First Uranium reports financial results for the three and nine months ended December 31, 2011 and cautionary announcement.

All amounts are in US dollars unless otherwise noted.

For the Management Discussion & Analysis and Financial Statements please refer to the Company's website at www.firsturanium.com.

TORONTO AND JOHANNESBURG, Feb. 14, 2012 /PRNewswire/ - First Uranium Corporation (TSX: FIU), (JSE: FUM) (ISIN: CA33744R1029) ("First Uranium" or "the Company") today released its results for the three and nine months ended December 31, 2011, being Q3 2012 and 2012 YTD, respectively.

First Uranium reported a consolidated gross profit of $1.8** million for Q3 2012, compared to a consolidated gross loss of $1.2** million in Q3 2011, due to a 9% improvement in the consolidated proceeds from gold and uranium sold of $49.9** million in Q3 2012, compared to $45.9** million in Q3 2011. Consolidated gross loss narrowed from $3.2** million for 2011 YTD to $1.9** million for 2012 YTD as a result of a 29% improvement in consolidated proceeds from gold and uranium sold of $147.1** million for 2012 YTD (2011 YTD: $113.9** million). The Company reported consolidated pre-tax losses of $110 million and $201.5 million for Q3 2012 and 2012 YTD (Q3 2011: $30.5 million; 2011 YTD $156.8 million), respectively. The $180.0 million impairment of the Ezulwini Mine's assets (see Outlook section of this news release) was the primary driver for the pre-tax losses in Q3 2012 and 2012 YTD.

The Company generated $4.0 million cash from its operations in Q3 2012 which is a marked improvement on the $3.6 million and $3.2 million cash utilized in operating activities during Q3 2011 and Q2 2012, respectively. The Company utilized only $5.9 million cash in operating activities during 2012 YTD compared to $32.0 million during 2011 YTD. The Company spent $7.9 million in Q3 2012 (Q3 2011: $33.9 million) and $30.9 million during 2012 YTD (2011 YTD: $92.4 million) on capital projects, mainly on the completion of the third gold module ("Phase 2") and the new tailings storage facility at Kareerand ("TSF"), including adjoining infrastructure at Mine Waste Solutions ("MWS"). The much lower capital spend in Q3 2012 reflects the close-out of the major capital projects at MWS.

As at December 31, 2011, current assets were $27.3 million (March 31, 2011: $73.4 million) and included cash and cash equivalents of $10.6 million (March 31, 2011: $49.6 million).

Corporate Overview

In Q2 2012, the Board of First Uranium empowered a Special Committee to monitor developments and undertake a strategic review of the Company and its capital structure and to advise on any strategic alternatives that may be in the interests of First Uranium and stakeholders of First Uranium. This includes reviewing available alternatives for the settlement of the Debentures that mature in June 2012 and alternatives for settlement of the Notes that mature in March 2013.

As part of the process, and in response to proposals received from third parties, the Company is in negotiations to dispose of its principal assets. If the Company is successful in entering into definitive agreements with these third parties and fulfilling all conditions precedent, including obtaining necessary regulatory and stakeholder approvals, the proceeds would enable it to meet its outstanding obligations.

In order to address any potential short-term cash constraints, the Company is also in negotiations for a short-term bridge lending facility.

However, there can be no assurance that these discussions will result in the execution of definitive agreements with regards to these transactions or that these transactions will be consummated within the time frame required to settle the outstanding obligations of the Debentures and the Notes.

President and CEO, Deon van der Mescht, said: "The Special Committee has been engaged in assessing the various options available to the Company and its stakeholders since July last year. Due to the number of stakeholders involved, the process was more complex and has taken longer than initially anticipated. These latest developments are part of the process undertaken by the Special Committee."

Until definitive agreements are completed and all conditions precedent thereunder are fulfilled, there will still be significant doubt as to the ability of the Company to meet its obligations as they become due and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The Company's ability to continue as a going concern is dependent upon its ability to bring these proposed transactions to fruition.

Mine Waste Solutions (MWS)

MWS increased its gross profits for Q3 2012 and 2012 YTD by 31% and 41%, respectively, compared to Q3 2011 and 2011 YTD, as a result of higher revenues generated by the tailings operation, mainly driven by the 17% and 26% higher average gold selling prices along with the 19% and 22% increase in gold ounces sold over the comparative periods.

During Q3 2012, MWS generated $33.2** million in proceeds (Q3 2011: $23.7** million) from 25,142 ounces of gold sold (Q3 2011: 21,040 ounces) at a Cash Cost* of $613** per ounce (Q3 2011: $506** per ounce). MWS generated $98.4** million in proceeds during 2012 YTD (2011 YTD: $63.9** million) from 74,141 ounces of gold sold (2011 YTD: 60,791 ounces) at a Cash Cost* of $653** per ounce (2011 YTD: $503** per ounce).

Although there was an improvement in tonnage throughput at MWS compared to Q2 2012, this achievement was offset by lower average delivered feed grades which in turn affected recovery performance. This factor, along with the 6% lower average gold selling prices, is reflected in the 14% decrease in gold proceeds in Q3 2012 compared to Q2 2012. Process improvements designed to enhance recoveries and mitigate the impact of a lower grade material are currently underway.

Amortization in Q3 2012 and 2012 YTD also increased compared to Q3 2011 and 2011 YTD, respectively, as a result of the increased tonnage profile associated with the start-up of the third gold plant module.

Ezulwini Mine

The Ezulwini Mine generated $15.3** million in proceeds during Q3 2012 (Q3 2011: $22.3** million) from 13,405 ounces of gold sold (Q3 2011: 19,477 ounces) at a Cash Cost of $2,049** per ounce (Q3 2011: $1,607**). During 2012 YTD, the Ezulwini Mine generated 45.4** million in proceeds (2011 YTD: $49.0** million) from 39,374 ounces of gold sold (2011 YTD: 48,296 ounces) at a Cash Cost of $2,143** per ounce (2011 YTD: $1,605** per ounce). The Ezulwini Mine also sold 27,780 and 59,187 pounds of uranium during Q3 2012 and 2012 YTD (2011 YTD: 20,500 pounds), respectively, generating $1.4 million in proceeds in Q3 2012 and $3.3 million in proceeds in 2012 YTD (2011 YTD: $0.8 million). No uranium was sold in Q3 2011.

Q3 2012 proved to be particularly challenging from a safety and production perspective. Three fatal accidents at the Ezulwini Mine in the latter half of the 2011 calendar year had a significant negative impact on employee morale and productivity of the mine. This is reflected in the lower than anticipated production figures which in turn necessitated the restructuring of the Ezulwini Mine in order to secure the future of this operation. The restructuring is expected to be concluded by the end of February 2012 and will form the basis of a revised business plan aimed at optimizing cash flow and improving the overall profitability of Ezulwini Mine by focusing on the more accessible higher-grade ore.

On a positive note, the Ezulwini Mine settled the final quarterly guaranteed ounces requirement to Franco-Nevada pursuant to the Ezulwini Gold Stream Transaction at the end of Q3 2012 (effectively 64% of the gold sold during Q3 2012 at $400 per ounce of gold). This means that as of January 2012, the mine reverted to delivering only 7% of its gold production to Franco-Nevada at $400 per ounce of gold.

Permitting

On January 4, 2012, the South African Water Tribunal dismissed an appeal by local pressure group, the Federation for a Sustainable Environment ("FSE"), against the issuing of MWS's Water Use Licence and the Tribunal has closed its file on the matter.

On February 1, 2012, however, the Company received notice that the FSE intends to appeal the ruling by the Water Tribunal in the High Court, an action which the Company will defend vigorously. While MWS is operating legally in terms of current authorizations and legislation, discussions with the DMR continue regarding the new order mining right for MWS.

On February 10, 2012 MWS received a notice of intention to issue a directive ("Pre-Directive") in terms of section 31 A of the Environment Conservation Act (# 73 of 1989) ("ECA") and or Section 28 of the National Environmental Management Act (# 107 of 1998) from the Department of Environmental Affairs ("DEA"). The Pre-Directive lists certain concerns that the DEA has with the MWS reclamation project and the environmental impact thereof. The DEA has requested information from MWS relating to the concerns which must be submitted by 24 February 2012. Should MWS fail to address the concerns raised by the DEA, the Pre-Directive will be made final. The impact of this is that MWS will be subject to greater regulatory compliance measures. Management is confident that the issues raised can be materially addressed and will engage pro-actively with the DEA in pursuit thereof.

Outlook

MWS

As a result of the challenges encountered with lower delivered feed grade experienced by the first and third gold modules, guidance for gold production for FY 2012 has been downgraded from a range of 105,000 ounces and 115,000 ounces to between 98,000 ounces and 100,000 ounces.

Ezulwini Mine

Although the new operating plan is not yet completed, it is clear that the Ezulwini Mine will not achieve its previously disclosed target of between 70,000 to 80,000 ounces of gold sold. As a result of the restructuring process, uranium production at Ezulwini Mine has been temporarily suspended. The uranium plant will therefore be placed under temporary care and maintenance as a result of the marginal benefit that was derived from the production of uranium under the current mine plan based on current production levels and uranium prices. As a result, uranium sales for FY 2012 are expected to be in the order of 82,000 pounds, compared to a previous forecast of uranium sales of between 110,000 and 130,000 pounds for FY 2012. The 82,000 pounds excludes the last shipment of approximately 25 000 pounds produced in Q3 2012, which is expected to be sold in Q1 2013.

The proposed restructuring obliged the Company to perform an impairment assessment with respect to the carrying value of the Ezulwini Mine's assets at the end of the Q3 2012 reporting period. The initial recoverable amount was based on the fair value less cost to sell approach derived from the acquisition proposals received from third parties for the Ezulwini Mine as discussed under the Corporate Overview section of this news release. At December 31, 2011 the carrying value of the Ezulwini Mine's assets included in property, plant and equipment was $277.6 million before recognizing the initial impairment adjustment. In terms of the results of the impairment exercise of the Ezulwini Mine's assets, an impairment adjustment of $180 million was recognized in the statement of comprehensive income.

In previous updates, the Ezulwini Mine reported on various business development initiatives aimed at leveraging the available capacity of the gold and uranium plant infrastructure, including the uranium concentrate float plant project and possible toll treatment of third party ore. Given the current restructuring of operations at the mine and within First Uranium as a whole, all business development initiatives are on hold for future review.

The revised business plan is being designed to optimize cash flow and result in the overall profitability of the Ezulwini Mine.

Shareholders are advised to use caution when trading in First Uranium's shares until further notice.

*Cash Costs are costs directly related to the physical activities of producing gold and uranium and include mining, processing and other plant costs; third-party refining and smelting costs; marketing expense, on-site general and administrative costs; royalties; on-mine drilling expenditures that are related to production and other direct costs. Sales of by-product metals such as uranium and silver are deducted from the above in computing cash costs. Cash costs exclude depreciation, depletion and amortization, corporate general and administrative expense, exploration, interest, and pre-feasibility costs and accruals for mine reclamation. Cash costs are calculated and presented using the "Gold Institute Production Cost Standard" applied consistently for all periods presented. The Gold Institute was a non-profit industry association comprised of leading gold producers, refiners, bullion suppliers and manufacturers. This institute has now been incorporated into the National Mining Association. The guidance was first issued in 1996 and revised in November 1999. Total cash costs per ounce is a non-IFRS measurement and investors are cautioned not to place undue reliance on it and are advised to read all IFRS accounting disclosures presented in the Company's financial statements.

**To be able to adequately report on the financial performance of the Company and its operations in the Management Discussion and Analysis for the three and nine months ended December 31, 2011 ("MD&A"), the revenue and cost of production related to the gold ounces delivered pursuant to the Gold Stream Transactions as discussed in note (b) to the IFRS section of the MD&A have been added back to revenue and costs of sales, respectively, in the MD&A and are not included in the derivative expense related to Gold Stream Transactions in profit and loss as disclosed in the Financial Statements. Only the fair value movement on the derivative liabilities related to the Gold Stream Transactions has been included in the derivative expense in this MD&A. The summary table on page 3 of the MD&A sets out where the Financial Statements vary from the financial information reported in this MD&A (also see financial information tables provided under the Operations Review and Financial Review sections of the MD&A.) This is a non-IFRS measurement and investors are cautioned not to place undue reliance on it and are advised to read all IFRS accounting disclosures presented in the Company's Financial Statements.

About First Uranium Corporation

First Uranium Corporation (TSX: FIU) (JSE: FUM) is focused on its goal of becoming a low-cost producer of gold and uranium.  The Company has two operations, the Mine Waste Solutions tailings recovery project ("MWS") and the underground Ezulwini Mine. The operations are located in South Africa's North West and Gauteng Provinces, respectively.

Cautionary Language Regarding Forward-Looking Information
This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release are forward-looking statements (or forward-looking information). The Company's plans involve various estimates and assumptions and its business and operations are subject to various risks and uncertainties, including without limitation, the successful conclusion of the sale of assets, securing of bridge financing and the outcome of the appeal of the Water Use License by FSE. No assurances can be given that the discussions regarding the sale of assets and bridge financing will result in the execution of definitive agreements or that the transactions will be consummated within the time frame required to settle the outstanding obligation of the Debentures and the Notes.  Until definitive agreements are completed and all conditions precedent thereunder are fulfilled, there will still be significant doubt as to the ability of the Company to meet its obligations as they become due and, accordingly the appropriateness of the use of accounting principles applicable to a going concern. The Company's ability to continue as a going concern is dependent upon its ability to bring these proposed transactions to fruition. For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form and most recent Management Discussion and Analysis on file with the Canadian provincial securities regulatory authorities on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein, except in accordance with applicable securities laws.

Non-IFRS Measures
The Company believes that in addition to conventional measures prepared in accordance with International Financial Reporting Standards ("IFRS"), the Company and certain investors and analysts use certain other non-IFRS financial measures to evaluate the Company's performance including its ability to generate cash flow and profits from its operations. The Company has included certain non-IFRS measures in this document. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Readers are advised to read all IFRS accounting disclosures presented in the Company's financial statements for more detail.

SOURCE First Uranium Corporation

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