First Uranium reports results for Q1 2010 - Receives approval of "new order" mining rights for its mine waste solutions operation

            All amounts are in US dollars unless otherwise noted.

    For a full discussion of financial and operating results, the Financial
    Statements and Management Discussion & Analysis, please see the Company's
      website, under "Investor Centre/Interim Reports"

    TORONTO and JOHANNESBURG, Aug. 14 /CNW/ - First Uranium Corporation
(TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company")
today announced its financial results for the three-month period ended June
30, 2009 ("Q1 2010"). The Company continues to advance the construction of its
third gold plant and first two uranium plants at its Mine Waste Solutions
tailings recovery operation ("MWS") and accelerate the underground development
at its Ezulwini Mine to feed its completed gold and uranium plants. The
Company's investments to increase uranium and gold production have contributed
to a net loss for the quarter of $33.3 million or $0.22 per share. The
substantial increase in the consolidated loss was primarily due to the gross
loss incurred at the Ezulwini Mine, which is continuing to ramp up its
underground development to fill its underutilized uranium and gold plants,
combined with the significant foreign exchange loss on translation during the
    Gordon Miller, First Uranium's President and Chief Executive Officer
commented, "Significant to our future success was the progress made regarding
necessary permits and approvals related to our MWS operation. In July 2009, we
received formal approval from South Africa's North West Province Department of
Agriculture, Conservation and Environment for the new tailings deposition
site, thus enabling MWS to proceed on schedule with construction of this
tailings facility for completion in Q1 2011. In addition, the Department of
Mining and Minerals granted MWS a 'new order' mining right, which signals
their approval of our Environmental Management Plan and our Social and Labour
Plan, thus establishing a firm foundation for the future of this operation."
    "In turn, the Ezulwini Mine has recently completed its
currently-identified capital projects and is accelerating underground
development to drive increases in the production of uranium and gold. Ezulwini
is expected to turn cash positive in Q3 2010," continued Mr. Miller.

    During Q1 2010, First Uranium achieved the following milestones:
    -  treated a total of 1.8 million tonnes of tailings through the MWS gold
       plant at an average recovered grade of 0.18 grams of gold per tonne of
       ore, producing a total of 11,007 ounces of gold at a Cash Cost of
       $338 per ounce (as defined in the notes to the Consolidated Results of
       Operations table on the next page);
    -  milled 92,468 tonnes of ore from the Ezulwini Mine at an average
       recovered grade of 1.28 grams of gold per tonne of ore, producing
       3,791 ounces of gold;
    -  dispatched the first batch of ammonium diuranate ("yellowcake") from
       the Ezulwini Mine to a third party calcining facility;
    -  completed final commissioning of the first of two streams of the
       Ezulwini Mine's 100,000 tonne per month uranium plant;
    -  entered into a strategic supplier contract with Petronex (Pty) Ltd for
       the guaranteed supply of sulphuric acid to MWS for a 36-month period;
    -  entered into a letter of intent to supply Eskom with uranium for their
       Koeberg nuclear power station beginning 2011 to 2017. The agreement to
       be finalized in September 2009, will be based upon a portion of the
       supply delivered at the uranium spot price and the remainder based on
       an escalated price; and
    -  completed a bought deal financing (the "Bought Deal") on June 1, 2009
       and raised gross proceeds of Cdn$106.8 million from 15,250,000 common
       shares at a price per share of Cdn$7.00.

    Financial considerations with respect to the completion of capital

    Future expansion will be subject to capital availability. Having access
to capital and maintaining the flexibility to react to negative, unforeseen
events are clearly prudent objectives in these uncertain markets. As at June
30, 2009, the remaining capital required to complete the current projects at
Ezulwini and MWS was $266 million, of which $232 million is planned to be
spent in the next twelve months. To support its financial position while
completing planned capital projects over the next twelve months, and to
enhance financial flexibility, the Corporation has recently finalized a
one-year term credit facility of ZAR160 million (approximately $20 million)
(the "Facility") with Simmer & Jack and is in negotiations with a South
African bank to establish additional access to longer-term debt capital.
    The Company believes that the cash resources of $123.0 million at June
30, 2009 and the cash forecasted to be generated from the sale of gold and
uranium from both its operations, together with the Facility, will provide
sufficient funding to complete the current capital projects at the two
operations. Should management in future determine that the funding is not
sufficient, it will at that time look to a potential new South African project
financing facility, if it is available, or reprioritize development and
expansion activities to reduce potential funding requirements.

    Consolidated Results of Operations

       Production Summary                       Q1 2010  Q1 2009  % Change
       Ezulwini Mine
         Tonnes hoisted (000s)                   64,965        -      100%
         Tonnes milled (000s)                    92,468        -      100%
         Ounces of gold produced                  3,794        -      100%
         Ounces of gold sold                      3,378        -      100%
         Average selling price per ounce ($)        957        -      100%
         Tonnes reclaimed (000s)                  1,835    1,665     10.2%
         Average gold recovery grade
          (grams/tonne)                            0.18     0.16     12.5%
         Ounces of gold reclaimed                11,007    8,530     29.0%
         Ounces of gold sold                     10,676    7,741     37.9%
         Average selling price per ounce ($)        905      879      3.0%
         Average cost per ounce reclaimed ($)      (367)    (482)   (23.9%)
         Average Cash Cost per ounce
          reclaimed ($)(a)                         (338)    (464)   (27.2%)
       Summary of Consolidated Financial Results
        (in thousands of dollars, except per
        share amounts)
       Revenue                                   12,895    6,805     89.5%
       Ezulwini Mine                              3,233        -      100%
       MWS                                        9,662    6,805     42.0%
       Cost of sales (excluding amortization)   (15,584)  (3,340)     367%
       Ezulwini Mine                            (11,974)       -      100%
       MWS                                       (3,610)  (3,340)     8.1%
       Amortization                              (1,236)    (189)     554%
       Ezulwini Mine                               (924)       -      100%
       MWS                                         (312)    (189)    65.1%
       Gross (loss) profit                       (3,925)   3,276     (220%)
       Ezulwini Mine                             (9,665)       -     (100%)
       MWS                                        5,740    3,276     75.2%
       Other income                                 280      318    (11.9%)
       Other expenditures(b)                     (6,799)  (7,442)    (8.6%)
       Operating loss(c)                        (10,444)  (3,848)     171%
       Investment income                            706    1,832    (61.5%)
       Interest and accretion expenditures       (3,558)  (2,149)    65.6%
       Fair value loss on derivative liability     (477)       -      100%
       Accretion expense on asset retirement
        obligations                                (492)    (381)    29.1%
       Foreign exchange loss                    (16,408)    (524)    3031%
       Loss before income taxes                 (30,673)  (5,070)     505%
       Income tax charge                         (2,591)    (725)     257%
       Loss for the period                      (33,264)  (5,795)     474%
       Basic and diluted loss per common share    (0.22)   (0.04)     450%


    (a) "Cash Costs" are costs directly related to the physical activities of
        producing gold and include mining, processing and other plant costs;
        third-party refining and smelting costs; marketing expense, on-site
        general and administrative costs; royalties; on-mine drilling
        expenditures that are related to production and other direct costs.
        Sales of by-product metals are deducted from the above in computing
        cash costs. Cash costs exclude depreciation, depletion and
        amortization, corporate general and administrative expense,
        exploration, interest, and pre-feasibility costs and accruals for
        mine reclamation. Cash costs are calculated and presented using the
        "Gold Institute Production Cost Standard" applied consistently for
        all periods presented. The Gold Institute was a non-profit industry
        association comprised of leading gold producers, refiners, bullion
        suppliers and manufacturers. This institute has now been incorporated
        into the National Mining Association. The guidance was first issued
        in 1996 and revised in November 1999. Total cash costs per ounce is a
        non-GAAP measurement and investors are cautioned not to place undue
        reliance on it and are advised to read all GAAP accounting
        disclosures presented in the Company's audited consolidated financial
        statements for FY 2009 and accompanying footnotes thereto.
    (b) Other expenditures include general, consulting and administrative
        expenditures, pumping feasibility and rehabilitation costs, stock-
        based compensation and non-production related amortization. See page
        3 to the Financial Statements for detail.
    (c) This is a non-GAAP measurement. Operating loss is loss before
        interest income, interest and accretion expenses, fair value loss on
        derivative liability, foreign exchange loss and income tax charges.
        See page 3 to the Financial Statements for more detail.

    As with all early stage mines, investment in site preparation and
    production capabilities are prerequisites to full production.

    In Q1 2010, the Ezulwini Mine gold plant was deemed to be in commercial
production, even though it was operating at substantially less than full
capacity as underground development continued. This resulted in a substantial
loss as the mine's fixed operating costs were being applied against a limited
amount of early-stage production.
    Although the uranium plant at the Ezulwini Mine was commissioned in Q1
2010, the plant is not yet deemed to be in commercial production. Therefore,
the Company has reported no uranium (U3O8) production and any revenues and the
related costs derived from the uranium plant are capitalized against property,
plant and equipment.
    At MWS, Q1 2010 throughput increased by 10% compared to Q1 2009 as a
result of improved mining methods implemented during FY 2009. Similarly, the
higher recoveries in Q1 2010 compared to Q1 2009 were due to a number of
positive changes implemented in the gold plant and at the reclamation station.
These improvements helped boost revenues and contributed to the significant
increase in gross profit from tailings processed at MWS.
    The 9% decrease in other expenditures was primarily attributable to the
lower stock-based compensation of $0.8 million in Q1 2010 compared to $1.6
million in Q1 2009. No stock options were issued during Q1 2010 or Q1 2009.
    The gross loss generated by the Ezulwini Mine, however, more than offset
the improvement and higher gross profit on MWS production and the decrease in
expenditures, resulting in the larger consolidated operating loss.
    Investment income primarily relates to interest income earned on cash and
cash equivalents invested in short-term deposits with the Company's bankers
until required for capital projects or to fund operating costs. The lower
interest income in Q1 2010 reflects the on average lower cash balance compared
to the cash on hand on average during Q1 2009 as well as lower interest rates.
The stronger Canadian dollar compared to the US dollar resulted in higher
interest and accretion expense in Q1 2010 relative to the comparative period.
    The significant foreign exchange loss in Q1 2010 resulted from the
translation of the value of Canadian and South African denominated assets,
liabilities, revenues and expenses into US dollars, which currencies
strengthened against the US dollar during the quarter.

    Consolidated Financial Position

    Summary Balance Sheet and Key financial ratios

       (thousands of dollars)                Q1 2010    FY 2009  % Change
       Cash and cash equivalents             122,982    112,005      9.8%
       Other current assets (a)               19,274     12,670     52.1%
       Current liabilities                   (64,705)   (57,213)    13.1%
       Total assets                          640,672    566,472     13.1%
       Total liabilities                    (310,505)  (296,375)     4.8%
       Debt (b)                             (131,223)  (121,416)     8.1%
       Total shareholders' equity           (330,167)  (270,097)    22.2%

       Key financial ratios:
       Current ratio (c)                      2.20:1     2.18:1
       Debt-to-equity (d)                     0.39:1     0.45:1


    (a) Represents total current assets excluding cash and cash equivalents.
    (b) Represents the total of the convertible debentures liability of Cdn
        $150 million translated to US$ at the exchange rate at the end of the
        period plus the toll treatment liability.
    (c) Represents current assets divided by current liabilities as the end
        of the reporting period.
    (d) Represents debt divided by total shareholder's equity at the end of
        the reporting period.

    Total assets primarily comprise property, plant and equipment, reflecting
the capital intensive projects at the Ezulwini Mine and MWS, and cash and cash
    The 13% increase in total assets represents an increase in cash as a
result of the Bought Deal in June 2009, an increase in other current assets
related to the increase in production at the Ezulwini Mine and an increase in
property, plant and equipment as a result of the capital projects at both

    The 5% increase in total liabilities represents an increase in accounts
payable and accrued liabilities, reflecting:
    -  the increase in capital activities at MWS during Q1 2010;
    -  an increase in the Cdn$ denominated debt portion of the senior
       unsecured convertible debentures due to the weakening of the US dollar
       against the Cdn$; and
    -  an increase in loan payable to a related party offset by a decrease in
       income tax payable as a result of a provisional tax payment by MWS to
       the South African Revenue Services.

    Operational Overview

    Ezulwini Mine

    During the quarter the Ezulwini Mine continued significant underground
work to access the underground ore bodies. At the end of Q1 2010, the workable
face length in the Upper Elsburg ("UE") gold-only ore body was 369 metres at a
grade of 4.66 grams per tonne. The workable face length for the Middle Elsburg
co-product gold and uranium ore body was 408 metres at a gold grade of 2.95
grams per tonne and a uranium grade of 0.049 grams per tonne.
    The de-stress cuts, which are designed to reduce pressure on the
load-bearing shaft pillar of the UE ore body and to open up mining of the
high-grade ore in the shaft pillar, have proceeded as planned. The current
mine plan includes the processing of low-grade ore from the de-stress cuts
through the gold plant until the cuts have been completed at the end of
September 2009. At that time, gold grades from the UE ore body are expected to
significantly improve.
    In July 2009, the mine dispatched its first batch of yellowcake from the
recently commissioned uranium plant to the local calcining facility. Once a
sufficient quantity of yellowcake has been calcined, the uranium will be
shipped from South Africa to a conversion facility, after which the Company
will sell the uranium to a nuclear power utility, a minimum of three months
after leaving the Company's uranium plant.
    The Ezulwini Mine gold plant is working to design specifications.


    The commissioning of the second gold plant module (Phase 1B) is
proceeding well and the second reclamation station that will feed ore to the
new plant module has been commissioned. Commissioning of the Phase 1B uranium
plant modules is expected in Q3 2010.
    The plans for construction and commissioning of the third gold plant
module and the third stream of the uranium flotation plant at MWS have been
finalized, the long-lead items have been ordered, major supplier contracts
have been entered into and construction is underway and is expected to be
operational by the end of June 2010.
    Management is concluding test work to finalize heat and oxygen control
elements within the pressure leach process. The outcome of the test work will
be integrated into the cost budget estimate ("CBE") of the pressure leach
process. The CBE is expected to be completed by the end of Q2 2010.
Construction is dependent upon having sufficient financial resources to
proceed and is expected to take from nine to twelve months.


    Mr. Miller commented: "Our primary focus at the Ezulwini Mine is to
develop more working areas in both ore bodies, which we measure by the length
of active mining rock face, grade and facelength buildup. Our success in
underground development will result in more ore available for hoisting to
surface and, in turn, drive production through the uranium and gold plants. At
Mine Waste Solutions, our priorities are to commission the remaining Phase 1B
gold and uranium plants by December 2009 and the Phase 2 gold plant module and
the third stream of the uranium flotation plant by the end of June 2010."

    Ezulwini Mine Outlook

    The key elements that will drive gold and uranium production and
operating results at the Ezulwini Mine are:
    -  favourable prices for gold and uranium;
    -  the successful sale of uranium to nuclear power utilities;
    -  the de-stress cuts required to open up mining of the high-grade ore in
       the shaft pillar of the UE ore body, which is scheduled for completion
       in Q3 2010; and
    -  the creation of workable face length, with grades of gold and uranium
       that correlate well within planned grades.

    Underground, the development of mining faces at economical grades of
uranium and gold are the key to the success as the plant depends upon a
consistent high-grade supply of ore from the Ezulwini Mine.
    It is anticipated that the high unit costs will decrease and operating
and financial performance will improve as the underground mine development and
production activities increase.

    MWS Outlook

    The second gold plant module at MWS has commenced commissioning and
management estimates that it will produce gold by the end of Q2 2010. The
additional Phase 1B gold plant module will increase MWS's gold plant capacity
from 633,000 tonnes per month to 1.3 million tonnes per month, an increase of
650,000 tonnes per month.
    The first two uranium plant modules, which are also part of Phase 1B, are
expected to be completed and producing yellowcake during Q3 2010.
    For the final phase (Phase 2) of construction, management has decided to
delay portions of the third uranium plant module until such time that higher
uranium prices are offered in the uranium market. Management has reconfigured
the plant design and changed the mine plan to achieve approximately 91% of the
previously planned life of mine uranium production resulting in a more
efficient capital investment program and optimized cash flow profile.
    The new plan required an immediate start to the construction of the third
gold plant module (also part of Phase 2) as well as the third stream of the
uranium flotation plant. The mine plan includes combining the optimized
flotation mass pull with direct feed from four high-grade tailings dams to
improve the operating margin. The plans for construction and commissioning of
the third gold module of the plant have been finalized, the long-lead items
have been ordered, major supplier contracts have been entered into and
construction is underway.
    Management is concluding test work to finalize elements within the
pressure leach process. The outcome of the test work will be integrated into
the cost budget estimate ("CBE") of the pressure leach process. The CBE is
expected to be completed by the end of Q2 2010. The pressure leach process is
expected to enhance gold and uranium recoveries and reduce operating costs per
unit significantly.

    Special considerations for the "monetization" of uranium

    After calcining the Company's yellowcake by a third party, the uranium
will be shipped overseas to uranium convertors for conversion and sale.
Including the time required for shipping and converting uranium, uranium sales
are expected on average to lag production by three months.
    While no contracts for uranium supply have been undertaken to date, the
Company has entered into a letter of intent to supply Eskom with uranium for
their Koeberg nuclear power station beginning 2011 to 2017. The intended
agreement is structured to deliver a portion of the uranium order at the
prevailing spot price and the remainder based on an escalated price. A signed
contract with Eskom is expected by the end of Q2 2010, once due diligence and
other conditions are met.

    Financial Results:  Release and Conference Call

    First Uranium will conduct a conference call with investors to discuss
the information in this news release at 10 a.m. local Toronto time and 4:00
p.m. local Johannesburg time on Tuesday, August 18. The conference call will
be available simultaneously to all interested analysts, investors and media.
    Callers may dial 1 800 319-4610 (Canada and the US) or 0800 981 705
(South Africa). Callers from other international locations may call +1 604
638-5340. The call will be webcast at and available for
replay shortly after the call for 90 days.
    A telephone replay of the conference call will be available for 30 days.
To access the replay, callers may dial 1 800 319-6413 (Canada and the US).
Callers from other international locations may access the replay by dialing +1
604 638-9010 (Canada). Access to the replay will require the code 2128,
followed by the number sign.

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

    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. First Uranium also plans to grow production by pursuing
value-enhancing acquisition and joint venture opportunities in South Africa
and elsewhere.

For further information:

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

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