First Uranium reports results for the three and six months ended September 30, 2007



    
            All amounts are in US dollars unless otherwise noted.
    

    TORONTO and JOHANNESBURG, Nov. 12 /CNW/ - First Uranium Corporation
(TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Corporation")
today announced that it recorded net income of $3.1 million for the
three months ended September 30, 2007 ("Q2 2008") compared to net income of
$0.8 million for the three months ended September 30, 2006 ("Q2 2007"),
primarily as a result of foreign exchange translation gains and interest
income offset by operating losses incurred in the quarter under review.
    Net income for the first half of the Corporation's fiscal year ending
March 31, 2008 ("FY 2008") was $8.5 million compared to a net loss for the
prior fiscal year ("FY 2007") of $1.5 million, which primarily reflected
expenditures in connection with preparing its two uranium and gold projects
for production.

    Highlights

    
    During Q2 2008, First Uranium:
    -   benefited from the first full quarter of its 100% of ownership of the
        assets of Mine Waste Solutions (Proprietary) Limited ("MWS"), which
        were acquired effective June 6, 2007, and that now form part of the
        Buffelsfontein Tailings Recovery Project
    -   processed 1.2 million tonnes of tailings through its MWS gold plant,
        producing 10,124 ounces of gold at a total cost of $527 per ounce
    -   began hoisting development material at its Ezulwini Mine, in
        September as scheduled, with a total of 9,940 tonnes hoisted by the
        end of the quarter
    -   defined initial underground and surface drilling targets related to
        the possible expansion of the existing Ezulwini underground uranium
        and gold mine
    -   approved an $11.7 million capital program to construct a reclamation
        station and pipelines at the Buffelsfontein Tailings Recovery Project
        and increase the planned processing rate from 500,000 tonnes per
        month to 630,000 tonnes per month
    -   entered into an agreement with Nuclear Fuels Corporation of South
        Africa (Proprietary) Limited ("Nufcor") to calcine the yellowcake
        from First Uranium to produce uranium oxide for dispatch to
        converters as of January 2009

    Subsequent to the end of Q2 2008, First Uranium:
    -   completed an interim off-take agreement with Nufcor pursuant to which
        Nufcor will purchase yellowcake from First Uranium from June 2008
        until January 2009 at rates based on the then prevailing spot prices
    -   pending completion of the Ezulwini Mine gold plant (expected in
        April 2008), commenced third-party toll-milling of the hoisted
        development material and gold ore from the Ezulwini Mine
    -   was granted a conditional prospecting right over an area of
        6,843 hectares of property known to contain gold and uranium minerals
        adjacent to the Corporation's Ezulwini mining rights, which are
        comprised of 3,717 hectares

    During Q3 2008, First Uranium plans to:
    -   hoist 30,000 tonnes of gold and uranium bearing ore at the Ezulwini
        Mine
    -   toll treat the 30,000 tonnes of ore at a yield of approximately 5.5
        to 6.0 grams of gold per tonne, producing in excess of 5,500 ounces
        of gold
    -   process approximately 1.4 million tonnes of tailings through its MWS
        gold plant, with expected production in excess of 9,600 ounces of
        gold
    -   complete the hydraulic mining and clean up of the remnant of
        MWS No. 2 tailings dam
    -   complete the construction of the pipeline to the MWS gold plant in
        November, whereafter hydraulic mining of the mineral resources in the
        Buffelsfontein tailings dams will commence
    -   commence the MWS gold plant upgrade to increase planned capacity from
        500,000 tonnes per month to 630,000 tonnes per month with completion
        scheduled in Q4 2008.
    -   complete a feasibility study for the further expansion of the MWS
        gold plant, which is targeted for completion in November 2008. The
        expansion will involve the construction of two additional gold plant
        modules and three uranium plant modules
    

    "Gold is now being produced at both of First Uranium's properties: at the
MWS plant at our Buffelsfontein Tailings Recovery Project and in a toll
milling arrangement for the ore being hoisted at our Ezulwini Mine," said
Gordon Miller, President and Chief Executive Officer of First Uranium. "With
the spot price for gold currently over $800 per ounce, that production is
expected to make a solid contribution to our cash flow."
    "Our focus remains on advancing uranium and gold production at both of
our projects," continued Mr. Miller. "Construction is well underway and we are
on schedule to commission our own gold plant at the Ezulwini Mine in April
2008 and the uranium plant in June 2008. At the Buffelsfontein Tailings
Recovery Project we expect to begin construction this month to both double our
gold plant capacity and commission the first two modules of our uranium plant
by November 2008."
    The spot price for uranium rose to $136 per pound at the end of June,
softened to $75 per pound and has recently risen to $90 per pound. Management
believes that the $50 per pound assumption upon which the project economics
were based remains reasonable and conservative. The Corporation has not yet
signed any contracts that have defined commitments to supply uranium.
    Mr. Miller added, "With rising prices for uranium and gold, and the net
proceeds from our equity and debenture offerings, we are confident that we are
fully-funded to develop our existing mining projects as currently planned and
advance them to full production by 2010."

    Financial Highlights

    
                                       Q2         Q2        2008       2007
    (thousands of dollars)            2008       2007       YTD        YTD
    -------------------------------------------------------------------------
    Revenue                           6,253          -      8,436          -
    Operating income (loss)          (2,166)       258     (5,354)    (2,651)
    Non-operating income and
     expenses                         5,268        528     13,927      1,199
    Net income (loss) for the
     period                           3,051        786      8,522     (1,452)
    Cash and cash equivalents at
     end of period                  254,332      1,158    254,332      1,158
    -------------------------------------------------------------------------

    Revenue

    First Uranium generated revenue during Q2 2008 and the first half of
FY 2008 solely from the processing of MWS tailings material and sale of gold
from the MWS gold plant.

    Operating income (loss)

    Operating income (loss) includes the following:
    -   cost of sales for the gold production in the first half of FY 2008
        reflects significantly higher unit costs than the long-term
        expectation of costs for this operation as the acquired tailings dams
        are nearing the end of their productive life and the hydraulic mining
        operation was subject to additional costs for mechanical loading and
        placement of tailings material
    -   employee compensation costs, consulting and professional fees, as
        well as shared services fees paid to the Corporation's majority
        shareholder, Simmer & Jack
    -   higher general, consulting and administrative expenses were primarily
        from an increase in services required to support the development of
        the projects, the costs of corporate offices in Johannesburg and
        Toronto and other expenses of operating a public company, which were
        not applicable in FY 2007
    -   stock-based compensation related to the amortized cost of stock
        options granted to directors, officers, employees and consultants
    -   pumping and feasibility costs in connection with the maintenance,
        assessment commencement and re-commissioning of the Ezulwini Mine

    Non-operating income and expenses

    Non-operating income and expenses for the periods reported included:
    -   interest income that was primarily earned on the net proceeds raised
        from First Uranium's offerings of equity issued in December 2006 and
        senior unsecured convertible debentures issued in May, 2007
    -   interest expense paid and accrued on the debentures and accretion
        expense related to the debentures
    -   foreign exchange translation gains that reflect that the Corporation
        holds the majority of its net assets in Canadian dollars and in South
        African rand, which have both strengthened against the Corporation's
        reporting currency of US dollars
    

    Cash and Capital Expenditures

    Cash and cash equivalents at the end of the first half of 2008 increased
by $115.4 million to $254.3 million from the end of FY 2007, primarily as a
result of the $130.6 million net proceeds raised through the issuance of
debentures, cash from operating activities and translation gains on cash held
in currencies other than US dollars offset by capital expenditures of
$35.5 million at the Ezulwini Mine.
    Capital investments of $148 million and $271 million are planned to
complete the construction of the Buffelsfontein Tailings Recovery Project and
the Ezulwini Mine, for which $34.8 million of current commitments exist.
Capital investments for property plant and equipment in were $31.1 million in
Q2 2008, $10.5 million in Q1 2008 and $20.8 million in FY 2007, totaling
$62.4 million invested to date.
    First Uranium anticipates that future capital requirements relating to
its development of the Ezulwini Mine and the Buffelsfontein Tailings Recovery
Project will be funded through a combination of current cash and cash
equivalents and internal cash flow.
    The Corporation holds its funds in cash and bank-sponsored guaranteed
investment certificates. It has no exposure to asset-backed commercial paper.

    Production Overview

    During the last week of September 2007, 9,940 tonnes of reef development
ore was hoisted to surface, which will be stockpiled for use as the initial
feed for the new mill and gold plant that are scheduled to be commissioned in
April 2008.
    Subsequent to the end of Q2 2008, in October the Ezulwini Mine began to
toll treat higher grade gold bearing ore at a neighbouring gold plant, which
will continue until the new gold plant is commissioned.
    At the Ezulwini Mine the gold plant currently under construction is
expected to be commissioned in April 2008 and the uranium plant is expected to
be commissioned in June 2008. Annual average production at the Ezulwini Mine
is expected to be 888,000 pounds of uranium and 290,000 ounces of gold over
the estimated 18-year life of the project.
    The Corporation's Buffelsfontein Tailings Recovery Project began
producing gold from June 6, 2007 as a result of the acquisition of MWS. A
total of 1.6 million tonnes of tailings material was processed in the first
half of 2008, resulting in gold sales of 13,544 ounces at an average cash cost
of $497 per ounce. The average sale price for gold during the first half of
FY 2008 was $623 per ounce.
    The average total cost per ounce during the first half of 2008 was $561
per ounce, significantly higher than the Corporation's long-term outlook for
cash costs at this operation, as the acquired MWS tailings are nearing the end
of their productive life. Cleaning up the remaining tailings from MWS tailings
dam No. 2, which requires mechanical loading and placement near the hydraulic
mining operation, reduces tonnages and increases handling costs relative to a
normal reclamation operation. More efficient hydraulic reclamation operations
at Buffelsfontein dam No. 2 are expected to commence during November 2007.
    The Corporation is in the process of expanding the existing MWS plant to
increase the plant capacity from the planned rate of 500,000 tonnes per month
to 630,000 tonnes per month. The expansion project is planned for completion
by the end of March 2008. Uranium production at the Buffelsfontein Tailings
Recovery Project is expected to commence in November 2008 to achieve an
average annual production of 922,000 pounds of uranium along with
128,000 ounces of gold over the 16-year life of the project.

    Technical Disclosure

    Technical disclosure under the heading "Production Overview" in this news
release relating to the Ezulwini Mine is extracted from a technical report
entitled "Technical Report - Preliminary Assessment of the Ezulwini Project,
Gauteng Province, Republic of South Africa" originally submitted on
November 8, 2006 and December 5, 2006 and revised on May 9, 2007, prepared in
accordance with NI 43-101 by Wayne Valliant, P.Geo. and R. Dennis Bergen,
P.Eng. of Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA").
Technical disclosure under the same heading relating to the Buffelsfontein
Tailings Recovery Project is extracted from a technical report entitled
"Technical Report - Preliminary Assessment of the Buffelsfontein Project,
Northwest Province, Republic of South Africa" originally submitted on
November 8, 2006, revised on December 5, 2006 and January 31, 2007 and further
revised on May 22, 2007, prepared in accordance with National Instrument
43-101 ("NI 43-101") by R. Dennis Bergen, P.Eng. and Wayne Valliant, P.Geo. of
Scott Wilson RPA. Each of Mr. Valliant and Mr. Bergen is a "qualified person"
under NI 43-101 and is independent of First Uranium. The technical disclosure
contained in this news release has been reviewed and approved by Messrs.
Bergen and Valliant.
    Technical disclosure under the heading "Production Overview" in this news
release relating to the Buffelsfontein Tailings Recovery Project is extracted
from a technical report entitled "Technical Report - Preliminary Assessment of
the Buffelsfontein Project, Northwest Province, Republic of South Africa"
originally submitted on November 8, 2006, revised on December 5, 2006 and
January 31, 2007 and further revised on May 22, 2007, prepared in accordance
with National Instrument 43-101 ("NI 43-101") by R. Dennis Bergen, P.Eng. and
Wayne Valliant, P.Geo. of Scott Wilson RPA. Each of Mr. Valliant and Mr.
Bergen is a "qualified person" under NI 43-101 and is independent of First
Uranium. The technical disclosure contained in this news release has been
reviewed and approved by Messrs. Bergen and Valliant.
    Messrs. Bergen and Valliant are each a "qualified person" under NI 43-101
and are independent of First Uranium. The technical disclosure contained in
this MD&A relevant to their respective contributions has been reviewed and
approved by Messrs. Bergen and Valliant.

    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 price of uranium and gold, the estimation of mineral resources and
reserves, 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, 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 "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 November 9, 2007;
(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 news release, First
Uranium has made several material assumptions, including but not limited to,
the assumption that: (i) approvals to transfer or grant, as the case may be,
mining rights will be obtained; (ii) metal prices, exchange rates and discount
rates applied in the preliminary economic assessments are achieved; (iii)
mineral resource estimates are accurate; (iv) the technology used to develop
and operate its two projects has, for the most part, been proven and will work
effectively; (v) that labour and materials will be sufficiently plentiful as
to not impede the projects or add significantly to the estimated cash costs of
operations; (vi) that outstanding approvals for the completion of an
acquisition, the transfer of mining rights and the approval of mining rights
will be granted; (vii) that Black Economic Empowerment ("BEE") investors will
maintain their interest in the Corporation and their investment in the
Corporation's common shares to a sufficient level to continue to support the
Corporation'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.

    Conference Call

    First Uranium will conduct a conference call with investors to discuss
the Corporation's first quarter results and related matters at 10:00 a.m.
local Toronto time or 5:00 p.m. local Johannesburg time on Tuesday,
November 13, 2007. The conference call will be available simultaneously to all
interested investors and the news media at (416) 644-3430 or 1 (800) 588-4942
(toll free) or 09 800 2288 3501 (toll free from South Africa) or through a
webcast at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2089340. A
replay of the conference call will be available on this site until the end of
November.

    About First Uranium Corporation

    First Uranium Corporation is focused on the development of South African
uranium and gold mines with the goal of becoming a significant producer
through the re-opening and development of the Ezulwini Mine, and the
construction of the Buffelsfontein tailings recovery facility. First Uranium
also plans to grow production by pursuing acquisition and joint venture
opportunities.

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



    FIRST URANIUM CORPORATION

    MANAGEMENT'S DISCUSSION AND ANALYSIS
    of the financial results
    for the three and six months ended
    September 30, 2007

    Management's discussion and analysis of the unaudited consolidated
    financial condition and results of operations for the three and
    six months ended September 30, 2007

    This Management's Discussion and Analysis ("MD&A") of the consolidated
financial position and results of operations review the activities, unaudited
consolidated results of operations and financial condition of First Uranium
Corporation and its subsidiaries ("First Uranium" or the "Corporation") for
the three and six months ended September 30, 2007 ("Q2 2008") and the first
half of the fiscal year ended March 31, 2008 ("FY 2008"), compared to the
corresponding period of the preceding year ("Q2 2007") and the first half of
the fiscal year ended March 31, 2007 ("FY 2007"), together with certain trends
and factors that are expected to have an impact in the future. References to
"Q3 2008" refer to the next fiscal quarter ending December 31, 2007.
    This MD&A is intended to supplement and complement the unaudited
consolidated financial statements and notes thereto for Q2 2008 and the first
half of FY 2008 (collectively the "Financial Statements") which have been
prepared in accordance with Canadian generally accepted accounting principles
("Canadian GAAP"). The MD&A should be read in conjunction with the Financial
Statements, the audited consolidated financial statements for FY 2007 and the
related management's discussion and analysis. The information contained in
this MD&A is current to November 9, 2007, unless otherwise indicated.
References to "FY 2008" refer to the fiscal year ending March 31, 2008.
    First Uranium's current operations are entirely focused on the Ezulwini
underground uranium ("U(3)O(8)") and gold ("Au") mine (the "Ezulwini Mine")
and the recovery of uranium and gold from the existing and future surface
tailings at the Buffelsfontein mine, inclusive of the assets of Mine Waste
Solutions (Proprietary) Limited ("MWS") (collectively, the "Buffelsfontein
Tailings Recovery Project").
    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.

    Responsibility of Management and the Board of Directors

    Management is responsible for the information disclosed in this MD&A and
the accompanying Financial Statements and has in place the appropriate
information systems, procedures and controls to ensure that information used
internally by management and disclosed externally is materially complete and
reliable. In addition, the Corporation's Audit Committee, on behalf of the
Board of Directors, provides an oversight role with respect to all public
financial disclosures made by the Corporation, and has reviewed and approved
this MD&A and the accompanying Financial Statements.

    Disclosure Controls and Procedures

    Disclosure controls and procedures are designed to provide reasonable
assurance that all relevant information is gathered and reported on a timely
basis to senior management, including the Corporation's Chief Executive
Officer and Chief Financial Officer, so that appropriate decisions can be made
regarding public disclosure. As at the end of the period covered by this MD&A,
management of First Uranium, by the direction of the Chief Executive Officer
and the Chief Financial Officer, evaluated the effectiveness of the
Corporation's disclosure controls and procedures as required by Canadian
securities laws.
    Based on the evaluation, the Chief Executive Officer and the Chief
Financial Officer have concluded that as of the end of the period covered by
this MD&A, the disclosure controls and procedures were effective to provide
reasonable assurance that information required to be disclosed in First
Uranium's annual filings and interim filings (as such terms are defined under
Multilateral Instrument 52-109 - Certification of Disclosure in Issuers'
Annual and Interim Filings) and other reports filed or 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 of First Uranium, including the
Chief Executive Officer and the Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure.
    During the most recent quarter 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.

    Overview

    First Uranium is a Canadian resource company focused on the development
of uranium and gold projects in South Africa. The Corporation's goal is to
become a significant producer of uranium and gold through the re-opening and
development of the Ezulwini Mine and the construction of the Buffelsfontein
Tailings Recovery Project. To expand its production profile, First Uranium
plans to continue to identify and acquire additional uranium and gold projects
in southern Africa and beyond. In December 2006, the Corporation received net
proceeds of $177.7 million from the sale of 33 million common shares (the
"Offering"). In May 2007, an additional $130.6 million was raised from the
sale of senior unsecured convertible debentures (the "Debentures"). The common
shares and the Debentures of First Uranium are listed on the Toronto Stock
Exchange (the "TSX") and the common shares on the Johannesburg Stock Exchange
(the "JSE"). Simmer and Jack Mines, Limited ("Simmer & Jack"), a public
company listed on the JSE, owns approximately 65.5% of the common shares of
First Uranium.

    Recent Highlights

    
    During Q2 2008, First Uranium:

    -   benefited from the first full quarter of gold production from its
        100% ownership of MWS, which was acquired effective June 6, 2007 and
        that now forms part of the Buffelsfontein Tailings Recovery Project
    -   processed 1.2 million tonnes of tailings through its MWS gold plant,
        producing 10,124 ounces of gold at a total cost of $527 per ounce
    -   began hoisting development material at its Ezulwini Mine in
        September, as scheduled, with a total of 9,940 tonnes hoisted by the
        end of the quarter
    -   defined initial underground and surface drilling targets related to
        the possible expansion of the existing Ezulwini Mine (the "Ezulwini
        Expansion Program")
    -   approved an $11.7 million capital program to construct a reclamation
        station and pipelines at the Buffelsfontein Tailings Recovery Project
        and increase the planned processing rate from 500,000 tonnes per
        month to 630,000 tonnes per month
    -   entered into an agreement with Nuclear Fuels Corporation of
        South Africa (Proprietary) Limited ("Nufcor") to calcine the
        yellowcake from First Uranium to produce uranium oxide for dispatch
        to converters beginning January 2009

    Subsequent to the end of Q2 2008, First Uranium:

    -   completed an interim off-take agreement with Nufcor pursuant to
        which Nufcor will purchase yellowcake from First Uranium from
        June 2008 until January 2009 at rates based on the then prevailing
        spot prices
    -   pending completion of the Ezulwini Mine gold plant (expected in
        April 2008), commenced third-party toll-milling of the hoisted
        development material and gold ore from the Ezulwini Mine
    -   was granted a conditional prospecting right over an area of
        6,843 hectares of property, known to contain gold and uranium
        minerals, adjacent to the Corporation's Ezulwini mining rights, which
        are comprised of 3,717 hectares

    During Q3 2008, First Uranium plans to:

    -   hoist 30,000 tonnes of gold and uranium bearing ore at the Ezulwini
        Mine
    -   toll treat the 30,000 tonnes of ore at a yield of approximately 5.5
        to 6.0 grams of gold per tonne, producing in excess of 5,500 ounces
        of gold
    -   process approximately 1.4 million tonnes of tailings through its MWS
        gold plant, with expected production of in excess of 9,600 ounces of
        gold
    -   complete the hydraulic mining and clean up of the remnant of
        MWS No. 2 tailings dam
    -   complete the construction of the pipeline to the MWS gold plant in
        November, whereafter hydraulic mining of the mineral resources in the
        Buffelsfontein tailings dams will commence
    -   commence the MWS gold plant upgrade to increase planned capacity from
        500,000 tonnes per month to 630,000 tonnes per month, with completion
        scheduled in Q4 2008
    -   complete a feasibility study for the further expansion of the MWS
        gold plant which is targeted for completion in November 2008. The
        expansion will involve the construction of two additional gold plant
        modules and three uranium plant modules.
    

    Financial Overview

    First Uranium's primary focus has been on the development activities of
the Ezulwini Mine and Buffelsfontein Tailings Recovery Project. As such,
production activities to date have been limited to hydraulic mining, clean up
and processing of approximately 1.6 million tonnes of tailings (0.4 million
tonnes in Q1 2008 and 1.2 million tonnes in Q2 2008) from the MWS tailings dam
No.2. The MWS gold mining operations generated revenue of $6.3 million in
Q2 2008 and $8.4 million during the first half of FY 2008 from the sale of
gold. No revenues were generated in 2007.
    As the Corporation was nearing the final stages of pumping the material
from the MWS tailings dam No.2, mechanical handling of the material was
necessary for more effective hydraulic mining. This reduced tonnages and
increased handling costs relative to a normal reclamation operation.
Accordingly, the cash cost of processing and sale of gold of $4.8 million in
Q2 2008 and $6.7 million during the first half of FY 2008 resulted in unit
costs which were significantly higher than the long-term expectation of unit
costs for this operation. The remnants of the current MWS resource is expected
to be exhausted in Q3 2008 and the use of higher mechanical handling costs
will cease as the Buffelsfontein dams are brought online.
    General, consulting and administrative expenditures combined with the
limited ore production during the development phase of the two uranium and
gold projects resulted in an operating loss of $2.2 million in Q2 2008 and an
operating loss of $5.4 million during the first half of FY 2008. In Q2 2007,
an operating profit of $0.3 million was reported, reflecting the
capitalization of shared services fees and pumping costs which had been
expensed in prior accounting periods. For the first half of 2007, an operating
loss of $2.7 million was incurred, reflecting expenditures in preparation of
the uranium and gold projects for production, along with general and
administrative expenses.
    Net income of $3.1 million in Q2 2008 and $8.5 million in the first half
of FY 2008 was primarily the result of foreign exchange gains on translation
of net assets held in Canadian dollars and South African Rand into US dollars,
along with interest income earned, partially offset by expenses. The
Corporation reported net income of $0.8 million in Q2 2007, as foreign
exchange translation gains and interest income more than offset expenses. A
net loss of $1.5 million was incurred in the first half of FY 2007 primarily
from expenditures in connection with preparing the mining projects for
production and general and administrative expenses.
    As at September 30, 2007, First Uranium was well funded and in a strong
financial position, with total assets of $389.6 million total liabilities of
$130.7 million and shareholders' equity of $258.9 million.
    At the end of Q2 2008, First Uranium had cash and cash equivalents of
$254.3 million (Q2 2007: $1.2 million), compared to $138.9 million at the end
of FY 2007. The increase in cash and cash equivalents from the end of FY 2007
was primarily attributable to the net proceeds received from the sale of the
Debentures. The Corporation believes that with anticipated revenue from future
sales of uranium and gold, together with funds from the proceeds from the
Offering and Debentures, it has the cash resources necessary to develop and
advance its two existing mining projects to full production on schedule by
2010, as currently planned. In the meantime, the Corporation holds its funds
in cash and bank-sponsored guaranteed investment certificates. It has no
exposure to asset-backed commercial paper.

    Operations overview

    Ezulwini Mine

    The Corporation has substantially re-commissioned the Ezulwini Mine and
is now in the process of ramping up underground production. The Ezulwini Mine
is located approximately 40 kilometres from Johannesburg on the outskirts of
the town of Westonaria in Gauteng Province, South Africa. Construction
activities, which involve the refurbishment of the shaft and construction of
gold and uranium plants, began in earnest in December 2006, subsequent to the
successful completion of the Offering. The Ezulwini Mine is part of the
Ezulwini mining right, which includes certain surface and underground assets,
acquired by Ezulwini Mining Company (Proprietary) Limited ("EMC").
    EMC operates the Ezulwini Mine under a new order mining right as
described in detail in the Corporation's Annual Information Form
(www.firsturanium.com).
    An accelerated schedule for commissioning all modules of the gold and
uranium plants is being executed. This will result in an accelerated capital
investment profile, which in turn will provide flexibility to significantly
increase uranium and gold production sooner than previously planned. EMC is
using construction contractors until all phases of the mill and plants are
completed.
    EMC continues with the main shaft rehabilitation program and
refurbishment of the infrastructure in the Middle Elsburg ("ME") uranium and
gold section and the Upper Elsburg ("UE") gold only section from which
hoisting of ore began in October 2007. Construction of the metallurgical plant
is progressing well and is expected to allow for the onsite treatment of gold
by April 2008 and uranium by June 2008.
    The Corporation estimates that $271 million of capital will be required
for the Ezulwini Mine, $193 million of which is expected to be invested in the
first four years of the project. As of the end of Q2 2008, $54.8 million has
been spent ($25.7 million in Q2 2008, $9.8 million in Q1 2008 and
$19.3 million during FY 2007).
    Simmer & Jack is presently the registered owner of the Ezulwini mining
right. On December 20, 2006, 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. The
Corporation expects the transfer of the Ezulwini mining right to be completed
in due course.

    
    Progress on the Ezulwini main shaft refurbishment project:
    -   phase one of this project, which entails rock consolidation,
        reinforcing and long anchor support of the Western Areas Formation
        ("WAF") within the Ezulwini Mine shaft barrel has been successfully
        completed and installation of the new shaft steelwork to create a
        floating tower through the WAF zone has progressed well.
    -   phase two, which involves support of the WAF zone is currently being
        undertaken from the access provided by the new tower steelwork. The
        250,000 tonnes per month double drum Koepe winder has been
        successfully re-commissioned and hoisting of gold and uranium bearing
        ore through the newly installed floating tower, has commenced ahead
        of schedule. During the last week of September 2007, 9,940 tonnes of
        reef development ore was hoisted to surface, which will be stockpiled
        for use as the initial feed for the new mill and gold plant that are
        scheduled to be commissioned in April 2008.
    -   the underground transfer belt for the gold section has also been
        commissioned. As a result the Ezulwini Mine has re-established
        sufficient hoisting capacity to meet its future production hoisting
        requirements.
    

    The Corporation has continued to develop access to the Ezulwini Mine
shaft de-stress cut on the UE gold only horizon on levels 38a and 41. To date
232 meters of raise development has been completed. The raise development
material's average gold values are 4.5 grams per tonne over 211 centimetres
and 6 grams per tonne over 175 centimetres for the MA and MB reef horizons
respectively. Preparatory stoping of the 41 level MB raise has commenced.
Stoping grade over a selected de-stress cut is expected to average 8.9 grams
per tonne over 120 centimetres and 6.9 grams per tonne over 150 centimetres
for the MA and MB raises respectively.
    At the ME uranium and gold section stope production in the newly
re-established 45 10B stope commenced during October 2007. The average block
value for this production area is estimated at 12 grams per tonne. To date,
1,692 metres of stope face sampling has been completed in the ME section and
this data is being modeled in order to provide a mineral resource update
expected to be completed in November 2007. Further additional stope panel
sampling awaits the installation of ventilation controls which are being
installed to course the air through old areas to remove Radon gas. A second
surface fan was also commissioned recently and this has doubled the
underground ventilation air quantity available for opening up of the old
areas.
    The samples from historic stopes and current reef development were
collected in accordance with industry standard practice. An independent
laboratory prepared and assayed the samples using industry standard methods.
    Based on existing surface stockpiles and anticipated production rates,
stockpiles are expected to provide sufficient surface inventory for the
uranium and gold plant commissioning.
    In late October 2007 third-party toll treatment of the higher grade gold
ore from the Ezulwini Mine commenced and will continue until the new gold
plant at the Ezulwini Mine is commissioned. Construction of the first
50,000 tonne per month module of the gold plant is scheduled for completion in
April 2008 (accelerating the original production schedule by three months) and
the first 50,000 tonne per month module of the uranium plant is scheduled for
completion in June 2008. Both of these projects are on schedule.
    At the end of September 2007, the cleanup process on surface and
underground has generated a stockpile in excess of 124,000 tonnes containing
an average grade of 1.1 grams per tonne of gold or 2,810 ounces of recoverable
gold, assuming an average recovery rate of 64%. This stockpile will be
utilised during mill commissioning in April 2008.

    Buffelsfontein Tailings Recovery Project

    The Buffelsfontein Tailings Recovery Project is a uranium and gold
tailings recovery operation with the gold tailings recovery operation already
operating. It is located in the western portion of the Witwatersrand Basin
approximately 160 kilometres from Johannesburg. Through its subsidiary, First
Uranium (Proprietary) Limited ("FUSA"), the Corporation has an agreement to
acquire surface tailings from Buffelsfontein Gold Mines Limited ("BGM"), a
subsidiary of Simmer & Jack. Please see the Corporation's MD&A in respect of
its audited consolidated financial statements for the fiscal year ended
March 31, 2007 for a summary of this agreement.
    The Corporation originally planned to develop and construct a processing
plant at the Buffelsfontein surface tailings site to reprocess these tailings
and to recover uranium and gold. However, with the acquisition of MWS, the
Corporation acquired an operating gold mine tailings re-processing facility
and remains of a historic uranium plant adjacent to and now part of the
Buffelsfontein Tailings Recovery Project. By November 2008, the Corporation
expects to double the size of the gold recovery plant and commission the first
two modules of the uranium recovery plant.
    FUSA plans to conduct hydraulic mining of tailings dams on the
Buffelsfontein property using high pressure water cannons to slurry the
tailings which will then be pumped to a processing plant for the recovery of
uranium and gold. The tailings from Buffelsfontein will be transported via the
soon to be completed pipeline to the MWS gold plant that will be expanded to
replace that originally planned at the Buffelsfontein mine site. The
Corporation also proposes to acquire the right to process three small
additional tailings dams. A prospecting right for these additional dams has
been accepted by the South African Department of Minerals and Energy
(the"DME").
    The pipeline, originally scheduled to be commissioned during
October 2007, has been delayed slightly to November due to excessive rain
which resulted in a loss of ten days on earth and civil work at the
reclamation sump area and late delivery of pumps.
    The MWS operation is hydraulically mining the remnant of its current
resource, which is due to be exhausted by December 2007. The operation
requires mechanical loading and placement of the remnant material, temporarily
increasing the operating cost significantly. The operation produced
10,124 ounces of gold in Q2 2008 and will continue in Q3 2008, with expected
production in excess of 9,600 ounces of gold. The Buffelsfontein tailings dams
are expected to be brought online when the material from the MWS tailings dams
is exhausted. This will result in production and average costs reverting to
the planned targets as per the Technical Report Preliminary Assessment of the
Buffelsfontein Project prepared by Scott Wilson RPA, and last revised on
May 22, 2007.
    The Corporation is in the process of expanding the existing MWS plant to
increase capacity from the planned rate of 500,000 tonnes per month to an
average of 630,000 tonnes per month. This expansion project is scheduled for
completion by the end of March 2008.

    Technical Disclosure Note:

    Technical disclosure under the heading "Ezulwini Mine" relating to the
samples of historic stopes and current reef development in this MD&A is
extracted from studies prepared in accordance with NI 43-101 by Daan Van
Heerden, Pr.Eng of South African mining and exploration consultants, Minxcon
(Proprietary) Limited and Dexter Ferraira of Lower Quartile Solutions
(Proprietary) Limited. Mr. Van Heerden and Mr. Ferreira are Qualified Persons
as defined in NI 43-101 and they have reviewed the technical disclosure
contained in this MD&A that was extracted from their report.

    Technical disclosure under the heading "Ezulwini Mine" relating to the
stockpiles sampled in this MD&A is extracted from studies prepared in
accordance with NI 43-101 by Warren de Wit who has a Mine Surveyors
Certificate of competency, National Diploma for technicians, Registered with
PLATO:00051. Mr. de Wit is a Qualified Person as defined in NI 43-101 and he
has reviewed the technical disclosure contained in this MD&A that was
extracted from his report.

    Results of Operations

    Revenue

    
                                                             2008       2007
                                    Q2 2008    Q2 2007        YTD        YTD
    -------------------------------------------------------------------------
    Buffelsfontein Tailings
     Recovery Project
      Tonnes processed (kt)           1,227          -      1,629          -
      Ounces of gold sold            10,124          -     13,544          -
      Average price per ounce ($)       618          -        623          -
      Average cost per ounce ($)        527          -        561          -
      Average cash cost per
       ounce ($)                        472          -        497          -
    -------------------------------------------------------------------------
    Revenue ($000s)                   6,253          -      8,436          -
    Cost of production ($000s)       (4,780)         -     (6,736)         -
    Amortization ($000s)               (563)         -       (862)         -
    Total cost of production
     ($000s)                         (5,343)         -     (7,598)         -
    -------------------------------------------------------------------------
    Profit from mining operations
     ($000s)                            910          -        838          -
    -------------------------------------------------------------------------
    

    "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, in-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.

    Total cash costs per ounce is a non-GAAP measurement and investors are
cautioned not to place undue reliance on it and are urged to read all GAAP
accounting disclosures presented in the consolidated financial statements and
accompanying footnotes.

    Revenue for Q2 2008 and the first half of FY 2008 as presented above was
generated solely from the processing of MWS tailings material and sale of the
related gold at the current MWS operations, which are included as part of the
Buffelsfontein Tailings Recovery Project.
    Unit costs from June 6, 2007 to the end of Q2 2008 are significantly
higher than the long-term expectation of unit costs for this operation as the
acquired tailings dams are nearing the end of their productive life. Cleaning
up the remaining tailings from MWS tailings dam No. 2 requires mechanical
loading and placement near the hydraulic mining operation which reduces
tonnages and increases the handling costs relative to a normal reclamation
operation. Upon completion of the pipeline from the Buffelsfontein No. 2
tailings dam to the MWS gold plant during November 2007 and when the hydraulic
mining of the untouched tailings dams consistently runs at full capacity,
First Uranium expects that the cash costs to produce gold at the expanded MWS
gold plant will be approximately $310 per ounce. When the MWS gold plant is
expanded in November 2008, unit costs are expected to be reduced from current
levels.

    The Corporation had no production during FY 2007.

    Other income

    
                                                             2008       2007
    (thousands of dollars)          Q2 2008    Q2 2007        YTD        YTD
    -------------------------------------------------------------------------
    Other income                        897          -        897          -
    -------------------------------------------------------------------------

    Other income primarily includes fees for sludge pumping services to a
third party and hostel rental income at the Ezulwini Mine. There was no such
income during the same period last year.

    Expenditures

                                                             2008       2007
    (thousands of dollars)          Q2 2008    Q2 2007        YTD        YTD
    -------------------------------------------------------------------------
    General, consulting and
     administrative expenditures     (2,520)        (5)    (4,490)    (1,377)
    Stock-based compensation           (663)         -     (1,434)         -
    Pumping,  feasibility and
     rehabilitation costs              (721)       263     (1,068)    (1,274)
    Amortization of property, plant
     and equipment                      (69)         -        (97)         -
    -------------------------------------------------------------------------
    Total expenditures               (3,973)       258     (7,089)    (2,651)
    -------------------------------------------------------------------------
    Operating income (loss)          (2,166)       258     (5,354)    (2,651)
    -------------------------------------------------------------------------
    

    General, consulting and administrative expenditures included $1.7 million
and $3.2 million for Q2 2008 and the first half of FY 2008, respectively, in
respect of employee compensation costs, consulting and professional fees, as
well as fees paid to Simmer & Jack for services provided pursuant to the
Shared Services Agreement (see "Related Party Transactions") of $0.3 million
and $0.6 million for Q2 2008 and the first half of FY 2008, respectively.
During Q2 2008, $0.1 million ($0.4 million in the first half of FY 2008) in
fees paid to Simmer & Jack, representing costs directly related to mine
development activities were capitalized. For Q2 2007 and the first half of
FY 2007 the employee compensation costs, consulting and professional fees were
$1.3 million for both periods, inclusive of $0.8 million fees paid to Simmer &
Jack. Shared services fees of $0.3 million that were expensed in prior
periods, were capitalized during Q2 2007 and the first half of FY 2008. This
resulted in the lower general, consulting and administrative costs reported in
Q1 2007 and the first half of FY 2007.
    Higher general, consulting and administrative expenses in Q2 2008 and the
first half of FY 2008, primarily reflect the higher project development
activities, the costs of corporate offices in Johannesburg and Toronto and
other expenses of operating a public company, which were not applicable in
Q2 2007 and in the first half of FY 2007.
    The Q2 2008 stock-based compensation expense reflects the amortized cost
of 1,223,001 stock options granted during FY 2007 and the amortized cost of
116,429 stock options granted during the first half of FY 2008. The fair value
of the stock-based compensation was estimated using the Black-Scholes option
pricing model.
    Pumping costs at the Ezulwini Mine remained relatively unchanged year
over year, but feasibility costs decreased. Feasibility assessment activities
were higher during the first half of FY 2007, as the Corporation initiated
early reviews in respect of re-commissioning of the Ezulwini Mine. Included in
the costs for Q2 2008 and first half of FY 2008 are rehabilitation costs
incurred at the MWS operations of $0.4 million. A review of pumping and
feasibility costs incurred in May and June 2006 resulted in the transferral of
$0.3 million of these costs to capital in Q2 2007. The capitalization of the
pumping and feasibility costs during the first half of FY 2007 of $5.2 million
also resulted in the higher costs compared to the costs in the first half of
FY 2008.
    Amortization of property, plant and equipment in Q2 2008 and the first
half of FY 2008 relate to amortization of non-mining assets such as computer
equipment and software, furniture and equipment and motor vehicles. There was
no amortization during the same periods of FY 2007.

    Non-operating Income and Expenses

    
                                                             2008       2007
    (thousands of dollars)          Q2 2008    Q2 2007        YTD        YTD
    -------------------------------------------------------------------------
    Operating income (loss)          (2,166)       258     (5,354)    (2,651)
    Interest income                   4,110         69      8,373        139
    Interest expense                 (1,502)      (204)    (2,459)      (348)
    Accretion expense on the
     Debentures                      (3,307)         -     (4,378)         -
    Foreign exchange gains            5,967        663     12,391      1,408
    -------------------------------------------------------------------------
    Net income (loss) before
     income taxes                     3,102        786      8,573     (1,452)
    -------------------------------------------------------------------------
    

    Interest income in Q2 2008 and during the first half of FY 2008
represents interest earned on the net proceeds from the Offering and the
Debentures. Cash balances have been invested in short-term deposits with the
Corporation's bankers until required for capital expenditures or to fund
operating costs.
    Interest expense in Q2 2008 and the first half of FY 2008 consists of the
interest paid and or accrued on the Debentures. The interest expense during
the same periods of FY 2007 consisted of the non-capital portion of interest
paid by EMC on the loan payable to Simmer & Jack. The accretion expense in
Q2 2008 and during the first half of FY 2008 relates to the Debentures. (See
Note 11 to the interim financial statements.)
    The Corporation's net assets are held in Canadian dollars ("Cdn$") and
South African Rand ("ZAR"), while its accounts are presented in US dollars.
During the reporting periods for FY 2008 and FY 2007, the Canadian dollar and
South African Rand both appreciated relative to the value of the US dollar.
The translation of the stronger currency assets (Cdn$ and ZAR) into US dollars
for reporting purposes resulted in the foreign exchange translation gain in
the second quarter and the first half of both FY 2008 and FY 2007. The larger
foreign exchange translation gain in Q2 2008 and in the first half of FY 2008
reflects the significant weakening of the US dollar, particularly with respect
to the Cdn$, but also relative to the ZAR.

    Net income

    Net income in Q2 2008 and the first half of FY 2008 increased year over
year primarily as a result of the net foreign exchange translation gains and
interest income earned, net of operating expenses. The net loss in the first
half of FY 2007 reflects expenditures in connection with preparing its two
uranium and gold projects for production.

    Use of Proceeds

    Offering

    Pursuant to the Offering in December 2006, First Uranium raised total net
proceeds of $177.7 million of which $72.8 million had been expended as at
September 30, 2007 leaving a balance on hand at that date of $104.9 million:

    
                                             Use of net proceeds
                                         To
                               September 30,    During     During     During
    (millions of dollars)              2007    Q2 2008    Q1 2008    FY 2007
    -------------------------------------------------------------------------
    Development of the
     Ezulwini Mine                    (54.8)     (25.7)      (9.8)     (19.3)
    Development of the
     Buffelsfontein Tailings
     Recovery Project                  (7.6)      (5.4)      (0.7)      (1.5)
    Repayment of indebtedness
     owed by EMC to
     Simmer & Jack                    (14.1)         -          -      (14.1)
    Purchase of the Ezulwini
     Mine infrastructure               (8.9)         -          -       (8.9)
    Working capital and general
     corporate purposes                12.6        0.6        3.4        8.6
    -------------------------------------------------------------------------
    Total                             (72.8)     (30.5)      (7.1)     (35.2)
    -------------------------------------------------------------------------
    

    While First Uranium intends to apply the net proceeds of the Offering
approximately as disclosed in the Corporation's MD&A in respect of its audited
consolidated financial statements for the fiscal year ended March 31, 2007,
such uses are by definition, based on estimates and assumptions and are
subject to variance. In addition, there may be circumstances where, for sound
business reasons, a re-allocation of the funds may be necessary or advisable.

    Debentures

    The Corporation intends to use the net proceeds from the issue of the
Debentures to: fund the Ezulwini Expansion Program which is designed to
determine the potential for a possible expansion of the Ezulwini Mine; and
together with the balance of the net proceeds of the Offering, fund the
development of the Ezulwini Mine and the Buffelsfontein Tailings Recovery
Project; and for general corporate purposes. The net proceeds of
$130.6 million from the issue of the Debentures are currently held in Canadian
dollar denominated short-term deposits bearing interest at 4.75% per annum.
The approval of the South African Reserve Bank ("SARB") pursuant to the issue
of the Debentures includes a condition that the Corporation transfers the net
Debenture proceeds to bank accounts of the Corporation in South Africa and
convert the funds to South African rand by May 3, 2008.
    First Uranium believes that the net Debenture proceeds and the unused
portion of the net proceeds of the Offering, are sufficient to fund its plans
for the near-term development of the Ezulwini Mine, the Ezulwini Expansion
Program and the Buffelsfontein Tailings Recovery Project expenditures, as
adjusted to reflect changed project capital with the acquisition of MWS.

    Cash flows

    Quarterly Cash Flow

    

    (thousands of dollars)                                Q2 2008    Q2 2007
    -------------------------------------------------------------------------
    Cash flows (utilized in) generated from operating
     activities                                              (455)     4,577
    Cash flows utilized on investing activities           (26,892)    (4,629)
    Cash flows from financing activities                      342          -
    Net effect of exchange rates on cash held in
     foreign currencies                                     6,103          -
    -------------------------------------------------------------------------
    Net decrease in cash and cash equivalents for
     the period                                           (20,902)       (52)
    Cash and cash equivalents at beginning of period      275,234      1,210
    -------------------------------------------------------------------------
    Cash and cash equivalents at end of period            254,332      1,158
    -------------------------------------------------------------------------
    

    The cash utilized by operating activities in Q2 2008 reflects net
operating expenses offset by net interest received during the quarter. The
cash generated from operating activities in Q2 2007 was mainly the result of a
reduction in net receivables from related parties and increased accruals.
    Investing activities used $26.9 million in Q2 2008, inclusive of capital
expenditures of $20.1 million on the Ezulwini Mine and $5.6 million on the
Buffelsfontein Tailings Recovery Project. The cash utilized on investing
activities in Q2 2007 were primarily represented by capitalized pumping costs
at the Ezulwini Mine (capitalized as part of mine development expenditures).
    Cash generated from financing activities in Q2 2008 is the result of
51,095 share options exercised during the quarter.
    The net effect of exchange rates on cash held in foreign currencies (Cdn$
and ZAR) in Q2 2008 is primarily the result of the Debenture proceeds held in
cash and the debt portion of the Debentures translated to US dollars at the
exchange rate in effect at the end of the quarter, whilst the equity portion
of the Debentures was translated to US dollars at the rate in effect on the
date that the Debentures were issued.

    First Half Cash Flow

    
                                                             2008       2007
    (thousands of dollars)                                    YTD        YTD
    -------------------------------------------------------------------------
    Cash flows from operating activities                   14,897      5,089
    Cash flows utilized on investing activities           (40,704)    (5,219)
    Cash flows from financing activities                  130,903        728
    Net effect of exchange rates on cash held in
     foreign currencies                                    10,322          -
    -------------------------------------------------------------------------
    Net increase in cash and cash equivalents for
     the period                                           115,418        598
    Cash and cash equivalents at beginning of period      138,914        560
    -------------------------------------------------------------------------
    Cash and cash equivalents at end of period            254,332      1,158
    -------------------------------------------------------------------------
    

    The cash generated from operating activities in the first half of FY 2008
was derived from net interest received and the payment during Q1 2008 of the
amounts receivable from related parties ($5.1 million and $1.7 million,
respectively from Simmer & Jack and FUSA), offset by increases in accounts
receivable (mainly value-added tax recoverable). The cash generated from
operating activities in the first half of FY 2007 was mainly the result of a
reduction in net receivables from related parties and an increase in accrued
liabilities.
    The cash utilized on investing activities in the first half of FY 2008
relates primarily to capital expenditures of $35.5 million at the Ezulwini
Mine and $6.2 million on the Buffelsfontein Tailings Recovery Project. The
cash utilized for investing activities in the first half of FY 2007 relates to
capitalized pumping costs at the Ezulwini Mine.
    The cash generated from financing activities was attributable to the
proceeds of $130.6 million raised from the issue of the Debentures on May 3,
2007.
    The net effect of exchange rates on cash held in foreign currencies (Cdn$
and ZAR) during the first half of FY 2008 are primarily the result of the
Debenture proceeds held in cash and the debt portion of the Debentures
translated to US dollars at the exchange rate in effect at the end of the
quarter, whilst the equity portion of the Debentures was translated to
US dollars at the rate in effect on the date that the Debentures were issued.

    Financial Position and Liquidity

    Assets

    Cash and cash equivalents increased by $115.4 million during the first
half of FY 2008 to $254.3 million. The increase is primarily the result of the
$130.6 million of Debenture net proceeds, cash from operating activities and
translation gains on cash held in currencies other than the US dollars,
partially offset by capital expenditures of $35.5 million at the Ezulwini Mine
and $6.1 million at the Buffelsfontein Tailings Recovery Project.
    Accounts receivable of $8.2 million at September 30, 2007 (FY 2007:
$1.7 million) were comprised primarily of value-added tax and goods and
services tax recoverable of $6.2 million relating to capital expenditures on
the two uranium and gold projects.
    Inventories of $2.9 million at September 30, 2007 (FY 2007: $0.3 million)
mainly consisted of the $1.3 million gold work-in-progress from the MWS
operations. At the end of the quarter the Corporation also included stockpiles
at the Ezulwini Mine that were on surface, measured and valued at
$0.9 million.
    Non-current assets increased to $124.1 million at September 30, 2007
(FY 2007: $33.7 million), reflecting expenditures on property, plant and
equipment at the Ezulwini Mine and the Buffelsfontein Tailings Recovery
Project ($35.5 million and $6.1 million respectively) and the property, plant
and equipment of $41.1 million acquired with the MWS purchase.
    The increase in asset retirement funds to $5.1 million (FY 2007:
$2.8 million) is primarily the result of the $2.0 million environmental
rehabilitation trust fund assumed by the Corporation on the acquisition of the
MWS operations on June 6, 2007.

    Investing activities

    During Q2 2007, investing activities were represented primarily by
pumping costs incurred and capitalized to mine development expenditures.

    Liabilities

    As of September 30, 2007, total liabilities were $130.7 million (FY 2007:
$11.1 million), consisting mainly of the debt portion of the Debentures of
$99.0 million, accounts payable and accrued liabilities of $13.1 million
(FY 2007: $5.7 million), the future tax liability in the amount of $10.4
million, arising from the MWS acquisition and the asset retirement obligation
of $7.9 million (FY 2007: $5.3 million) relating to the Ezulwini Mine and the
Buffelsfontein Tailings Recovery Project.
    The increase in accounts payable and accrued liabilities at September 30,
2007 reflects payables in respect of capital costs of $6.8 million for the
Ezulwini Mine, trade payables of $2.5 million related to the MWS operations
and accrued interest on the Debentures of $1.5 million.
    The payable to a related party of $0.3 million (FY 2007: Nil) consists of
the shared services fee payable to Simmer & Jack pursuant to the terms of the
Shared Services Agreement.

    Liquidity and Capital Resources

    At September 30, 2007, First Uranium had working capital of
$252.1 million (FY 2007: $142.0 million). The significant increase in working
capital is mainly attributable to the inclusion of $130.6 million net proceeds
from the issue of the Debentures during Q1 2008 partially offset by the
$40.7 million cash utilized in investing activities during the first half of
FY 2008.
    First Uranium anticipates that future capital requirements relating to
development of the Ezulwini Mine and the Buffelsfontein Tailings Recovery
Project, as currently planned, will be funded from existing cash resources (a
combination of the proceeds from the Offering and the Debentures) and from
internal cash flow.
    Capital investments of $148.0 million and $270.6 million are planned to
complete the construction of the Buffelsfontein Tailings Recovery Project and
the Ezulwini Mine, respectively, for which $34.8 million (FY 2007:
$5.2 million) of current commitments exist. As at September 30, 2007,
cumulative expenditures for property, plant and equipment in Q2 2008 were
$62.4 million ($31.1 million in Q2 2008, $10.5 million in Q1 2008 and $20.8
million in FY 2007).
    Exploration budgets of $30 million for the Ezulwini Mine and $10 million
for the contiguous properties to the north-east and south-east of the Ezulwini
Mine have been approved by the Board of Directors. The extent to which the
budgeted amounts are spent depends on the ongoing exploration results. No
exploration costs were incurred during the first half of FY 2008, although
current commitments of $0.3 million existed as at September 30, 2007. The
exploration expenditures are expected to be funded from available working
capital.
    First Uranium had executed a mandate letter and term sheet with Investec
Bank Limited ("Investec") in respect of potential debt financing, which was
originally planned to be used towards the development of the Ezulwini Mine and
the Buffelsfontein Tailings Recovery Project. The need for this facility as
originally contemplated was eliminated as a result of the Debenture issue. The
Corporation is, however, continuing with the process of satisfying certain
conditions precedent and is in discussions with Investec to establish a
general corporate credit facility, which would be available as required to
fund short-term cash needs.
    As at September 30, 2007, First Uranium had the following contractual
obligations:

    
    -------------------------------------------------------------------------
                                             Payments due by date
    -------------------------------------------------------------------------
                               Less than      1-3      4-5  After 5
                                  1 year    Years    Years    Years    Total
    (millions of dollars)           $000     $000     $000     $000     $000
    -------------------------------------------------------------------------
    Operating leases                  13       12        -        -       25
    Purchase obligations          34,748        -        -        -   34,748
    Capital lease obligations         87      268       68        -      423
    Asset retirement obligations       -        -        -    7,941    7,941
    Senior unsecured convertible
     debentures                        -        -  135,060        -  135,060
    -------------------------------------------------------------------------
    Total contractual
     obligations                  34,848      280  135,128    7,941  178,197
    -------------------------------------------------------------------------

    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):

    -------------------------------------------------------------------------
                                                        Basic and
    Fiscal Quarters Ended                                 Diluted
                                                   Net   Earnings/
    (thousands of dollars,            Total     Income/     (Loss)  Long Term
     except per share amounts)       Assets      (Loss) per Share Liabilities
    -------------------------------------------------------------------------
    September 30, 2007              389,554      3,051       0.02    117,349
    June 30, 2007                   373,549      5,471       0.04    118,900
    March 31, 2007 (audited)        181,427     (2,689)     (0.02)     5,377
    December 31, 2006               195,374     (3,787)     (0.04)       Nil
    September 30, 2006                8,839        786       0.01        Nil
    June 30, 2006                     4,120     (2,238)     (0.03)       Nil
    March 31, 2006 (audited)          3,433     (4,656)     (0.05)       Nil
    December 31, 2005                 4,519     (2,201)     (0.03)       Nil
    September 30, 2005                  n/a        n/a        n/a        n/a
    -------------------------------------------------------------------------
    

    Outlook

    In November 2007, the Corporation will finalize the integration of MWS
into the Buffelsfontein Tailings Recovery Project by completing the pipeline
from the Buffelsfontein tailings dams to the MWS gold plant. Upon completion
of the pipeline, hydraulic mining of the Buffelsfontein tailings dams is
expected to commence, increasing gold production in respect of the
Buffelsfontein Tailings Recovery Project from an annualized rate of
38,000 ounces to an annualized rate of 54,000 ounces. Average cash costs per
ounce of gold produced are expected to decrease from the current average cash
cost of $497 per ounce for the first half of FY 2008 to approximately $310 per
ounce.
    In addition, the Corporation expects to complete the full feasibility
study for the Buffelsfontein Tailings Recovery Project's new gold and uranium
plant modules. The MWS assets include an operating gold plant. The second
module of the gold plant and the first two modules of the uranium plant are
expected to be commissioned in November 2008.
    In October, 2007, third-party toll treatment of higher grade gold ore
from the Ezulwini Mine commenced. The current plan is for the Ezulwini Mine to
process gold and uranium at its own plants by April and June 2008,
respectively.
    In Q3 2008, the Corporation expects to process 1.4 million tonnes of
tailings through its MWS gold plant, with expected production in excess of
9,600 ounces of gold.
    The spot price for uranium rose to $136 per pound at the end of June,
softened to $75 per pound and has recently risen to $90 per pound. Management
believes that the $50 per pound assumption upon which the project economics
were based remains reasonable and conservative. The Corporation has not yet
signed any contracts that have defined commitments to supply uranium.
    First Uranium has entered into an agreement with Nufcor pursuant to which
Nufcor will calcine the yellowcake from First Uranium to produce uranium oxide
for dispatch to converters beginning January 2009. The Corporation has also
entered into an off-take agreement with Nufcor, for the period from startup of
the uranium plant at the Ezulwini Mine in June 2008 to January 2009, to
purchase First Uranium's yellowcake production at rates based on the then
prevailing spot prices.
    The Corporation has no plans to hedge the price it receives for its gold
production at this time.
    The spot price for gold was $832 per ounce as of November 9, 2007.
Management believes that the $500 per ounce assumption upon which the project
economics were based remains reasonable and conservative.
    Offsetting the higher price assumptions, mine construction costs have
risen for labour, reflecting higher negotiated wage settlements across the
sector, and for materials, such as steel and concrete. First Uranium has
included assumptions for higher costs into its revised technical reports and
into planning assumptions for the future.
    Based on the most recent technical reports published for each project in
May 2007, the co-product costs for the Ezulwini Mine are expected to be
$297 (down from $315) per ounce for gold and $30 (up from $25) per pound for
uranium and for the Buffelsfontein Tailings Recovery Project co-product costs
are expected to be $220 (down from $235) per ounce for gold and $22 (up from
$19) per pound for uranium.
    The development and production of both of the Corporation's current
projects continues on schedule and on budget. At the Ezulwini Mine,
construction is well underway to commission a gold plant in April 2008 and a
uranium plant in June 2008. In November 2007, the Corporation expects to
complete a feasibility study and begin the construction at the Buffelsfontein
Tailings Recovery Project to double the gold plant capacity and commission the
first two modules of the uranium plant by November 2008.
    First Uranium is confident that the combination of the net proceeds from
First Uranium's earlier equity and debenture offerings and internal cash flow,
given current prices for uranium and gold, will be sufficient to fully fund
the development of the Corporation's two projects and to advance them to full
production by 2010.

    Related Party Transactions

    On December 20, 2006, First Uranium and Simmer & Jack entered into a
shared services agreement (the "Shared Services Agreement"). For a description
of the shared services agreement, see the Corporation's MD&A in respect of its
audited consolidated financial statements for the fiscal year ended March 31,
2007. During Q2 2008 the Corporation paid $0.5 million for shared services to
Simmer & Jack ($1.0 million in the first half of FY 2008) pursuant to the
terms of the Shared Services Agreement. During Q2 2007, the Corporation paid
$0.4 million for shared services relating to the operations to Simmer & Jack
($0.8 million in the first half of FY 2007).
    Prior to December 2006, the Corporation shared its premises with other
companies that had common directors and reimbursed the related companies for
its proportional share of expenses or was reimbursed by the related companies
for their proportional share of expenses. During Q2 2007, the Corporation was
charged $0.6 million for consulting services provided by related directors,
officers and consultants of the Corporation.
    First Uranium has agreed to reimburse Simmer & Jack for 50% of the fees
(to a maximum of ZAR125,000 per month) that Simmer & Jack is required to pay
to an empowerment company for consulting. During Q2 2008 and the first half of
FY 2008, the Corporation paid $0.06 million and $0.1 million, respectively, to
Simmer & Jack in connection with such services.
    The $0.3 million amount payable at the end of Q2 2008 by First Uranium to
Simmer & Jack are as a result of transactions pursuant to the Shared Services
Agreement and are in the normal course of business.
    Waterpan Mining Consortium ("Waterpan") currently holds a 10%
shareholding in EMC. On December 20, 2006, Waterpan, First Uranium Limited
("FUL") and the Corporation entered into a purchase agreement (the "Waterpan
Purchase Agreement") pursuant to which Waterpan agreed to sell its shares in
EMC to FUL and as consideration for such sale, First Uranium will issue
6,141,009 common shares of First Uranium to Waterpan (the "Waterpan Shares").
The closing of the transaction is subject to approval of SARB. Certain
shareholders of Waterpan are officers or employees of First Uranium or
directors of its subsidiaries.
    On September 27, 2007, the Board approved a housing loan in the amount of
Cdn$1 million to the President and Chief Executive Officer of First Uranium
for the purpose of facilitating the relocation of his family to Toronto, where
the corporate office is located. The loan carries interest at 4% payable
monthly in arrears, is for a term of six years from date of closing of the
purchase of a family residence and is unsecured. The loan was advanced on
October 17, 2007.

    Critical Accounting Policies and Estimates

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements,
and reported amounts of revenues and expenditures during the reporting period.
Note 2 of the interim financial statements describes all of the Corporation's
significant accounting policies.

    Changes in accounting policies

    Effective April 1, 2007, the Corporation adopted the Canadian Institute
of Chartered Accountants ("CICA") Handbook Sections 1530 - Comprehensive
Income, Section 3855 - Financial Instruments - Recognition and Measurement and
Section 3865 - Hedges. The adoption of these new standards resulted in changes
in the accounting for financial instruments and hedges, as well as the
recognition of certain transition adjustments. As provided under the
standards, the comparative consolidated financial statements have not been
restated.
    The adoption of these Sections is done retroactively without restatement
of the consolidated financial statements of prior periods. There was no impact
on the consolidated balance sheet of as at April 1, 2007.
    The effect of these changes in the accounting policies on net income for
Q1 2008 is not significant.
    Effective April 1, 2007, the Corporation adopted the revised Section 1506
- Accounting Changes relating to changes in accounting policies, changes in
accounting estimates, and errors. Adoption of these recommendations had no
effect on the consolidated financial statements for the Q1 2008, except for
the disclosure of accounting changes that have been issued by the CICA but
have not yet been adopted by the Corporation because they are not effective
until a future date (refer to Future accounting standards below).

    Future accounting standards

    In February 2007, the CICA issued the following pronouncements:

    Section 1535, Capital Disclosures, which is effective for the Corporation
for the fiscal year beginning April 1, 2008. This standard requires disclosure
of information that enables users of its financial statements to evaluate the
entity's objectives, policies and processes for managing capital. The adoption
is not expected to have a significant effect on the Corporation's financial
statements.
    Section 3862, Financial Instruments - Disclosures and Section 3863,
Financial Instruments - Presentation, which are effective for the Corporation
for the fiscal year beginning April 1, 2008. The objective of Section 3862 is
to provide financial statement disclosure to enable users to evaluate the
significance of financial instruments for the Corporation's financial position
and performance and the nature and extent of risks arising from financial
instruments that the Corporation is exposed to during the reporting period and
the balance sheet date and how the Corporation is managing those risks. The
purpose of Section 3863 is to enhance the financial statement user's
understanding of the significance of financial instruments to the
Corporation's financial position, performance and cash flows.
    In March 2007, CICA approved Handbook Section 3031 - Inventories, which
replaces the existing Section 3030 - Inventories. This standard is effective
for the Corporation for interim and annual financial statements relating to
the fiscal year beginning April 1, 2008. The standard provides more guidance
on the measurement and disclosure requirements for inventories.
    The Corporation is currently assessing the impact of these new accounting
standards on its financial statements.

    Outstanding Share Data

    
                              Q2 2008      Q2 2007     2008 YTD     2007 YTD
    -------------------------------------------------------------------------
    Common shares
     outstanding at
     beginning of period  124,780,027   88,336,047  121,686,147   87,536,047
    Share issued               51,095            -    3,145,075      800,000
    Common shares
     outstanding at end
     of period            124,831,222   88,336,047  123,831,222   88,336,047
    Unexercised stock
     options outstanding
     at end of period       1,259,763            -    1,259,763            -
    Average strike price
     of outstanding
     options (Cdn$)              7.67            -         7.67            -
    -------------------------------------------------------------------------
    

    As at November 9, 2007, First Uranium had 124,831,222 common shares
outstanding and there were 1,259,763 unexercised stock options outstanding, at
an average strike price of Cdn$7.67 per share.
    As at September 30, 2007 and November 9, 2007, First Uranium also had
$135.1 million (Cdn$150 million) principal amount of Debentures outstanding
which are convertible into 60.9013 common shares of First Uranium for each
Cdn$1,000 principal amount of Debentures, representing 9,135,195 common
shares.

    Risks and Uncertainties

    Uncertainties

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

    
    -   demand and prices for the Corporation's future production of uranium
        and gold
    -   government legislation regarding mining companies in South Africa
    -   securities regulation regarding public listed companies in Canada and
        South Africa
    -   foreign exchange rates
    -   interest rates
    -   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 energy needs
    -   the decisions of investors to continue to buy and hold the securities
        of the Corporation
    -   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 is in the development stage and is subject to
the risks and challenges similar to other companies in a comparable stage of
development. The risks include, but are not limited to, certain business,
operational and market risks. For a discussion of the Corporation's risks
please refer to the Corporation's MD&A in respect of its audited consolidated
financial statements for the fiscal year ended March 31, 2007, the 2007 Annual
Information Form and other filings, which are available on the Corporation's
website www.firsturanium.com and on www.sedar.com or upon request from the
Corporation.

    Construction costs

    First Uranium is in the development stage and is building its gold and
uranium plants. To complete the construction of these plants requires steel,
concrete and construction tradespeople. With the vast amount of construction
underway in South Africa, materials and construction tradespeople are
difficult to acquire and retain, particularly in light of the upcoming World
Cup of soccer in South Africa in 2010 and the high metal prices, which has
driven the demand for new mines and plants around the world. As a result of
this high demand, structural steel prices, for example, have risen by over 30%
in the last 18 months.
    To mitigate this risk, First Uranium has secured its supply of materials
and tradespeople for the construction of the mills and the gold and uranium
plants for the planned modules of the Ezulwini Mine.
    For the Buffelsfontein Tailings Recovery Project, the required materials
to expand the gold plant and build the uranium plant have not yet been
secured. To mitigate the impact of rising costs, the Corporation has decided
to skip the pre-feasibility step and accelerate the project's final
feasibility study for completion by the end of November 2007, thus enabling
orders for the required materials to be placed as soon as possible.

    Labour

    A trend that could increase risk for the Corporation would be 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 heightened mineral prices. Strikes have been threatened during some
of the negotiations. First Uranium has mitigated the threat of work stoppages
by negotiating recent settlements with unions represented at its operations.
    Similarly, workers in other industries have been demanding higher
compensation and threatening strike action. One such example is the strike by
petroleum workers in early August which limited the supply of petrol. Strikes
in the public sector and service industries, if protracted, have the potential
to disrupt the development of the Corporation's two projects. No material
delays have been experienced to date and the projects are on track for their
scheduled completion dates.

    Additional Information

    Additional information relating to First Uranium is included in the
Corporation's Annual Information Form dated June 13, 2007 and it is available
on SEDAR at www.sedar.com.

    Forward-looking Information

    This MD&A and consolidated financial statements for the period ended
September 30, 2007 contain certain forward-looking statements. Forward-looking
statements include but are not limited to those with respect to the price of
uranium and gold, the estimation of mineral resources and reserves, 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,
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 "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) approvals to transfer or grant, as the case may be,
mining rights or prospecting rights will be obtained; (ii) metal prices,
exchange rates and discount rates applied in the preliminary economic
assessments are achieved; (iii) mineral resource estimates are accurate; (iv)
the technology used to develop and operate its two projects has, for the most
part, been proven and will work effectively; (v) that labour and materials
will be sufficiently plentiful as to not impede the projects or add
significantly to the estimated cash costs of operations; (vi) that Black
Economic Empowerment ("BEE") investors will maintain their interest in the
Corporation and their investment in the Corporation's common shares to a
sufficient level to continue to support the Corporation's compliance with 2014
BEE requirements; and (vii) 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.



    
                 CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
            for the three and six months ended September 30, 2007
                           and September 30, 2006

    The interim consolidated financial statements contained herein have not
    been audited by the Corporation's independent auditors.


    First Uranium Corporation
    Consolidated Balance Sheets (unaudited)
    (in United States Dollars)

                                                      September 30  March 31
                                                              2007      2007
                                                Notes      US$'000   US$'000
    -------------------------------------------------------------------------

    ASSETS

    Current assets
    Cash and cash equivalents                              254,332   138,914
    Amounts receivable                              5        8,190     1,713
    Inventories                                     6        2,909       292
    Receivables from related party                 22            -     6,763
    -------------------------------------------------------------------------
                                                           265,431   147,682
    -------------------------------------------------------------------------

    Non-current assets
    Property, plant and equipment                   7      119,077    30,954
    Asset retirement funds                          8        5,046     2,791
    -------------------------------------------------------------------------
                                                           124,123    33,745
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total assets                                           389,554   181,427
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities       10       13,090     5,702
    Payable to related party                       22          273         -
    -------------------------------------------------------------------------
                                                            13,363     5,702
    -------------------------------------------------------------------------

    Non-current liabilities
    Senior unsecured convertible debentures        11       98,963         -
    Future tax liability                           15       10,445         -
    Asset retirement obligations                   12        7,941     5,377
    -------------------------------------------------------------------------
                                                           117,349     5,377
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Share capital                                  13      214,787   182,673
    Equity portion of senior unsecured
     convertible debentures                        11       46,504         -
    Contributed surplus                            14        3,814     2,460
    Accumulated deficit                                     (6,263)  (14,785)
    Accumulated other comprehensive income          3            -         -
    -------------------------------------------------------------------------
                                                           258,842   170,348
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total equity and liabilities                           389,554   181,427
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the Consolidated Financial Statements



    First Uranium Corporation
    Consolidated Statements of Operations and Deficit and Other Comprehensive
    Income (unaudited)
    (in United States Dollars)

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                Notes  US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------
    Revenue                              6,253         -     8,436         -
    Cost of sales                       (5,343)        -    (7,598)        -
    -------------------------------------------------------------------------

    Profit from mining operations          910         -       838         -

    Other Income                   16      897         -       897         -

    Expenditures
    General, consulting and
     administrative expenditures        (2,520)       (5)   (4,490)   (1,377)
    Stock-based compensation       14     (663)        -    (1,434)        -
    Pumping, feasibility and
     rehabilitation costs                 (721)      263    (1,068)   (1,274)
    Amortization of property,
     plant and equipment            7      (69)        -       (97)        -
    -------------------------------------------------------------------------
                                        (3,973)      258    (7,089)   (2,651)
    -------------------------------------------------------------------------

    Operating profit (loss)             (2,166)      258    (5,354)   (2,651)
    Interest income                      4,110        69     8,373       139
    Interest expense                    (1,502)     (204)   (2,459)     (348)
    Accretion expense on
     convertible debentures        11   (3,307)        -    (4,378)        -
    Foreign exchange gains         17    5,967       663    12,391     1,408
    -------------------------------------------------------------------------

    Net income (loss) before
     income taxes                        3,102       786     8,573    (1,452)
    Provision for income taxes     15      (51)        -       (51)        -
    -------------------------------------------------------------------------
    Net income (loss) for the
     period                              3,051       786     8,522    (1,452)
    Accumulated deficit at the
     beginning of the period            (9,314)   (9,095)  (14,785)   (6,857)
    -------------------------------------------------------------------------
    Accumulated deficit at the end
     of the period                      (6,263)   (8,309)   (6,263)   (8,309)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted earnings
     (loss) per common share ($)   18     0.02      0.01      0.07     (0.02)

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


    Net income (loss)                    3,051       786     8,522    (1,452)
    Adjustments                              -         -         -         -
    -------------------------------------------------------------------------
    Comprehensive income (loss)     3    3,051       786     8,522    (1,452)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the Consolidated Financial Statements



    First Uranium Corporation
    Consolidated Statements of Cash Flows (unaudited)
    (in United States Dollars)

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                Notes  US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------

    Net income (loss) before
     income taxes                        3,102       786     8,573    (1,452)
    Changes not affecting cash:
      - Interest income          19.1      (65)      (63)      (97)     (133)
      - Interest expense         19.2    1,499       204     1,499       348
      - Accretion expense on
         convertible debentures    11    3,307         -     4,378         -
      - Amortization on property,
         plant and equipment               631         -       959         -
      - Stock-based compensation   14      663         -     1,434         -
    -------------------------------------------------------------------------
    Net income (loss) after
     interest and non-cash items         9,137       927    16,746    (1,237)
    Movement in working capital:
      - Increase in inventories         (1,564)        -    (1,208)        -
      - Increase in accounts
         receivable                     (4,418)     (600)   (5,231)     (640)
      - Decrease in net
         receivables from related
         parties                 19.3    1,007     2,677     7,036     4,922
      - Increase/(decrease) in
         accounts payable and
        accrued liabilities             (4,617)    1,573    (2,446)    2,044
    -------------------------------------------------------------------------
    Cash flows from operating
     activities                           (455)    4,577    14,897     5,089
    -------------------------------------------------------------------------

    Additions to property, plant
     and equipment               19.4  (26,604)   (4,629)  (41,681)   (5,219)
    Rehabilitation costs
     incurred                             (227)        -      (272)        -
    Net cash movement on
    acquisition of MWS           19.5      (61)        -     1,249         -
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                        (26,892)   (4,629)  (40,704)   (5,219)
    -------------------------------------------------------------------------

    Issuance of senior unsecured
     convertible debentures
     (net of issue costs)          11        -         -   130,561         -
    Proceeds from shares issuance
     (net of issue costs)          13      342         -       342       728
    -------------------------------------------------------------------------
    Cash flows from financing
     activities                            342         -   130,903       728
    -------------------------------------------------------------------------

    Net effect of exchange rate
     changes on cash held in
     foreign currencies                  6,103         -    10,322         -
    -------------------------------------------------------------------------

    Net increase in cash and cash
     equivalents for the period        (20,902)      (52)  115,418       598

    Cash and cash equivalents at
     beginning of the period           275,234     1,210   138,914       560
    -------------------------------------------------------------------------
    Cash and cash equivalents at
     end of the period                 254,332     1,158   254,332     1,158
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the Consolidated Financial Statements



    First Uranium Corporation
    Notes to the Consolidated Financial Statements (unaudited)
    September 30, 2007

    1.  NATURE OF OPERATIONS AND BASIS OF PRESENTATION

        First Uranium Corporation ("First Uranium" or "the Corporation") is a
        Canadian resource company focused on the development of uranium and
        gold projects in South Africa and beyond. See Note 7 "Property,
        Plant and Equipment" for a description of the projects. The
        Corporation has a primary listing on the Toronto Stock Exchange
        ("TSX") and a secondary listing on the Johannesburg Stock Exchange
        ("JSE"). First Uranium owns 100% of First Uranium Limited ("FUL"),
        which in turn holds 100% of First Uranium (Proprietary) Limited
        ("FUSA") and 90% of Ezulwini Mining Company (Proprietary) Limited
        ("EMC"). During the first quarter ended June 30, 2007, First Uranium,
        through FUSA, acquired all the issued and outstanding shares of Mine
        Waste Solutions (Proprietary) Limited and its subsidiary, Chemwes
        (Proprietary) Limited (collectively "MWS"). See Note 4 "Business
        Acquisitions". As at September 30, 2007, Simmer and Jack Mines,
        Limited ("Simmer & Jack"), a JSE listed company, owned 65.5% of First
        Uranium's common shares.

        The reporting currency of the Corporation is the US dollar, and all
        amounts in these financial statements are in US dollars (US$), except
        where otherwise indicated.

    2.  SIGNIFICANT ACCOUNTING POLICIES

        The unaudited interim consolidated financial statements have been
        prepared by First Uranium in accordance with Canadian generally
        accepted accounting principles ("Canadian GAAP") for preparation of
        the interim financial statements. The preparation of the unaudited
        interim consolidated financial statements is based on the same
        accounting policies and practices as those disclosed in Note 1
        "Nature of operations" and Note 2 "Significant accounting policies"
        to the Corporation's audited consolidated financial statements for
        the year ended March 31, 2007, except for changes as described in
        Note 3 "Changes in accounting policies". These unaudited interim
        consolidated financial statements do not include all disclosures
        required by GAAP for annual financial statements, and accordingly
        should be read in conjunction with the Corporation's audited
        consolidated financial statements for the year ended March 31, 2007.

    2.1 Financial instruments

        Transaction costs for financial assets and liabilities

        For a financial asset or financial liability classified other than as
        held for trading, the Corporation has added the transaction costs
        that are directly attributable to the acquisition or issue of a
        financial asset or financial liability to the fair value of the asset
        or liability established at the recognition of the asset or
        liability.

    2.2 Inventories

        Inventories include ore stockpiles, gold in process and supplies and
        spares, and are recorded at the lower of cost or net realizable
        value. The cost of ore stockpiles and gold produced is determined
        principally by the weighted average cost method using related
        production costs. Costs of gold produced inventories include costs
        such as milling costs, mining costs and mine general and
        administration costs but excluding transport, refining and taxes. Net
        realizable value is determined with reference to current market
        prices. Stockpiles consist of ore to be processed through the
        processing plant. The stockpiles have been sampled and evaluated and
        are on surface. Spares and consumable stores are valued at weighted
        average cost after appropriate impairment of redundant and slow
        moving items.

    2.3 Revenue recognition

        Revenue from sales is recognized when significant risks and rewards
        of title and ownership of the goods are transferred upon delivery to
        the final refiner.

        Interest income is recognized on a time proportion basis, taking
        account of the principal outstanding and the effective rate over the
        period of maturity, when it is determined that such income will
        accrue to the Corporation.

    2.4 Earnings or loss per share

        Basic earnings or loss per share is computed by dividing earnings or
        loss available to common shareholders by the weighted average number
        of common shares outstanding during the period. The treasury stock
        method is used to calculate diluted earnings or loss per share.
        Diluted earnings or loss per share is similar to basic earnings or
        loss per share, except that the denominator is increased to include
        the number of additional common shares that would have been
        outstanding assuming that options with an average market price for
        the period greater than their exercise price are exercised and the
        proceeds used to repurchase common shares. In applying the treasury
        stock method, options with an exercise price greater than the average
        quoted market price of the common shares are not included in the
        calculation of diluted earnings per share, as the effect is anti-
        dilutive.

    3.  CHANGES IN ACCOUNTING POLICIES

        Effective April 1, 2007, the Corporation adopted two new accounting
        standards that were issued by the Canadian Institute of Chartered
        Accountants ("CICA"):

        -  Handbook Section 1530 - Comprehensive Income

        -  Handbook Section 3855 - Financial Instruments - Recognition and
           Measurement

        As provided under the standards, the comparative interim consolidated
        financial statements have not been restated. There were no
        transitional effects and as a result no adjustments have been
        recorded to deficit as at April 1, 2007.

        Section 1530 - Comprehensive income

        This section describes the reporting and disclosure standards with
        respect to comprehensive income and its components. Comprehensive
        income is composed of net income and other comprehensive income. At
        this time the Corporation has none of the elements that will give
        rise to comprehensive income.

        Section 3855 - Financial instruments - recognition and measurement

        This section establishes standards for recognizing and measuring
        financial assets, financial liabilities and non-financial
        derivatives. It requires that financial assets and liabilities
        including derivatives be recognized on the balance sheet when the
        Corporation becomes a party to the contractual provisions of the
        financial instrument or a non-financial derivative contract. All
        financial instruments should be measured at fair value on initial
        recognition except for certain related party transactions. Fair value
        is the amount at which an item could be exchanged between willing
        parties. Measurement in subsequent periods depends on whether the
        financial instruments have been classified as held for trading,
        available-for-sale, held-to-maturity, loans and receivables, or other
        liabilities.

        The Corporation designated certain financial assets and liabilities
        and adopted the following new accounting policies:

        Cash and cash equivalents

        Cash and cash equivalents are classified as "assets available-for-
        sale" and are measured at fair value at each balance sheet date. Any
        changes in fair value are recognized in net income in the period in
        which the change arises. Fair value is calculated using published
        price quotations in an active market, where applicable. The carrying
        values for cash and cash equivalents at March 31 2007 approximated
        their fair values because of their short terms of maturity; no
        adjustments were made to the opening values.

        Accounts receivable and receivables from related party

        These assets are classified as "loans and receivables" and are
        recorded at amortized cost, which upon their initial measurement is
        equal to their fair value. Subsequent measurements are recorded at
        amortized cost using the effective interest rate method. The carrying
        values for these assets at March 31 2007 approximated their fair
        values because of their short terms of maturity; no adjustments were
        made to the opening values.


        Asset retirement funds

        The asset retirement funds are classified as "assets available-for-
        sale" and are measured at fair value at each balance sheet date. Any
        changes in fair value are recognized in net income in the period in
        which the change arises. Fair value is calculated using the quoted
        prices of South African equities in an active market, with interest
        and dividends recognized in net income; unrealized gains or losses
        are recognized in Other Comprehensive Income. Any equities without
        market quotes are carried using the cost method. The carrying values
        for the asset retirement funds at March 31 2007 approximated their
        fair values; no adjustments were made to the opening values.

        Accounts payable and accrued liabilities and payable to related party

        These liabilities are classified as "other financial liabilities" and
        are initially measured at their fair values. Subsequent measurements
        are recorded at amortized cost using the effective interest rate
        method. The carrying values for these liabilities at March 31 2007
        approximated their fair values; no adjustments were made to the
        opening values.

        Senior unsecured convertible debentures

        The sum of the carrying amounts assigned to the liability and equity
        components of the convertible debenture on initial recognition is
        always equal to the carrying amount that would be ascribed to the
        instrument as a whole. No gain or loss arises from recognizing and
        presenting the components of the instrument separately. The relative
        fair value method is used to determine the value of the option
        directly either by reference to the fair value of a similar option,
        if one exists, or by using an option pricing model. The value
        determined for each component is then adjusted on a pro rata basis to
        the extent necessary to ensure that the sum of the carrying amounts
        assigned to the components equals the amount of the consideration
        received for the convertible debenture.

    4.  BUSINESS ACQUISITION

        Acquisition of Mine Waste Solutions (Proprietary) Limited

        First Uranium, through its wholly-owned subsidiary FUSA,
        acquired all of the issued and outstanding shares of MWS. MWS owns
        and operates an existing gold mine tailings and re-processing
        facility adjacent to First Uranium's Buffelsfontein Tailings Recovery
        Project in South Africa.

        The MWS acquisition closed on June 6, 2007 (effective date of
        acquisition), at which point First Uranium assumed management control
        of MWS. For accounting purposes, net income from MWS operations of
        $1,866,086 for the period from April 1, 2007 to June 6, 2007 has been
        applied to reduce the cost of the MWS acquisition.

        A total consideration of US$32,262,765 was paid for the MWS
        acquisition in the form of an issuance of 3,093,980 First Uranium
        common shares valued at US$31,557,061 and US$705,704 in cash for
        transaction costs.

        The table below sets out the preliminary allocation of the purchase
        price to the assets acquired and liabilities assumed, based on
        preliminary estimates of fair value. Final valuations of the assets
        and liabilities have not been completed. Furthermore, the future
        income tax assets and liabilities are not yet complete due to the
        inherent complexity associated with these valuations. The preliminary
        purchase price allocation is subject to adjustments.


        The acquisition was accounted for by the purchase method of
        accounting and the estimated allocation of fair value to the assets
        acquired and liabilities assumed as at June 6, 2007 was:

                                                Reported            Reported
                                                      at                  at
                                               September   Adjust-   June 30,
                                                30, 2007     ments      2007
                                                 US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Current assets                             4,608         -     4,608
        Asset retirement fund                      1,950         -     1,950
        Property, plant and equipment             40,430    (1,299)   41,729
        ---------------------------------------------------------------------
        Total assets acquired                     46,988    (1,299)   48,287
        ---------------------------------------------------------------------

        Current liabilities                        1,476         -     1,476
        Lease obligations                             28         -        28
        Asset retirement obligation                2,777      (716)    3,493
        Future tax liability                      10,445      (644)   11,089
        ---------------------------------------------------------------------
        Total liabilities assumed                 14,726    (1,360)   16,086
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        Net assets acquired                       32,262        61    32,201
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Current assets include cash and cash equivalents of US$1,248,531 (net
        of transaction costs) (see Note 18.5).

        Although the estimated allocation of fair value to the assets
        acquired and liabilities assumed is subject to changes as additional
        information becomes available, the final allocation is not expected
        to differ materially from the estimated allocation.

        The excess of the purchase consideration over the net book value of
        MWS of US$35.2 million was attributed to the tailings for processing
        of US$29.6 million and US$5.6 million adjustment of the fair value of
        property, plant and equipment obtained with the MWS acquisition less
        the related future tax liability arising on these assets.

    5.  AMOUNTS RECEIVABLE

                                                      September 30  March 31
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Trade receivables                                       38        99
        Value Added Tax and Goods and Services Tax           7,046     1,463
        Prepayments and advances                             1,097       144
        Deposits and guarantees                                  9         7
        ---------------------------------------------------------------------
                                                             8,190     1,713
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    6.  INVENTORIES

                                                      September 30  March 31
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Gold work-in-progress                                1,283         -
        Spares and consumables                                 759       292
        Stockpiles                                             867         -
        ---------------------------------------------------------------------
                                                             2,909       292
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


    7.  PROPERTY, PLANT AND EQUIPMENT

                                                           Accumu-
                                                             lated       Net
                                                           amorti-  carrying
                                                    Cost    zation    amount
        September 30, 2007                       US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Land and buildings                         3,826       (17)    3,809
        Mine infrastructure                       14,555         -    14,555
        Mining assets                             36,175         -    36,175
        Tailings for processing                   29,642      (710)   28,932
        Mining rights                                 28         -        28
        Plant and equipment                       34,727       (84)   34,643
        Motor vehicles                               518       (49)      469
        Office furniture and equipment               108        (9)       99
        Computer equipment and software              428       (61)      367
        ---------------------------------------------------------------------
        Total                                    120,007      (930)  119,077
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

                                                           Accumu-
                                                             lated       Net
                                                           amorti-  carrying
                                                    Cost    zation    amount
        March 31, 2007                           US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Land and buildings                           863         -       863
        Mine infrastructure                        3,710         -     3,710
        Mining assets                             16,942         -    16,942
        Mining rights                                 13         -        13
        Plant and equipment                        9,000         -     9,000
        Motor vehicles                               179        (8)      171
        Office furniture and equipment                56        (1)       55
        Computer equipment and software              205        (5)      200
        ---------------------------------------------------------------------
        Total                                     30,968       (14)   30,954
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Included in the above are mining related assets with a net carrying
        value of US$72.4 million (March 31, 2007: US$29.0 million) related to
        the Ezulwini Mine and US$41.1 million (March 31, 2007:
        US$0.8 million) related to the Buffelsfontein Tailings Recovery
        Project.

        Included in the US$41.1 million net carrying value related to the
        Buffelsfontein Tailings Recovery Project, is US$28.9 million relating
        to the Tailings for processing acquired with the MWS acquisition as
        well as US$5.5 million adjustment of the fair value of property,
        plant and equipment obtained with the MWS acquisition (see Note 4).

        As at September 30, 2007, all property, plant and equipment were
        owned by the Corporation, except for motor vehicles with a net
        carrying value of US$17,854 which are held under capitalized lease
        contracts.

        As at March 31, 2007, all property, plant and equipment were owned by
        the Corporation.

        Ezulwini Mine

        The Ezulwini Mine project involves the recommissioning of an
        underground uranium and gold mining operation located on the
        outskirts of the town of Westonaria in Gauteng Province, South
        Africa. The mine, previously on care and maintenance, is being
        readied for production. The development of the Ezulwini Mine includes
        the rehabilitation and re-engineering of the main mine shaft through
        the installation of a floating steel tower, de-stressing the area
        where the shaft pillar intersects the shaft barrel, and the
        construction of uranium and gold processing facilities.

        EMC purchased certain surface and underground assets relating to the
        Ezulwini Mine for a total consideration of US$7.8 million, effective
        December 22, 2006.

        As part of the Ezulwini acquisition, the related environmental
        rehabilitation trust fund amounting to US$2.7 million (see Note 8 -
        Asset retirement funds) was transferred into the Ezulwini trust fund
        and EMC took over the related environmental rehabilitation provision
        of US$5.1 million (see Note 12 - Asset retirement obligations) as
        determined by the South African Department of Minerals and Energy
        (the "DME"). The difference of US$2.4 million between the
        environmental rehabilitation trust fund and the environmental
        rehabilitation provision has been capitalized as part of mining
        infrastructure.

        On December 8, 2006 the Ezulwini mining right was awarded to Simmer &
        Jack by the DME. On December 20, 2006, EMC and Simmer & Jack entered
        into an agreement (the "Ezulwini Mining Right Agreement") pursuant to
        which Simmer & Jack agreed to take all necessary steps to obtain all
        ministerial approvals in order to effect the transfer of the Ezulwini
        mining right from Simmer & Jack to EMC.

        Buffelsfontein Tailings Recovery Project

        The Buffelsfontein Tailings Recovery Project is a uranium and gold
        tailings recovery operation located in the western portion of the
        Witwatersrand Basin. Hydraulic mining of the tailings dams on the
        Buffelsfontein property will be conducted using high pressure water
        cannons to slurry the tailings which will then be pumped to
        processing plants for the recovery of uranium and gold. Following the
        MWS acquisition (see Note 4), First Uranium commenced hydraulic
        mining of two tailings dams on the MWS property. The Corporation is
        constructing a pipeline between the MWS property and the
        Buffelsfontein property and is also expanding the plant facilities on
        the MWS property.

        In October 2005, Simmer & Jack purchased Buffelsfontein Gold Mines
        Limited ("BGM"), consisting of the Buffelsfontein and
        Hartebeesfontein underground gold mines and mill (the "BGM
        Underground Mine"), out of provisional liquidation (the
        "Buffelsfontein Liquidation Acquisition").

        BGM holds an old order mining right in respect of mining gold at the
        BGM Underground Mine but not for the recovery of the uranium in the
        tailings dams at Buffelsfontein. On June 4, 2007 the DME granted to
        BGM a prospecting right with respect to uranium and other minerals in
        the Buffelsfontein property and tailings dams subject to certain
        conditions which are expected to be satisfied in due course. BGM has
        also filed with the DME an application to convert its old order
        mining right for BGM into a new order mining right. If and when this
        conversion application is approved, BGM intends to file with the DME
        one or more applications (which, together with the foregoing
        conversion application, are collectively referred to herein as the
        "Buffelsfontein Conversion Application") to: (i) amend, with effect
        from the date of conversion, the new order mining right to include
        the authority to mine for uranium underground and for gold, uranium
        and other minerals in respect of the tailings; (ii) divide the new
        order mining right, if granted, into separate new order mining rights
        - one in respect of the mining for gold, uranium and other minerals
        at the BGM Underground Mine and the other, the Buffelsfontein
        Tailings Mining Right, in respect of the mining of the gold, uranium
        and other minerals in the Buffelsfontein tailings dams; and (iii)
        cede the Buffelsfontein Tailings Mining Right, if granted, to MWS, a
        wholly-owned subsidiary of FUSA. The recognition of the BGM
        transaction will only take effect when the above stated conditions
        precedent are met.

        On December 20, 2006, FUSA, BGM and Simmer & Jack entered into an
        agreement (the "Buffelsfontein Tailings and Rights Agreement")
        pursuant to which, among other things: (i) BGM agreed to take all
        necessary steps to obtain all ministerial approvals required for the
        items requested in the Buffelsfontein Conversion Application in order
        to effect the transfer of the Buffelsfontein Tailings Mining Right to
        FUSA as soon as possible; (ii) BGM agreed to sell to FUSA upon FUSA's
        receipt of the Buffelsfontein Tailings Mining Right, the
        Buffelsfontein tailings dams as well as certain property required for
        construction of the proposed processing plants, and grant to FUSA a
        right to the tailings arising from BGM's ongoing mining operations at
        its underground Buffelsfontein mine; and (iii) BGM agreed to grant a
        servitude to FUSA for access and egress to BGM's property to enable
        FUSA, its employees, consultants, agents and subcontractors access
        for purposes of constructing, servicing and operating the uranium and
        gold processing plants and tailings pipelines to be built by FUSA.

        The underground mines that were purchased by Simmer & Jack pursuant
        to the Buffelsfontein Liquidation Acquisition do not form part of
        First Uranium's assets at the Buffelsfontein Tailings Recovery
        Project.


    8.  ASSET RETIREMENT FUNDS

                                                      September 30  March 31
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Balance, beginning of the period                     2,791         -
        Trust fund assumed on acquisition of Ezulwini mine       -     2,686
        Trust fund assumed on acquisition of MWS
         (see Note 4)                                        1,950         -
        Investment income                                       97        82
        Contributions in respect of guarantee                    -       103
        Costs incurred                                           -       (80)
        Foreign exchange differences                           208         -
        ---------------------------------------------------------------------
        Balance, closing of the period                       5,046     2,791
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The asset retirement funds consisting of environmental rehabilitation
        trust funds are under the Corporation's control and are to be used to
        fund the respective mining operation's rehabilitation liabilities.
        Funds in the trust consist primarily of cash held in interest bearing
        accounts, together with investments in South African equities. An
        accredited South African financial institution manages the trust
        funds under the direction of the trustees. The trust deed limits the
        trustees' investments to institutions and investment vehicles as
        referred to in section 37A of the South African Income Tax Act.

    9.  GUARANTEES

        The following guarantees have been issued:

                                                                   Guarantee
                                                                       value
        To                   Regarding                               US$'000
        ---------------------------------------------------------------------
        DME                  Ezulwini environmental rehabilitation
                              provision                                5,427
        Murray and Roberts
         Cementation
         (Pty) Ltd           Ezulwini shaft rehabilitation project     1,445
        Eskom Holdings Ltd   Electricity accounts                      1,228
        ---------------------------------------------------------------------

        The Ezulwini rehabilitation trust funds included in the asset
        retirement funds (see Note 8) have been pledged as security against
        the guarantees.

    10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

                                                      September 30  March 31
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Trade payables                                      10,162     5,302
        Accruals                                             2,928       400
        ---------------------------------------------------------------------
                                                            13,090     5,702
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The trade payables primarily relate to committed purchases for
        capital expansion at the Ezulwini Mine and normal operational
        expenses at the Buffelsfontein Tailings Recovery Project.

    11. SENIOR UNSECURED CONVERTIBLE DEBENTURES

        On May 3, 2007 First Uranium issued senior unsecured convertible
        debentures (the "Debentures") in denominations of Cdn$1,000 in the
        principal amount of US$135,060,000 (Cdn$150,000,000). The interest
        rate on the Debentures is 4.25% per annum. The Debentures pay
        interest semi-annually in arrears on June 30th and December 31st and
        have a maturity date of June 30, 2012. The Debentures are convertible
        at the option of the holder into common shares at any time prior to
        the maturity date at an exchange price of Cdn$16.42 per share.

        The Debentures may not be redeemed by the Corporation prior to
        June 30, 2010. On or after June 30, 2010 and prior to the maturity
        date, the Debentures may be redeemed by the Corporation, in whole or
        in part from time to time, provided that the weighted average trading
        price of the Common Shares on the TSX for the 20 consecutive trading
        days ending five trading days prior to the date on which notice of
        redemption is provided is at least 130% of the exchange price of
        Cdn$16.42.

        First Uranium has the option, subject to regulatory approval, to
        satisfy its obligations to repay the principal amount of the
        Debentures upon redemption or at maturity by issuing and delivering
        that number of freely tradable Common Shares obtained by dividing the
        principal amount of the Debentures by 95% of the weighted average
        trading price of the Common Shares on the TSX for the twenty
        consecutive trading days ending five trading days before the date
        fixed for the redemption or maturity.

        The equity component of the Debentures was valued on issuance at
        US$46,503,825 which is recorded as a separate component of
        shareholders' equity. The conversion option was valued using the
        Black-Scholes pricing model with the following assumptions: Expected
        dividend yield 0%, expected volatility 56%, risk free interest rate
        4.2% and expected life of five years.

        The liability component of the Debentures is being accreted such that
        the liability at maturity will equal the gross proceeds of
        US$135,060,000 (Cdn$150,000,000) less conversions. The amount
        accreted in during the three and six months ending September 30, 2007
        was US$3,307,858 and US$4,378,260 respectively. The cost of issuing
        the Debentures amounted to US$4,498,778.

        As at September 30, 2007, no portion of the Debenture had been
        converted and US$956,679 interest was paid on the Debentures on June
        30, 2007. Interest accrued for the three months ending
        September 30, 2007 amounted to US$1,499,222.

    12. ASSET RETIREMENT OBLIGATIONS

                                                      September 30  March 31
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Balance, beginning of the period                     5,377         -
        Provision assumed on acquisition of the
         Ezulwini Mine                                           -     5,133
        Provision assumed on acquisition of MWS
         (see Note 4)                                        2,777         -
        Accretion expense                                       59       244
        Rehabilitation costs                                  (272)        -
        ---------------------------------------------------------------------
        Balance, closing of the period                       7,941     5,377
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The environmental rehabilitation provision assumed by EMC as part of
        the acquisition of the Ezulwini assets was determined by the DME as
        at November 2006. During March 2007 an independent review was
        performed by Johan Fourie & Associates on the Ezulwini assets
        relating to environmental rehabilitation provision that confirmed the
        provision at March 31, 2007 was sufficient.

        The environmental rehabilitation provision assumed as part of the MWS
        acquisition is to be partly funded by its rehabilitation trust fund
        (see Note 8). During April 2007, an independent valuation of the
        rehabilitation provision was completed by GCS (Proprietary) Limited,
        a water environmental engineering and science consultancy company.
        The provision was based on the estimated net cost to rehabilitate the
        mine.

    13. SHARE CAPITAL

                                       Number of shares
                                    September     March  September     March
                                     30, 2007  31, 2007   30, 2007  31, 2007
    Ordinary shares                      '000      '000    US$'000   US$'000
    -------------------------------------------------------------------------
    Balance, beginning of period      121,686    87,536    206,726     4,176
    Shares issued in public or
     private offering                       -    33,350          -   201,795
    Shares issued in respect of
     acquisition (see Note 4)           3,094         -     31,557         -
    Exercise of stock options              51       800        342       728
    Contributed surplus relating
     to stock options exercised             -         -        215        27
    -------------------------------------------------------------------------
                                      124,831   121,686    238,840   206,726
    Less: Share issue costs                 -         -    (24,053)  (24,053)
    -------------------------------------------------------------------------
    Balance, closing of period        124,831   121,686    214,787   182,673
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        Authorized

        The authorized share capital of First Uranium consists of an
        unlimited number of common shares.

        Issued and outstanding

        On June 1, 2006, 800,000 stock options were exercised for proceeds of
        US$728,480.

        During December 2006, First Uranium issued 33.35 million shares
        pursuant to its initial public offering ("the Offering") at Cdn$7 per
        share for gross proceeds of US$201.8 million;

        On June 6, 2007, First Uranium issued 3,093,980 shares valued at
        US$31,557,061 relating to the acquisition of MWS (see Note 4).

        During the three months ending September 30, 2007, 51,095 stock
        options were exercised at an exercise price of Cdn$7 per share.

    14. CONTRIBUTED SURPLUS - STOCK-BASED COMPENSATION

        The Corporation maintains a stock-option plan (the "Option Plan") for
        employees, officers, directors and for certain consultants who
        provide ongoing support to First Uranium and its subsidiaries. Under
        the Option Plan, options typically are granted for a period of up to
        ten years following the date of grant. The amounts granted usually
        reflect the level of responsibility of the particular optionee and
        his or her contributions to First Uranium.

        The Board of Directors has discretion to set the terms of any vesting
        schedule of each option granted. Except in specified circumstances,
        options are not assignable and non-transferable, and terminate 90
        days after the optionee ceases to be employed or associated with
        First Uranium.

        The terms of the Option Plan further provide that the price at which
        shares may be issued under the Option Plan shall not be less than the
        volume weighted average trading price of the shares on the TSX for
        the five trading days immediately preceding the day the option is
        granted.

        The following table details the movements of contributed surplus
        during the period:

                                                      September 30  March 31
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Balance, beginning of period                         2,460        27
        Transfer to share capital surplus relating
         to stock options exercised                           (215)      (27)
        Stock options granted during the period              1,569     2,460
        ---------------------------------------------------------------------
        Balance, end of period                               3,814     2,460
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Assumptions

        The fair value of shares used to calculate the compensation expense
        was determined as the share price on the grant date adjusted by the
        probability of the recipients remaining employed or associated with
        the Corporation until the vesting date.

        For purposes of stock-based compensation, the fair values of these
        stock options were estimated using the Black-Scholes option pricing
        model with the assumptions used for the grants as follows:

                                            September 30   June 30  March 31
                                                    2007      2007      2007
        ---------------------------------------------------------------------
        Expected dividend yield                       0%        0%        0%
        Expected volatility of the
         Corporation's share price                   63%       56%       85%
        Risk free interest rate - Canadian
         rates                                     4.75%     4.81%     3.90%
        Expected life                            3 years   3 years   3 years
        ---------------------------------------------------------------------

        Due to the short history of First Uranium trading on the TSX, changes
        in the subjective input assumptions can materially affect the fair
        value estimate, and therefore, the existing model does not
        necessarily provide a reliable measure of the fair value of First
        Uranium's stock options.

        During the 2007 fiscal year, 1,223,001 stock options were granted for
        a period of 10 years following the date of the grant and are subject
        to vesting within 2 years from the date of grant.

        During the quarter ending June 30, 2007, and the quarter ending
        September 30, 2007, 60,000 and 56,429 stock options were granted
        respectively for a period of 10 years following the date of the grant
        and are subject to vesting within 2 years from the date of grant.

        The following table is a summary of the Corporation's options granted
        under its stock-based compensation plan:

                                                          Weighted average
                                     Number of options  exercise price (Cdn$)
                                    September     March  September     March
                                     30, 2007  31, 2007   30, 2007  31, 2007
    -------------------------------------------------------------------------
    Outstanding options at
     beginning of period            1,223,001   800,000       7.30      1.00
    Granted during the period         116,429 1,223,001       7.78      7.30
    Exercised during the period       (51,095) (800,000)     (7.00)    (1.00)
    Forfeited during the period       (28,572)        -      (7.00)        -
    -------------------------------------------------------------------------
    Outstanding options at end
     of period                      1,259,763 1,223,001       7.67      7.30
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        The total stock-based compensation recognized for the three and six
        months ending September 30, 2007 was US$663,895 and US$1,568,976,
        respectively. The stock-based compensation expense recognized in the
        statements of operations and deficit was US$663,395 and US$1,433,989
        for the three and six months ending September 30, 2007 (September 30,
        2006: US$nil). During the three months ending September 30, 2007
        $134,987 stock-based compensation was capitalized to the projects. As
        at September 30, 2007, the aggregate unexpensed fair value of
        unvested stock options granted amounted to US$278,275 (March 31,
        2007: US$2,858,354).

        The following table summarizes information about the First Uranium's
        outstanding stock options at September 30, 2007:

                        Options outstanding          Options exercisable
                              Weighted Weighted            Weighted Weighted
                               average  average Number of   average  average
    Exercise       Number of remaining exercise   options remaining exercise
    price            options      life    price  exercis-     price  exercis-
    ranges Cdn$  outstanding    (years)   (Cdn$)     able     (Cdn$)    able
    -------------------------------------------------------------------------
    7.00 to 8.99   1,047,477      9.22     7.04   287,956      9.22     7.05
    9.00 to 11.99    152,286      9.58     9.95    50,761      9.58     9.95
    12.00 to 13.99    60,000      9.66    12.87    20,000      9.66    12.87
    -------------------------------------------------------------------------
                   1,259,763      9.29     7.67   358,717      9.30     7.79
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    15. TAXATION

        Provision for income taxes

        The reconciliation of income taxes attributable to operations
        computed at the statutory tax rates to income tax recovery, using a
        statutory tax rate of 35.72% for the three and six months ending
        September 30, 2007 (three and six months ending September 30, 2007:
        36.12%), is as follows:

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    Net profit (loss) before taxation    3,653       786     9,124    (1,452)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Income tax payable (receivable) at
     statutory rate                      1,305       284     3,259      (525)
    Difference between Canadian rates
     and foreign jurisdiction               18       (95)      104        41
    Change in valuation allowance            -         -      (570)        -
    Adjustment for future tax rate
     difference                          3,667      (170)    4,133       417
    Permanent differences               (4,939)      (19)   (7,087)       67
    Other                                    -         -       212         -
    -------------------------------------------------------------------------
                                            51         -        51         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        Future tax liability
                                                            Sep 30    Mar 31
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Capital assets                                      11,072         -
        Non-capital loss carry-forwards                       (629)   (1,602)
        Share issue costs                                   (8,399)   (6,629)
        Foreign resource expenses                           (1,273)   (1,099)
        Foreign exchange                                    (3,540)     (850)
        ---------------------------------------------------------------------
                                                            (2,769)  (10,180)
        Less: Valuation allowance                           13,214    10,180
        ---------------------------------------------------------------------
                                                            10,445         -
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        As at September 30, 2007, the Corporation had non-capital losses of
        approximately US$381,000 that may be applied against earnings in
        future years.  These losses are expected to expire in 2026.

        Due to uncertainties in the Corporation's ability to utilize its net
        operating losses in all of its operations, the Corporation has
        provided a valuation allowance against those future tax assets for
        which uncertainty exist.

    16. OTHER INCOME

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                       US$'000   US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Other income                       897         -       897         -
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Other income primarily includes fees for sludge pumping services to a
        third party and hostel rental income at the Ezulwini Mine.

    17. FOREIGN EXCHANGE GAINS

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                       US$'000   US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Foreign exchange gains           5,967       663    12,391     1,408
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The Corporation's net assets are held in Canadian dollars ("Cdn$")
        and South African Rand ("ZAR"), while its accounts are presented in
        US dollars. During the reporting periods for FY 2008 and FY 2007, the
        Canadian dollar and South African Rand both appreciated relative to
        the value of the US dollar. The translation of the stronger currency
        assets (Cdn$ and ZAR) into US dollars for reporting purposes resulted
        in the foreign exchange translation gain in the second quarter and
        six months for both FY 2008 and FY 2007. The larger foreign exchange
        translation gain in Q2 2008 and in the first half of FY 2008 reflects
        the significant weakening of the US dollar, particularly with respect
        to the Cdn$, but also relative to the ZAR.

    18. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Basic earnings (loss) per share
     of (US$)                             0.02      0.01      0.07     (0.02)
    is calculated based on net income
     (loss) for the period of (US$'000)  3,051       786     8,522    (1,452)
    and a weighted average number of
     shares outstanding of ('000)      122,475    87,738   122,679    97,522
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Diluted earnings (loss) per share
     of (US$)                             0.02      0.01      0.07     (0.02)
    is calculated based on net income
     (loss) for the period of (US$'000)  3,051       786     8,522    (1,452)
    and a diluted weighted average
     number of shares outstanding
     of ('000)                         122,714    87,738   122,739    97,522
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        The impact of the Debentures issued on May 3, 2007, has been excluded
        from the diluted shares computation because it was anti-dilutive for
        earnings per share purposes.

    19. NOTES TO THE CASH FLOW STATEMENT

    19.1   Non-cash interest income

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                       US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------
    Total interest income               (4,110)      (69)   (8,373)     (139)
    Add back: Cash interest income       4,045         6     8,276         6
    -------------------------------------------------------------------------
                                           (65)      (63)      (97)     (133)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    19.2   Non-cash interest expense

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                       US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------
    Total interest expense               1,502       204     2,459       348
    Add back: Cash interest paid            (3)        -      (960)        -
    -------------------------------------------------------------------------
                                         1,499       204     1,499       348
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    19.3   Decrease in net receivables from related parties

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                       US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------
    Decrease in receivables from
     related parties                       890       457     6,763     1,052
    Increase in payable to related
     parties                               117     2,361       273     4,085
    Add back:
      - Interest income accrued on
       amounts receivable                    -        63         -       133
      - Interest expense accrued on
       amounts payable                       -      (204)        -      (348)
    -------------------------------------------------------------------------
                                         1,007     2,677     7,036     4,922
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    19.4   Additions to property, plant and equipment

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                       US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------
    Total additions to property,
     plant and equipment               (33,382)   (4,629)  (48,459)   (5,219)
    Add back:
      - Accrued capital expenditure      6,778         -     6,778         -
    -------------------------------------------------------------------------
                                       (26,604)   (4,629)  (41,681)   (5,219)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    19.5   Net cash movement on acquisition of MWS

                                      Three months ended    Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
                                       US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------
    Cash and cash equivalents taken
     over on date of acquisition             -         -     1,954         -
    Less: Expenses related to MWS
     acquisition                           (61)        -      (705)        -
    -------------------------------------------------------------------------
                                           (61)        -     1,249         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    20. COMMITMENTS AND CONTINGENCIES

    Commitments

                                                      September 30  March 31
                                                              2007      2007
                                                           US$'000   US$'000
    -------------------------------------------------------------------------
    Capital commitments - Ezulwini Mine                     26,171    14,836
    Capital commitments - Buffelsfontein Tailings
     Recovery Project                                        8,577         -
    -------------------------------------------------------------------------
    Total contractual obligations                           34,748    14,836
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

        The capital commitments are payable within one year.

        The Corporation entered into an agreement with a third party to
        calcine the yellowcake from First Uranium to produce uranium oxide
        packaged for dispatch to converters as of January 2009. Either party
        may terminate the agreement on 18 months notice. The calciner will
        construct a plant with one-half of the capacity of the plant
        dedicated for the processing of the First Uranium yellowcake and a
        road tanker to transport the yellowcake from the First Uranium
        operations to the calciner's operations. First Uranium will pay one-
        half of the construction cost of the calcining plant up to a maximum
        of ZAR15 million and one-half of the cost of the tanker (together
        referred to as the "Loan"). The Loan will be effective January 5,
        2009 and be repaid in monthly instalments over a seven year period
        commencing January 30, 2009. The Loan will bear interest at a rate of
        the prime overdraft rate, as quoted by the South African Reserve
        Bank, plus 2% commencing January 5, 2009. If First Uranium cancels
        the agreement, in absence of a right to cancel the agreement in
        prescribed circumstances, First Uranium will continue to be obligated
        to repay the entire Loan.

        Contingencies

        A loan agreement (the "Aberdeen Loan Agreement") was entered into by
        Simmer & Jack with Aberdeen International Inc. ("Aberdeen") dated
        March 30, 2006 pursuant to which Aberdeen provided to Simmer & Jack a
        loan facility in the amount of US$10 million in respect of the
        financing of Simmer & Jack's acquisition of BGM and the BGM
        Underground Mine. As part of the consideration for the facility,
        Simmer & Jack granted to Aberdeen a net smelter royalty on all of the
        gold assets held by Simmer & Jack through BGM. The royalty as
        determined in the Aberdeen Loan Agreement will be applicable to any
        gold produced by FUSA from tailings acquired from BGM pursuant to the
        Buffelsfontein Tailings and Rights Agreement (see Note 7) and will
        continue until the loan is repaid to Aberdeen, which is expected to
        occur by December 31, 2008 (unless extended by Simmer & Jack to
        December 31, 2010). In addition, pursuant to the Aberdeen Loan
        Agreement, Aberdeen has the sole option, at any time following the
        one year anniversary of the first advance there under to convert the
        amount of the facility outstanding at that time into ordinary shares
        of Simmer & Jack at a conversion rate of ZAR0.80, subject to the
        approval of Simmer & Jack's shareholders. In the event that such
        shareholder approval is not obtained within a reasonable period of
        time, Aberdeen will be entitled to a 1.0% net smelter royalty in
        perpetuity on gold produced by properties held by BGM, including the
        Buffelsfontein Tailings Recovery Project.

        On December 20, 2006, FUSA, Simmer & Jack and Aberdeen entered into
        an arrangement agreement (the "Aberdeen Arrangement Agreement")
        pursuant to which (i) Simmer & Jack confirmed that it will pay to
        Aberdeen the amount of any royalty owing to Aberdeen under the
        Aberdeen Loan Agreement in respect of gold produced from the tailings
        to be acquired by FUSA from BGM pursuant to the Buffelsfontein
        Tailings and Rights Agreement, and (ii) FUSA confirmed that it will
        pay to Simmer & Jack, immediately prior to any payment contemplated
        in (i) above, an amount equal to the amount of any royalty payment to
        be made by Simmer & Jack to Aberdeen in respect of gold produced from
        the tailings to be acquired by FUSA from BGM pursuant to the
        Buffelsfontein Tailings and Rights Agreement.

        Pursuant to the Buffelsfontein Tailings and Rights Agreement dated
        December 20, 2006 among BGM, Simmer & Jack and FUSA, in consideration
        for the cession of the Buffelsfontein Tailings and Mining Right from
        BGM to FUSA as well as certain servitudes, and the right to the
        tailings arising from future underground mining operations by BGM at
        the BGM Underground Mine, FUSA agreed to pay to BGM a royalty of 1%
        plus value added tax of the gross revenue earned by FUSA from the
        sale of uranium, gold, sulphur and other minerals recovered from the
        processing of tailings acquired by FUSA from BGM pursuant to the
        Buffelsfontein Tailings and Rights Agreement.

        In summary, as and when there is production from the tailings
        acquired from BGM pursuant to the Buffelsfontein Tailings and Rights
        Agreement, FUSA will become liable to pay: (i) to Simmer & Jack,
        under the Aberdeen Arrangement Agreement, an amount equal to the
        royalty payable by Simmer & Jack to Aberdeen pursuant to the Aberdeen
        Loan Agreement in respect of the tailings to be acquired from BGM
        pursuant to the Buffelsfontein Tailings and Rights Agreement, and
        (ii) to BGM the above-mentioned 1% royalty pursuant to the terms of
        the Buffelsfontein Tailings and Rights Agreement.

    21. FINANCIAL INSTRUMENTS

    Financial risk factors

        The Corporation's activities expose it to a variety of financial
        risks, including the effects of changes in debt and equity market
        prices, foreign currency exchange rates and interest rates. The
        Corporation's overall risk management program focuses on the
        unpredictability of financial markets and seeks to minimize potential
        adverse effects on the financial performance of the Corporation. The
        Corporation does not hedge its exposure to foreign currency exchange
        risk.

        Risk management carried out by the Corporation is approved by the
        Board of Directors.

        (i)   Foreign exchange and commodity price risk

              The Corporation does not hedge its exposure to foreign currency
              exchange risk nor does it hedge its exposure to commodity price
              fluctuation risk.

        (ii)  Interest rate risk

              The Corporation does not hedge its exposure to interest rate
              risk. Deposits attract interest at rates that vary with prime.
              The Corporation's policy is to manage interest rate risk so
              that fluctuations in variable rates do not have a material
              impact on the statement of operations and deficit.

        (iii) Credit risk

              The Corporation has no significant concentrations of credit
              risk. The Corporation has policies in place to ensure that
              sales of products and services are made to customers with an
              appropriate credit history. The Corporation has policies that
              limit the amount of credit exposure to any one financial
              institution.

        (iv)  Liquidity risk

              Prudent liquidity risk management implies maintaining
              sufficient cash and marketable securities, the availability of
              funding through an adequate amount of credit facilities and the
              ability to close out market positions. The Corporation manages
              liquidity risk through an ongoing review of future commitments
              and credit facilities. Cash flow forecasts are prepared and
              adequate utilized borrowing facilities are monitored.

        Fair value estimation

        The fair value of publicly traded derivatives and trading securities
        is based on quoted market prices at the balance sheet date.

        In assessing the fair value of other financial instruments, the
        Corporation uses a variety of methods and makes assumptions that are
        based on market conditions existing at each balance sheet date.
        Option pricing models and estimated discounted value of future cash
        flows, are used to determine fair value for the remaining financial
        instruments.

        The face value less any estimated credit adjustments for financial
        assets and liabilities with a maturity of less than one year are
        assumed to approximate their fair values. The fair value of financial
        liabilities for disclosure purposes is estimated by discounting the
        future contractual cash flows at the current market interest rate
        available to the Corporation for similar financial instruments.

        The actual disclosed values of the financial instruments all
        approximate the fair values of these instruments.

    22. RELATED PARTY TRANSACTIONS AND COMMITMENTS

                                                      September 30    Mar 31
                                                              2007      2007
        Related party balances                             US$'000   US$'000
        ---------------------------------------------------------------------
        FUSA amount (payable to)/receivable
         from Simmer & Jack                                   (273)    5,079
        First Uranium amount receivable
         from Simmer & Jack                                      -     1,684
        ---------------------------------------------------------------------
                                                              (273)    6,763
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

                                       Three months ended   Six months ended
                                            September 30        September 30
                                          2007      2006      2007      2006
    Related party transactions         US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------
    Shared services fees paid to
     Simmer & Jack                        (459)     (382)     (987)     (806)
    Fees paid to empowerment company       (55)        -      (108)         -
    Interest paid to Simmer & Jack
     by EMC                                  -      (204)        -      (348)
    Interest received from Simmer &
     Jack by FUSA                           57        63        57       133
    -------------------------------------------------------------------------

        On December 20, 2006 First Uranium and Simmer & Jack entered into a
        shared services agreement (the "Shared Services Agreement").

        Pursuant to the terms of the Shared Services Agreement, First Uranium
        may retain certain services to be provided by Simmer & Jack,
        including project management and technical services, cash management
        and investment services, accounting, treasury and financial services,
        corporate secretarial services and human resources and staffing
        services, including payroll and benefits administration, and such
        other services as may be required by First Uranium and which Simmer &
        Jack is able and willing to provide. Subsequent to entering into the
        agreement, the Corporation hired eight senior executives, including
        Mr. Miller, President and Chief Executive Officer, Mr. Fisher,
        Executive Vice President and Chief Operating Officer and Ms. Emma
        Oosthuizen, Senior Vice President and Chief Financial Officer, and
        other staff, resulting in certain of these services being no longer
        required to be provided by Simmer & Jack. The expense for the
        financial year ending March 31, 2007 relates to such services
        received, together with those provided prior to December 2006.

        During the three months ending September 30, 2007, US$458,576
        (September 30, 2006: US$381,678) shared services fees were charged
        respectively by Simmer & Jack of which US$110,247 were capitalized,
        representing services provided in respect of technical services for
        the Ezulwini Mine and the Buffelsfontein Tailings Recovery Project.
        During the six months ending September 30, 2007, US$986,457
        (September 30, 2006: US$806,384) shared services fees were charged by
        Simmer & Jack of which US$578,157 were capitalized. During the three
        and six months ending September 30, 2006 US$298,322 shared services
        fees were capitalized.

        Prior to December 2006, the Corporation shared its premises with
        other companies that had common directors and reimbursed the related
        companies for its proportional share of expenses or was reimbursed by
        the related companies for their proportional share of expenses.
        During Q2 2007, the Corporation was charged US$598,828 for consulting
        services provided by related directors, officers and consultants of
        the Corporation.

        In addition, First Uranium has agreed to reimburse Simmer & Jack with
        respect to 50% of fees (to a maximum of ZAR125,000 per month) that
        Simmer & Jack is required to pay to an empowerment company for
        consulting services regarding transformation, human resources and
        occupational health and safety. BJ Njenje, AX Sisulu and SLB Mapisa,
        shareholders of the empowerment company, are also directors of Simmer
        & Jack.

        Waterpan Mining Consortium ("Waterpan") currently holds a 10%
        shareholding in EMC. On December 20, 2006, Waterpan, FUL and the
        Corporation entered into a purchase agreement (the "Waterpan Purchase
        Agreement") pursuant to which Waterpan agreed to sell its shares in
        EMC to FUL and as consideration for such sale, First Uranium will
        issue 6,141,009 common shares of First Uranium to Waterpan (the
        "Waterpan Shares"). The closing of the transaction is subject to
        approval of the South African Reserve Bank. Pursuant to the Waterpan
        Purchase Agreement, Waterpan has agreed not to sell or transfer 90%
        of the Waterpan Shares for a period of two years from the date of
        issuance. One shareholder of Waterpan is a director of EMC, two other
        shareholders of Waterpan are officers and/or employees of First
        Uranium and EMC.

        On September 27, 2007, the Board approved a housing loan in the
        amount of Cdn$1 million to the President and Chief Executive Officer
        of First Uranium for the purpose of facilitating the relocation of
        his family to Toronto, where the corporate office is located. The
        loan carries interest at 4% payable monthly in arrears, is for a term
        of six years from date of closing of the purchase of a family
        residence and is unsecured. The loan was advanced on October 17,
        2007.

    23. SEGMENTED INFORMATION

        Segmented information is presented in respect of the Corporation's
        business and geographical segments. The primary format business
        segments, is based on the Corporation's management and internal
        reporting structure. Inter-segment reporting is determined on an
        arm's length basis.

        Segment results, assets and liabilities include items directly
        attributable to a segment as well as those that can be allocated on a
        reasonable basis. Unallocated items comprise mainly income earning
        assets and revenue, interest-bearing loans, borrowing and expenses,
        and corporate assets and expenses. Segment capital expenditure is the
        total cost incurred during the period to acquire segment assets that
        are expected to be used for more than one period.

                                         South Africa       Canada
                                      Ezulwini  Buffels-
                                          Mine   fontein
                                                Tailings
                                                Recovery     Corp-
    Three months ended                         Project(*)    orate    Total
     September 30, 2007                US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------

    Revenue                                  -     6,253         -     6,253
    Cost of sales                            -    (5,343)        -    (5,343)
    -------------------------------------------------------------------------
    Profit from mining operations            -       910         -       910
    Other income                           897         -         -       897
    Expenditure
    General, consulting and
     administrative expenditures          (516)      344    (2,348)   (2,520)
    Stock-based compensation              (311)      (78)     (274)     (663)
    Pumping, feasibility and
     rehabilitation costs                 (362)     (359)        -      (721)
    Amortization on property, plant
     and equipment                         (64)       (2)       (3)      (69)
    -------------------------------------------------------------------------
                                        (1,253)      (95)   (2,625)   (3,973)
    -------------------------------------------------------------------------

    Operating profit (loss)               (356)      815    (2,625)   (2,166)
    Interest income                        101        56     3,953     4,110
    Interest expense                        (3)        -    (1,499)   (1,502)
    Accretion expense on convertible
     debentures                              -         -    (3,307)   (3,307)
    Foreign exchange gains (losses)     (1,734)      772     6,929     5,967
    -------------------------------------------------------------------------
    Income (loss) before income taxes   (1,992)    1,643     3,451     3,102
    Provision for income taxes             (25)      (26)        -       (51)
    -------------------------------------------------------------------------
    Net income (loss) for the period    (2,017)    1,617     3,451     3,051
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total assets                        90,918    65,718   232,918   389,554
    Total liabilities                  (13,204)  (15,770) (101,738) (130,712)
    Capital expenditure                (20,988)   (5,608)       (8)  (26,604)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*)Includes the MWS operations


                                         South Africa       Canada
                                      Ezulwini  Buffels-
                                          Mine   fontein
                                                Tailings
                                                Recovery     Corp-
    Three months ended                         Project(*)    orate    Total
     September 30, 2006                US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------

    Expenditure
    General, consulting and
     administrative expenditure            606      (230)     (381)       (5)
    Pumping and feasibility costs          436      (173)        -       263
    -------------------------------------------------------------------------

    Operating profit (loss)              1,042      (403)     (381)      258
    Interest income                          -        63         6        69
    Interest expense                      (204)        -         -      (204)
    Foreign exchange gains (losses)      1,050      (214)     (173)      663
    -------------------------------------------------------------------------
    Profit (loss) before income taxes    1,888      (554)     (548)      786
    Provision for income taxes               -         -         -         -
    -------------------------------------------------------------------------
    Net profit (loss) for the period     1,888      (554)      (548)     786
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total assets                         5,485     1,678      1,676    8,839
    Total liabilities                  (10,793)     (344)    (1,079) (12,216)
    Capital expenditure                 (4,629)        -          -   (4,629)
    -------------------------------------------------------------------------


                                          South Africa       Canada
                                      Ezulwini  Buffels-
                                          Mine   fontein
                                                Tailings
                                                Recovery     Corp-
    Six months ended                           Project(*)    orate    Total
     September 30, 2007                US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------

    Revenue                                  -     8,436         -     8,436
    Cost of sales                            -    (7,598)        -    (7,598)
    -------------------------------------------------------------------------
    Profit from mining operations            -       838         -       838
    Other income                           897         -         -       897
    Expenditure
    General, consulting and
     administrative expenditures          (727)     (192)   (3,571)   (4,490)
    Stock-based compensation              (311)      (78)   (1,045)   (1,434)
    Pumping, feasibility and
     rehabilitation costs                 (709)     (359)        -    (1,068)
    Amortization on property, plant
     and equipment                         (90)       (2)       (5)      (97)
    -------------------------------------------------------------------------
                                        (1,837)     (631)   (4,621)   (7,089)
    -------------------------------------------------------------------------

    Operating profit (loss)               (940)      207    (4,621)   (5,354)
    Interest income                        131       113     8,129     8,373
    Interest expense                        (3)        -    (2,456)   (2,459)
    Accretion expense on convertible
     debentures                              -         -    (4,378)   (4,378)
    Foreign exchange gains (losses)     (2,379)    1,255    13,515    12,391
    -------------------------------------------------------------------------
    Income (loss) before income taxes   (3,191)    1,575    10,189     8,573
    Provision for income taxes             (25)      (26)        -       (51)
    -------------------------------------------------------------------------
    Net income (loss) for the period    (3,216)    1,549    10,189     8,522
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total assets                        90,918    65,718   232,918   389,554
    Total liabilities                  (13,204)  (15,770) (101,738) (130,712)
    Capital expenditure                (35,338)   (6,325)      (18)  (41,681)
    -------------------------------------------------------------------------

    (*)Includes the MWS operations


                                           South Africa       Canada
                                      Ezulwini  Buffels-
                                          Mine   fontein
                                                Tailings
                                                Recovery     Corp-
    Six months ended                           Project(*)    orate    Total
     September 30, 2006                US$'000   US$'000   US$'000   US$'000
    -------------------------------------------------------------------------

    Expenditure
    General, consulting and
     administrative expenditures          (188)     (486)     (703)   (1,377)
    Pumping and feasibility costs       (1,046)     (228)        -    (1,274)
    -------------------------------------------------------------------------

    Operating loss                      (1,234)     (714)     (703)   (2,651)
    Interest income                          -       133         6       139
    Interest expense                      (348)        -         -      (348)
    Foreign exchange gains (losses)      2,160      (568)     (184)    1,408
    -------------------------------------------------------------------------
    Profit (loss) before income taxes      578    (1,149)     (881)   (1,452)
    Provision for income taxes               -         -         -         -
    -------------------------------------------------------------------------
    Net profit (loss) for the period       578    (1,149)     (881)   (1,452)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Total assets                         5,485     1,678     1,676     8,839
    Total liabilities                  (10,793)     (344)   (1,079)  (12,216)
    Capital expenditure                 (5,219)        -         -    (5,219)
    -------------------------------------------------------------------------
    





For further information:

For further information: Bob Tait, VP Investor Relations, at (416)
342-5639, or bob@firsturanium.com

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