First Uranium reports results for the three months ended June 30, 2007



    
            All amounts are in US dollars unless otherwise noted.
    

    TORONTO, and JOHANNESBURG, Aug. 13 /CNW/ - First Uranium Corporation
(TSX:FIU, JSE:FUM) (CA33744R1029:ISIN) ("First Uranium" or "the Corporation")
today announced that it recorded a net profit of US $5.5 million for the three
months ended June 30, 2007 ("Q1 2008") compared to a net loss of
US$2.2 million recorded for Q1 2007, primarily as a result of foreign exchange
gains and net interest income offset by operating losses incurred in the
quarter under review.

    Highlights

    During Q1 2008, First Uranium:

    
    -   Raised gross proceeds of Cdn$150 million through an issue of 4.25%
        senior unsecured convertible debentures (the "Debentures").
    -   Filed revised technical reports for each of the Ezulwini Mine and the
        Buffelsfontein Tailings Recovery Project, which indicated improvement
        to their respective NPVs and IRRs, reflecting the accelerated
        timetables for both projects.
    -   Accelerated capital investment at the Ezulwini Mine to advance the
        plant commissioning and production startup by three months.
    -   Acquired effective June 6, 2007 100% of the equity interest and
        management control of Mine Waste Solutions (Proprietary) Limited and
        its subsidiary Chemwes (Proprietary) Limited (collectively "MWS") to
        advance the Buffelsfontein Tailings Recovery Project, following which
        First Uranium has commenced to record for its account gold production
        from the MWS plant.
    -   The South African Department of Minerals and Energy acknowledged
        receipt of the Corporation's prospecting permit application on
        incremental ground contiguous to the Ezulwini Mine.
    

    Subsequent to Q1 2008, First Uranium defined initial underground and
surface drilling targets related to the possible expansion of the existing
Ezulwini underground uranium and gold mine (the "Ezulwini Expansion Program").
    In the second quarter of fiscal year 2008 ending September 30, 2007, the
Corporation plans to process 1.5 million tonnes of tailings through its MWS
gold plant, with expected production of over 12,000 ounces of gold.
    "While we are actively pursuing additional avenues of growth through the
Ezulwini Expansion Program, our focus remains on advancing production at our
two uranium and gold projects, the Ezulwini Mine and the Buffelsfontein
Tailings Recovery Project," said Gordon Miller, President and Chief Executive
Officer of First Uranium.
    "To this end we've accelerated the construction schedule at Ezulwini and,
with the completion of the acquisition of MWS, which included a gold plant,
tailings and a tailings deposition area, we are in the process of integrating
these facilities into the Buffelsfontein Tailings Recovery Project, which will
accelerate production from the Corporation's Buffelsfontein tailings,"
continued Mr. Miller. "With the combined capital resources of cash and cash
equivalents, the net proceeds from the Debentures and anticipated revenue from
future sales of gold and uranium, we believe we are fully-funded to develop
our existing mining projects as currently planned and advance them to full
production by 2010."
    Although spot prices for uranium, which reached $136 per pound at the end
of June, have recently softened to $110 per pound, this is still above the $50
per pound, upon which First Uranium has based its project economics for the
next 20 years. Concerns about the supply of uranium not being able to meet
near- to mid-term demand persist in the market. The Corporation has not yet
signed any contracts to supply uranium and does not expect to do so until it
is nearer production in June 2008.

    Revenue

    First Uranium generated revenue of $2.2 million during Q1 2008 from the
operation of the MWS gold plant, which the Corporation assumed ownership of on
June 6, 2007.

    Expenditures

    Expenses during Q1 2008 reflect normal costs associated with a
development-phase company that, with the exception of the newly acquired MWS
operations, was not yet in production.
    Operating losses of $3.3 million in Q1 2008 reflect an increase from the
$2.9 million loss in Q1 2007, primarily as a result of:

    
    -   An increase in services required to support the development of the
        projects and establishing corporate offices including an increase in
        employee compensation costs, consulting and professional fees to
        support a growing infrastructure including the establishment of
        offices in Johannesburg and Toronto, which were not in existence in
        Q1 2007.
    -   Stock-based compensation costs of $0.8 million relating to the
        amortized cost of stock options granted to directors, officers,
        employees and consultants. The fair value of the stock-based
        compensation was estimated using the Black-Scholes option pricing
        model.
    -   The decrease in pumping and feasibility costs to $0.3 million in Q1
        2008 (versus $1.5 million in Q1 2007), reflect the fact that these
        costs are being capitalized in Q1 2008 as part of the mine
        infrastructure costs as compared to being expensed as care and
        maintenance costs for the Ezulwini Mine in Q1 2007, prior to
        commencement of development activities.
    -   Interest of $1.0 million was paid on the Debentures at the end of the
        quarter.
    -   The accretion expense of $1.1 million also relates to the Debentures.
    

    The above expenses were partially offset during Q1 2008 by $4.4 million
of interest income from the $177.7 million of net proceeds from the
Corporation's initial public offering (the "Offering") and the net proceeds
from the issue of the Debentures.
    The Corporation also benefited from foreign exchange gains of
$6.4 million during Q1 2008 (Q1 2007: $0.8 million), which result from the
Corporation reporting in US dollars, while the majority of its cash funds are
held in Canadian dollars and in South African rand, each of which have
strengthened against the US dollar.

    Cash and Capital Expenditures

    First Uranium ended Q1 2008 with cash and cash equivalents of
$275.2 million as compared to $138.9 million at the fiscal year ended
March 31, 2007. This position reflects the net proceeds of both the Offering
and the Debentures, less the cost of certain assets acquired from Simmer &
Jack, cash utilized in operations and capital invested for additions to
property, plant and equipment.
    Including cash and cash equivalents, the Corporation had $373.5 million
of assets at the end of Q1 2008. Total liabilities at the end of Q1 2008 of
$118.9 million included $89.3 million for the debt portion of the Debentures
and an $11.1 million future tax liability arising from the MWS acquisition.
Shareholders' equity amounted to $254.6 million.

    Production Overview

    To date, US$29.1 million has been spent on re-opening and re-furbishing
the Ezulwini Mine. The shaft stabilization is on track for completion in
September 2007 and the Corporation expects to commence hoisting ore in October
2007. The first gold plant module is scheduled for completion in April 2008,
three months ahead of the previously disclosed schedule; and, the first
uranium plant module is on track for completion in June 2008 to achieve an
average annual production of 290,000 ounces of gold and 888,000 pounds of
uranium over the 18-year life of the mine.
    The accelerated schedule for commissioning all modules of the gold and
uranium plants results in an accelerated capital investment profile, which
will provide the flexibility sooner to significantly increase uranium
production if and when market pricing dictates.
    Also at the Ezulwini Mine, the Corporation has commenced the development
to access the shaft destress cut and has accessed the Upper Elsburg horizon on
levels 38a and 41. Development on both of these levels has started. The
Company plans to collect chip samples at six metre intervals from the reef
horizon. Chip sampling in two sections six metres apart on both levels has
indicated a reef horizon that is 2.4 metres thick. Samples averaged 11.2 grams
per tonne gold and 4.7 grams per tonne gold on levels 38a and 41,
respectively.
    Opening up of the Middle Elsburg reef is well underway with 76 panels
sampled and 24 panels selected for development, giving a face length of
568 metres with an average grade of 6.76 grams per tonne gold and 660 grams
per tonne uranium.
    The samples were collected in accordance with industry standard practice.
An independent laboratory prepared and assayed the samples using industry
standard methods.
    The clean up process to date on surface and underground has generated a
stockpile in excess of 70,000 tonnes containing more than 88 kilograms of
recoverable gold.
    In addition, First Uranium has identified initial drill targets which may
justify the development of a new 250,000 tonne-per-month shaft at the Ezulwini
Mine, which would allow a significant increase in uranium and gold production.
This expansion program has the potential to significantly increase production
beyond levels currently planned and thereby extend the current 19-year mine
plan, which only consumes 20% of the significant resource area at this site.
    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 401,621 tonnes of tailings material was processed in the period under
review, resulting in gold sales of 3,395 ounces at a total cost of
$664 per ounce. The MWS operation is mining the remnant of its current
resource, due to be exhausted by December 2007. The operation requires
mechanical cleaning of the floor material, temporarily increasing the
operating cost significantly. The mechanical cleaning will continue in Q2
2008, with expected production of over 12,000 ounces of gold at a cash cost of
$520 per ounce. The mechanical cleaning will stop as the new Buffelsfontein
tailings dams are brought online, when it is expected that the production and
average cost will then revert to the planned targets of $360 per ounce as per
the May 22, 2007 revised technical report by Scott Wilson Roscoe Postle
Associates. The average sale price was $643 per ounce. Uranium production is
expected to commence in November 2008 to achieve an average annual production
of 128,000 ounces of gold and 922,000 pounds of uranium over the 16-year life
of the project.

    Technical Disclosure

    With the exception of the third, fourth, fifth and sixth paragraphs under
the heading "Production Overview" in this news release, the technical
disclosure 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.
    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.

    The economic analysis contained in this news release is contained in the
technical reports mentioned above and 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 on which the
preliminary assessment contained in the technical reports are based, will be
realized.

    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 June 13, 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 11:00 a.m.
local Toronto time or 5:00 p.m. local Johannesburg time on Monday, August 13,
2007. The conference call will be available simultaneously to all interested
investors and the news media at (416) 644-3424 or 1 (800) 594 3790 (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=1972960
    The call will be available through replay at this website for one month.

    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



    CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
    for the three months ended June 30, 2007
    and June 30, 2006
    The interim consolidated financial statements contained herein have not
been reviewed or audited by the Corporation's independent auditors.

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

                                                             As at     As at
                                                           June 30, March 31,
                                                              2007      2007
                                                   Notes   US$'000   US$'000
    -------------------------------------------------------------------------

    ASSETS

    Current assets
    Cash and cash equivalents                              275,234   138,914
    Accounts receivable                               5      3,772     1,713
    Inventories                                       6      1,345       292
    Amount receivable from related party             21        890     6,763
    -------------------------------------------------------------------------
                                                           281,241   147,682
    -------------------------------------------------------------------------

    Non-current assets
    Property, plant and equipment                     7     87,433    30,954
    Asset retirement funds                            8      4,875     2,791
    -------------------------------------------------------------------------
                                                            92,308    33,745
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total assets                                           373,549   181,427
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities         10      9,350     5,702
    Current portion of lease obligations             11         13         -
    Amount payable to related party                  21        156         -
    -------------------------------------------------------------------------
                                                             9,519     5,702
    -------------------------------------------------------------------------

    Non-current liabilities
    Senior unsecured convertible debentures          12     89,266         -
    Asset retirement obligations                     13      9,011     5,377
    Lease obligations                                11         15         -
    Future tax liability                              4     11,089         -
    -------------------------------------------------------------------------
                                                           109,381     5,377
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Share capital                                    14    214,230   182,673
    Contributed surplus                              15      3,230     2,460
    Equity portion of senior
     unsecured convertible debentures                12     46,503         -
    Accumulated deficit                                     (9,314)  (14,785)
    Accumulated other comprehensive income            3          -         -
    -------------------------------------------------------------------------
                                                           254,649   170,348
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total equity and liabilities                           373,549   181,427
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the Consolidated Financial Statements



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

                                                           For the   For the
                                                             three     three
                                                         months to months to
                                                           June 30,  June 30,
                                                              2007      2006
                                                   Notes   US$'000   US$'000
    -------------------------------------------------------------------------

    Revenue                                                  2,183         -
    Cost of sales                                           (2,255)        -
    -------------------------------------------------------------------------

    Loss from mining operations                                (72)        -

    Expenditures                                            (3,220)   (2,910)
    -------------------------------------------------------------------------
    General, consulting and
     administrative expenditures                     21      2,075     1,373
    Stock-based compensation                         15        770         -
    Pumping and feasibility costs                              347     1,537
    Amortization of property, plant and equipment     7         28         -
    -------------------------------------------------------------------------

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

    Operating loss                                          (3,292)   (2,910)
    Interest income                                  21      4,366        70
    Interest expense                                 21       (957)     (144)
    Accretion expense on convertible debentures      12     (1,071)        -
    Foreign exchange gains                           16      6,425       746
    -------------------------------------------------------------------------
    Net income (loss) before income taxes                    5,471    (2,238)
    Provision for income taxes                                   -         -
    -------------------------------------------------------------------------
    Net income (loss) for the period                         5,471    (2,238)
    Accumulated deficit at the
     beginning of the period                               (14,785)   (6,857)
    -------------------------------------------------------------------------
    Accumulated deficit at the end of the period            (9,314)   (9,095)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted earnings (loss)
     per common share (US$)                          17       0.04     (0.03)

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

    Net income (loss)                                        5,471    (2,238)
    Adjustments                                                  -         -
    -------------------------------------------------------------------------
    Comprehensive income (loss)                       3      5,471    (2,238)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes to the Consolidated Financial Statements



    First Uranium Corporation
    Consolidated Statement of Cash Flows (unaudited)
    (in United Stated Dollars)

                                                           For the   For the
                                                             three     three
                                                         months to months to
                                                           June 30,  June 30,
                                                              2007      2006
                                                   Notes   US$'000   US$'000
    -------------------------------------------------------------------------

    Net income (loss) for the period                         5,471    (2,238)
    Changes not affecting cash:
      - Interest income                            18.1       (197)      (70)
      - Interest expense                                         -       144
      - Accretion expense on convertible
         debentures                                          1,071         -
      - Amortization on property,
         plant and equipment                                   327         -
      - Contributions to asset retirement funds                105         -
      - Stock-based compensation                     15        770         -
    -------------------------------------------------------------------------
    Net income (loss) after interest
     and non-cash items                                      7,547    (2,164)
    Movement in working capital:
      - Increase in inventories                                355         -
      - Increase in accounts receivable                       (813)      (40)
      - (Increase)/decrease in net amounts
         receivable from related parties           18.2      6,086     2,245
      - Decrease in accounts payable
         and accrued liabilities                            (3,091)      471
    -------------------------------------------------------------------------
    Cash flows from operating activities                    10,084       512
    -------------------------------------------------------------------------

    Additions to property, plant and equipment     18.3     (9,812)     (590)
    Net cash movement on acquisition of MWS        18.4      1,310         -
    -------------------------------------------------------------------------
    Cash flows from investing activities                    (8,502)     (590)
    -------------------------------------------------------------------------

    Issuance of senior unsecured convertible
     debentures (net of issue costs)                 12    130,561         -
    Proceeds from shares issuance
     (net of issue costs)                            14          -       728
    -------------------------------------------------------------------------
    Cash flows from financing activities                   130,561       728
    -------------------------------------------------------------------------

    Net effect of exchange rate changes
     on cash held in foreign currencies                      4,177         -

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

    Net increase in cash and cash
     equivalents for the period                            136,320       650

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

    See accompanying notes to the Consolidated Financial Statements



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

    1.  NATURE OF OPERATIONS AND BASIS OF PRESENTATION

        First Uranium Corporation ("First Uranium" or "the Corporation") is a
        Canadian corporation with a primary listing on the Toronto Stock
        Exchange ("TSX") and a secondary listing on the Johannesburg Stock
        Exchange ("JSE"). First Uranium is a resource company focused on the
        development of uranium and gold projects in southern Africa and
        beyond, see Note 7 "Property, Plant and Equipment" for a description
        of the projects. 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 quarter, 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 June 30, 2007, Simmer and Jack Mines, Limited
        ("Simmer & Jack") owned 65.5% of First Uranium's common shares.

    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"). 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 below
        and in note 3 "Changes in accounting policies".

        The unaudited interim consolidated financial statements should be
        read in conjunction with the Corporation's audited consolidated
        financial statements for the year ended March 31, 2007.

    2.1 Goodwill

        Goodwill represents the excess purchase price over the fair value of
        identifiable assets and liabilities acquired in business
        combinations. Goodwill is not amortized but is assessed for
        impairment annually, or more frequently as events occur that may
        indicate impairment. Impairment is assessed by comparing the fair
        value of each reporting unit to the book value of the reporting unit.
        If the fair value of the reporting unit is less than the book value
        then impairment of goodwill is measured by deducting the fair value
        of the reporting unit's individual assets and liabilities from the
        fair value of the reporting unit to determine the implied fair value
        of goodwill. This is compared to the amount of the book value of the
        reporting unit's goodwill. Any excess of the book value of goodwill
        over the implied fair value of goodwill is the impairment amount.

    2.2 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.

    2.3 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, but any transitional
        effects have been recorded as an adjustment 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. The
        components of comprehensive income are disclosed in the consolidated
        statement of comprehensive income. The Corporation's had no other
        comprehensive income during the period ending June 30, 2007.

        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 arise. 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 amount receivable from related party

        These assets are classified as "loans and receivables" and are
        recorded at amortized cost, which upon its initial measurement is
        equal to its 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 fund

        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 amount 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
        $2,100,772 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$32,201,377 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$644,316 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 listed below have not been completed. The future
        income tax assets and liabilities are not yet complete due to the
        inherent complexity associated with these valuations. The purchase
        price allocation is only preliminary and 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:

                                                                     US$'000
        ---------------------------------------------------------------------
        Current assets                                                 4,608
        Property, plant and equipment                                 41,729
        Asset retirement fund                                          1,950
        ---------------------------------------------------------------------
        Total assets acquired                                         48,287
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Current liabilities                                            1,476
        Asset retirement obligation                                    3,493
        Lease obligations                                                 28
        Future tax liability                                          11,089
        ---------------------------------------------------------------------
        Total liabilities assumed                                     16,086
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        Net assets acquired                                           32,201
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Current assets include cash and cash equivalents of US$1,309,519 (net
        of transaction costs) (see Note 18.4).

        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 goodwill was assigned to the MWS operating unit.


    5.  ACCOUNTS RECEIVABLE

                                                           June 30, March 31,
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Trade receivables                                      273        99
        Value Added Tax and Goods and Services Tax           3,347     1,463
        Prepayments and advances                               142       144
        Deposits and guarantees                                 10         7
        ---------------------------------------------------------------------
                                                             3,772     1,713
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    6.  INVENTORIES

                                                           June 30, March 31,
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Spares and consumables                                 694       292
        Gold work-in-progress                                  651         -
        ---------------------------------------------------------------------
                                                             1,345       292
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    7.  PROPERTY, PLANT AND EQUIPMENT

                                                            Accum-
                                                            ulated       Net
                                                           amorti-  carrying
                                                    Cost    zation    amount
        June 30, 2007                            US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Land and buildings                           863         -       863
        Mine infrastructure                        6,982         -     6,982
        Mining assets                             26,612         -    26,612
        Tailings for processing                   24,228              24,228
        Mining rights                                 13         -        13
        Plant and equipment                       28,591      (294)   28,297
        Motor vehicles                               202       (18)      184
        Office furniture and equipment                66        (4)       62
        Computer equipment and software              216       (24)      192
        ---------------------------------------------------------------------
        Total                                     87,773      (340)   87,433
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------



                                                            Accum-
                                                            ulated       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$44.6 million (March 31, 2007: US$29.0 million) related to
        the Ezulwini Mine and US$39.3 million (March 31, 2007:
        US$0.8 million) related to the Buffelsfontein Tailings Recovery
        Project.

        As at June 30, 2007, all property, plant and equipment were owned by
        the Corporation, except for motor vehicles with a net carrying value
        of US$21,217 which are held under lease contracts.

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

        Ezulwini Mine

        The Ezulwini Mine involves the re-commissioning 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 mine was constructed in the 1960s. In 2001, mine production at
        Ezulwini was ceased primarily as a result of capital constraints
        compounded by a weak gold and uranium market environment. The geology
        of the Ezulwini property includes a number of reef packages, with the
        Upper Elsburg and Middle Elsburg reefs being the primary focus of
        First Uranium's mine reopening plans at the Ezulwini Mine. 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.

        On October 19, 2006, EMC entered into an agreement with Randfontein
        Estates Limited ("REL"), a wholly-owned subsidiary of Harmony Gold
        Mining Company Limited ("Harmony"), in respect of the purchase of
        certain surface and underground assets relating to the Ezulwini Mine,
        including two shaft headgears and four winders, fans, compressors,
        generators and underground equipment as well as the necessary surface
        freehold required to operate the mine. A total consideration of
        US$7.8 million was paid to REL. The effective date of the transaction
        was 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 13 - Asset retirement obligation) 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 capitalised as part of mining
        infrastructure.

        On December 8, 2006 the Ezulwini mining right was awarded to Simmer &
        Jack. 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.

        The Ezulwini Mine shaft stabilization is expected to be completed by
        September 2007. The Corporation expects to commence hoisting ore in
        October 2007, with the first gold plant module scheduled for
        completion in April 2008 (accelerating the previously disclosed
        planned dates for production by three months) and the first uranium
        plant module scheduled for completion in June 2008. The Corporation
        is in discussions with third parties to toll treat the ore prior to
        the commissioning of the gold plant.

        The Corporation is commencing the development to access the shaft
        destress cut and have accessed most of the Upper Elsburg horizon.

        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 will conduct hydraulic
        mining of two tailings dams on the MWS property. The Corporation will
        construct a pipeline between the MWS property and the Buffelsfontein
        property and expand 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 will not form part of
        First Uranium's assets at the Buffelsfontein Tailings Recovery
        Project.


    8.  ASSET RETIREMENT FUNDS

                                                           June 30, March 31,
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Opening balance                                      2,791         -
        Trust fund obtained on acquisition
         of Ezulwini mine                                        -     2,686
        Trust fund obtained on acquisition
         of MWS (see Note 4)                                 1,950         -
        Investment income                                      140        82
        Contributions in respect of guarantee                    -       103
        Costs incurred                                        (105)      (80)
        Foreign exchange differences                            99         -
        ---------------------------------------------------------------------
        Closing balance                                      4,875     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 of primarily 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             5,309
        Murray and Roberts       Ezulwini shaft
         Cementation (Pty) Ltd    rehabilitation project               1,413
        Eskom Holdings Ltd       Electricity accounts                  1,201
        ---------------------------------------------------------------------

        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

                                                           June 30, March 31,
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Trade payables                                       8,404     5,302
        Accruals                                               946       400
        ---------------------------------------------------------------------
                                                             9,350     5,702
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

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


    11. LEASE OBLIGATIONS

                                                           June 30, March 31,
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Present value of finance lease obligations
         payable within 1 year                                  13         -
                                                           ------------------
          - Minimum lease payments                              16         -
          - Finance charges                                     (3)        -
                                                           ------------------
        Present value of finance lease obligations
         payable within 2 to 5 years                            15         -
                                                           ------------------
          - Minimum lease payments                              16         -
          - Finance charges                                     (1)        -
                                                           ------------------
        Payable in:                                             28         -
                                                           ------------------
        2007                                                     5         -
        2008                                                    23         -
                                                           ------------------

        ---------------------------------------------------------------------
        Total debt                                              28         -
                                                           ------------------
        Current portion of lease obligations                    13         -
        Non-current portion of lease obligations                15         -
                                                           ------------------

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

        Finance leases were obtained for the purchase of motor vehicles.  The
        average monthly instalments payable are US$1,618 and interest is
        charged at the South African prime rate minus 1%.


    12. 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 the quarter ended June 30, 2007 was US$1,070,402. The
        cost of issuing the Debentures amounted to US$4,498,778.

        As at June 30, 2007, no portion of the Debenture had been converted.
        Interest paid on the Debentures for the period ended June 30, 2007
        amounted to US$956,679.


    13. ASSET RETIREMENT OBLIGATIONS


                                                           June 30, March 31,
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Opening balance                                      5,377         -
        Provision taken over with acquisition
         of the Ezulwini Mine                                    -     5,133
        Provision taken over with acquisition
         of MWS (see Note 4)                                 3,500         -
        Accretion expense                                        -       244
        Foreign exchange differences                           134         -
        ---------------------------------------------------------------------
        Total obligation                                     9,011     5,377
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The environmental rehabilitation provision taken over 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.

        The environmental rehabilitation provision taken over as part of the
        MWS acquisition is to be partly funded by its rehabilitation trust
        fund (see Note 8). The balance of the provision is in respect of post
        cessation of operations expenditure and will be financed out of the
        proceeds from the sale of plant and equipment following cessation of
        the respective operations.


    14. SHARE CAPITAL

                                        Number of shares
                                       June 30, March 31,  June 30, March 31,
                                          2007      2007      2007      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            -       800         -       728
        Contributed surplus relating
         to stock options exercised          -         -         -        27
        ---------------------------------------------------------------------
                                       124,780   121,686   238,283   206,726
        Less: Share issue costs              -         -   (24,053)  (24,053)
        ---------------------------------------------------------------------
        Balance, closing of period     124,780   121,686   214,230   182,673
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Authorized

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

        Issued and outstanding

        In December 2005 and January 2006 First Uranium raised US$4.2 million
        through the private placement issues of 4,875,000 shares at Cdn$1 per
        share. US$3 million of the capital raised was used to acquire the 20%
        interest in FUSA.

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

        As part of the First Uranium reorganization (the "Reorganization")
        and initial public offering (the "Offering") in December 2006:

        -  the 5,675,001 issued and outstanding shares of First Uranium where
           split resulting in an increase in the issued and outstanding
           shares to 6,613,394. This split was determined based on the
           initial public offering issue price of Cdn$7 per share and the
           agreed valuation of the assets, which was supported by a valuation
           assessment provided by an independent valuator;

        -  First Uranium issued to Simmer & Jack 26,416,295 shares valued at
           US$187,495,878 for 1,196 FUL shares relating to the 80% FUSA
           shares previously owned by Simmer & Jack;

        -  First Uranium issued to Simmer & Jack 55,306,358 shares valued at
           US$391,732,461 for 2,504 FUL shares relating to the 90% EMC shares
           previously owned by Simmer & Jack;

        -  First Uranium issued 33.35 million shares to the public at Cdn$7
           per share for gross proceeds of US$201.8 million;

        Under continuity of interest, the shares issued to Simmer & Jack for
        EMC and FUSA are deemed to have always been outstanding.

        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).


    15. CONTRIBUTED SURPLUS - STOCK-BASED COMPENSATION

        The stock-option plan (the "Option Plan") for employees, officers,
        directors and certain consultants provides 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 the 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:

                                                           June 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                              -       (27)
        Stock options granted during the period                770     2,460
        ---------------------------------------------------------------------
        Balance, end of period                               3,230     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:

                                                           June 30, March 31,
                                                              2007      2007
        ---------------------------------------------------------------------
        Expected dividend yield                                 0%        0%
        Expected volatility of the
         Corporation's share price                             56%       85%
        Risk free interest rate - Canadian rates             4.81%      3.9%
        Expected life                                      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, 60,000 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.

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

                                                           Weighted average
                                                            exercise price
                                       Number of options        (Cdn$)
                                       June 30, March 31,  June 30, March 31,
                                          2007      2007      2007      2007
        ---------------------------------------------------------------------
        Outstanding options at
         beginning of period         1,223,001   800,000      7.30      1.00
        Granted during the period       60,000 1,223,001     12.87      7.30
        Exercised during the period          -  (800,000)        -     (1.00)
        ---------------------------------------------------------------------
        Outstanding options at
         end of period               1,283,001 1,223,001      7.56      7.30
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The stock-based compensation expense recognized in the statements of
        operations and deficit is US$770,094 for the quarter (June 30, 2006:
        US$nil). As at June 30, 2007, the aggregate unexpensed fair value of
        unvested stock options granted amounted to US$2,366,912 (March 31,
        2007: US$2,858,354).


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

                                                    Options outstanding
                                                          Weighted  Weighted
                                                  Number   average   average
        Exercise price                       outstanding remaining  exercise
        ranges                                at June 30,     life     price
        Cdn$                                        2007    (years)    (Cdn$)
        ---------------------------------------------------------------------
        7.00 to 8.99                           1,127,144      9.48      7.04
        9.00 to 11.99                             95,857      9.68     10.37
        12.00 to 13.99                            60,000      9.91     12.87
        ---------------------------------------------------------------------
                                               1,283,001      9.51      7.56
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


                                                    Options outstanding
                                                          Weighted  Weighted
                                                  Number   average   average
        Exercise price                       outstanding remaining  exercise
        ranges                                at June 30,     life     price
        Cdn$                                        2007    (years)    (Cdn$)
        ---------------------------------------------------------------------
        7.00 to 8.99                             339,051      9.48      7.04
        9.00 to 11.99                             31,952      9.68     10.37
        12.00 to 13.99                            20,000      9.91     12.87
        ---------------------------------------------------------------------
                                                 391,003      9.51      7.61
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


    16. FOREIGN EXCHANGE GAINS

                                                           June 30,  June 30,
                                                              2007      2006
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Foreign exchange gains                               6,425       746
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The foreign exchange gains of $6.4 million during the three months
        ending June 30, 2007 are the combined result of the fact that the
        Corporation reports in US dollars, while the majority of its cash
        funds are held in Canadian dollar ("Cdn$") and in South African rand
        ("ZAR"), each of which have strengthened against the US dollar
        ("US$") during the quarter ending June 30, 2007. The increase in
        value of the Canadian dollar versus the US dollar during the quarter
        ending June 30, 2007 was partially offset by the Corporation having
        Canadian dollar denominated debt with the issue of the Debentures.

        The net proceeds from the Offering were held in South African rand
        during the quarter ending June 30, 2007. At the beginning of the
        quarter the US$/ZAR exchange rate was 7.305, while at the end of the
        quarter the US$/ZAR exchange rate was 7.076.

        On May 3, 2007, when First Uranium received the net proceeds from the
        issue of the Debentures (the majority of the Corporation's Canadian
        funds held during the quarter ending June 30, 2007), the Cdn$/US$
        exchange rate was 0.900. At June 30, 2007, the Cdn$/US$ exchange rate
        was 0.944.


    17. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE

                                                           June 30,  June 30,
                                                              2007      2006
        ---------------------------------------------------------------------
        Basic earnings (loss) per share of (US$)              0.04     (0.03)
        is calculated based on net income (loss)
         for the period of (US$'000)                         5,471    (2,238)
        and a weighted average number
         of shares outstanding of ('000)                   122,502    87,602
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Diluted earnings (loss) per share of (US$)            0.04     (0.03)
        is calculated based on net income (loss)
         for the period of (US$'000)                         5,471    (2,238)
        and a diluted weighted average number
         of shares outstanding of ('000)                   122,989    87,602
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        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.


    18. NOTES TO THE CASH FLOW STATEMENT

    18.1   Non-cash interest income

                                                           June 30,  June 30,
                                                              2007      2006
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Total interest income                               (4,366)      (70)
        Add back: Cash interest income                       4,169         -
        ---------------------------------------------------------------------
                                                              (197)      (70)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


    18.2   (Increase)/decrease in net amounts receivable from related parties

                                                           June 30,  June 30,
                                                              2007      2006
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Decrease in amounts receivable from related parties  5,873       594
        Increase in amounts payable to related parties         156     1,725
        Add back:
          - Interest income accrued on amounts receivable       57        70
          - Interest expense accrued on amounts payable          -      (144)
        ---------------------------------------------------------------------
                                                             6,086     2,245
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    18.3   Additions to property, plant and equipment

                                                           June 30,  June 30,
                                                              2007      2006
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Total additions to property, plant and equipment   (15,075)     (590)
        Add back:
          - Accrued capital expenditure                      5,263         -
        ---------------------------------------------------------------------
                                                            (9,812)     (590)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    18.4   Net cash movement on acquisition of MWS

                                                           June 30,  June 30,
                                                              2007      2006
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Cash and cash equivalents taken over on
         date of acquisition                                 1,954         -
        Less: Expenses related to MWS acquisition             (644)        -
        ---------------------------------------------------------------------
                                                             1,310         -
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------


    19. COMMITMENTS AND CONTINGENCIES

        Commitments

                                                           June 30, March 31,
                                                              2007      2007
                                                           US$'000   US$'000
        ---------------------------------------------------------------------
        Capital commitments - Ezulwini Mine                 26,100    14,836
        Capital commitments - Buffelsfontein
         Tailings Recovery Project                           3,841         -
        ---------------------------------------------------------------------
        Total contractual obligations                       29,941    14,836
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        The capital commitments are payable within one year.

        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.


    20. 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.


    21. RELATED PARTY TRANSACTIONS AND COMMITMENTS

                                                             As at     As at
                                                           June 30, March 31,
                                                              2007      2007
        Related party balances                             US$'000   US$'000
        ---------------------------------------------------------------------
        FUSA amount (payable to)/receivable
         from Simmer & Jack                                   (156)    5,079
        First Uranium amount receivable
         from Simmer & Jack                                    890     1,684
        ---------------------------------------------------------------------
                                                               734     6,763
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------



                                                             Three     Three
                                                         months to months to
                                                           June 30,  June 30,
                                                              2007      2006
        Related party transactions                         US$'000   US$'000
        ---------------------------------------------------------------------
        Shared services fees paid to Simmer & Jack            (528)     (445)
        Fees paid to empowerment company                       (53)        -
        Interest paid to Simmer & Jack by EMC                    -      (144)
        Interest received from Simmer & Jack by FUSA            57        70
        ---------------------------------------------------------------------

        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 2007 expense relates to
        such services received, together with those provided prior to
        December 2006.

        During the three months ending June 30, 2007, $527,881 shared
        services fees were charged by Simmer & Jack of which $467,910 were
        capitalized, representing services provided in respect of technical
        services for the Ezulwini Mine and the Buffelsfontein Tailings
        Recovery Project.

        Prior to December 2006, the Corporation shared its premises with
        other companies, including Simmer & Jack, which had common management
        and directors and reimbursed the related companies for its
        proportional share of expenses or was reimbursed by the related
        companies for their proportional expenses. During the three months
        ending June 30, 2007, the Corporation was charged $303,306 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.


    22. 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

                                                Buffels-
                                                 fontein
                                                Tailings
                                      Ezulwini  Recovery
        For the three months              Mine Project(*) Corporate    Total
         ended June 30, 2007           US$'000   US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Revenue                              -     2,183         -     2,183
        Cost of sales                        -    (2,255)        -    (2,255)
        ---------------------------------------------------------------------
        Loss from mining operations          -       (72)        -       (72)
        Expenditure                       (689)     (535)   (1,996)   (3,220)
        ---------------------------------------------------------------------
        General, consulting and
         administrative expenditures       316       535     1,224     2,075
        Stock-based compensation             -         -       770       770
        Pumping and feasibility costs      347         -         -       347
        Amortization on property,
         plant and equipment                26         -         2        28
        ---------------------------------------------------------------------

        ---------------------------------------------------------------------
        Operating loss                    (689)     (607)   (1,996)   (3,292)
        Interest income                    134        55     4,177     4,366
        Interest expense                     -         -      (957)     (957)
        Accretion expense on
         convertible debentures              -         -    (1,071)   (1,071)
        Foreign exchange gains (losses)   (645)      473     6,597     6,425
        ---------------------------------------------------------------------
        Income (loss) before
         income taxes                   (1,200)      (79)    6,750     5,471
        Provision for income taxes           -         -         -         -
        ---------------------------------------------------------------------
        Net income (loss)
         for the period                 (1,200)      (79)    6,750     5,471
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Total assets                    52,642    51,672   269,235   373,549
        Total liabilities              (11,902)  (16,869)  (90,129) (118,900)
        Capital expenditure             (9,229)     (573)      (10)   (9,812)
        ---------------------------------------------------------------------

        (*)   The Buffelsfontein Tailings Recovery Project segment includes
              the MWS operations.



                                         South Africa           Canada

                                                Buffels-
                                                 fontein
                                                Tailings
                                      Ezulwini  Recovery
        For the three months              Mine Project(*) Corporate    Total
         ended June 30, 2007           US$'000   US$'000   US$'000   US$'000
        ---------------------------------------------------------------------
        Expenditure
        Consulting and management fees     794       255       268     1,317
        General and administrative
         expenditure                         3         -        53        56
        Pumping and feasibility costs    1,482        55         -     1,537
        ---------------------------------------------------------------------

        Operating loss                  (2,279)     (310)     (321)   (2,910)
        Interest income                      -        70         -        70
        Interest expense                  (144)        -         -      (144)
        Foreign exchange gains (losses)  1,110      (354)      (10)      746
        ---------------------------------------------------------------------
        Loss before income taxes        (1,313)     (594)     (331)   (2,238)
        Provision for income taxes           -         -         -         -
        ---------------------------------------------------------------------
        Net loss for the period         (1,313)     (594)     (331)   (2,238)
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Total assets                       714     2,135      1,270    4,119
        Total liabilities               (7,644)        -       (638)  (8,282)
        Capital expenditure               (590)        -          -     (590)
        ---------------------------------------------------------------------



                          FIRST URANIUM CORPORATION
                     MANAGEMENT DISCUSSION AND ANALYSIS
                         For the three months ended
                       June 30, 2007 and June 30, 2006
    

    Management's Discussion and Analysis of The Unaudited Consolidated
    Financial Condition and Results of Operations
    for the three months ended June 30, 2007 and June 30, 2006

    Set out below is a review of 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 months
ended June 30, 2007 ("Q1 2008") and June 30, 2006 ("Q1 2007"), together with
certain trends and factors that are expected to have an impact in the future.
This management's discussion and analysis of the consolidated financial
position and results of operations ("MD&A") is intended to supplement and
complement the unaudited consolidated financial statements and notes thereto
for Q1 2008 and Q1 2007 (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 and First Uranium's audited consolidated financial
statements for the fiscal year ended March 31, 2007 ("FY 2007") and the notes
thereto and the related management's discussion and analysis. Information
contained in this MD&A is based on information available as at August 10,
2007, unless otherwise indicated.
    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.

    Overall Performance

    Highlights

    During Q1 2008, First Uranium:

    
    -   Raised gross proceeds of Cdn$150 million through an issue of 4.25%
        senior unsecured convertible debentures (the "Debentures").
    -   Filed revised technical reports for each of the Ezulwini Mine and the
        Buffelsfontein Tailings Recovery Project, which indicated improvement
        to their respective NPVs and IRRs, reflecting the accelerated
        timetables for both projects.
    -   Accelerated capital investment at the Ezulwini Mine to advance the
        plant commissioning and production startup by three months.
    -   Acquired, effective June 6, 2007, 100% of the equity and management
        control of Mine Waste Solutions (Proprietary) Limited and its
        subsidiary Chemwes (Proprietary) Limited (collectively, "MWS") to
        advance the Buffelsfontein Tailings Recovery Project, following which
        First Uranium has commenced to record for its account, gold
        production from the MWS plant.
    -   The South African Department of Minerals and Energy (the"DME")
        acknowledged receipt of the Corporation's prospecting permit
        application on incremental ground contiguous to the Ezulwini Mine.

    Subsequent to Q1 2008:

    -   First Uranium defined initial underground and surface drilling
        targets related to the possible expansion of the existing Ezulwini
        underground uranium ("U(3)O(8)") and gold ("Au") mine (the "Ezulwini
        Expansion Program").
    

    In the second quarter of fiscal year 2008 ending September 30, 2007, the
Corporation plans to process 1.5 million tonnes of tailings through its MWS
gold plant, with expected production of over 12,000 ounces of gold.

    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 underground uranium and gold mine (the "Ezulwini
Mine") and the construction of the Buffelsfontein tailings recovery project to
recover uranium and gold from the existing surface tailings and future
tailings, at the Buffelsfontein mine (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.
    The common shares of First Uranium are listed on the Toronto Stock
Exchange (the "TSX") and the Johannesburg Stock Exchange (the "JSE"). Simmer
and Jack Mines, Limited ("Simmer & Jack") owns approximately 65.5% of the
common shares of First Uranium. Simmer & Jack's shareholding was diluted from
67.2% during Q1 2008 as a result of the issuance by First Uranium of 3,093,980
common shares as consideration for the June 6, 2007 acquisition of Mine Waste
Solutions (Proprietary) Limited and its subsidiary Chemwes (Proprietary)
Limited (collectively, "MWS").
    Through its subsidiary, First Uranium (Proprietary) Limited ("FUSA"),
First Uranium has an agreement to acquire surface tailings from Buffelsfontein
Gold Mines Limited ("BGM"), a subsidiary of Simmer & Jack. The Corporation
originally planned to develop and construct a processing plant at the
Bufflesfontein surface tailings site to reprocess these tailings to recover
uranium and gold. However, with the acquisition of MWS, the Corporation
acquired an operating gold mine tailings re-processing facility adjacent to
Buffelsfontein. The Corporation intends to construct a pipeline to the MWS
plant for processing the Buffelsfontein surface tailings as well as the
tailings from the ongoing gold mining operations at BGM's underground gold
mine. The Corporation also intends to expand the MWS plant to replace the
plant originally planned at the Buffelsfontein mine site.
    In December 2006, First Uranium completed a public offering of 33,350,000
common shares at Cdn$7.00 per share for gross proceeds of $201.8 million (the
"Offering"). The proceeds of the Offering, net of underwriting fees and
expenses, were $177.7 million. The funds raised from the Offering and a
portion of the net proceeds from the May 3, 2007 issuance of $130.6 million of
4.25% senior unsecured convertible debentures due June 30, 2012 (the
"Debentures"), net of underwriting fees and expenses, are being used to: (i)
reopen, develop and rebuild the Ezulwini Mine and (ii) to develop the
Buffelsfontein Tailings Recovery Project.

    Financial Overview

    First Uranium is a development stage company. The Corporation generated
revenue of $2.2 million during Q1 2008 from the operations of the MWS gold
plant, which the Corporation assumed ownership of on June 6, 2007.
    General, consulting and administrative expenditures fees as well as
development activities at its two uranium and gold projects resulted in an
operating loss of $3.3 million in Q1 2008 (Q1 2007: $2.9 million).
    The net income of $5.5 million in Q1 2008 is primarily the result of
foreign exchange gains and net interest income earned, partially offset by
operating losses. The Corporation incurred a net loss of $2.2 million in Q1
2007 primarily from expenditures in connection with preparing its two uranium
and gold projects for production.
    As at June 30, 2007, the Corporation had cash and cash equivalents of
$275.2 million (June 30, 2006: $1.2 million). With these funds and anticipated
revenue from future sales of uranium and gold, the Corporation currently
believes that it is fully funded and will be able to develop its two existing
mining projects and advance them to full production as currently planned by
2010.
    As at June 30, 2007, First Uranium had total assets of $373.5 million,
total liabilities of $118.9 million and shareholders' equity of
$254.6 million.

    Ezulwini Mine

    The Corporation is in the process of re-commissioning the Ezulwini Mine
located approximately 40 kilometres from Johannesburg on the outskirts of the
town of Westonaria in Gauteng Province, South Africa. Re-commissioning
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") from
Randfontein Estates Limited ("REL"), a wholly-owned subsidiary of Harmony Gold
Mining Company Limited, including two shaft headgears, four hoists, fans,
compressors, generators, a complete sub-vertical shaft infrastructure down to
2,100 metres below surface and underground equipment as well as the necessary
surface freehold required to operate the mine.
    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 all 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. EMC continues with the ongoing water pumping required to keep
the Ezulwini Mine dry and to enable the shaft rehabilitation program and
refurbishment of the infrastructure in the Middle Elsburg section, which will,
in turn, allow hoisting of ore by October 2007. Construction of the
metallurgical plant has started to allow the onsite treatment for gold by
April 2008 and uranium by June 2008.
    As previously reported, Scott Wilson Roscoe Postle Associates Inc.
("Scott Wilson RPA") prepared a preliminary economic assessment of the
Ezulwini Mine for First Uranium in connection with the Offering. The
assessment was subsequently updated in a May 9, 2007 technical report (the
"Ezulwini Report"), which incorporates the latest developments in respect of
permitting/mining rights, changes to the mineral resource estimate, ongoing
process selection and capital and operating forecasts. As a result, the net
present value ("NPV") of the Ezulwini Mine improved by 29% ($74 million), from
$258 million to $332 million and the internal rate of return ("IRR") improved
from 26% to 32%. Although these improvements are primarily a reflection of the
increase in the long-term price assumption for uranium from $40 per pound to
$50 per pound, the NPV of the Ezulwini Mine also increased due to the
investment of pre-production capital at a faster rate than originally planned,
which results in an accelerated schedule for planned uranium and gold
production. The improved NPV assumes the original discount rate of 8% and a
gold price of $500 per ounce and excludes sunken capital costs.
    The Ezulwini Report also projects a $24.2 million increase in
metallurgical plant costs from $88.6 million to $112.8 million, due to higher
than expected increases in the cost of steel and cement resulting from an
industry-wide construction boom. The project contingency has been reduced by
$13.1 million from $44.1 million to $31.0 million due to confirmation of firm
pricing for most of the major capital items, thus increasing the level of
confidence in the capital estimates.
    An accelerated schedule for commissioning all modules of the gold and
uranium plants is also planned, resulting in an accelerated capital investment
profile, which will provide flexibility to significantly increase uranium
production quicker, as market pricing dictates. EMC is using construction
contractors until all phases of the mill and plants are completed. 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 Q1 2008, $29.1 million has been
spent.
    The Ezulwini Mine shaft floating tower installation is currently on
schedule to be completed by September 2007. The Corporation expects to
commence hoisting ore in October 2007, with the first module of the gold plant
scheduled for completion in April 2008 (accelerating the previously disclosed
planned date for production by three months) and the first module of the
uranium plant scheduled for completion in June 2008. The Corporation is in
discussions with third parties to toll treat the ore prior to the
commissioning of the gold plant.
    Also at the Ezulwini Mine, the Corporation has commenced the development
to access the shaft destress cut and has accessed the Upper Elsburg horizon on
levels 38a and 41. Development on both of these levels has started. The
Company plans to collect chip samples at six metre intervals from the reef
horizon. Chip sampling in two sections six metres apart on both levels has
indicated a reef horizon that is 2.4 metres thick. Samples averaged 11.2 grams
per tonne gold and 4.7 grams per tonne gold on levels 38a and 41,
respectively.
    Opening up of the Middle Elsburg reef is well underway with 76 panels
sampled and 24 panels selected for development, giving a face length of 568
metres with an average grade of 6.76 grams per tonne gold and 660 grams per
tonne uranium.
    The samples were collected in accordance with industry standard practice.
An independent laboratory prepared and assayed the samples using industry
standard methods.
    The clean up process to date on surface and underground has generated a
stockpile in excess of 70,000 tonnes containing more than 88 kilograms of
recoverable gold.
    The following table depicts the planned production at Ezulwini from April
2007 through to March 2015.

    
    -------------------------------------------------------------------------
    From April                2007  2008  2009  2010  2011  2012  2013  2014
    To March                  2008  2009  2010  2011  2012  2013  2014  2015
    -------------------------------------------------------------------------
    Gold ore 000s tonnes        93   196   736 1,186 1,243 1,091   759   806
    -------------------------------------------------------------------------
    Uranium ore 000s tonnes      -   410   725   784   943 1,077   981   951
    -------------------------------------------------------------------------
    Recovered gold 000s oz    17.8  98.6 242.9 341.3 370.5 334.1 247.2 246.9
    -------------------------------------------------------------------------
    Recovered uranium 000s lbs   - 335.5 602.6 652.3 793.4 929.1 893.2 895.8
    -------------------------------------------------------------------------
    

    The average annual production at Ezulwini for the life of the project
(2007-2024) is expected to be 290,000 ounces of gold and 888,000 pounds of
uranium.

    The above economic analysis 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 on which this preliminary
assessment is based, will be realized.

    Ezulwini Expansion Program

    First Uranium has defined initial underground and surface drilling
targets related to the possible expansion of the existing Ezulwini Mine.
Detailed studies completed by Minxcon (Proprietary) Limited ("Minxcon"), an
independent South African mining and exploration consulting company, have
utilized historical face sampling information on the E9EC reef, to project
higher grade pay-shoot trends which have resulted in the definition of six
drill target areas, some of which are accessible from existing underground
workings.
    The outputs of this work have been compared to historical grades as
delivered to the old Ezulwini plant for a period of 14 years from 1982 to
1995. This analysis resulted in a mine recovery factor of 74% for gold and 65%
for uranium. These mine recovery factors were used to define potential and
expected plant delivery grades from each of the six drilling target areas. The
table below summarizes the expected plant delivery grades from the defined
drilling target areas and has been derived by Minxcon using a Bayesian
approach.

    
    -------------------------------------------------------------------------
                      Au                U(3)O(8)
            -----------------------------------------
    Drill                 Plant                Plant
    Target   In-Stope   Delivery   In Stope  Delivery      Au       U(3)O(8)
    Area       Grade      Grade      Grade     Grade   Equivalent  Equivalent
            -----------------------------------------------------------------
                g/t        g/t       Kg/t      Kg/t        g/t        Kg/t
    -------------------------------------------------------------------------
    1(2)       8.93       6.61      0.970     0.630      10.93       1.589
    -------------------------------------------------------------------------
    2          10.2       7.54      0.800     0.520      11.10       1.614
    -------------------------------------------------------------------------
    3          6.66       4.93      0.128     0.830      10.68       1.552
    -------------------------------------------------------------------------
    4          7.11       5.26      0.560     0.360       7.76       1.127
    -------------------------------------------------------------------------
    5          4.13       3.05      0.580     0.520       5.65       0.821
    -------------------------------------------------------------------------
    6          6.69       4.95      0.800     0.450       8.53       1.239
    -------------------------------------------------------------------------

    Notes:

    1)  Mine recovery factor is the combination of dilution and loss factors
        applied to convert "in stope" sampling grades to plant delivery
        grades.
    2)  Table derived using population statistics on face sampling data; geo-
        statistics has been applied to pay-shoot 1 only, resulting in a lower
        Au plant delivery grade of 5.9g/t (versus 6.61g/t) and a higher
        U(3)O(8) plant delivery grade of 0.642 Kg/t (versus 0.630Kg/t).
    3)  Au and U(3)O(8) equivalents have been calculated using First
        Uranium's stated long term pricing assumptions of $500 per ounce for
        Au and $50 per pound for U(3)O(8). By example, a grade of
        1kg U(3)O(8) per tonne equates to 6.88 grams per tonne of Au.
    

    Based upon an internal concept evaluation, the combined Phase 1 drilling
target areas have the potential to delineate a substantial portion of measured
and indicated resources which would be required to justify the construction of
a new 250,000 tonne-per-month shaft and a related mill expansion, that would
have the potential to triple production capacity from the uranium bearing
Middle Elsburg ore body. The conceptual evaluation excludes any potential
contribution from the UE1A reef. Approximately 16,000 metres will need to be
drilled in order to complete Phase 1. Drilling results and associated resource
estimation can be expected towards the end of 2008. Additional Phase 2 target
areas will be defined for the UE1A reef once historical face sampling
information has been validated.
    The expansion program excludes any prospecting that is expected to take
place on contiguous properties to the north-east and south-east of the
Ezulwini lease area covered by the prospecting application submitted to and
accepted by the DME on April 16, 2007.

    Buffelsfontein Tailings Recovery Project

    The Buffelsfontein Tailings Recovery Project is a proposed uranium and
gold tailings recovery operation located in the western portion of the
Witwatersrand Basin approximately 160 kilometres from Johannesburg. 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. FUSA had
planned to process the tailings from the ongoing mining operations at a plant
to be located at the nearby Buffelsfontein underground mine owned and operated
by Buffelsfontein Gold Mines Limited ("BGM"), a subsidiary of Simmer & Jack.
As discussed above, the MWS acquisition, includes an operating gold mine
tailings and re-processing facility, adjacent to First Uranium's
Buffelsfontein Tailings Recovery Project. With this acquisition, the mined
tailings from Buffelsfontein will be transported via a new pipeline to the MWS
plant that will be expanded to replace the plant originally planned at the
Buffelsfontein mine site. As well, the Corporation proposes to acquire the
right to process three small additional tailings dams (the "Additional Dams
Acquisition"). A prospecting right for these additional dams has been
submitted to the DME.
    The building of the pipeline between the Buffelsfontein site and MWS has
commenced and is expected to be completed by October 2007, while hydraulic
mining of the Buffelsfontein tailings dumps is expected to commence in
November 2007. The MWS operation is mining the remnant of its current
resource, due to be exhausted by December 2007. The operation requires
mechanical cleaning of the floor material, temporarily increasing the
operating cost significantly. The mechanical cleaning will continue in Q2
2008, with expected production of over 12,000 ounces of gold. The mechanical
cleaning will stop as the Buffelsfontein tailings dams are brought online, and
it is expected that production and average cost will then revert to the
planned targets as per the May 22, 2007 revised technical report by Scott
Wilson RPA.
    BGM held an old order mining right in respect of mining gold at the BGM
underground mine, which did not cover 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 dumps, subject to certain conditions
which BGM expects to satisfy 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 two 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
and uranium in the Buffelsfontein tailings dams; and (iii) cede the
Buffelsfontein Tailings Mining Right, if granted, to MWS, a subsidiary of
FUSA.
    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; and (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
Buffelsfontein underground mine. In exchange for the above mentioned rights,
FUSA will be required to (i) pay a nominal consideration of $13.50 to BGM;
(ii) assume the rehabilitation obligation relating to the dams; and (iii) pay
to BGM, a 1% royalty plus value-added tax of the gross revenue accrued by FUSA
from the sale of uranium, gold and any other minerals recovered from the
Buffelsfontein tailings. In addition, FUSA will be responsible for making
payments to BGM in respect of a net smelter royalty on all gold produced from
the Buffelsfontein Tailings Recovery Project on a graduated basis with
reference to the price of gold. For a more detailed discussion of these
arrangements, reference should be made to the Corporation's Annual Information
Form.
    Scott Wilson RPA prepared a preliminary economic assessment of the
Buffelsfontein Tailings Recovery Project for First Uranium in connection with
the Offering which was revised in January 2007 to incorporate the results of
ongoing process selection work and to demonstrate the impact of this work on
the preliminary economic assessment. The results of the preliminary assessment
as revised are contained in a technical report dated January 31, 2007 (the
"Prior Buffels Report"). The Prior Buffels Report was subsequently revised,
incorporating the MWS Acquisition and the Additional Dams Acquisition, and
indicated in a technical report dated May 22, 2007 (the "Revised Buffels
Report"). In addition, to better reflect the current uranium pricing
environment, the assumed price per pound of uranium has been increased from
$40 to $50 from the assumption in the Prior Buffels Report.
    According to the Revised Buffels Report, the projected NPV of the
Buffelsfontein Tailings Recovery Project (assuming the completion of the
Additional Dams Acquisition and a discount rate of 8%) is $295 million with a
projected IRR of 69% (as compared to $211 million and 39%, respectively, as
disclosed in the Prior Buffels Report). The incorporation of the MWS
Acquisition and the Additional Dams Acquisition into the Buffelsfontein
Tailings Recovery Project accounted for an increase in the projected NPV and
IRR to $237 million and 57% respectively as compared to the Prior Buffels
Report. In addition, according to the Revised Buffels Report, the increase in
the uranium price assumption resulted in an increase in the projected NPV from
$237 million to $295 million and in the projected IRR from 57% to 69%.
    With the MWS resources included and better defined, the life of the
Buffelsfontein Tailings Recovery Project is presently estimated to be
16 years.
    As the Corporation allocates the Buffelsfontein Tailings Recovery
Project's projected cash costs in proportion to the projected revenue
contribution from each product and the Corporation is assuming higher uranium
prices and revenues, the Corporation expects that on a co-product basis, the
cash cost of gold should be $220 per ounce and the cash cost of uranium should
be $22 per pound.
    Uranium production from the first two of three uranium plant modules is
scheduled to commence in November 2008. The average annual production for the
life of the Buffelsfontein Tailings Recovery Project (March 2007 to April
2023) is expected to be 128,000 ounces of gold and 922,000 pounds of uranium.
    The preparation of a pre-feasibility study for the Buffelsfontein
Tailings Recovery Project and detailed test work is ongoing to firmly identify
the design and operating parameters.

    The above economic analysis 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, on which this preliminary
assessment is based, will be realized.

    Technical Disclosure

    With the exception of paragraphs seven through ten under the heading
"Ezulwini Mine" in this MD&A, the technical disclosure 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 heading "Ezulwini Expansion Program" 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.

    Technical disclosure under the heading "Buffelsfontein Tailings Recovery
Project" in this MD&A is extracted from a technical report entitled "Technical
Report - Preliminary Assessment of the Buffelsfontein Project, Northwest
Province, Republic of South Africa" (the "Buffelsfontein Technical Report")
originally submitted on November 8, 2006, revised on December 5, 2006, revised
on January 31, 2007 and further revised on May 22, 2007.

    Messrs. Bergen, Valliant and Van Heerden 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, Valliant and Van Heerden.

    Results of Operations

    Revenue

    Revenue was generated from the processing of 401,621 tonnes of tailings
material and sales of 3,395 ounces from the processing of gold at the current
MWS operations at an average sales price of $643 per ounce. Revenue from the
MWS gold plant is included as of June 6, 2006, the effective date of the MWS
acquisition for accounting purposes.
    Total costs from June 6, 2007 to the end of the quarter were $664 per
ounce, as the acquired tailings dams are nearing the end of their productive
life, which resulted in the requirement to load and haul tailings for
mechanical placement near the hydraulic mining operation and, thus reduced the
tonnes being processed and increased the handling costs.

    There was no production attributable to First Uranium during Q1 2007.

    Expenditures

    Expenditures for Q1 2008 were $3.2 million (Q1 2007: $2.9 million). The
expenditures for Q1 2008 included $1.1 million (Q1 2007: $0.9 million) of
employee compensation costs, consulting and professional fees, as well as the
non-capitalized portion of $0.5 million (Q1 2007: $0.4 million) for shared
services fees paid to the majority shareholder, Simmer & Jack, for services
provided pursuant to the Shared Services Agreement (see "Related Party
Transactions") with First Uranium. Also included were general and
administrative expenses of $0.4 million during Q1 2008 (Q1 2007: Nil). The
higher expenditures in Q1 2008 resulted 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 Q1 2007.
    First Uranium also recognized a stock-based compensation expense of
$0.8 million during Q1 2008 (Q1 2007: Nil). This expense relates to the
amortized cost of 1,223,001 stock options granted to directors, officers,
employees and consultants during FY 2007 and the amortised cost of 60,000
stock options granted to directors and employees during Q1 2008. The fair
value of the stock-based compensation was estimated using the Black-Scholes
option pricing model.
    Expenditures also include pumping and feasibility costs of $0.3 million
during Q1 2008 (Q1 2007: $1.5 million). These costs related to the ongoing
care and maintenance of the Ezulwini Mine. The decrease in costs is primarily
the result of pumping and feasibility costs being capitalized, as part of mine
infrastructure costs, since the end of May 2006, when the DME granted the
mining right to Simmer & Jack, EMC's 90% shareholder at that time.
    The Corporation earned interest income of $4.4 million during Q1 2008
(Q1 2007: Nil). The interest income was primarily earned on the net proceeds
raised from the Offering and the Debentures.
    The interest expense of $1.0 million during Q1 2008 consists of the
interest paid on the Debentures at the end of the quarter. The interest
expense of $0.1 million during Q1 2007 consists of the non-capital portion of
interest paid by EMC on the loan payable to Simmer & Jack. The accretion
expense of $1.1 million during Q1 2008 relates to the Debentures.
    The foreign exchange gains of $6.4 million during Q1 2008 (Q1 2007:
$0.8 million) are the combined result of the fact that the Corporation reports
in US dollars, while the majority of its cash funds are held in Canadian
dollars ("Cdn$") and in South African rand ("ZAR"), each of which have
strengthened against the US dollar ("US$"). The increase in the value of the
Canadian dollar versus the US dollar during the quarter was partially offset
by the Corporation having Canadian dollar denominated debt with the issue of
the Debentures.
    The net proceeds of the Offering were held in South African rand during
Q1 2008. At the beginning of the quarter the US$/ZAR exchange rate was 7.305,
while at the end of the quarter the US$/ZAR exchange rate was 7.076.
    On May 3, 2007, when First Uranium received the net proceeds from the
issue of the Debentures (the majority of the Corporation's Canadian funds held
during Q1 2008), the Cdn$/US$ exchange rate was 0.900. At June 30, 2007, the
Cdn$/US$ exchange rate was 0.944.

    Net income

    First Uranium generated net income of $5.5 million during Q1 2008
(Q1 2007: incurred a loss of $2.2 million), primarily as a result of the
foreign exchange gains and net interest income earned, offset by operating
losses incurred in Q1 2008. The Corporation incurred a net loss of
$2.2 million in Q1 2007 primarily from expenditures in connection with
preparing its two uranium and gold projects for production.

    Use of Proceeds

    Offering

    In the final prospectus dated December 12, 2006 filed by First Uranium in
connection with the Offering (the "Final Prospectus"), First Uranium provided
the following disclosure as to the anticipated uses of the estimated
$162.6 million of net proceeds from the sale of 29 million common shares by
First Uranium to the public pursuant to the Offering:

    
    -   Development of the Ezulwini Mine - $77.2 million
    -   Development of the Buffelsfontein Tailings Recovery Project -
        $53.6 million
    -   Repayment of indebtedness owed by EMC to Simmer & Jack -
        $18.3 million
    -   Repayment of the purchase price for the Ezulwini Mine assets under
        the REL Purchase Agreement - $7.7 million
    -   Decrease in working capital plus general corporate costs -
        $5.8 million
    

    The estimated $162.6 million net proceeds from the Offering and the above
estimated uses of such proceeds as disclosed in First Uranium's Final
Prospectus specifically did not include any proceeds received by First Uranium
from the exercise of the over-allotment option granted to the underwriters. On
December 29, 2006, the underwriters exercised the over-allotment option in
full in respect of the sale of an additional 4.35 million shares of First
Uranium and First Uranium received additional net proceeds of approximately
$24.7 million.
    Of the total net proceeds of $177.7 million received by First Uranium
pursuant to the Offering, $42.3 million had been expended as at June 30, 2007
as follows (resulting in $135.4 million of the net proceeds on hand as at
June 30, 2007):

    
    -------------------------------------------------------------------------
                                                         Used in
                                                       the quarter
                                            Used up to    ended   Used up to
    Use of Net Proceeds Since The Offering    June 30,   June 30,  March 31,
     (amounts in millions of dollars)           2007       2007      2007
    -------------------------------------------------------------------------
    Development of the Ezulwini Mine             (29.1)      (9.8)     (19.3)
    Development of the Buffelsfontein
     Tailings Recovery Project                    (2.2)      (0.7)      (1.5)
    Repayment of indebtedness owed by
     EMC to Simmer & Jack                        (14.1)         -      (14.1)
    Payment of the REL Purchase
     Agreement purchase price                     (8.9)         -       (8.9)
    Working capital and general
     corporate purposes                           12.0        3.4        8.6
    -------------------------------------------------------------------------
    Total                                        (42.3)      (7.1)     (35.2)
    -------------------------------------------------------------------------
    

    While First Uranium intends to apply the net proceeds of the Offering
approximately as disclosed above, 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, a drilling program and
feasibility study which are designed to determine the potential for a possible
expansion of the Ezulwini Mine; together with the net proceeds of the Offering
to fund the development of 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 by the Corporation in Canadian
dollars in a Canadian bank account. The approval of the South African Reserve
Bank ("SARB") to the issue of the Debentures includes a condition that the
Corporation transfer the net proceeds from the issue of the Debentures 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 proceeds of the issue of the
Debentures, in addition to 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 as adjusted as a result of the acquisition of MWS.

    Cash flows

    Cash generated from operating activities of $10.1 million during Q1 2008
(Q1 2007: $0.5 million) was mainly as a result of the net interest earned and
the payment by Simmer & Jack of an outstanding receivable.
    During Q1 2008, Simmer & Jack transferred $5.9 million of cash it held on
behalf of First Uranium and its subsidiaries at the beginning of Q1 2008 into
newly opened bank accounts of First Uranium and its subsidiaries, which
resulted in the decrease in amounts receivable from related parties.
    Investing activities utilized $8.5 million during Q1 2008 (Q1 2007:
$0.6 million), consisting mainly of additions to property, plant and equipment
relating to the Ezulwini Mine of $9.2 million (Q1 2007: $0.6 million).
    On May 3, 2007, First Uranium raised net cash of $130.6 million (Q1 2007:
$0.7 million) through the private placement of $135.1 million
(Cdn$150 million) aggregate principal amount of Debentures due June 30, 2012.
The Debentures bear interest at a rate of 4.25% per annum payable
semi-annually and are convertible into common shares of First Uranium at
Cdn$16.42 per share.

    Financial Position and Liquidity

    Cash and non-cash assets

    Cash and cash equivalent balances available at June 30, 2007 increased by
$136.3 million to $275.2 million (FY 2007: $138.9 million), primarily as a
result of the inclusion of the net proceeds from the issue of the Debentures.
    Accounts receivable of $3.8 million at June 30, 2007 (FY 2007:
$1.7 million) was comprised primarily of value-added tax and goods and
services tax refunds.
    During Q1 2008, First Uranium set up separate bank accounts for itself
and its subsidiaries and the cash previously held on its behalf by Simmer &
Jack was transferred into these bank accounts. The transfer of such amounts
resulted in a decrease in accounts receivable of $5.9 million to $0.9 million
(FY 2007: $6.8 million).
    Non-current assets increased to $92.3 million at June 30, 2007 (FY 2007:
$33.7 million), mainly as a result of the additions to property, plant and
equipment by EMC of $14.5 million and the fair value allocation of
$35.8 million to plant and equipment and tailings for processing as a result
of the acquisition of MWS. The additional costs also include capitalized
pumping costs and costs relating to mining assets, mining infrastructure and
plant and equipment.

    Investing activities

    On June 6, 2007, First Uranium, through its wholly-owned subsidiary FUSA,
acquired a 100% equity interest in MWS in consideration for 3,093,980 common
shares of First Uranium.

    Total Liabilities

    As of June 30, 2007, First Uranium had total liabilities of
$118.9 million (FY 2007: $11.1 million), consisting mainly of the debt portion
of the Debentures of $89.3 million, accounts payable and accrued liabilities
of $9.4 million (FY 2007: $5.7 million) and the future tax liability arising
from the MWS acquisition of $11.1 million.
    The increase in accounts payable and accrued liabilities at June 30, 2007
is primarily the result of capital costs incurred by EMC and normal trade
payables related to the operations of MWS.
    The amount payable to a related party of $0.2 million (FY 2007: Nil)
consists of the shared services fee payable by FUSA to Simmer & Jack pursuant
to the terms of the Shared Services Agreement between First Uranium and Simmer
& Jack.

    Liquidity and Capital Resources

    At June 30, 2007, First Uranium had working capital of $271.7 million (FY
2007: $142.0 million). The significant increase in working capital is
attributable to the inclusion of net proceeds of $130.6 million from the issue
of the Debentures.
    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 the proceeds of the Offering
and the Debentures and from internal cash flow.
    Capital expenditures of $148.0 million and $270.6 million will be
required to complete the currently planned construction of the Buffelsfontein
Tailings Recovery Project and the Ezulwini Mine, respectively, for which
$29.9 million (FY 2007: $14.8 million) of current commitments exist.
    Exploration budgets for the Ezulwini Mine and on the contiguous
properties to the north-east and south-east of the Ezulwini Mine of
$30 million and $10 million, respectively, have been approved by the Board of
Directors. The extent to which the budgeted amounts are spent depends on the
ongoing exploration results. The exploration expenditures will be funded out
of 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, but the original need for this
facility 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 modify the proposed facility
to a corporate facility.
    As at June 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
    Contractual Obligations        $000     $000     $000     $000     $000
    -------------------------------------------------------------------------
    Operating Leases                  13       15        -        -       28
    Purchase Obligations          29,941        -        -        -   29,941
    Capital Lease Obligations         36      115       40        -      191
    Asset Retirement Obligations       -        -        -    8,186    8,186
    Senior Unsecured
     Convertible Debentures            -        -  135,060        -  135,060
    -------------------------------------------------------------------------
    Total Contractual
     Obligations                  29,990      130  135,100    8,186  173,406
    -------------------------------------------------------------------------

    Summary of Quarterly Results

    The table below sets out selected financial data for the periods
indicated. The financial data presented is derived from First Uranium's
consolidated financial statements, which are prepared in accordance with
Canadian GAAP.

    -------------------------------------------------------------------------
                                                       Basic and
                                                       Diluted
                                                       Earnings/
                                  Total    Net Income/   (Loss)    Long Term
                                 Assets      (Loss)    per Share  Liabilities
    Fiscal Quarters Ended         $000        $000         $          $000
    -------------------------------------------------------------------------
    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             3,619         786        0.01         Nil
    June 30, 2006                  3,522      (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
    June 30, 2005                    n/a         n/a         n/a         n/a
    -------------------------------------------------------------------------
    

    Outlook

    The Corporation will take the following steps to integrate MWS into the
Buffelsfontein Tailings Recovery Project. The Corporation is preparing to
undertake a pre-feasibility study for the project's new gold and uranium plant
modules. The MWS assets include a gold plant. The second gold module and the
first two uranium modules are expected to be commissioned in November 2008.
The Corporation has commenced construction of a pipeline from the
Buffelsfontein site to the MWS site, which is expected to be completed in
October 2007 with hydraulic mining of the Buffelsfontein tailings dams to
commence in November 2007.
    Gold production at the Ezulwini Mine is expected to commence by the end
of October 2007 using a gold toll milling operation. First Uranium is in
negotiation with third parties regarding the tolling arrangement. The current
plan is for the Ezulwini Mine to process gold and uranium at its own plants by
April and June 2008, respectively.
    In the second quarter of fiscal year 2008 ending September 30, 2007, the
Corporation expects to process 1.5 million tonnes of tailings through its MWS
gold plant, with expected production of over 12,000 ounces of gold.
    Although the spot price for uranium, which reached $136 per pound at the
end of June, had recently softened to $110 per pound, this is still well above
the $50 per pound, upon which First Uranium has based its project economics
for the next 20 years. As concerns persist that the supply of uranium might
not meet near- to mid-term demand, the Corporation raised its expectations for
the average price of uranium for the life of its projects from $40 per pound
to $50 per pound. The Corporation has not yet signed any contracts to supply
uranium and does not expect to do so until it is nearer production in
June 2008.
    Offsetting the higher price assumptions, mining cost expectations have
also increased. 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 consideration for higher
costs into its revised technical reports and planning for the future.
    Based on the most recent technical reports published in May 2007 for each
project 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 at the Buffelsfontein Tailings Recovery Project co-product costs
are expected to be $220 (down from $235) per ounce and $22 (up from $19) per
pound.

    Related Party Transactions

    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 is
entitled to 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.
    During Q1 2008 the Corporation paid $527,881 shared services fees to
Simmer & Jack pursuant to the terms of the Shared Services Agreement.
    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 Q1 2007, the Corporation was
charged $303,306 for consulting services provided by related directors,
officers and consultants of the Corporation.
    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. During Q1 2008 the Corporation paid $57,000 to
Simmer & Jack in connection with such services.
    The amounts payable 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. 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.

    Critical Accounting Policies and Estimates

    The preparation of these unaudited consolidated interim financial
statements in accordance with Canadian generally accepted accounting practice
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amount of revenues and expenses during the reporting period.
    Significant areas requiring the use of management estimates relate to the
determination of impairment of capital assets, goodwill estimation of future
site restoration costs, stock-based compensation and future income taxes,
classification of current portion of long-term debt, and the valuation of the
equity component of convertible debentures. Financial results as determined by
actual events could differ from those estimated.

    Foreign currency translation

    The Corporation considers the United States dollar ("US$") to be the
functional and reporting currency. The translated amounts are of a foreign
entity where its subsidiaries are accounted for as integrated foreign
operations and as such, the translation to US dollar was made using the
temporal method. Monetary assets and liabilities denominated in foreign
currencies are translated in United States dollars at the period-end exchange
rates, while non-monetary items are translated at the exchange rate in effect
at the transaction date. Revenue and expense items are translated at the
exchange rates in effect on the date of the transaction. Exchange gains and
losses resulting from the translation of these amounts are included in the
consolidated statements of operations.

    Property, plant and equipment

    The application of the Corporation's accounting policies for these assets
has a material impact on its financial statements. Property, plant and
equipment and related capitalized expenditures are recorded at cost.
Amortization expense is based on the estimated useful lives of these assets.
The carrying values of mining properties and property, plant and equipment are
reviewed for impairment when events or changes in circumstances indicate that
the carrying amounts may not be recoverable. Impairment assessments are based
on estimates of future cash flows, which include: the quantity of mineral
reserves; future metal prices and future operating and capital costs to mine
and process the Corporation's reserves.
    The variability of these factors depends on a number of conditions,
including the uncertainty of future events, and as a result, accounting
estimates may change from one period to another. Asset balances could be
materially impacted if other assumptions and estimates had been used. In
addition, future operating results could be impacted if different assumptions
and estimates are applied in future periods.

    Asset retirement obligations

    Mining, development and exploration activities are subject to various
laws and regulations governing the protection of the environment. The
Corporation has recorded a liability for future costs related to these
regulations with a corresponding adjustment to the carrying amount of the
related assets.
    Significant judgments and estimates are made when determining the nature
and costs associated with asset retirement obligations. Changes in the
underlying assumptions used to estimate the obligation as well as changes to
environmental laws and regulations could cause material changes in the
expected cost and the fair value of asset retirement obligations.

    Stock-based compensation

    The Corporation accounts for all stock-based payments under the fair
value based method. Under the fair value based method, compensation cost is
measured at fair value at the grant date using the Black Scholes option
pricing model that takes into account the exercise price, the expected life of
the options, expected volatility of the underlying shares, expected dividend
yield and the risk free interest rate for the term of the option.

    Convertible debentures

    The Corporation determines the equity component of the convertible
debenture by using the fair value based method. Under the fair value based
method, the equity component is measured at fair value at the date the
convertible debentures were issued using the Black Scholes option pricing
model that takes into account the exercise price, the expected life of the
convertible debentures, expected volatility of the underlying shares, expected
dividend yield and the risk free interest rate for the term of the convertible
debentures.

    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:

    
    (i)    Section 1535, Capital Disclosures, which is effective for fiscal
           years beginning on or after October 1, 2007. 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.
    (ii)   Section 3862, Financial Instruments - Disclosures and Section
           3863, Financial Instruments - Presentation, which are effective
           for fiscal years beginning on or after October 1, 2007. 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 interim and annual financial statements relating to fiscal years beginning
on or after January 1, 2008, with earlier application encouraged. 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

    As at June 30, 2007 and August 10, 2007, First Uranium had 124,780,027
and 124,818,122 issued and outstanding common shares, respectively. As at
June 30, 2007 there were 1,283,001 unexercised stock options outstanding,
exercisable at an average strike price of Cdn$7.56 per share. As at August 10,
2007 there were 1,301,334 unexercised stock options outstanding, exercisable
at an average strike price of Cdn$7.85 per share.
    As at June 30, 2007 and August 10, 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.

    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 President and Chief
Executive Officer and the 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
President and 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 President and 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
President and 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.

    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 Annual MD&A, 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.
    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
June 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, 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 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 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; (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; and (ix) the completion of the Additional Dams
Acquisition.





For further information:

For further information: Bob Tait, VP Investor Relations, at (416)
558-3858, or bob@firsturanium.com

Organization Profile

First Uranium Corporation

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890