FY 2010, with the price ranging between $870 to $1,213 per ounce during the year. The average market price for the year of $1,023 per ounce was an all-time high. The market price of gold has been influenced by low US dollar interest rates, volatility in the credit and financial markets, investment demand and the monetary policies put in place by the world's most prominent central banks. As a result of the global easing of monetary policy, as well as increases in announced government spending, particularly in the US, we believe that there is a possibility that both inflation and US dollar depreciation could emerge in the coming years. Historically gold has been a natural hedge against inflation and has been inversely correlated to the US dollar. Therefore, higher inflation and/or depreciation in the US dollar should be positive for the price of gold. As of June 17, 2010, the gold spot price was $1,245 per ounce.

Management believes that the world's gold production will continue to decline. Obtaining permits for new mines is a primary deterrent to starting up new gold mines, but new projects are also becoming more difficult to find, are facing increasing public scrutiny, need to be bigger to be economically viable and are subject to inflationary pressures on capital and operating costs. In South Africa, the strength of the South African Rand ("ZAR") relative to the US dollar, as well as recent increases in labour and power costs, have squeezed operating margins and led to the curtailment of marginal operations. In addition, there has been a lack of global exploration success in recent years and few new promising regions for gold exploration and production. A decrease in global industry production heightens the potential increases in the sustainable long-term gold price.

Uranium

According to an industry source, The Ux Consulting Company, LLC ("UxC"), the spot price per pound for uranium ranged between $40 and $54 during FY 2010 and the term price, that at which most supply contracts are completed, started the year at $70 per pound and ended the year at $58 per pound. As of June 17, 2010, the uranium spot price per pound was $40.75 and the term price was $58. The Corporation currently does not have any medium to long-term uranium contracts in place and therefore sells uranium at the spot price per pound on date of delivery.

In the current environment, the uranium spot price has been variable within this range, with demand increasing as the price falls and diminishing as the price rises. While this pattern is expected to continue for the remainder of FY 2011, the range of this volatility has narrowed considerably to the low $40 range.

Demand for uranium as a clean source of base-load power is expected to grow over the next 20 years in excess of four percent, perhaps even stronger around the end of the next decade. Many countries are making announcements about building new nuclear power plants, none more aggressively than China.

The US is recommending a tripling of its existing loan guarantee program in its proposed budget for its 2011 fiscal year, which the country's Energy Secretary has indicated could support construction of seven to ten new nuclear power plants. The renaissance of nuclear power will, however, have to overcome the major challenges of the economics of building nuclear power plants and the waste disposal issue. For instance, in the US, funding for Yucca Mountain was recently cut, formalizing the end of this US nuclear waste storage project.

Currency exchange rates

During FY 2010, both the Canadian dollar ("Cdn$") and the ZAR experienced significant exchange rate swings relative to the US dollar as a result of uncertainty in global markets and US dollar weaknesses highlighted by fluctuations in commodity prices.

During FY 2010, in US dollar terms the ZAR traded in a range of $0.10 - $0.14 per ZAR, averaging $0.13 and closed at $0.14. Relative to the US dollar, the Cdn$ traded in a range of Cdn$0.80 - Cdn$0.98, averaging Cdn$0.92 and closed stronger at Cdn$0.98. In Cdn$ terms the ZAR traded in a range of Cdn$0.13 - Cdn$0.15, averaging Cdn$0.14 and maintained its position at year-end.

At March 31, 2010, First Uranium held 54% of its cash in ZAR, 25% in US dollars and the balance in Cdn$. At June 17, 2010, the Corporation held 71% of its cash in Cdn$, 28% in ZAR and the balance in US dollars. The funds are primarily held in cash and bank-sponsored guaranteed investment certificates with Canadian and South African banks. As a substantial portion of the cash will be utilized in ZAR to fund the outstanding commitments relating to the capital program at MWS, the movement in the relative values of the currencies continues to have a significant impact on the funding available to finance capital projects and operations. To minimize the impact of currency fluctuations on the Corporation's business plan management is monitoring fluctuations in the foreign exchange rates and will convert its funds currently held in Cdn$ to ZAR when the rates are within a range which meets the Corporation's forecast assumptions.

The 2008 worldwide economic downturn and US government-sponsored bailouts in 2009, have driven investors to seek countries with proven track records and conservative fiscal policies. Due to fiscal and monetary policies and high interest rates, South Africa is attracting the interest of currency traders. This resulted in the overall strengthening of the ZAR against the US dollar during the first nine months of the 2009 calendar year, with only modest gains in the ZAR gold price. During the first quarter of 2011 calendar year, however, the ZAR started to show some weakening against the US dollar, along with a steady increase in the gold price. Continuation of these trends could have a positive impact on the Corporation's revenues.

Swings in the value of the US dollar also continued to have an impact on the ZAR and Cdn$ denominated costs and on assets and liabilities reported in US dollar terms, resulting in the significant foreign exchange movements in the Corporation's financial results. In Q4 2010 and FY 2010, currency movements produced a loss, primarily unrealized, reflecting the impact of the weakening US dollar relative to the Cdn$ and ZAR.

Inflation

The Corporation's operations are subject to inflation. Over the past twelve months there has been a steady decline in the South Africa inflation rate from an inflation rate of 8.5% at the end of FY 2009 to 5.1% at the end of FY 2010. The rise in construction costs in South Africa witnessed in 2008 and early 2009, began to ease during the latter half of calendar year 2009. As a result, First Uranium has been able to negotiate lower costs for some of the services and materials ordered to build new gold and uranium plants at MWS during that time period.

Financial Review

At the Ezulwini Mine, gold production for Q4 2010 and FY 2010 increased by 65% and 161%, respectively, compared to Q4 2009 and FY 2009 as per the Consolidated Results of Operations table on page 14. As indicated by the increase in production year-over-year and quarter-over-quarter, the mine is steadily increasing output, although the build-up is much slower than anticipated. The Ezulwini Mine's gold plant was deemed to be in commercial production as of Q3 2009 and accordingly, from the beginning of that quarter, the revenues and related costs derived from the gold processing plant at the Ezulwini Mine were no longer capitalized. While revenues are increasing (resulting from increased production and increased gold selling prices), the cost of production remains high due to the fact that the mine is still ramping up production and currently operates at considerably less than capacity.

The losses at the Ezulwini Mine for both Q4 2010 and FY 2010 were as a result of the mine's fixed operating costs being spread over the limited early-stage production. It is anticipated that the high unit costs will decrease and operating and financial performance will improve as the underground mine development and production levels increase, albeit at a slower pace than initially indicated. The ounces delivered by the Ezulwini Mine to settle the 2010 Guaranteed Ounces during Q4 2010 were sold at the contract price of $400 per ounce, but accounted for in revenue at the gold spot price at the time of delivery. The proceeds from these ounces were used to settle the Derivative Liability (see Note 11.2 to the Financial Statements). If the ounces delivered to GW were recognized at $400 per ounce as per the agreement then the average gold selling price would have been $1,185 and $1,081 per ounce for Q4 2010 and FY 2010, respectively. Although the uranium plant at the Ezulwini Mine was commissioned in Q1 2010, it was only deemed to be in commercial production as of November 2009 (Q3 2010), so any costs derived from the uranium plant prior to November 2009 have been capitalized against property, plant and equipment. Production of ammonium diuranate ("yellowcake") increased by 46% from Q3 2010 to 22,488 pounds in Q4 2010. The mine recorded its first sale of uranium on March 9, 2010, selling 22,500 pounds of uranium for $956,250. A portion of the uranium revenue was capitalized against property, plant and equipment.

At MWS, the overall increase in revenues and cost of sales in Q4 2010 and FY 2010 compared to its comparative periods was mainly attributable to additional production through the second gold plant module which was commissioned in Q1 2010. The ounces delivered by MWS to settle the 2009 Guaranteed Ounces were sold at the contract price of $400 per ounce, but accounted for in revenue at the gold spot price at the time of delivery. The proceeds from these ounces were used to settle the Derivative Liability (see Note 11.1 to the Financial Statements). As of Q4 2010, the revenue related to ounces delivered into the MWS Gold Stream Transaction comprised of revenue from the ounces delivered at $400 per ounce plus deferred revenue amortized for the quarter. This resulted in lower gold revenue for Q4 2010 and was also the reason for the average gold selling price in Q4 2010 and FY 2010 being much lower than the average gold spot price over the comparative periods. If the ounces delivered to GW were recognized at $400 per ounce as per the agreement then the average gold selling price would have been $883 and $815 per ounce for Q4 2010 and FY 2010, respectively (Q4 2009: $800; FY 2009: $845).

    
    Consolidated Results of Operations
    -------------------------------------------------------------------------
    Production Summary  Q4 2010  Q4 2009  %Change  FY 2010  FY 2009  %Change
    -------------------------------------------------------------------------
    Ezulwini Mine
    Tonnes milled       129,532  108,622      19%  425,102  232,715      83%
    Ounces of gold
     produced             7,526    4,569      65%   29,957   11,494     161%
    Ounces of gold
     sold (total)         8,327    4,267      95%   26,965   10,678     153%
    Ounces of gold
     delivered into
     Ezulwini Gold
     Stream Transaction   2,571        -     100%    2,673        -     100%
    Average gold
     selling price
     per ounce ($)        1,404      917      53%    1,149      920      25%
    Average Cash Cost
     per ounce of gold
     sold ($)(a)         (2,929)  (2,032)     44%   (2,858)  (1,941)     47%
    Average cost per
     ounce sold ($)      (3,112)  (2,069)     50%   (3,036)  (1,956)     55%
    Pounds of U(3)O(8)
     produced            20,638        -     100%   44,399        -     100%
    Pounds of U(3)O(8)
     sold                22,500        -     100%   22,500        -     100%
    -------------------------------------------------------------------------
    MWS
    Tonnes reclaimed
     (000s)               3,232    1,693      91%   11,071    6,995      58%
    Ounces of gold
     produced            19,693   10,513      87%   66,444   43,099      54%
    Ounces of gold
     sold (total)        18,505   10,417      78%   62,019   42,857      45%
    Ounces of gold
     delivered into
     MWS Gold Stream
     Transaction          5,392    2,540     112%   26,145    3,293     694%
    Average gold
     selling price
     per ounce ($)          889      948      (6%)     985      881      12%
    Average Cash Cost
     per ounce of gold
     sold ($)(a)           (402)    (379)      6%     (392)    (397)     (1%)
    Average cost per
     ounce sold ($)        (549)    (412)     33%     (449)    (418)      7%
    -------------------------------------------------------------------------
    Revenue              28,561   13,787     107%   92,460   47,596      94%
    -------------------------------------------------------------------------
    Ezulwini Mine        12,104    3,915     209%   31,393    9,825     220%
    MWS                  16,457    9,872      67%   61,067   37,771      62%
    -------------------------------------------------------------------------
    Cost of sales
     (excluding
     amortization)      (32,248) (12,623)    156% (101,789) (37,735)    170%
    -------------------------------------------------------------------------
    Ezulwini Mine       (24,807)  (8,671)    186%  (77,479) (20,725)    274%
    MWS                  (7,441)  (3,952)     88%  (24,310) (17,010)     43%
    -------------------------------------------------------------------------
    Amortization         (4,244)    (494)    759%   (8,307)  (1,081)    669%
    -------------------------------------------------------------------------
    Ezulwini Mine        (1,523)    (158)    864%   (4,790)    (158)  2,932%
    MWS                  (2,721)    (336)    710%   (3,517)    (923)    281%
    -------------------------------------------------------------------------
    Gross (loss) profit  (7,931)     670  (1,284%) (17,636)   8,780    (301%)
    -------------------------------------------------------------------------
    Ezulwini Mine       (14,226)  (4,914)    190%  (50,876) (11,058)    360%
    MWS                   6,295    5,584      13%   33,240   19,838      68%
    -------------------------------------------------------------------------
    Other income             62      869     (93%)   2,231    2,008      11%
    Other
     expenditures(b)     (8,035)  (7,207)     12%  (31,695) (28,035)     13%
    -------------------------------------------------------------------------
    Operating loss(c)   (15,904)  (5,668)    181%  (47,100) (17,247)    173%
    Investment income      (363)     251    (245%)   1,163    3,439     (66%)
    Fair value gain
     (loss) on
     derivative
     liabilities           (991)    (697)     42%      128     (983)    113%
    Accretion expense on
     asset retirement
     obligations           (607)    (424)    (43%)  (2,142)  (1,511)     42%
    Interest and
     accretion
     expenditures        (4,193)  (3,031)     38%  (15,663) (12,720)     23%
    Foreign exchange
     (loss) gain         (8,727)   3,063    (385%) (30,123)  18,404    (264%)
    -------------------------------------------------------------------------
    Loss before income
     taxes              (30,785)  (6,506)    373%  (93,737) (10,618)    783%
    Income tax
     recovery (charge)    4,744   (4,216)    213%    1,559   (5,724)    127%
    -------------------------------------------------------------------------
    Loss for the period (26,041) (10,722)    143%  (92,178) (16,342)    464%
    Other comprehensive
     income                 812        -     100%      812        -     100%
    -------------------------------------------------------------------------
    Comprehensive loss
     for the period     (25,229) (10,722)    135%  (91,366) (16,342)    459%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings (loss)
     per common share     (0.14)   (0.08)     75%    (0.56)   (0.12)    367%
    -------------------------------------------------------------------------
    Notes:
    (a) "Cash Costs" are costs directly related to the physical activities of
        producing gold and uranium and include mining, processing and other
        plant costs; third-party refining and smelting costs; marketing
        expense, on-site general and administrative costs; royalties; on-mine
        drilling expenditures that are related to production and other direct
        costs. Sales of by-product metals such as uranium and silver are
        deducted from the above in computing cash costs. Cash costs exclude
        depreciation, depletion and amortization, corporate general and
        administrative expense, exploration, interest, and pre-feasibility
        costs and accruals for mine reclamation. Cash costs are calculated
        and presented using the "Gold Institute Production Cost Standard"
        applied consistently for all periods presented. The Gold Institute
        was a non-profit industry association comprised of leading gold
        producers, refiners, bullion suppliers and manufacturers. This
        institute has now been incorporated into the National Mining
        Association. The guidance was first issued in 1996 and revised in
        November 1999. Total cash costs per ounce is a non-GAAP measurement
        and investors are cautioned not to place undue reliance on it and are
        advised to read all GAAP accounting disclosures presented in the
        Corporation's Financial Statements.
    (b) Other expenditures include general, consulting and administrative
        expenditures, pumping feasibility and rehabilitation costs,
        stock-based compensation, the settlement fee regarding the Auramet
        claim and non-production related amortization. See page 5 to the
        Financial Statements for detail.
    (c) This is a non-GAAP measurement. Operating loss is loss before
        interest income, interest and accretion expenses, fair value gain or
        loss on derivative liability, foreign exchange gain or loss and
        income tax charges. See page 5 to the Financial Statements for more
        detail.
    

MWS started amortizing the capital costs relating to the second gold plant module at the start of Q4 2010 resulting in amortization for Q4 2010 and FY 2010 increasing by 710% and 281%, respectively, compared to Q4 2009 and FY 2010. The increase in revenues more than offset the increase in costs and amortization due to the additional production in both Q4 2010 and FY 2010, resulting in the operating margin at MWS increasing by 20% and 70% compared to Q4 2009 and FY 2009, respectively.

The consolidated gross losses in Q4 2010 and FY 2010 compared to the gross profits in Q4 2009 and FY 2009 were primarily attributable to the substantial losses resulting from the activities at the Ezulwini Mine which more than offset the additional profits generated by MWS from the second gold plant module.

The Corporation incurred a larger operating loss in FY 2010 compared to FY 2009. The larger loss reflected the fact that for the first six months of FY 2009, the Ezulwini Mine was not in commercial production. During that six-month period the costs of production from the Ezulwini Mine were capitalized and the related proceeds of gold sales were credited against property, plant and equipment.

Other income consisted primarily of fees for sludge pumping services to a third party, scrap sales and rental income at the Ezulwini Mine and varies from period to period relative to the pumping activity, sales and occupation (see Note 20 to the Financial Statements).

Other expenditures (as defined in Note b) to the Consolidated Results of Operations table on page 19) increased in both Q4 2010 and FY 2010 relative to the comparative periods and were mainly attributable to increased corporate activities, increased pumping costs due to increased mining activities at the Ezulwini Mine, the inclusion of $1.8 million settlement amount pursuant to the Auramet claim in Q2 2010 and $1.4 million regarding the loan to the CEO that was written off in Q4 2010 in connection with the terms of his resignation (see also Commitments and Contingencies and Related Party Transactions in this MD&A).

Investment income primarily related to interest income earned on cash and cash equivalents invested in short-term deposits with the Corporation's bankers until required for capital projects or to fund operating costs. The overall lower interest income in FY 2010 reflected the on average lower cash balances compared to FY 2009, as well as lower interest rates.

The interest and accretion expenditures include interest and accretion expenses related to the convertible debentures based on the Cdn$150 million Debenture issue in May 2007 as well as interest charged on the Facility with Simmer & Jack since the utilization of the facility in August 2009. The higher interest and accretion expenditures compared to Q4 2009 and FY 2009 was primarily due to the additional interest charged on the Facility with Simmer & Jack along with the increase in interest and accretion expense relating to the Debentures as a result of the Cdn$ strengthening relative to the US dollar over the comparative periods.

The accretion expense on Asset Retirement Obligations in Q4 2010 and FY 2010 mainly increased compared to its comparative periods as a result of the stronger ZAR compared to the US dollar.

The fair value loss on the derivative liabilities in Q4 2010 related to the movement in fair value on the derivative liability related to the Ezulwini Mine, while the fair value loss in Q4 2009 related to the movement in fair value on the derivative liability related to MWS. MWS satisfied the 2009 Guaranteed Ounces pursuant to the MWS Gold Stream Transaction and settled its derivative liability at the end of Q3 2010. In both quarters the fair value loss was driven by a higher gold price at the end of the quarter compared to the gold price at the end of the preceding quarter. The fair value loss for FY 2010 comprises of the fair value loss on the derivative liability related to MWS offset by the fair value gain on the derivative liability related to the Ezulwini Mine. The fair value loss related to the MWS derivative liability reflects the increase in fair value (due to the increase in the gold price at the end of FY 2010 from the gold price at end of FY 2009) of the 2009 Guaranteed Ounces delivered pursuant to the MWS Gold Stream Transaction during the year (see Note 11.1 to the Financial Statements).

The fair value gain related to the Ezulwini Mine derivative liability reflects the decrease in fair value (due to the decrease in the gold price at the end of FY 2010 from the gold price at initial recognition) of the 2010 and 2011 Guaranteed Ounces to be delivered pursuant to the Ezulwini Gold Wheaton Transaction from initial recognition to the end of FY 2010 (see Note 11.2 to the Financial Statements).

The foreign exchange gain (loss), which was primarily unrealized, results from the translation of the value of Canadian and South African denominated assets, liabilities, revenues and expenses into US dollars. The foreign exchange loss in Q4 2010 and FY 2010 reflects primarily the weakening of the US$ against the Cdn$, but also its overall weakening against the ZAR during the respective periods. During Q4 2009 and FY 2009 both the ZAR and the Cdn$ weakened against the US dollar resulting in the foreign exchange gains during these periods.

The income tax recovery in Q4 2010 and FY 2010 is primarily the result of the net increase in the asset base at MWS, along with the reversal of the $125 million advance payment received by MWS pursuant to the MWS Gold Stream Transaction from the taxable amount in Q2 2010, which increased the future tax liability during the respective periods. In FY 2009, the $125 million advance payment received from GW was fully taxed and, when combined with various tax deductions, resulted in an income tax charge of $4.7 million for MWS.

The substantial consolidated losses in Q4 2010 and FY 2010 were attributable to the gross losses incurred at the Ezulwini Mine during Q4 2010 and FY 2010 (inclusion of its operating results for the full twelve months) combined with the significant foreign exchange loss on translation during Q4 2010 and FY 2010. The much lower consolidated loss in FY 2009 only included the operating results from the Ezulwini Mine as of Q3 2009 and the loss incurred during FY 2009 was offset by the significant foreign exchange gain during that year.

Other comprehensive income in Q4 2010 and FY 2010 was comprised of unrealized gains resulting from increases in the value of investments included in the asset retirements funds from the end of the previous period.

Consolidated Financial Position

    
    Summary Balance Sheet and Key financial ratios
    -------------------------------------------------------------------------

    (thousands of dollars)                     FY 2010    FY 2009   % Change
    -------------------------------------------------------------------------
    Cash and cash equivalents                   10,177    112,005       (91%)
    Other current assets(a)                     17,345     12,670        37%
    Current liabilities                        123,728     58,629       111%
    Total assets                               684,643    566,472        21%
    Total liabilities                          411,513    296,375        39%
    Debt(b)                                    169,462    121,710        39%
    Total shareholders' equity                 273,130    270,097         2%
    -------------------------------------------------------------------------
    Key financial ratios:
    Current ratio(c)                            0.22:1     2.13:1
    Debt-to-equity(d)                           0.62:1     0.45:1
    -------------------------------------------------------------------------
    Notes:
    (a) Other current assets include accounts receivable and inventories.
    (b) Convertible debentures liability of Cdn$150 million translated to US$
        at the exchange rate at the end of the reporting period plus Facility
        with Simmer & Jack at the end of the reporting period.
    (c) Current assets divided by current liabilities at the end of the
        reporting period.
    (d) Debt divided by total shareholders' equity at the end of the
        reporting period.
    

Balance sheet review

Total assets were primarily comprised of property, plant and equipment, reflecting the capital intensive projects at the Ezulwini Mine and MWS, cash and cash equivalents, accounts receivable, inventories, asset retirement funds and future tax asset.

The 21% increase in total assets since FY 2009 was primarily attributable to a substantial increase in property, plant and equipment as a result of the capital projects at both operations, the addition of a future tax asset relating to MWS, increases in accounts receivable and inventories related to increased production at the Ezulwini Mine during the year, and an increase in asset retirement funds, partially offset by reduced cash and cash equivalents resulting from capital expenditures and cash operating losses.

The 39% increase in total liabilities since FY 2009 represented an increase in the Cdn$ denominated debt portion of the senior unsecured convertible debentures (the US dollar equivalent is higher because of the weaker US dollar relative to the Cdn$), a drawdown of the Facility with Simmer & Jack in August 2009 (see Related Party Transactions section in this MD&A), increased accounts payable and accrued liabilities arising from the increased capital expenditures at MWS, the provision of a GW penalty due to the Corporation not being able to meet the Construction Completion date (see Commitments and Contingencies section in this MD&A), increased derivative liabilities related to the 2010 and 2011 Guaranteed Ounces pursuant to the Ezulwini Gold Stream Transaction, an increase in deferred revenue resulting from the Ezulwini Gold Stream Transaction in December 2009 and an increase in future tax liability arising from the increased asset base at MWS during the year.

Liquidity and Capital Resources

As a result of the Cdn$150 million gross proceeds raised from the Offering on April 26, 2010, the Corporation is now in a position to fund its operations and capital projects under the revised plans. The Corporation plans to rely, in part, on cash generated from the operations to fund the capital expenditure obligations to complete construction and commissioning of the remaining capital projects at MWS. To reduce the risk of requiring any further funding to meet the current plans, the Corporation is currently undergoing a detailed review on all areas of the business to optimize cash flow and thus manage its peak funding risk.

At March 31, 2010, the Corporation had existing capital commitments of $22.3 million. In addition, pursuant to the terms of the Offering, First Uranium issued shares to GW on April 26, 2010 as partial settlement of the Gold Wheaton Penalty and committed to complete construction of the third gold plant module at MWS and satisfaction of the technical completion tests prior to September 1, 2011 (see Commitments and Contingencies section in this MD&A). Also pursuant to the terms of the Offering, the Facility with Simmer & Jack and the unpaid interest on the Facility was settled in full on April 26, 2010 with the issue of R167.8 million in Rand Notes to Simmer & Jack (see Related Party Transactions section in this MD&A).

Management believes that the available cash resources of $10.2 million at the end of FY 2010, along with the Cdn$150 million gross proceeds raised from the Offering on April 26, 2010 and the cash forecasted to be generated from the sale of gold and uranium at both of its operations, will be sufficient to fund the Corporation's outstanding commitments and to complete the capital projects under the current revised plans based on the following price assumptions for the fiscal years:

    
    -------------------------------------------------------------------------
                           2011     2012     2013     2014     2015   Beyond
    -------------------------------------------------------------------------
    Gold price ($/oz)     1,152    1,142    1,047    1,004      971      867
    Uranium price ($/lbs)    42       56       61       57       55       55
    ZAR/$                  7.73     8.11     8.55     8.93     9.33     9.64
    Cdn$/$                 0.97     0.96     0.95     0.93     0.92     0.88
    -------------------------------------------------------------------------
    

The current revised and restructured mine plans are based on the assumption that it will take the Corporation up to the end of September 2010 to secure the new order water user license for MWS at which time the remaining capital projects at MWS will resume. On June 15, 2010, the Corporation received approval for a new order water user license from the DWA. The approval allows MWS to consider bringing forward the seven-month construction schedule of the TSF.

Cash Flows

Cash flows for the three months ended March 31, 2010 are summarized below:

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

    (thousands of dollars)                     Q4 2010    Q4 2009   % Change
    -------------------------------------------------------------------------
    Cash flows generated from (utilized
     in) operating activities                   13,515    (11,005)      223%
    Cash flows utilized in investing
     activities                                (31,646)   (36,913)      (14%)
    Cash flows from financing activities             -    120,907      (100%)
    -------------------------------------------------------------------------
    Net (decrease) increase in cash and
     cash equivalents for the period           (18,131)    72,989      (125%)
    Cash and cash equivalents at beginning
     of period                                  28,308     39,016       (27%)
    -------------------------------------------------------------------------
    Cash and cash equivalents at end of
     period                                     10,177    112,005       (91%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

The Corporation recovered $20.6 million in VAT and income tax refunds which increased the cash flow in Q4 2010. During Q4 2010, the Corporation did, however, require substantially more cash to be utilized in operating activities compared to Q4 2009 due primarily to increased mining activities at the Ezulwini Mine, but due to the constrained financial condition of the Corporation during the latter part of Q4 2010, payments to suppliers relating to operating expenses and capital expenditures were limited which resulted in less cash being spent during the quarter. The cash utilized in operating activities for Q4 2009 is mainly attributable to the Ezulwini Mine which had limited production during the quarter that was not sufficient to cover the quarter's operating costs.

During Q4 2010, capital expenditures of $30.6 million were incurred at MWS and $1.0 million at the Ezulwini Mine. During Q4 2009 capital expenditures of $13.2 million and $22.0 million were incurred at the Ezulwini Mine and MWS, respectively.

The cash from financing activities during Q4 2009 was attributable to $47.6 million received pursuant to the Private Placement in February 2009 and the second payment of $75 million received in March 2009 pursuant to the MWS Gold Stream Transaction.

Cash flows for the year ended March 31, 2010 are summarized below:

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

    (thousands of dollars)                     FY 2010    FY 2009   % Change
    -------------------------------------------------------------------------
    Cash flows utilized in operating
     activities                                (34,855)   (11,745)      197%
    Cash flows utilized in investing
     activities                               (229,665)  (211,896)        8%
    Cash flows from financing activities       162,692    170,907        (5%)
    -------------------------------------------------------------------------
    Net decrease in cash and cash
     equivalents for the year                 (101,828)   (52,734)       93%
    Cash and cash equivalents at
     beginning of year                         112,005    164,739       (32%)
    -------------------------------------------------------------------------
    Cash and cash equivalents at end
     of year                                    10,177    112,005       (91%)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

The higher cash consumption from operating activities in FY 2010 was primarily attributable to the increased mine activities, and limited production at the Ezulwini Mine. For FY 2009 the first six months' operating costs and related revenues from the Ezulwini Mine were capitalized.

During FY 2010, cash used in investing activities increased marginally compared to FY 2009. The significant increase in expenditures at MWS due to the ramp up of its capital programs over the year, was substantially offset by a decrease in the current capital expenditure program at the Ezulwini Mine, which is mostly complete. During FY 2010, capital expenditures of $21.7 million and $206.9 million were incurred at the Ezulwini Mine and MWS, respectively. During FY 2009 capital expenditures of $102.0 million and $109.3 million were incurred at the Ezulwini Mine and MWS, respectively.

The cash from financing activities during FY 2010 was attributable to $92.6 million net proceeds received from the June 2009 bought deal financing, $20.5 million net cash from the Facility with Simmer & Jack and $50 million pursuant to the Ezulwini Gold Stream Transaction. During FY 2009 the Corporation received $123.3 million net proceeds pursuant to the MWS Gold Stream Transaction and $47.6 million net proceeds raised from the Private Placement.

Use of Proceeds

Inclusive of the Offering in December 2006, First Uranium has raised over $780 million to date. At the end of FY 2010, $240.3 million of the funds raised had been utilized at the Ezulwini Mine on the rehabilitation and re-engineering of the mine's main shaft, the building of the gold and uranium plant and pre-production costs. $336.5 million of the funds raised had been utilized at MWS primarily on the MWS capital expansion project. The Corporation used $56.6 million to fund costs relating to operating activities at the Ezulwini Mine, which currently still exceeds its cash revenues generated, and general and working capital requirements.

To date, the Corporation has brought both of its operations into gold production and the Ezulwini Mine into uranium production, while having to manage a myriad of challenges including: a global economic crisis and the resultant tightening of credit and funding opportunities; power shortages; the temporary withdrawal of the EA of the TSF at MWS; high clay content in the MWS tailings being reclaimed; escalating costs for construction materials and considerable fluctuations in the price of re-agents such as sulphuric acid and cyanide. In addition to building and commissioning new processing plants, First Uranium refurbished the Ezulwini Mine shaft, installed diesel-fired generators at both operations as insurance against future shortages of electrical power, commissioned two tailings reclamation stations and pipelines at MWS and, to achieve its business goals, negotiated key supplier contracts with various partners, including labour and the local uranium calcining operation. With the most recent financing and changes to the management team, management believes that the Corporation is positioned to complete its primary capital projects and progress to full production at the Ezulwini Mine and MWS.

Financial Instruments

First Uranium uses a mixture of cash, long-term debt and shareholders' equity to maintain an efficient capital structure and ensure adequate liquidity exists to meet the cash needs of its operations. In the normal course of business, the Corporation is inherently exposed to currency and commodity price risk. The Corporation does not currently hedge its exposure to currency or commodity price risk. The Corporation does hold certain derivative instruments that do not qualify for hedge accounting. These non-hedge derivatives are described in note 11 of the Financial Statements. For a discussion of certain risks and assumptions that relate to the use of derivatives, including market risk, market liquidity risk and credit risk, refer to notes 2 and 27 of the Financial Statements. For a discussion of the methods used to value financial instruments, refer to note 2 of the Financial Statements.

Commitments and Contingencies

At the end of FY 2010, the Corporation had $22.3 million of commitments, of which $0.1 million related to the Ezulwini Mine and $22.2 million to MWS. The existing commitments at MWS included $1.2 million relating to the construction and commissioning of the second gold module and the first two uranium modules, $8.3 million relating to the construction of the third gold module, $12.2 million for the construction of the new TSF and $0.5 million on-mine capital requirements.

Pursuant to the terms of the Offering, GW agreed to settle the completion penalty of $42 million in respect of the MWS Gold Stream Transaction with the issuance of 14 million common shares in First Uranium to GW and a commitment by the Corporation to complete construction of the third gold plant module at MWS and satisfaction of the technical completion tests prior to September 1, 2011. In the event that the construction and tests are not met by such date, a $1.5 million payment shall be payable by the Corporation to GW on the first day of each of September, October, November and December 2011 unless such tests have been met prior to such date. In the event that these commitments to construction and technical completion are not met prior to December 1, 2011, a remaining penalty of $30 million will be payable, such sum to be settled in cash or in common shares of First Uranium at the election of GW (at the lowest issue price permitted by the rules of the TSX).

Any payment made by MWS related to the delay in construction completion of the third gold plant module or the satisfaction of the Technical Completion Test including but not limited to the 14 million common shares and the further potential penalty of $30 million if paid to GW shall be considered a refund to GW. The full $42 million potential penalty due will be deemed to have been paid on June 1, 2010 for the purposes of any Default Interest (as defined in the MWS Gold Stream Transaction) but will not be considered a refund that would reduce the Uncredited Balance. Refunds which may become due and owing by GW to MWS shall continue to be conditional upon MWS having fully satisfied the Technical Completion Test as defined in the MWS Gold Purchase Agreement and, if made by Gold Wheaton shall constitute an increase to the Uncredited Balance (as defined in the MWS Gold Stream Transaction).

First Uranium issued 14 million common shares to GW on April 26, 2010 as partial settlement of the Gold Wheaton Penalty. At the end of FY 2010, a provision of $17.9 million for this penalty has been included in the Financial Statements (see Note 12.1 to the Financial Statements).

In December 2008, Auramet Trading LLC ("Auramet") served a statement of claim on the Corporation. The parties reached a settlement on a total amount of $1.8 million on November 10, 2009, pursuant to which the Corporation paid $0.6 million on signing the minutes of settlement and has agreed to pay the remaining $1.2 million in three equal installments over the first three quarters of calendar 2010.

On August 4, 2009, Aberdeen International Inc. ("Aberdeen") filed a claim for $11.4 million against Simmer & Jack and First Uranium (Proprietary) Limited ("FUSA"), a subsidiary of First Uranium, alleging certain breaches of a loan agreement dated March 30, 2006 and as amended by agreement on November 30, 2006 (together the "Loan Agreement"). FUSA was not a party to the Loan Agreement. Simmer & Jack, FUSA and Aberdeen entered into an arrangement agreement (the "Arrangement Agreement") dated December 20, 2006. Also see Related Party Transactions section in this MD&A in connection with the sale of the Buffelsfontein Tailings by Simmer & Jack to FUSA. The Arrangement Agreement provides for FUSA to pay to Simmer & Jack an amount equal the royalty payable to Aberdeen by Simmer & Jack under the Loan Agreement in respect of the gold produced from the Buffelsfontein Tailings. Of the total amount claimed, Aberdeen asserts that an additional royalty was payable by FUSA for the period October 16, 2008 to December 31, 2008 in the amount of approximately $400,000. FUSA has fulfilled or has caused its obligations to be fulfilled under the Arrangement Agreement and the agreement explicitly states that Aberdeen shall have no recourse to FUSA. Management believes that the claim against FUSA has no merit and that Aberdeen has no recourse to First Uranium or FUSA and as such the Corporation has not made any provision in this regard.

The Corporation entered into an agreement with a third party, commencing in January 2009, to calcine the yellowcake from First Uranium to produce uranium oxide packaged for dispatch to converters (the Toll Treatment Arrangement). Either party may terminate the agreement on eighteen months notice. The third party calciner constructed a plant with one half of the capacity of the plant to be dedicated for the processing of the First Uranium yellowcake and acquired a road tanker to transport the yellowcake from the First Uranium operations to the calciner's operations. First Uranium was obliged to pay one-half of the construction cost of the calcining plant up to a maximum of $1.6 million and one half of the cost of the tanker (together referred to as the Loan). The Loan is effective as of January 5, 2009 and is repaid in monthly instalments over a seven year period commencing January 30, 2009. The Loan bears interest equal to the prime overdraft rate as quoted by the SARB, plus 2%. During the year ended March 31, 2010, the Corporation paid $0.9 million (2009: $0.2 million) pursuant to the arrangement and expects to pay $1.1 million in the next 12 months and $1.1 million thereafter, until the end of the agreement.

At March 31, 2010, First Uranium had the following contractual obligations:

    
    -------------------------------------------------------------------------
                                           Payments due by date
    -------------------------------------------------------------------------
                                                3
                                           Months  Between
                                Within 3       to      1-3  After 3
    (thousands of dollars)        Months   a Year    Years    Years    Total
    -------------------------------------------------------------------------
    Senior unsecured
     convertible debentures        3,101    3,152  156,539        -  162,792
    Asset retirement obligations     304      911    2,783   22,517   26,515
    Derivative liabilities         4,063    9,391   10,464        -   23,918
    Facility with Simmer
     & Jack*                    22,462        -        -        -   22,462
    Purchase obligations          22,311        -        -        -   22,311
    Provision for GW penalty(xx)  17,857        -        -        -   17,857
    Capital leases                    55      178      584    1,163    1,980
    Operating leases                  48      144      576        -      768
    -------------------------------------------------------------------------
    Total contractual
     obligations                  70,201   13,776  170,946   23,680  278,603
    -------------------------------------------------------------------------
    *  The Facility with Simmer & Jack has been settled with Rand Notes
         subsequent to March 31, 2010.
    (xx) The GW penalty was settled with the issue of 14 million common
         shares subsequent to March 31, 2010.
    

Outlook

The Corporation continues to focus on attaining optimal output from gold and uranium facilities at both of its operations under the restructured plans being developed. At the Ezulwini Mine, the underground mine and development plans are being restructured to focus additional attention on the targets that need to be achieved. At MWS, the current operations are being optimized to ensure maximum cash generation and the remaining capital programme is being reviewed in detail to identify any opportunities to reduce peak funding requirements without compromising project sustainability or efficiency. Future expansion and production activities will be subject to capital availability.

In addition to these initiatives, a cost cutting exercise has been initiated across the Corporation. The key focus is to reduce corporate and non-core costs to ensure that the Corporation's overall cost base can be reduced to enhance operational margins. This exercise is also intended to create flexibility with respect to cash flow and ensure that the Corporation is able to execute on its plans.

MWS

As discussed under the Operations Review section in this MD&A, management has decided to continue utilizing two gold plant modules with two-stream deposition, albeit at reduced throughput of 975 ktpm until the end May 2011. Under the two-stream deposition plan, the previously communicated one-stream production run rate increases by 56% from approximately 11,500 ounces per month to approximately 18,000 ounces per month and should contribute significantly towards mitigating corporate peak funding risk.

The table below summarizes the production forecast under the two-stream deposition plan for the financial years ending March 31, 2011 and 2012 compared to the production forecasts under the technical report:

    
    -------------------------------------------------------------------------
                                       Two Streams to
                                        end May 2011       Technical Report
    -------------------------------------------------------------------------
                                    FY 2011    FY 2012    FY 2011    FY 2012
    -------------------------------------------------------------------------
    Gold production
    Production (oz)                  72,000    128,000     48,000    128,000
    Estimated Cash Cost ($/oz)(1)       479        494        474        494
    -------------------------------------------------------------------------
    Uranium production
    Production (lb)                       -          -          -    498,000
    Estimated Cash Cost ($/lb)(2)         -          -          -         33
    -------------------------------------------------------------------------

    Notes:

    1.  Gold "Cash Costs" are costs directly related to the physical
        activities of producing gold and include mining, processing and other
        plant costs; third-party refining and smelting costs; marketing
        expense, on-site general and administrative costs; royalties; on-mine
        drilling expenditures that are related to production and other direct
        costs. Sales of by-product metals are deducted from the above in
        computing cash costs. Cash costs exclude depreciation, depletion and
        amortization, corporate general and administrative expense,
        exploration, interest, and pre-feasibility costs and accruals for
        mine reclamation. Cash costs are calculated and presented using the
        "Gold Institute Production Cost Standard" applied consistently for
        all periods presented. The Gold Institute was a non-profit industry
        association comprised of leading gold producers, refiners, bullion
        suppliers and manufacturers. This institute has now been incorporated
        into the National Mining Association. The guidance was first issued
        in 1996 and revised in November 1999. Total cash costs per ounce is a
        non-GAAP measurement and investors are cautioned not to place undue
        reliance on it and are advised to read all GAAP accounting
        disclosures presented in the Corporation's audited consolidated
        financial statements for FY 2009 and accompanying footnotes thereto.
    2.  Uranium "Cash Costs" calculations take into account the incremental
        ounces of gold recovered when the ore is run through the atmospheric
        leach tanks of the uranium plant.
    

On the expected completion of the third gold plant module and TSF by May 2011, MWS will commence with the GW technical completion tests which must be satisfied prior to September 1, 2011 in order to avoid paying further penalties to GW as discussed under the Commitments and Contingencies section of this MD&A. Subsequent to the achievement of the GW completion test, MWS will commission the first two modules of the uranium plant.

Ezulwini Mine

The key elements that drive production and operating results at the Ezulwini Mine are:

    
    -   the creation of available face length, with uranium and gold grades
        within planned ranges;
    -   increasing available face length, trained mining crews and equipping
        of panels thereby increasing production build-up;
    -   reducing dilution and improving its mine call factor, including gold
        and uranium recoveries;
    -   favourable ZAR prices for uranium and gold; and
    -   the sale of uranium to nuclear power utilities.
    

As discussed in the Ezulwini Mine Operations Review section in this MD&A, the mine production forecast is being revised in response to slower than expected mine production build-up to date and the capital constraints. To ensure the build-up and production ramp-up is realistic and achievable, management is currently reviewing a detailed 'bottom-up' production plan. This detailed review of the plan is expected to be completed by the end of June 2010.

Technical Disclosure

All technical disclosure in this MD&A relating to MWS has been prepared in accordance with National Instrument 43-101 ("NI 43-101) by Jim Fisher who is a Chartered Engineer and is a "qualified person" under NI 43-101. Mr. Fisher is an executive officer of the Corporation.

Related Party Transactions

On August 14, 2009, the Corporation finalized a one-year term credit facility of ZAR160 million (the "Facility") with Simmer & Jack. The Corporation drew down the entire Facility during Q2 2010. The Facility bears interest at the three-month Johannesburg Interbank Agreed Rate (JIBAR) for ZAR denominated loans (currently 7.40%) plus 7% per annum. An arrangement fee of 3% was paid on the Facility amount and the Corporation paid for the legal and other costs relating to the Facility. As at March 31, 2010, the Facility with Simmer & Jack was $22.5 million. The interest accrued on the Facility for Q4 2010 and FY 2010 was $0.8 million and $1.9 million, respectively. Interest paid during Q4 2010 and FY 2010 was $0.4 million and $1.1 million respectively. Pursuant to the terms of the Offering, the Facility with Simmer & Jack plus the unpaid interest on the Facility (approximately $22.7 million) was settled in full on April 26, 2010 with the issue of R167.8 million in Rand Notes to Simmer & Jack.

Pursuant to the Offering, Simmer & Jack also subscribed to a further R296.1 million of Rand Notes for a cash consideration of Cdn$40 million on April 26, 2010.

During Q4 2010 and FY 2010, the Corporation paid $1.0 million and $3.4 million, respectively, to Simmer & Jack pursuant to the Shared Services Agreement (Q4 2009: $0.5 million and FY 2009: $2.1 million). For Q4 2010 and FY 2010 $0.7 million and $2.2 million, respectively, of the fees paid to Simmer & Jack were related to technical services provided to the operations that were capitalized (Q4 2009: $0.2 million and FY 2009: $0.7 million). For a description of the Shared Services Agreement, see the Corporation's most recently filed Annual Information Form ("AIF").

At the end of Q4 2010, the amount payable to Simmer & Jack was $2.5 million compared to $0.9 million payable at the end of FY 2009.

First Uranium has agreed to reimburse Simmer & Jack for 50% of the fees that Simmer & Jack is required to pay to an empowerment company for consulting. During Q4 2010 and FY 2010, the Corporation paid $0.1 million and $0.2 million, respectively to Simmer & Jack in connection with such services (Q4 2009: $0.05 million and FY 2009: $0.2 million).

On September 27, 2007, the Board approved a loan in the amount of Cdn$1 million to the President and CEO of First Uranium for the purpose of facilitating his purchase of a family home. The loan was for a term of six years, was unsecured and bore interest at 4% per annum payable monthly in arrears. At the resignation of the CEO in March 2010 and as part of his severance package, the Board agreed to forgive this loan in full. The outstanding loan amount of Cdn$1 million was therefore written off and recognized as an expense in the current statement of operations. In addition, a tax amount related to this transaction of $0.4 million was also incurred by the Corporation and recognised as an expense in the current statement of operations.

On March 15, 2010, Deon van der Mescht as interim President and CEO of the Corporation was granted 300,000 share options that were conditional upon the successful conclusion of the Offering and his subsequent appointment as permanent President and CEO. On May 6, 2010, Deon van der Mescht was confirmed as President and CEO and also appointed a director of the Corporation.

Pursuant to the Buffelsfontein Tailings and Rights Agreement and the Aberdeen Arrangement (Refer to the Corporation's AIF for more detail), MWS is liable to pay: (i) to Simmer & Jack, an amount equal to the royalty payable by Simmer & Jack to Aberdeen pursuant to the Aberdeen Loan Agreement in respect of gold produced from the Buffelsfontein Tailings, and (ii) to BGM a royalty of 1% of the gross revenue earned by MWS from the sale of uranium, gold, sulphur and other minerals recovered from the processing of the Buffelsfontein Tailings. During Q4 2010 and FY 2010, the total royalties and payments, inclusive of the amounts due in respect of the Aberdeen Loan Agreement were $0.2 million and $0.7 million, respectively (Q4 2009: $0.04 million and FY 2009: $0.2 million).

Disclosure Controls and Procedures and Internal Control over Financial Reporting

Disclosure Controls and Procedures

The CEO and Chief Financial Officer ("CFO") are responsible for establishing and maintaining adequate disclosure controls and procedures, as defined in National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109). Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the Corporation's filings under securities legislation is accumulated and communicated to management, including the CEO and CFO as appropriate, to allow timely decisions regarding public disclosure. They are also designed to provide reasonable assurance that all information required to be disclosed in these filings is recorded, processed, summarized and reported within the time periods specified in securities legislation. Management regularly reviews the disclosure controls and procedures; however, they cannot provide an absolute level of assurance because of the inherent limitations in control systems to prevent or detect all misstatements due to error or fraud.

Management, including the CEO and CFO, conducted an evaluation of the effectiveness of the Corporation's disclosure controls and procedures as of March 31, 2010. Based on this evaluation, the CEO and CFO have concluded that the disclosure controls and procedures were effective to provide reasonable assurance that as of March 31, 2010 information required to be disclosed in First Uranium's annual and interim filings (as such terms are defined under NI 52-109) and other reports filed and submitted under Canadian securities laws is recorded, processed, summarized and reported within the time periods specified by those laws, and that material information is accumulated and communicated to management, including the CEO and CFO as appropriate, to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in NI 52-109. Internal control over financial reporting means a process designed by and under the supervision of the CEO and CFO, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian GAAP. All internal control systems have inherent limitations and therefore the internal control over financial reporting can only provide reasonable assurance and may not prevent or detect misstatements due to error or fraud.

Management, including the CEO and CFO, conducted an evaluation of the effectiveness of the Corporation's internal control over financial reporting as of March 31, 2010 using the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework. Based on this evaluation, the CEO and CFO have concluded that the internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian GAAP as of March 31, 2010.

Changes in Internal Control over Financial Reporting

During the most recent period there were no changes in the Corporation's internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.

Critical Accounting Policies and Estimates

The preparation of these consolidated financial statements in accordance with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenues and expenses during the year. Areas of judgement that have the most significant effect on the amounts recognized in the financial statements are estimation of asset lives, determination of ore reserve estimates, capitalization of exploration and evaluation costs, and identification of functional currencies. Key sources of estimation uncertainty that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities are the estimation of close-down and restoration costs and the timing of expenditures, the review of asset carrying values and impairment charges and reversals, the estimation of environmental clean-up costs and the timing of expenditures and the recoverability of potential future income taxes. Financial results as determined by actual events could differ from those estimated. Management estimates are also applied in arriving at the useful lives of items of property, plant and equipment and in determining the fair value of stock options. Note 2 to the Financial Statements describes the Corporation's significant accounting policies.

Property, plant and equipment

The cost of an item of property, plant and equipment is recognized as an asset when:

    
    -   it is probable that future economic benefits associated with the item
        will flow to the Corporation; and
    -   the cost of the item can be measured reliably.
    

Costs include expenditures incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognized in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is written off.

Property, plant and equipment are carried at cost less accumulated amortization and any impairment losses. Exploration costs incurred to the date of establishing that a property has mineral resources are expensed. Exploration and development expenses incurred subsequent to this date and which have the potential of being economically recoverable are capitalized. If the project becomes feasible, the costs are amortized over the life of the mine. If the project is stopped, the costs are written off immediately.

Management carries out a review at each financial year-end to determine the appropriateness of the residual value and the useful life of each asset. Each component of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is amortized. Amortization is provided on all property, plant and equipment other than freehold land, to write down the cost, less residual value over their useful lives. Land is not amortized. The amortization charge for each period is recognized in earnings or loss unless it is included in the carrying amount of another asset.

Asset retirement obligations

The Corporation recognizes the fair value of a future asset retirement obligation as a liability in the year in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that results from the acquisition, construction, development, and/or normal use of the assets. The Corporation concurrently recognizes a corresponding increase in the carrying amount of the related long-lived asset that is depreciated over the life of the asset. The fair value of the asset retirement obligation is estimated using the expected cash flow approach that reflects a range of possible outcomes discounted at credit adjusted risk-free interest rate. Provision is made in full for the estimated future costs of pollution control and rehabilitation, in accordance with statutory requirements. The fair value of asset retirement obligations is recognized and provided for in the financial statements and capitalized to mining assets when incurred.

Subsequent to the initial measurement, the asset retirement obligation is adjusted at the end of each year to reflect the passage of time and changes in the estimated future cash flows underlying the obligation.

Changes in the obligation due to the passage of time are recognized in income as an operating expense using the interest method. Changes in the obligation due to changes in estimated cash flows are recognized as an adjustment of the carrying amount of the long-lived asset that is depreciated over the remaining life of the asset.

Annual increases in the provision are accreted into income and consist of financing costs relating to the change in present value of the provision and inflationary increases in the provision estimate. The present value of additional environmental disturbances created is capitalized to mining assets against an increase in rehabilitation provision.

Impairment of Long-Lived Assets

The Corporation's long-lived assets consist of property, plant and equipment. At the end of each accounting period, the Corporation reviews the carrying value of its long-lived assets based on a number of factors. These factors include analysis of net recoverable amounts, permitting considerations and current economics. Estimates of the recoverable amount of long-lived assets may also be impacted by changes in commodity prices, currency exchange rates, operating costs, production levels and other factors that may be different from those used in determining the recoverable amount. Changes in estimates could have a material impact on the carrying value of the long-lived assets. Should impairment be determined, the Corporation would write-down the recorded value of the long-lived asset to fair value.

Changes in accounting policies

Goodwill and Intangible Assets

Canadian Institute of Chartered Accountants (CICA) Handbook Section 3064 - Goodwill and Intangible Assets, establishes revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets. Concurrent with the introduction of this standard, the CICA withdrew EIC 27, Revenues and Expenses during the pre-operating period. The changes were effective for the Corporation's interim and annual financial statements beginning on or after April 1, 2009. The adoption of this section had no impact on the results of the Corporation.

Credit Risk and the Fair Value of Financial Assets and Financial Liabilities

In January 2009, the CICA issued EIC-173, "Credit Risk and the Fair Value of Financial Assets and Financial Liabilities" which requires the Corporation to consider its own credit risk as well as the credit risk of its counterparty when determining the fair value of financial assets and liabilities, including derivative instruments. The standard became effective for the Corporation's first quarter of Fiscal 2010 and was required to be applied retrospectively without restatement of prior periods. The adoption of this section had no impact on the results of the Corporation.

Mining Exploration Costs

In March 2009, the CICA issued EIC-174, "Mining Exploration Costs" which provides guidance to mining enterprises related to the measurement of exploration costs and the conditions that a mining enterprise should consider when determining the need to perform an impairment review of such costs. EIC-174 was applicable for the Corporation's interim and annual financial statements for its fiscal year ending March 31, 2010, with retroactive application. The adoption of this section had no impact on the results of the Corporation.

Future and new accounting standards

The CICA issued the following amendments to the accounting standards for periods beginning on or after April 1, 2011:

Business Combinations/Consolidated Financial Statements/Non-Controlling Interests

In January 2009, the CICA adopted Sections 1582 - Business Combinations, 1601 - Consolidated Financial Statements, and 1602 - Non-Controlling Interests which superseded current Sections 1581 - Business Combinations and 1600 - Consolidated Financial Statement.

These new sections replace existing guidance on business combinations and consolidated financial statements to harmonize Canadian accounting for business combinations with International Financial Reporting Standards. These sections will be applied prospectively to business combinations for which the acquisition date is on or after April 1, 2011. Earlier adoption is permitted. If the Corporation applies these sections before April 1, 2011, it is required to disclose that fact and apply each of the new sections concurrently. The Corporation is currently evaluating the impact of the adoption of these changes on its consolidated financial statements.

International financial reporting standards ("IFRS")

In terms of the requirements of the Canadian Accounting Standards Board, First Uranium has to adopt IFRS for interim and annual financial statements relating to its fiscal year ending March 31, 2012 ("FY 2012"). First Uranium is in the process of converting its basis of accounting from Canadian GAAP to IFRS effective for the first quarter report in FY 2012. The transition date of April 1, 2010 will require the conversion, for comparative purposes, of the Corporation's previously reported balance sheet as at March 31, 2010 and March 31, 2011 and its interim and annual consolidated statements of operations and cash flows for the year ending March 31, 2011 from Canadian GAAP to IFRS.

The impact analysis and design phase is currently underway. During management's analysis phase to date, it has been established that all of First Uranium's subsidiaries (directly and indirectly owned) are required (and have been since the listing of the Corporation on the TSX in December 2006) under their respective jurisdiction's company's act, to prepare financial statements in accordance with IFRS. The Corporation's operational activities resides within its subsidiaries. Therefore most of the Corporation's financial reporting systems and processes already take IFRS into consideration and the staff involved in the financial reporting process are knowledgeable on IFRS. On consolidation of First Uranium's group financial statements at the end of each reporting period, the subsidiaries' financial information is reviewed to consider any potential differences between IFRS and Canadian GAAP, and if any differences are identified, such differences are adjusted to the consolidated financial statements to ensure that the Corporation's group consolidated financial statements are reported in accordance with Canadian GAAP.

IFRS are premised on a conceptual framework similar to Canadian GAAP, however, significant differences exist in certain matters of recognition, measurement and disclosure. While adoption of IFRS will not change the cash flow of the Corporation, the adoption of IFRS will result in changes to the reported financial position and results of operations of the Corporation. The Corporation identified a number of key areas where differences between Canadian GAAP and IFRS exist and the Corporation reviews any new financial information on an ongoing basis to identify further areas of differences.

The key areas identified where the most substantial differences exist are as follows:

    
    -   the accounting treatment of the gold stream transactions;
    -   the valuation methods used for the debt and equity portions on
        convertible debentures;
    -   the discount rates and foreign exchange rates used to determine the
        value of the asset retirement obligations at the end of reporting
        periods; and
    -   the determination of functional currency and the treatment of foreign
        exchange differences resulting from the translation of functional
        currencies of the different reporting entities within the group to
        reporting currencies.

    Over the next twelve months, management plans to:

    -   analyze and select ongoing accounting policies where alternatives are
        permitted including IFRS 1 exemptions, if required;
    -   quantify the key differences between IFRS and Corporation's
        application of Canadian GAAP;
    -   revise the Corporation's accounting policy manual; and
    -   prepare IFRS consolidated financial statements including first-time
        adoption reconciliations.
    

To maintain effective disclosure controls and procedures and internal controls over financial reporting throughout the IFRS project, management is also in the process of evaluating the impact of the conversion to IFRS on the Corporation's control environment in order to identify the additional controls that need to be developed. Management plans to have the additional controls identified and developed by the end of Q2 2011 for the review of the IFRS comparative financial information.

All key personnel will undergo ongoing training as and when needed. Management will also review the financial information systems to identify changes required by the transition date and setup processes to ensure that financial information is recorded under both Canadian GAAP and IFRS for comparative purposes.

Outstanding Share Data

    
    -------------------------------------------------------------------------
                                                        FY 2010      FY 2009
    -------------------------------------------------------------------------

    Common shares outstanding at beginning
     of the year                                    151,574,037  131,074,037
    Shares issued during the year                    15,250,000   20,500,000
    Restricted share unit shares issued                  23,000            -
    -------------------------------------------------------------------------
    Common shares outstanding at end of the year    166,847,037  151,574,037
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Unexercised common share purchase warrants
     at end of the year                              10,250,000   10,250,000
    Unexercised restricted units outstanding
     at end of the year                                 177,000            -
    Unexercised stock options outstanding
     at end of the year                               3,204,622    3,588,194
    Average strike price of
     outstanding options (Cdn$)                            7.74         7.79
    -------------------------------------------------------------------------
    

At June 17, 2010, First Uranium had 180,847,037 common shares outstanding and there were 3,504,622 unexercised stock options outstanding at an average strike price of Cdn$7.22 per share.

Each warrant is exercisable for one common share of First Uranium at a purchase price of Cdn$4.15 until February 11, 2011.

At March 31, 2010 and June 17, 2010, First Uranium also had Cdn$150 million ($147 million as at March 31, 2010) principal amount of Debentures outstanding which are convertible into 60.9013 common shares for each Cdn$1,000 principal amount of Debentures, representing 9,135,195 common shares.

At June 17, 2010, First Uranium also had Cdn$110 million principal amount of Canadian Notes outstanding which are convertible into 769.23 common shares for each Cdn$1,000 principal amount of Canadian Notes, representing 84,615,384 common shares.

At June 17, 2010, First Uranium also had R463.9 million principal amount of Rand Notes outstanding which are convertible into 107.53 common shares for each R1,000 principal amount of Rand Notes, representing 49,882,736 common shares.

Risks and Uncertainties

Uncertainties

There are a number of uncertainties in the mining business of First Uranium, some of which are beyond First Uranium's control:

    
    -   government legislation regarding mining companies in South Africa,
        including without limitation, securing authorizations and permits
        required thereunder within the timeframes required to achieve the
        Corporation's plans and objectives;
    -   the ability of the Corporation to provide financial assurance for
        rehabilitation liabilities to the satisfaction of the DMR;
    -   prices for the Corporation's future production of uranium and gold;
    -   foreign exchange and interest rates;
    -   the supply and cost of other re-agents, including sulphuric acid,
        used by the Corporation in the process to extract gold and uranium;
    -   the consistent supply of sufficient electrical power;
    -   the decisions and activities of the Corporation's competitors in the
        uranium and gold mining business, which impact the supply of uranium
        and the demand for available services, construction materials, labour
        and the rights for prospecting and mining;
    -   the continued endorsement of nuclear power as a preferred source for
        the world's growing energy needs;
    -   the decisions of investors to continue to buy and hold the securities
        of the Corporation;
    -   securities regulation regarding public listed companies in Canada and
        South Africa; and
    -   natural disasters, war or random occurrences or acts that could
        result in a material change to economic and market performance,
        business conditions or operations.
    

Risks

In addition, First Uranium's mining properties are in the development stage and are subject to the risks and challenges similar to other companies in a comparable stage of development and production startup. The risks include, but are not limited to, certain business, operational and market risks. For a detailed discussion of the Corporation's risks please refer to the Corporation's most recent AIF, which is available on the Corporation's website www.firsturanium.com and on www.sedar.com or upon request from the Corporation.

Business Risks

Mining and Prospecting Rights

The Corporation has not secured all mining rights and government approvals required to develop its proposed uranium and gold project at MWS. In July 2009, a new order mining right for MWS was approved by the DMR. The execution of the mining license is subject to certain conditions which MWS is in the process of satisfying including providing financial assurance for rehabilitation liabilities to the satisfaction of the DMR. It should however be noted that MWS does not require the new order mining right because tailings recovery facilities are not currently covered under the MPRDA. Until such time as the MRPDA has been amended to include tailings recovery facilities, MWS relies upon the recently issued EA governed by NEMA (see also Permitting issues at MWS section in this MD&A).

Gold Stream Transaction Obligations

If the MWS Project experiences further construction delays, including labour stoppages, delays supplies of goods and services or lack of availability of equipment, it may impact MWS' ability to meet certain obligations under the MWS Gold Stream Transaction (see Commitments and Contingencies section to this MD&A for a description of obligations and repercussions if such obligations are not satisfied).

Foreign Currency Exchange Rates

The Corporation has exposure to the risk of significant change in foreign currency exchange rates between US dollars, Canadian dollars and the South African rand. Most of the Corporation's expenses are currently in ZAR. The Corporation's current and future gold and uranium production will be sold in US dollars. As a result, an increase in the US dollar value relative to the ZAR would decrease profitability. In addition, the Corporation runs a small office in Canada and also holds Debentures that is Canadian dollar denominated, which will result in increased expenses and increased liabilities in the case of any further increases in the value of the Canadian dollar relative to the US dollar as the Corporation's reporting currency is in US dollars.

Financing

Management has considered the market turbulence arising from the credit crises and taken the related risks into consideration and is carefully monitoring future developments, the impact they may have on the Corporation's operations, financial condition and outlook and is actively assessing non-critical capital expenditures and opportunities to reduce overheads and operating costs and improve returns.

Business Interruption

The Corporation is exposed to risks that could interrupt its business. One of the Corporation's two projects, the Ezulwini Mine, is an underground mine that has historically had ground movement problems in the Upper Elsburg shaft pillar. On one occasion it was necessary to cease shaft operations and excavate the lava unit around the shaft to reinstall the necessary shaft hardware. To eliminate the ground control problems in the shaft area, the Corporation is executing its plan to mine out the shaft pillar and to stabilize the main shaft.

There is a risk of flooding at the Ezulwini Mine, where the Corporation daily pumps approximately 65 million litres of water from the site. The pumps are well maintained and there are several contingency arrangements including multiple power sources, large diesel generators, back-up pumps and catch basins in the event of failure of the main pumps. The mine has never been flooded, including during the period of 2001 through 2006 when the mine ceased operations and was on care and maintenance.

Black Economic Empowerment ("BEE") Requirements

In all industries in South Africa, BEE is a program that promotes the accelerated integration of black people into the South African economy and has been a policy of the South African government since 1994. In April 2004, the Broad-Based Black Economic Empowerment Act (the "BEE Act") came into effect. The BEE Act establishes the legislative framework for the promotion of BEE across all industries that sell or wish to sell products and/or services to Government departments and agencies and all public sector entities, and in particular, what it refers to as "broad-based" BEE.

Broad-based BEE has as its goal, the economic empowerment of all black people, including women, youth, people with disabilities and people living in rural areas through strategies which seek to, amongst others, increase the number of black people that manage, own and control enterprises and productive assets.

In the South African mineral industry the Mining Charter and the Codes promulgated thereunder in April 2009 (the "Mining Codes") with its accompanying compliance targets establish a set of criteria and compliance targets for the SA minerals industry that is separate from, but which overlaps certain provisions and principles in the Codes of Good Practice issued by South Africa's Minister of Trade and Industry.

The Mining Codes establish compliance targets across nine elements comprising: ownership, Management control, employment equity, human resource development, preferential procurement, mine community and rural development, beneficiation, housing and living conditions standards. The ownership or equity participation by HDSA's target for 2009 and 2014 is 15% and 26%, respectively. (For more information on BEE, please refer to the Corporation's most recent AIF).

Although compliant with the above set requirements for shareholder representation of 15%, the proportion of BEE holdings in the Corporation's shares have recently declined to approximately 16% as a result of recent equity financings by the Corporation and Simmer & Jack. Both the Corporation and Simmer & Jack are considering securing more investment interest in their companies by BEE investors in advance of the higher 2014 shareholder representation requirement of 26%. Failure to comply with BEE requirements may complicate the ability of applicants to obtain and retain mining and prospecting rights.

Disclosure

The Corporation is required to comply with securities reporting legislation and accounting standards in Canada and South Africa. To ensure that First Uranium meets its regulatory obligations and mitigate risks associated with inaccurate or incomplete disclosure, the Audit Committee is responsible for reviewing and assessing the quality and integrity of the Corporation's continuous disclosure documents. The Corporation is also in the process of implementing a disclosure policy.

Insurance

First Uranium's insurance coverage does not cover all of its potential losses, liabilities and damage related to its business and certain risks are uninsured or uninsurable. The Corporation makes its insurance decisions based on the likelihood of any risk occurring, the cost of the insurance and the Corporation's tolerance for risk.

Simmer & Jack

Simmer & Jack and First Uranium share several services that benefit both companies. In addition, Simmer & Jack maintains a significant interest in the Corporation, which investors view as an overhang on the value of the Corporation's shares in the event that Simmer & Jack should decide to further dilute their shareholding in the Corporation. First Uranium also relies on Simmer & Jack for the majority of its BEE credentials, among other things.

Litigation

From time to time, the Corporation is involved in litigation, investigations, or proceedings related to claims arising out of its operations in the ordinary course of business. In the opinion of the Corporation's management, these claims and lawsuits in the aggregate, even if adversely settled, will not have a material effect on the consolidated financial statements.

Operational Risks

Mining

The business of mining generally involves a high degree of risk and First Uranium has a limited operating history. No assurance can be given that the development and bringing into commercial production of a mine or tailings processing facility will be completed as contemplated and for the estimated capital costs or within the estimated schedule. Also, no assurance can be given that the intended production schedule, metal recoveries, estimated operating costs and/or that profitable operations will be achieved.

Confidence in Resources

The economic analysis for the Ezulwini Mine is based, in part, on inferred resources, and is preliminary in nature. Inferred resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as mineral reserves. There is no certainty that the reserves, development, production and economic forecasts on which such preliminary assessments are based, will be realized.

Labour

The Corporation will employ most of its labour at its two operations. There has historically been much higher employment in the areas in which the two operations are situated and management does not consider availability of general labourers a risk. The higher demand for uranium, gold and other metals has raised the demand for skilled professionals, such as mining engineers, metallurgists and geologists.

The cost of labour is a risk since labour costs have risen significantly from the last time uranium mines were in production at these sites. Higher costs have been identified and factored into the economic forecasts for these operations.

A trend that could increase risk for the Corporation is the heightened labour unrest in South Africa. Workers at various South African mining operations have been demanding, through their unions, higher compensation as a result of increased revenues in the mining sector being driven by rising mineral prices. First Uranium's two-year settlements expired at the end of FY 2010 and wage negotiations are currently in process at both operations with the aim of concluding new two-year agreements.

South Africa has significantly higher HIV infection rates than those prevailing in North America and Europe. Current and future First Uranium employees may have or could contract this potentially deadly virus. The prevalence of HIV could cause the Corporation to sustain higher costs to replace sick employees.

Operational safety is considered a top priority by management and the Board has established an Environmental, Health and Safety Committee. The Committee has the responsibility to review and make recommendations regarding the Corporation's health and safety programs and compliance issues.

Power

Power outages beset South Africa in early 2008 and have continued sporadically in 2009, causing disruption in business activities. In 2008, coal-fed power stations ran low on fuel and several power-generating facilities were down for maintenance. No significant new power-generating facilities are expected to start up in South Africa until 2012.

On January 24, 2008, Eskom advised that continuity of electric power supply could not be guaranteed. Specific warnings were communicated to South African mining companies, including the Corporation. To mitigate the impact of further power restrictions, the Corporation has power generation installed at its two operations, with a 30 MW power plant installed at its MWS operation and 14 MW of power at the Ezulwini Mine. The supply of power from Eskom has recently increased, aided by the sluggish economic growth in South Africa and the curtailment of production by high-demand users such as smelter operations in the mining industry. Eskom is implementing significant electricity price increases, but Eskom's supply remains at a significantly lower cost than diesel-generated power.

Construction Costs

First Uranium is in the development stage and is continuing construction of additional gold and uranium modules at the MWS plant. To complete the construction of the additional plant modules requires steel, concrete and construction tradespeople.

Fuel

Rising costs of fuel impact the costs of running the plants and the transportation of labour and materials to the sites and eventually the costs of moving rock from the underground mine and the metals that are to be produced at both operations. Higher costs of other fuels have increased the demand for uranium, offsetting the negative impact of the increase in the costs of these fuels in the Corporation's operations.

As a result of the Corporation's decision to install diesel-fired generators, it will be exposed to changes in the availability and price of diesel fuel. Close geographic proximity to a government source of fuel provides the Corporation with some confidence in its ability to source some of its diesel fuel requirements domestically, but it may also have to transport diesel fuel from South African ports. To mitigate the risk of price escalation for the transport of diesel fuel, the Corporation will seek long term transportation contracts.

The Corporation had factored additional costs into the economic models at both operations for the expected need to run its diesel generators to fill peak electricity demand, in the event that Eskom fails to provide sufficient power. To date, the Corporation has not yet had to use its diesel-fired generators and has, therefore, kept costs for electricity below planned levels.

Environmental and hazardous materials

Laws and regulations involving the protection and remediation of the environment and the governmental policies for implementation of such laws and regulations are constantly changing and are generally becoming more restrictive. Mining operations have inherent risks and liabilities associated with pollution of the environment and the disposal of waste products and hazardous materials occurring as a result of mining and production. First Uranium cannot give any assurance that, notwithstanding its precautions, breaches of environmental laws (whether inadvertent or not) or environmental pollution will not materially and adversely affect its financial condition and its operations' results.

First Uranium's proposed mining projects are subject to the risk of uranium exposure. The Corporation has put systems in place to manage exposure to uranium or uranium metal and no known exposures have occurred at First Uranium to date. Exposure by First Uranium's employees, however, could result in the Corporation having to incur extra compensation costs.

Market risks

Uranium and Gold Prices

First Uranium's future revenues will be directly related to the world market prices of uranium and gold as its revenues will be derived primarily from gold and uranium mining. Uranium and gold prices can be subject to volatile price movements, which can be material and can occur over short periods of time and are affected by numerous factors beyond First Uranium's control.

If, after the commencement of commercial production, uranium and/or gold prices fall below the costs of production at First Uranium's operations for a sustained period, it may not be economically feasible to continue production at such operations. This would materially and adversely affect production, profitability and First Uranium's financial position. A decline in uranium and/or gold prices may also require First Uranium to write down its mineral reserves and mineral resources, which would have a material adverse effect on its earnings and profitability. First Uranium's future profitability may be materially and adversely affected by the effectiveness of any hedging strategy. Apart from the two gold stream transactions with GW, the Corporation currently does not hedge any of its future gold and uranium production.

In December 2008, the Corporation entered into the MWS Gold Stream Transaction to sell approximately 25% of its expected life-of-mine gold production at the lesser of $400 per ounce of gold or spot price (See also Note 11.1 to the Financial Statements). In December 2009, the Corporation entered into the Ezulwini Gold Stream Transaction to sell approximately 7% of its expected life-of-mine gold production at the lesser of $400 per ounce of gold or spot price (see also Note 11.2 to the Financial Statements).

Public Perception and Acceptance of Nuclear Energy

Growth of the uranium and nuclear power industry will depend, amongst other factors, upon continued and increased acceptance of nuclear technology as a means of generating electricity. Because of unique political, technological and environmental factors that affect the nuclear industry, the industry is subject to public opinion risks that could have an adverse impact on the demand for nuclear power and increase the regulation of the nuclear power industry. An accident at a nuclear reactor anywhere in the world could impact the continuing acceptance of nuclear energy and the future prospects for nuclear power generation, which may have a material adverse effect on First Uranium.

Uranium and Gold Industry Competition

International uranium and gold industries are highly competitive. There is no guarantee that First Uranium will be able to compete successfully with other mining companies, particularly the larger, seasoned mining companies. The Corporation cannot assure that it will be able to compete successfully with its competitors in developing or acquiring uranium or gold projects or in attracting and retaining skilled and experienced employees.

First Uranium intends to market its uranium in a number of potential markets in direct competition with supplies available from a relatively small number of mining companies. Current and future international trade agreements and policies, governmental policies and trade restrictions are beyond the control of First Uranium and may affect the supply of uranium available to the market.

Competition from other energy sources

Nuclear energy competes with other sources of energy, including oil, natural gas, coal and hydroelectricity. These other energy sources are to some extent interchangeable with nuclear energy, particularly over the longer term. Sustained lower prices of oil, natural gas, coal and hydro-electricity may result in lower demand for uranium concentrates.

Additional Information

Additional information relating to First Uranium is contained in the Corporation's filings with the Canadian Securities regulator, including the AIF. These are available on SEDAR at www.sedar.com and on the Corporation's website at www.firsturanium.com.

Forward-looking Information

This MD&A and consolidated financial statements for the year ended March 31, 2010 contain certain forward-looking statements. Forward-looking statements include but are not limited to those with respect to the timing and amount of estimated future production, the timing and receipt of required permits, 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, 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 Corporation's expectations as at the date of this MD&A; (ii) actual results may differ materially from the Corporation's expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate; (iii) the Corporation 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 Corporation 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 MD&A, First Uranium has made several material assumptions, including but not limited to, the assumption that: (i) projected metal production, 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 and as updated by the Corporation in its continuous disclosure from time to time 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 BEE investors will maintain their interest in the Corporation and the Corporation will be able to secure additional BEE investment in the Corporation's common shares to a sufficient level to maintain compliance with BEE requirements as required by applicable law; 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.

Non-GAAP Measures

The Corporation believes that in addition to conventional measures prepared in accordance with Canadian GAAP, the Corporation and certain investors and analysts use certain other non-GAAP financial measures to evaluate the Corporation's performance including its ability to generate cash flow and profits from its operations. The Corporation has included certain non-GAAP measures in this document. Non-GAAP measures do not have any standardized meaning prescribed under Canadian GAAP, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP. Readers are advised to read all GAAP accounting disclosures presented in the Corporation's Financial Statements for more detail.

SOURCE First Uranium Corporation

For further information: For further information: Jim Fisher, Executive Vice President Corporate Development at jim@firsturanium.ca, +1 (416) 342 5636 (Office), +1 (416) 294 2450 (Mobile), Suite 1240 - 155 University Avenue, Toronto, Ontario, Canada, M5H 3B7

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First Uranium Corporation

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