First Uranium acquires Mine Waste Solutions (Proprietary) Limited to complement the Buffelsfontein Tailings Recovery Project in South Africa


    TORONTO, April 4 /CNW/ - First Uranium Corporation (FIU:TSX, FUM:JSE,
CA33744R1029:ISIN) ("First Uranium" or "the Company") today announced that the
Company, through its wholly-owned subsidiary, First Uranium (Proprietary)
Limited, had entered into a binding agreement to acquire Mine Waste Solutions
(Proprietary) Limited ("MWS") and its subsidiary Chemwes (Proprietary) Limited
("Chemwes"), which owns and operates an existing gold mine tailings and
re-processing facility adjacent to the Company's Buffelsfontein Project in
South Africa.
    First Uranium has agreed to acquire all MWS shares for the equivalent of
200 million South African Rand (approximately US$27.5 million) in First
Uranium shares. The acquisition is subject to a number of conditions
including, among others, the satisfactory completion by the Company of a due
diligence review of MWS (which is expected to be completed by April 13, 2007)
and the receipt of required approvals from South African competition
authorities, the Toronto Stock Exchange, the JSE Limited, the investment
committee of the Industrial Development Corporation of South Africa Limited,
the South African Reserve Bank and the South African Department of Minerals
and Energy. Subject to completion of the due diligence and receipt of the
requisite approvals, the transaction is expected to close no later than August
31, 2007 with effect as of April 1, 2007. The number of First Uranium shares
to be issued will be approximately 3.2 million at CDN$10.20, the fifteen
trading day volume weighted average price of First Uranium's shares traded on
the TSX up to and including March 30, 2007.
    All shareholders of MWS have agreed to tender their MWS shares to the
offer. On closing of the acquisition, First Uranium will assume management
control of MWS and its wholly-owned subsidiary, Chemwes.

    The MWS assets to be acquired include:
    -   a gold plant which, based on its actual operating performance over
        the last three years, has a proven capacity for processing
        570,000 tonnes per month;
    -   three tailings dams from which gold and uranium can be recovered, one
        of which is actively being depleted and another with sufficient
        disposal area for several years of tailings deposition; and
    -   rock dumps.

    The acquisition of the MWS gold plant will eliminate the necessity of
building the first gold plant planned for the Buffelsfontein Project, reducing
both the time and capital required to begin gold production. The combination
of the reduction in capital, the changes to the production schedule and the
additional cash flow from re-processing of MWS tailings will increase the
total Buffelsfontein Project net present value ("NPV") to US$240 million, an
accretive NPV improvement of US$29 million from the US$211 million originally
planned. In addition, the Buffelsfontein Project's internal rate of return
will improve from 39% to 59%. The accretion analysis is based upon commercial
metrics of US$500 per ounce gold, US$40 per pound uranium, an exchange rate of
7.4 South African Rand to the U.S. dollar and a discount rate of 8%.
    "This acquisition is very positive for our Buffelsfontein Project as we
will be able to begin a significant amount of our gold production one year
ahead of schedule, establish a lower cost for our first gold plant module, and
begin the first phase of uranium production at twice the rate previously
contemplated, thus achieving peak uranium production eight months ahead of
schedule," said Gordon Miller, President and Chief Executive Officer of First
Uranium. "This fits exactly into our strategy of bringing our two near-term
projects into production as quickly as possible."

    Revised Project Development and Production Schedule

    With regard to gold production, the acquisition of MWS will enable First
Uranium to begin to process approximately 500,000 tonnes per month, slightly
lower than the plant's designed capacity due to restrictions to the rate of
tailings deposition. In the first year the Company expects to recover
approximately 43,000 ounces of gold at a cash cost of $317 per ounce including
royalties. First Uranium intends to process MWS tailings with the highest gold
grade first. By the end of 2007, the Company also expects to complete a
pipeline from the Buffelsfontein site to the MWS gold plant to process
tailings with the highest gold grade available from select areas of the
Buffelsfontein site. First Uranium expects to increase the gold plant's
average monthly processing capacity to 1,200,000 tonnes per month by November
2008, with the construction of a 600,000 tonnes per month plant module.
    With regard to uranium production, the Company's original plan had been
to build a uranium plant at the Buffelsfontein site by June 2008. With this
acquisition, the Company now plans to build a uranium plant by November 2008
with twice the previously contemplated capacity beside the MWS gold plant. The
addition of MWS tailings deposition capacity will enable First Uranium to
process 40,000 tonnes of tailings per day immediately upon completion of the
uranium plant compared to its original plan of processing 20,000 tonnes per
day until June 2009 and then increasing its processing to 40,000 tonnes per
day. The acquisition will also allow the Company to move forward by eight
months the construction of the third plant module, which is designed to
increase processing to 60,000 tonnes per day.
    The acquisition of MWS is expected to increase the life of the
Buffelsfontein Project by 3 years from 14 to 17 years.

    The figure below depicts the revised planned production as a result of
the MWS acquisition:

    The resource table below reflects the contribution of MWS resources to
the Buffelsfontein Project.

                                          Gold   Uranium    Cont.     Cont.
                              Tonnes     Grade    Grade     Gold     Uranium
                             (t 000s)    (g/t)     (%)    (oz 000s) (lb 000s)
     Measured                115,064      0.31    0.0083     1,144    21,130
     Indicated               165,953      0.31    0.0059     1,628    21,603
    Total Measured &
     Indicated               281,017      0.31    0.0069     2,772    42,733
      Buffelsfontein           1,740      0.54    0.0243        30       932
      MWS                     18,128      0.32    0.0120       188     4,786
      Combined                19,868      0.34    0.0131       218     5,718
    1.  CIM definitions were followed for mineral resources.
    2.  Mineral resources that are not mineral reserves do not have
        demonstrated economic viability.
    3.  A zero grade cutoff was used.
    4.  Rows and columns may not add exactly due to rounding.
    5.  MWS resources reflected in this table include all of Dam 2 and the
        lower portion of Dam 4, as the top 12 metres of Dam 4 contains an
        uneconomic gold grades, which the Company will remove.

    Review of Technical Disclosure

    All technical disclosure in this news release relating to the
Buffelsfontein Project and the MWS acquisition has been reviewed and approved
by R. Dennis Bergen, P.Eng and Wayne Valliant P.Geo of Scott Wilson Roscoe
Postle Associates Inc. ("Scott Wilson RPA"), each of whom is a "qualified
person" under National Instrument 43-101 ("NI 43-101") and is independent of
First Uranium. In accordance with NI 43-101, the Company will file a revised
technical report for the Buffelsfontein Project, reflecting the impact of the
MWS acquisition, within 45 calendar days of this release.
    The MWS resources disclosed in this news release are from MWS Dams 2 and
4. Scott Wilson RPA has reviewed the MWS production records and mineral
resource reconciliation for Dam 2 and considers the remaining tailings
reported by MWS as inferred mineral resources as per NI 43-101.
    Scott Wilson RPA has reviewed an internal mineral resource report by MWS
on Dam 4. The mineral resource estimate was based on appropriately spaced
drill holes and used a computerized block model methodology. In the opinion of
Scott Wilson RPA the data density and methodology was suitable for the mineral
resource estimate of the tailings. However, based on the requirement for
additional data verification, the Dam 4 mineral resources have been classified
as inferred as per NI 43-101.
    MWS also has Dam 5, which has not been analyzed sufficiently for use in
the technical analysis disclosed in this news release and which currently
serves as a tailings deposit area. If and when the Company is able to complete
sufficient work to categorize Dam 5 as a resource pursuant to NI 43-101, the
Company expects the conversion of Dam 5 to resources would result a further
extension of the life of the Buffelsfontein Project an additional 3 years from
17 to 20 years.
    The economic analysis contained in this news release is based, in part,
on inferred resources, and is preliminary in nature. Inferred resources are
considered too geologically speculative to have mining and economic
considerations applied to them and to be categorized as Mineral Reserves.
There is no certainty that the reserves development, production and economic
forecasts contained in this news release and which will be the subject of a
preliminary assessment, will be realized.

    Update on other Strategic Discussions

    First Uranium's primary goal continues to be to bring its two uranium and
gold projects, Buffelsfontein and Ezulwini, into production. The acquisition
of MWS complements this goal by bringing the Buffelsfontein Project's
production forward and adds value to the Company and its shareholders. In
addition, the Company continually evaluates further acquisitions, joint
ventures and/or development opportunities relating to strategically located
uranium prospects and properties in Southern Africa, which have the potential
to add additional growth. One such potential opportunity could be Harmony Gold
Mining Company Limited's Randfontein gold mine, which is adjacent to First
Uranium's Ezulwini underground mine project, in respect of which some
preliminary discussions have been held. There can be no assurance that any
agreement or transaction might be completed with Harmony.
    It was reported in the South African media on March 30, 2007 that the
Company could be a possible takeover target for other producers. Neither the
Company nor its 67% shareholder, Simmer and Jack Mines, Limited, is in any
discussions with third parties regarding any possible takeover transaction
with respect to First Uranium.

    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 potential production rates and operating costs,
processing and development plans, estimated net present values and future
plans and objectives of First Uranium are forward-looking statements (or
forward-looking information) that involve various risks and uncertainties.
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.
    In making the forward-looking statements in this news release, the
Company has applied several material assumptions, including but not limited
to, the assumption that:

    -   the integrated operation of the Buffelsfontein Project and the MWS
        gold processing plant is viable operationally and economically;
    -   metal prices, exchange rates and discount rates applied in the
        accretion analysis are achieved;
    -   regulatory approvals will be obtained within the expected time frame;
    -   production capacity and mineral resource estimates are accurate.

    Important factors could cause actual results to differ materially from
First Uranium's expectations. Such factors include, among others: the actual
results of the planned feasibility studies on First Uranium's projects; the
actual results of additional exploration and development activities at First
Uranium's projects; the timing and amount of estimated future production and
the costs thereof; capital expenditures; the costs and timing of the
development of First Uranium's projects; the availability of any additional
capital required to bring future projects into production; conclusions of
economic evaluations; changes in project parameters as plans continue to be
refined; future prices of commodities; the failure of plant, equipment or
processes to operate as anticipated; accidents; labour disputes; delays in
obtaining governmental approvals, permits or financing or in the completion of
development or construction activities; delays in closing the MWS acquisition;
delays or complications relating to the re-engineering at the MWS site and the
integration of the MWS assets into First Uranium's development plans; the
actual recovery rates of the MWS gold plant; currency fluctuations, as well as
those factors discussed under "Risk Factors" in First Uranium's final
prospectus dated December 12, 2006 as filed with securities regulatory
authorities in Canada. Although First Uranium has attempted to identify
important factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated, estimated or
    These forward-looking statements are made as of the date hereof and there
can be no assurance that such forward-looking statements will prove to be
accurate as actual 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.

    Conference Call

    An investor conference call with regard to the acquisition of MWS has
been set up for Wednesday, April 4 at 10h00 (16h00 in South Africa). The
following numbers have been set up for participants on this conference call:

    Toronto         416 644 3420
    Toll free       1 800 594 3615
    South Africa    09 800 0022 8228

    A replay of this call will be available for one week at the following

    Toronto         416 640 1917
    Toll free       1 877 289 8525

    A passcode of 21225860 (followed by the number sign) is required to
    access the replay.

    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 underground 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

For further information:

For further information: Gordon Miller, President and Chief Executive
Officer, at +27 11 830 0390; or Bob Tait, VP Investor Relations, at (416)

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