First Uranium reports results for first quarter ended June 30, 2008



    For a full discussion of results, the Financial Statements and Management
    Discussion & Analysis, please see the Company's website,
    www.firsturanium.com under "Regulatory Filings"

    All amounts are in US dollars unless otherwise noted.

    TORONTO and JOHANNESBURG, Aug. 11 /CNW/ - First Uranium Corporation
(TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company")
today announced its financial results for the fiscal quarter ended June 30,
2008 ("Q1 2009"). At the Ezulwini underground uranium and gold mine (the
"Ezulwini Mine"), First Uranium is continuing the ramp up of gold production
through its newly commissioned gold plant and by the end of October 2008,
expects to commence uranium production as well. The rehabilitation of the main
shaft at the Ezulwini Mine is also progressing as planned. At Mine Waste
Solutions ("MWS"), where gold production has been recognized since a gold
plant was acquired in June 2007, construction is continuing on the next phase
of the plants that are designed to double MWS's current gold production
capacity and commence processing of uranium by the end of the fiscal year
ending March 31, 2009 ("FY2009").
    References to "Q1 2008" refer to the Company's three-month fiscal period
ending June 30, 2007. References to "Q2 2009" and "Q3 2009" refer to the
Company's three-month fiscal periods ending September 30, 2008 and December
31, 2008, respectively.

    Highlights

    During Q1 2009, First Uranium:

    
    -   ended the quarter with $102.1 million cash and cash equivalents on
        hand
    -   hoisted 24,238 tonnes of ore at the Ezulwini Mine, which resulted in
        a stockpiled inventory of 12,695 tonnes of gold and uranium bearing
        ore from the Middle Elsburg ("ME") reef horizon and 11,543 tonnes of
        gold bearing ore from the Upper Elsburg ("UE") reef horizon,
        estimated to contain in the aggregate:
        -  3,164 ounces of gold from the 11,543 tonnes at an average grade of
           4.64 grams of gold per tonne and the 12,695 tonnes at an average
           grade of 3.89 grams of gold per tonne
        -  10,060 pounds of uranium from the stockpiled 12,695 tonnes of ME
           ore at an average grade of 0.45 kilograms per tonne
    -   reclaimed 1.7 million tonnes of tailings through the MWS gold plant
        at a yield of 0.16 grams of gold per tonne, producing 8,530 ounces of
        gold at a Cash Cost (as defined in the 'Summary of Operating
        Results') of $464 per ounce
    -   completed the upgrading of the MWS gold plant to increase the design
        capacity from 500,000 tonnes per month to 633,000 tonnes per month
        during May 2008
    -   upgraded MWS No.5 tailings dam during May 2008 to enable a deposition
        rate of 633,000 tonnes of material per month
    -   approved, subject to financing, a plan to build an acid plant at MWS
        to secure a low-cost supply of sulphuric acid, a necessary reagent
        for the production of uranium, from the sulphur contained in the
        pyritic material within the tailings dams, which are already being
        processed for gold at MWS
    -   entered into agreements to supplement the power supplied to the
        Ezulwini Mine and MWS by the South African national power utility
        ("Eskom") by obtaining diesel-fired generators and a power plant to
        secure a steady supply of electrical power, which will provide total
        incremental capacity of 54 megawatts ("MW"), inclusive of existing
        stand-by units, until Eskom could be expected to restore a steady,
        reliable supply of electrical power
    -   filed updated independent technical reports on June 5, 2008 on both
        the Ezulwini Mine and MWS, taking into consideration the capital and
        operating costs of generating additional power, revised acid price
        assumptions and a revaluation of metal price and exchange rate
        assumptions, for which projected revised net present values are
        $667 million for the Ezulwini Mine and $413 million for MWS and the
        projected internal rates of return are 336% for the Ezulwini Mine and
        70% for MWS
    -   received notification on June 9, 2008, that Eskom will be able to
        increase its supply of power to the Ezulwini Mine from 40 MW to 55
        MW, which is expected to reduce the Company's requirement to generate
        its own additional power and the costs thereof

    Subsequent to the end of Q1 2009, First Uranium:

    -   continued commissioning the Ezulwini Mine's 200,000 tonne per month
        gold plant with the first 50,000 tonne per month module commencing
        production of gold bullion in July 2008
    -   continued commissioning the Ezulwini Mine's 100,000 tonne per month
        uranium plant, which had been scheduled for production of ammonium
        diuranate ("yellowcake") in August 2008 and is now scheduled for
        October 2008
    -   finalized and implemented two-year agreements with the National Union
        of Mineworkers ("NUM") at both the Ezulwini Mine and MWS
    -   resolved previously disclosed issues of handling clay content in
        tailings at MWS, with the result that the MWS gold plant throughput
        and recovery rates are at, and sometimes slightly above, design
        specifications

    During Q2 2009, First Uranium plans to:

    -   hoist approximately 83,300 tonnes of ore at the Ezulwini Mine, of
        which approximately 65,500 tonnes would comprise gold and uranium
        bearing ore from the ME reef horizon and approximately 17,800 tonnes
        would comprise gold bearing ore from the UE reef horizon
    -   process approximately 17,200 tonnes of gold bearing ore through the
        newly commissioned gold plant at the Ezulwini Mine
    -   commission the second 50,000 tonne per month mill module of the gold
        plant at the Ezulwini Mine during September 2008
    -   publish an updated technical report for the Ezulwini Mine
    -   reclaim 1.9 million tonnes of tailings through the MWS gold plant at
        a yield of approximately 0.2 grams of gold per tonne with expected
        production of approximately 12,000 ounces of gold
    

    "Our first quarter of 2009 was highlighted by the commissioning of our
Ezulwini Mine gold plant and the production of gold in July as planned," said
Gordon Miller, President and Chief Executive Officer of First Uranium.
"Although the final commissioning stages of the uranium plant at the Ezulwini
Mine have been delayed until October 2008 as a result of the late delivery of
certain equipment, we believe that this will not affect our planned production
for the fiscal year as the capacity of the mills and the uranium plant will
exceed the planned near-term capability of the mine to produce ore.
    "At MWS we made significant operational improvements during Q1 2009,
which enhanced gold production. During Q2 2009, we expect to operate the MWS
gold plant at designed throughput and recovery rates. Uranium production is
expected in Q3 2009 at the Ezulwini Mine and Q4 2009 at MWS."

    
    Summary of Operating Results
    -------------------------------------------------------------------------
                                                        Q1 2009      Q1 2008
    -------------------------------------------------------------------------
    Ezulwini Mine
      Tonnes hoisted (000s)(a)                           24,238            -
    -------------------------------------------------------------------------
    MWS
      Tonnes reclaimed (000s)                             1,665          402
      Average gold recovery grade (grams/tonne)            0.16         0.27
      Total ounces of gold reclaimed                      8,530        3,420
      Total ounces of gold sold                           7,741        3,395
      Average selling price per ounce ($)                   879          643
      Average cost per ounce reclaimed ($)                  482          669
      Average Cash Cost per ounce reclaimed ($)(b)          464          581
    -------------------------------------------------------------------------
    (in thousands of dollars, except per share amounts)
    Revenue(c)                                            6,805        2,183
    Cost of sales (excluding amortization)(c)            (3,340)      (1,956)
    Amortization(c)                                        (189)        (299)
    Operating loss(d)                                    (3,902)      (3,292)
    Gross profit (loss)                                   3,276          (72)
    (Loss) income for the period                         (5,795)       5,471
    Basic and diluted (loss) income per share             (0.04)        0.04
    Cash flow (utilized by) generated from operations   (19,610)       9,979
    Cash outflow from investing activities              (44,080)      (8,397)
    -------------------------------------------------------------------------
    Notes:

    (a) There was no recovery of gold or uranium concentrates from processing
        facilities located at the Ezulwini Mine during Q1 2009 or Q1 2008.
    (b) Cash cost per ounce is defined as cost of sales 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 5 of the Company's MD&A.
    (c) Revenue, cost of sales (including amortization) relate to the sale of
        gold from the MWS operations. For Q1 2008 only the results of MWS for
        the month of June 2007 were included in the Company's consolidated
        results as the effective date of acquisition of MWS was June 6, 2007.
    (d) This is a non-GAAP measurement. Operating loss is loss before
        interest income, interest expenses, accretion expenses, foreign
        exchange (losses) gains and income tax charges.
    -------------------------------------------------------------------------
    

    During Q1 2009, a total of 8,530 ounces of gold were reclaimed at MWS at
an average Cash Cost of $464 per ounce compared to 3,420 ounces of gold
reclaimed during Q1 2008 at an average Cash Cost of $581 per ounce. MWS
generated $6.8 million of revenue from 7,741 ounces of gold sold at an average
selling price of $879 per ounce compared to $2.2 million from 3,395 ounces of
gold sold at an average selling price of $643 per ounce in Q1 2008.
    The relatively high average Cash Costs at MWS for Q1 2008 can be
attributed primarily to the diminishing resources taken from the MWS No.2
tailings dam, which necessitated a high-cost mechanical load and placement
operation. With the transition during December 2007 to the high-volume,
low-cost operations associated with the mining of the tailings from
Buffelsfontein Gold Mines Limited "(BGM"), the average Cash Costs started to
decrease. As throughput and gold production increase, average Cash Costs are
expected to decrease further.
    The Company incurred an operating loss of $3.8 million in Q1 2009 (Q1
2008: $3.3 million) that reflects increased revenues which were more than
offset by increased expenditures as a result of the ongoing and increasing
scope of activities, including the progression of work at the Ezulwini Mine
and MWS, the costs of corporate offices in Johannesburg and Toronto, other
expenses of operating a public company and in Q1 2009 royalties and related
payments made to BGM and Simmer & Jack Mines, Limited ("Simmer & Jack") in
respect of revenues from production at MWS.
    The loss of $5.8 million in Q1 2009 was primarily the result of the
ongoing expenditures mentioned above and foreign exchange losses on
translation of Canadian and South African assets, liabilities, revenues and
expenses converted to the US dollar. The Company reported net income of
$5.5 million in Q1 2008 that was primarily the result of foreign exchange
translation gains and net interest income earned, partially offset by
operating losses.
    The cash utilized in operating activities during Q1 2009 was primarily
used to fund the ongoing expenditures in excess of the cash generated from
gold sales. The cash generated from operating activities during Q1 2008 was
mainly the result of the net interest earned on cash balances during the
quarter and the payment by Simmer & Jack of an outstanding receivable.
    At the end of Q1 2009, First Uranium had total assets of $394.4 million,
total liabilities of $166.1 million and shareholders' equity of
$228.3 million. It had cash and cash equivalents of $102.1 million (excluding
$9.7 million of restricted cash on deposit) compared to $164.7 million at the
end of FY 2008. The decrease in cash and cash equivalents from the end of FY
2008 was primarily attributable to $34.2 million of cash utilized during Q1
2009 for capital expenditures for the development of the Company's two mining
operations and increased working capital.

    Outlook

    The next major milestone for the Ezulwini Mine is the completion of the
commissioning of the 100,000 tonne per month uranium plant which is scheduled
to deliver its first shipment of yellowcake in October 2008. Current mine
production from the ME section of the Ezulwini Mine is being stockpiled
separately on surface to feed the uranium plant during its commissioning
phase. The Ezulwini Mine also plans to commission the second 50,000 tonne per
month mill module during September 2008.
    First Uranium has not yet signed any long-term contracts to sell uranium,
although the Company does have the option to use a take and pay agreement with
Nufcor. As long-term uranium supply contracts are currently all tending to be
of a fixed delivery nature, First Uranium wants to complete the commissioning
of at least one of its uranium plants prior to entering into any such uranium
contracts.
    It is expected that all four holes being drilled under the Ezulwini
exploration program will have intersected the E9EC reef horizon by the end of
the September 2008. Deflections from these four existing boreholes will
provide supplemental borehole valuation data. The Phase 2 drilling project is
expected to start in Q3 2009. The final holes of the Phase 1 drilling project
and the first reef intersections of the Phase 2 drilling project are expected
to begin during Q4 2009.
    The current and planned capital projects at MWS include:

    
    -   construction of the second gold module and the first two uranium
        modules that are scheduled for commencement of commissioning in
        January 2009 and completion in April 2009
    -   construction of the third gold module and the third uranium module
        that are scheduled for commissioning in December 2009, increasing
        plant capacity to 1.9 million tonnes per month
    -   the establishment of a single large tailings dam that will
        accommodate all future production tailings as well as tailings from
        processing the ore from BGM for uranium
    -   permitting for additional tailings deposition facilities
    

    An upgrade to accommodate a deposition rate of 1.3 million tonnes of
material per month on the MWS No.5 tailings dam is planned in advance of the
commissioning of the second module of the MWS gold plant and the first two
modules of the uranium plant. In the event that the MWS No.5 tailings dam is
found to be insufficient, additional tailings dam locations have been
identified.
    As previously reported, a specification and procurement study for a
sulphuric acid plant has been initiated and is expected to be completed in
October 2008.

    Cautionary Language Regarding Forward-Looking Information

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

    Review by Board of Directors

    The First Uranium Board of Directors, on the recommendation of its Audit
Committee, has approved the contents of this disclosure.

    Conference Call

    First Uranium will conduct a conference call with investors to discuss
the information in this news release at 10:00 a.m. local Toronto time and
4:00 p.m. local Johannesburg time on Tuesday, August 12, 2008. The conference
call will be available simultaneously to all interested investors and news
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
http://services.choruscall.com/links/firsturanium080812.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 the
development of its South African uranium and gold mines with the goal of
becoming a significant low-cost producer through the re-opening and
underground development of the Ezulwini Mine and the expansion of the Mine
Waste Solutions tailings recovery facility. First Uranium also plans to grow
production by pursuing value-enhancing acquisition and joint venture
opportunities in South Africa and elsewhere.

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





For further information:

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

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