First Uranium updates MWS technical report

    
            All amounts are in US dollars unless otherwise noted.

                     MWS Updated NPV (8%) $211M, IRR 34%
                     -----------------------------------
    

TORONTO and JOHANNESBURG, March 22 /CNW/ - First Uranium Corporation (TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or the "Company") has updated the technical report for the Mine Waste Solutions tailings recovery operation ("MWS") in South Africa.

The updated technical report was developed as a consequence of the uncertainties and delays precipitated by the withdrawal of the environmental authorization for the MWS tailings storage facility ("TSF") and the resultant financial pressure placed on the Company. On February 25, 2010, the Company announced the reinstatement of the environmental authorization. Also, on March 12, 2010, the Company announced a refinancing package of up to $150 million. The economic model for the updated technical report was used to calculate the peak funding requirements disclosed in regard to the financing discussed above.

The updated economic valuation for MWS yields a net present value ("NPV") of $211 million, at an 8% discount rate, and an internal rate of return ("IRR") of 34.2% based on the following broad assumptions:

    
    -  Operations being scaled back from the two currently operating gold
       plants to one gold plant at the end of March 2010 with an expected
       throughput of 600,000 tonnes per month, which will enable use of the
       existing tailings deposition site, MWS 5 dam, until December 2011;
    -  Construction of the new TSF commencing in November 2010 for
       commissioning by May 2011;
    -  Restart of the second gold plant and the commissioning of the third
       gold plant in May 2011 at an expected throughput of 1.83 million
       tonnes per month;
    -  Operation of the uranium plant modules and all three flotation plants
       commencing in August 2011; and
    -  Construction of the pressure leach circuit of the uranium plant by
       April 2013, which is expected to increase gold recovery from 58% to
       68% and uranium leach efficiency from 75% to 82%.
    

The updated technical report for MWS has been filed on SEDAR.

Economic and Commodity Price Assumptions

The following tables show the Company's commodity price assumptions for March 2008 (the date of the previous technical report for MWS) and March 2010 (the current assumptions). The March 2010 assumptions are based on an average nominal consensus forecast from equity research analysts, adjusted downward by the US inflation rate for the period covering the construction of the projects.

    
    Table 1: MARCH 2008 ECONOMIC AND COMMODITY PRICE ASSUMPTIONS
    -------------------------------------------------------------------------
    Technical report March 2008     2010   2011   2012   2013   2014   2015
    -------------------------------------------------------------------------
    Gold (US$/oz)                    907    874    797    711    711    711
    -------------------------------------------------------------------------
    Uranium (US$/lb)                  92     79     75     50     50     50
    -------------------------------------------------------------------------
    ZAR/US$                         7.36   7.50   7.45   7.57   7.57   7.57
    -------------------------------------------------------------------------


    Table 2: MARCH 2010 ECONOMIC AND COMMODITY PRICE ASSUMPTIONS
    -------------------------------------------------------------------------
    Technical report March 2010     2010   2011   2012   2013   2014   2015
    -------------------------------------------------------------------------
    Gold (US$/oz)                   1105   1080   1129   1011    984    820
    -------------------------------------------------------------------------
    Uranium (US$/lb)                  42     50     63     63     63     56
    -------------------------------------------------------------------------
    ZAR/US$                         7.57   7.55   8.44   8.52   8.53   9.33
    -------------------------------------------------------------------------
    

Revised Project Economics

The following table summarizes the revised mine plan for MWS. More details of the project economics from the financial models upon which the information in Table 3 is based, will be posted to the Company's web site (www.firsturanium.com) in due course.

    
    Table 3: REVISED PROJECT ECONOMICS FOR MWS
    -------------------------------------------------------------------------
                                                     March 2008   March 2010
    -------------------------------------------------------------------------
    Life of mine average co-product operating costs
    -------------------------------------------------------------------------
    Gold operating cost/tonne reclaimed ($/tonne)         $2.12        $2.53
    -------------------------------------------------------------------------
    Uranium operating cost/concentrate
     tonne ($/tonne)                                      $9.82       $17.25
    -------------------------------------------------------------------------
    Uranium cash costs ($/pound)                            $22          $33
    -------------------------------------------------------------------------
    Gold cash cost ($/ounce)                               $347         $427
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Capital expenditures ($ millions)                      $241         $188
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Average annual life of mine production
    -------------------------------------------------------------------------
    Uranium (pounds)                                  1,317,000      916,000
    -------------------------------------------------------------------------
    Gold (ounces)                                       130,000      109,000
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    NPV ($ millions)                                       $419         $211
    -------------------------------------------------------------------------
    IRR                                                     75%          34%
    -------------------------------------------------------------------------
    Notes:
    1. Co-product costs assume that operating cash costs are split in
       proportion to the revenue earned from each product.
    2. NPV is calculated using a real discount rate of 8%.
    3. Uranium operating cost/concentrate tonne has increased compared to the
       March 2008 technical report due to a general increase in operating
       costs, mainly reagents, water, power and general administration costs.
    4. Uranium operating cost/lb has increased due to the aforementioned
       operating cost increase as well as fewer uranium pounds recovered due
       to an average of 4% lower resource grade compared to the 2008
       technical report, as well as 94% MCF applied to the uranium resource
       based on reconciled modifying factors as well as the average pressure
       leach theoretical leach recovery being reduced from 90% to 81.75% due
       to hybrid pressure leach circuit.
    5. Fewer concentrate tonnes get processed as the third uranium module
       will not be commissioned resulting in the average life of mine mass
       pull being reduced from 13% to 8% when processing 3 streams.
    6. Gold operating cost increase is in line with annual RSA inflation rate
       in the years 2008 through 2010.
    7. The average annual life of mine production reflects the longer mine
       life which has been extended from 2023 to 2026.
    8. The effective date of the technical report is January 1, 2010.
    

MWS Water Use License

MWS held a water license (No. 23050323), which was valid until October 20, 2008. As required in terms of the National Water Act 1998, MWS submitted an amended Integrated Water Use License ("IWULA") application to the Department of Water and Environment ("DWAE") in January of 2009. The application incorporated all defined 'water uses' associated with the extended activities of MWS as addressed in the EMP. The application submitted was evaluated by the regional office of DWAE with a positive recommendation and forwarded to the national office of DWAE for processing and issuing. Preliminary indications are that the license should be issued in May 2010.

Estimated Mineral Reserves

The differences between the estimated Mineral Reserves declared in March 2008 and the updated declaration are due to the following factors:

    
    1.  Tonnage and gold content differences for Buffels 2 dam due to
        depletion.
    2.  Additional tonnage for the Buffels 3 dam due to the updated
        allocation of the Reserve between Buffels 3 and Buffels 4 where the
        two dams abut.
    3.  Lower tonnage and gold content on Buffels 4 due to depletion, as well
        as the updated allocation of the Reserve between Buffels 3 and
        Buffels 4 dams.
    4.  Conversion of Probable to Proven Reserves for Harties 1 and Harties 2
        dams and an updated allocation of the Reserve between these two dams
        where they abut.
    5.  Tonnage differences on Harties 5 and 6 dams due to the updated
        allocation of the Reserve between these two dams where they abut.
    6.  Lower tonnages for Buffels 5 dam as a result of a much more detailed
        survey.
    7.  Increased tonnage for MWS 4 dam as a result of more accurate
        perimeter modelling by means of sub-celling in the resource models.
    8.  Increased tonnage on MWS 5 deposited from the re-mining of the
        Buffels 2, Buffels 4, MWS 2 and NKGE dams.
    9.  The additional gold content on the MWS 5 dam is also attributed to
        this additional material that was added to the dam.
    10. Gold mine call factor ("MCF") of 106% was applied to all Resources
        converting to Reserves other than the Buffels 2 and Buffels 4 dams
        where the actual reconciliation to the end of December 2010 was
        applied. A tonnage factor of 97% was applied to all Resource tonnage
        in the process of converting to Reserves. The MCF applied for uranium
        based on historical reconciliation was 94%.
    11. The gold content variance for MWS 4 dam is due to the entire dam
        having been converted to Reserves in 2010, whereas only the Domain 2
        portion of MWS 4 was converted in 2008, with the other portion having
        been considered below the pay limit.


    Table 4: MWS MARCH 2008 MINERAL RESERVES STATEMENT
    -------------------------------------------------------------------------
                              Tonnage         Gold              Uranium
                         ----------------------------------------------------
          Surface           Reclaimed     Grade   Content     Grade  Content
    -------------------------------------------------------------------------
    Category  Dam                (Mt)     (g/t)  (000 ozs)   (kg/t) (000 lbs)
    -------------------------------------------------------------------------
    Proven    Buffels 2          23.2      0.36       267      0.09    4,608
    -------------------------------------------------------------------------
              Buffels 3          24.9      0.30       280      0.10    5,437
    -------------------------------------------------------------------------
              Buffels 4          14.1      0.37       170      0.10    3,172
    -------------------------------------------------------------------------
              Harties 5          23.9      0.21       163      0.06    3,261
    -------------------------------------------------------------------------
              Harties 6          13.3      0.20        85      0.06    1,850
    -------------------------------------------------------------------------
    Total Proven Mineral
     Reserve                     99.4      0.30       965      0.08   18,327
    -------------------------------------------------------------------------
    Probable  Buffels 5          47.6      0.24       360      0.06    6,616
    -------------------------------------------------------------------------
              Harties 1          74.4      0.26       624      0.06   10,166
    -------------------------------------------------------------------------
              Harties 2          43.8      0.26       369      0.06    5,789
    -------------------------------------------------------------------------
              Harties 7           1.3      0.27        11      0.16      465
    -------------------------------------------------------------------------
              NKGE                1.2      0.50        19      0.18      472
    -------------------------------------------------------------------------
              MWS 4              17.4      0.28       157      0.13    5,119
    -------------------------------------------------------------------------
              MWS 5              40.3      0.31       402      0.09    7,811
    -------------------------------------------------------------------------
    Total Probable Mineral
     Reserve                    226.0      0.27     1,941      0.07   36,440
    -------------------------------------------------------------------------
      Grand Total               325.4      0.28     2,907      0.08   54,767
    -------------------------------------------------------------------------
    Notes:
    1. Mineral Reserves are quoted as fully diluted delivered to plant
       estimates.
    2. Based on assumptions of a gold price of $711 per ounce, a uranium
       price of $49 per pound and ZAR/$ exchange rate of 7.57, which are
       long-term forecast figures.
    3. A Reserve COG of 0.28g/t gold equivalent was used. Uranium grades were
       converted to gold equivalent using a conversion factor of 1 gram per
       tonne, which equals 0.503 kilograms per tonne on an extracted metal
       basis.
    4. Rows and columns may not add exactly due to rounding.
    5. The average life of mine gold recovery applied was 68% and 34%
       effective recovery for uranium.


    Table 5: MWS JANUARY 2010 MINERAL RESERVES STATEMENT
    -------------------------------------------------------------------------
                              Tonnage         Gold              Uranium
                         ----------------------------------------------------
          Surface           Reclaimed     Grade   Content     Grade  Content
    -------------------------------------------------------------------------
    Category  Dam                (Mt)     (g/t)  (000 ozs)   (kg/t) (000 lbs)
    -------------------------------------------------------------------------
    Proven    Buffels 2          10.4      0.41       137      0.08    1,940
    -------------------------------------------------------------------------
              Buffels 3          29.1      0.39       362      0.10    6,171
    -------------------------------------------------------------------------
              Buffels 4          11.6      0.35       131      0.09    2,376
    -------------------------------------------------------------------------
              Harties 1          80.7      0.26       680      0.07   11,600
    -------------------------------------------------------------------------
              Harties 2          32.3      0.21       216      0.07    4,779
    -------------------------------------------------------------------------
              Harties 5          22.2      0.21       153      0.06    3,172
    -------------------------------------------------------------------------
              Harties 6           9.8      0.23        73      0.07    1,455
    -------------------------------------------------------------------------
    Total Proven Mineral
     Reserve                    196.0      0.28     1,751      0.07   31,494
    -------------------------------------------------------------------------
    Probable  Buffels 5          37.7      0.28       335      0.07    5,512
    -------------------------------------------------------------------------
              MWS 4              26.0      0.25       209      0.10    5,554
    -------------------------------------------------------------------------
              MWS 5              60.9      0.30       578      0.09   11,488
    -------------------------------------------------------------------------
              Harties 7           1.3      0.29        12      0.16      439
    -------------------------------------------------------------------------
              NKGE                0.9      0.60        17      0.18      336
    -------------------------------------------------------------------------
    Total Probable Mineral
     Reserve                    126.8      0.28     1,150      0.08   23,328
    -------------------------------------------------------------------------
      Grand Total               322.8      0.28     2,901      0.08   54,822
    -------------------------------------------------------------------------
    Notes:
    1. Mineral Reserves are quoted as fully diluted delivered to plant
       estimates.
    2. Based on assumptions of a gold price of $820 per ounce, a uranium
       price of $56 per pound and ZAR/$ exchange rate of 9.33, which are
       long-term forecast figures.
    3. A Reserve COG of 0.221g/t to 0.300g/t gold equivalent was used.
       Uranium grades were converted to gold equivalent using a conversion
       factor of 1 gram per tonne which equals 0.650 kilograms per tonne on
       an extracted metal basis.
    4. The Mineral Reserves gold ounces exceed the Mineral Resource gold
       ounces due to the use of a 106% mine call factor.
    5. Rows and columns may not add exactly due to rounding.
    6. The average life of mine gold recovery applied was 65.38% and 23.14%
       for uranium. Gold recovery achieves steady state from April 2013
       onward at 68% when pressure leach incepts.
    7. March 2010 Resources have considered depletion from Buffels dam 2,
       Buffels dam 4 and NKGE for 2008 and 2009.
    

For more information, see the Technical Report on the Mine Waste Solutions Tailings Recovery Project, North West Province, South Africa, dated 1 January 2010 and filed on SEDAR on 19 March 2010.

Technical Disclosure

All technical disclosure in this news release relating to the Mine Waste Solutions tailings recovery project, formerly named the Buffelsfontein tailings recovery project, has been prepared in accordance with National Instrument 43-101 ("NI 43-101") by Daan van Heerden, B.Sc. (Min. Eng.), M.Comm. (Bus.Admin), Charles Muller, B.Sc, Hons. (Geol) Pr.Sci.Nat, and Johan Odendaal, B.Sc. (Geol), B.Sc. (Hons) (Min. Econ.), M.Sc. (Min.Eng.), Pr.Sci.Nat. all of Minxcon Pty Ltd. ("Minxcon"), each of whom is a "qualified person" under NI 43-101 and is independent of First Uranium.

About First Uranium Corporation

First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on its goal of becoming a significant low-cost producer of uranium and gold through the expansion of the underground development to feed the new uranium and gold plants at the Ezulwini Mine and through the expansion of the plant capacity of the Mine Waste Solutions tailings recovery facility, both operations situated in South Africa.

Cautionary Language Regarding Forward-Looking Information

This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release including, without limitation, statements regarding the refinancing transaction, capital project timelines, operating and capital cost estimates, reserve and resource estimates, metal prices, exchange rates, discount rates, the timing and receipt of required permits, the timing and amount of estimated future production, processing and development plans and future plans and objectives of First Uranium are forward-looking statements (or forward-looking information) that involve various estimates, assumptions, risks and uncertainties. For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form and Management's Discussion and Analysis on file with the Canadian provincial securities regulatory authorities on SEDAR at www.sedar.com. No assurance can be given that the refinancing transaction will be concluded. These forward-looking statements are made as of the date hereof and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein, except in accordance with applicable securities laws.

SOURCE First Uranium Corporation

For further information: For further information: Bob Tait, Vice President, Investor Relations at bob@firsturanium.ca, (416) 342-5639 (office) or (416) 558-3858 (mobile), 1240-155 University Avenue, Toronto, ON, M5H 3B7

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