First Uranium Responds to Olma Investments: Asset Sales in Best Interest of Stakeholders

All amounts are in US dollars unless otherwise noted.

TORONTO AND JOHANNESBURG, May 23, 2012 /CNW/ - First Uranium Corporation (TSX:FIU), (JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company") responded today to recent media comments attributable to Olma Investments ("Olma") which suggest that Olma will vote against the sale of the Company's two main assets. Today, the Company has initiated a mailing to its shareholders responding to certain public statements made by Olma.  A copy of the letter is attached to this release.

As set out in management information circulars issued by the Company in connection with special meetings to be held on June 13, 2012, the proposed transactions "are the result of an active, extensive and public process to assess the Company's available strategic alternatives and represent the most attractive proposal for its shareholders and debtholders".  Copies of the management information circulars have been filed and are available on the Company's website at www.firsturanium.com and on SEDAR at www.sedar.com.

In the absence of any other suitable transaction or credible offer, the Company's Board of Directors (the "Board") has approved the sale of its subsidiary company holding, Mine Waste Solutions operations ("MWS") to AngloGold Ashanti Limited ("AngloGold") and its subsidiary company holding Ezulwini Mine ("Ezulwini") to Gold One International Limited ("Gold One") for $335 and $70 million, respectively.

The management information circulars explain the exhaustive process undertaken by the Board in order to secure the highest possible price for each of MWS and Ezulwini.  The Company contacted approximately 20 potential buyers globally and only AngloGold and Gold One emerged as bona fide bidders. No other credible offer has been received since the announcement of the two transactions.

John Hick, the Company's lead independent director, said that the Board had approved the two transactions because they were "the best option for shareholders with the most certainty to close." Among other considerations, Mr. Hick said, RBC Capital Markets had concluded the fairness of the proposed transactions, from a financial point of view, to the Company and the Board concluded that they were in the best interests of all of the Company's shareholders and debtholders. In addition, the Company obtained an independent formal valuation of the AngloGold transaction as required under securities laws for related party transactions.  Paradigm Capital Inc., an independent investment banking firm, prepared this valuation and concluded that the fair market value of FUSA is in the range of $229 million to $352 million and the AngloGold transaction is fair, from a financial point of view to Shareholders, other than AngloGold.

Mr. Hick rejected Olma's claims that the Company would be better served filing for bankruptcy protection than accepting the AngloGold and Gold One transactions. Under such a scenario, it is expected that the shareholders would receive no recovery. There is no better alternative available and the Company faces significant liquidity constraints with impending debt maturities on June 30, 2012 and March 31, 2013. The Company has previously disclosed the challenges facing its two operations, including significant requirements to fund those operations.

By contrast, the AngloGold and Gold One transactions afford several benefits to the Company's stakeholders. First, the transactions provide shareholders with certainty and immediate value, without the significant dilution that would be required to satisfy the obligations owed to the Company's debenture holders and without the financing risks associated with the continuation of the Company's business plan. Second, completion of both transactions will enable the Company to satisfy all of the outstanding indebtedness owed to its debtholders as set out in the circulars. Lastly, if the transactions are not approved, the Company and its South African subsidiaries may not be able to comply with certain South African mining and minerals legislation, which jeopardizes the Company's mining permits and may ultimately cause material breaches of certain contracts and therefore materially impact the recovery of stakeholders and the ability of the Company to continue as a going concern.

The Board unanimously recommends that shareholders and debtholders vote FOR the transactions.

Shareholders and debtholders are reminded to vote their proxy FOR the transactions and all related proposals before the proxy voting deadline on Monday, June 11, 2012 at 5:00 p.m. (Toronto time).

If you have any questions about the information contained in the Management Information Circulars or require assistance with voting your securities, please contact Kingsdale Shareholder Services Inc. by telephone at 1-866-581-1571toll-free in North America, or at 1-416-867-2272 outside of North America (collect calls accepted), or by email at contactus@kingsdaleshareholder.com.

About First Uranium Corporation
First Uranium Corporation (TSX:FIU, JSE:FUM) operates the Ezulwini Mine, an underground mining operation, and Mine Waste Solutions (MWS), a tailings recovery facility.  Both operations are situated in South Africa.

Cautionary Language Regarding Forward-Looking Information
This news release contains and refers to forward-looking information based on current expectations. All other statements other than statements of historical fact included in this release 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. 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, including without limitation, the statements regarding the proposed transactions with Gold One International Limited and AngloGold Ashanti Limited. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein, except in accordance with applicable securities laws.

www.firsturanium.com

May 23, 2012

Dear Shareholder,

As you know, for a period of several months, your board of directors (the "Board") has carried out a public and comprehensive strategic process aimed at identifying the best possible transaction or series of transactions which will allow you to obtain the highest possible value for your investment in the Company. As a result of this process, your Board has concluded that the proposed AngloGold Ashanti Limited ("AngloGold") and Gold One International Limited ("Gold One") transactions are in the best interests of the Company, its shareholders (the "Shareholders") and its other stakeholders. The proposed sale of the Company's two main assets offers the highest, most certain and immediate return to stakeholders.

As is the case with virtually any proposed transaction, support will not always be unanimous. According to a recent Globe & Mail article, Nicholas Betsky, head of Olma Investments, believes that "shareholders would fare better if the company declared bankruptcy than under the current deals."

We strongly disagree. In all bankruptcy proceedings, shareholders rank behind all secured and unsecured creditors and thus are typically the last in line to receive any proceeds from liquidation. Allowing the Company to go into bankruptcy is NOT in your best interest, as we expect that should this occur you will receive NO recovery. Bankruptcy/liquidation will result in the immediate loss of mining rights in Ezulwini, which will accordingly extinguish much of the value of Ezulwini and have an impact on the value of Mine Waste Solutions. As is common place in liquidation sales, liquidators are rarely able to extract fair market value from the sale of assets in liquidation. In addition, from the liquidation proceeds received, all costs of liquidation will need to be deducted before any proceeds are paid to creditors and then to Shareholders, if any proceeds remain. It is important that you vote regardless of the number of shares you own, in light of the threat of Olma Investments to control the vote through the shares it influences.

Accordingly, we urge you to vote FOR the AngloGold and Gold One transactions and send a strong message to Olma Investments that YOU DO NOT agree with its decision to attempt to block the sale of the Company's two main assets to AngloGold and Gold One.

After an exhaustive evaluation of alternatives, your Board has approved two transactions:

• The sale of all the ordinary shares of First Uranium (Proprietary) Limited ("FUSA"), principally the Mine Waste Solutions tailings recovery project in South Africa, to AngloGold for US$335 million in cash.
• The sale of all issued and outstanding shares of First Uranium Limited ("FUL"), another wholly-owned subsidiary of the Company, to Gold One for US$70 million in cash. FUL's main asset, following the sale of FUSA to AngloGold, is the Ezulwini mine in South Africa.

We urge you to carefully consider the information presented in the management information circular previously mailed to you. The Board and management strongly believe that we have left no stone unturned to find solutions that will bring the greatest potential benefit to all of the Company's stakeholders. The transactions are the culmination of a comprehensive eight month process spearheaded by a special committee that:

1) Reviewed a wide range of available strategic alternatives in the interests of all stakeholders.

2) Evaluated these alternatives with guidance from financial, legal and technical advisors.

3) Enlisted RBC Capital Markets to reach out globally to each of the most likely parties that would consider a transaction with the Company.

4) Engaged in ongoing detailed discussions with significant debtholders which resulted in enhanced recoveries to Shareholders.

Ultimately, the AngloGold and Gold One transactions are the result of an active, extensive and public process to assess the Company's strategic alternatives and represent the most attractive proposal for ALL stakeholders. There is NO other viable alternative to achieve a better recovery.

The Board has approved these transactions as the BEST option for the Company and Shareholders and urges you to vote FOR them. RBC Capital Markets, one of the Board's and Special Committee's financial advisors, also concluded that the transactions are fair, from a financial point of view, to the Company.

In addition, the Company obtained an independent formal valuation of the AngloGold transaction as required under securities laws for related party transactions. Paradigm Capital Inc., an independent investment banking firm, prepared this valuation and concluded that the fair market value of FUSA is in the range of US$229 million to US$352 million and the AngloGold transaction is fair, from a financial point of view to Shareholders, other than AngloGold.

Why These Transactions Will Benefit ALL First Uranium Shareholders

Both the AngloGold and Gold One transactions afford several benefits to First Uranium, including:

• The transactions will provide Shareholders with certainty and immediate value.
• The transactions will enable the Company to satisfy all of the outstanding amounts owing to its debtholders. Without this, debtholders may assert claims greater than amounts negotiated as part of the comprehensive solution as outlined in the circulars.
• Failure to repay the Debentures on June 30, 2012 would require the Company to issue additional common shares in accordance with the terms of the debenture indenture. This would result in significant dilution to existing Shareholders with the debentureholders holding approximately 85% of the Company's issued and outstanding common shares following such issuance based on 95% of the 20-day VWAP ending five trading days before May 22^nd. Further, this is combined with the uncertainty of continued operations, with limited cash resources and the impending maturity of the Notes on March 31, 2013.

Why the Position Put Forward by Olma Investments Will Harm Your Investment in First Uranium

Olma Investments and its group are asking the Company's Shareholders to block the proposed transactions, claiming the terms offered by AngloGold and Gold One are "too cheap". The fact is that no other bona fide offers emerged for either of the Company's two main assets or for the Company as a whole, either before the transactions were announced or since the announcement. The call to vote against the transactions carries enormous risks for the Company, its Shareholders and debtholders:

• If the transactions are not approved, the Company and its South African subsidiaries may not be able to comply with certain South African mining and minerals legislation, which may jeopardize the Company's mining permits and ultimately cause material breaches of certain contracts.
• If the transactions are not approved, the Company may not have sufficient funds to satisfy not only the debtholders, but also its creditors. Without these transactions and with limited cash resources, the Company may not be able to continue as a going concern.

In summary, the statement made by the representative of Olma Investments that Shareholders would be better off if the Company declared bankruptcy, we submit, is irresponsible and is likely made without a proper understanding of the impact of a liquidation scenario involving South African assets. Olma Investments has not proposed a concrete workable alternative plan. A non-binding expression of interest creates no legally binding commitment and may be worthless.

Your Board has not taken its responsibilities lightly. We have agreed to the sale of Mine Waste Solutions and Ezulwini only after the most thorough examination of all available options. We believe we have acted in the BEST interests of ALL stakeholders.

Accordingly, we urge you to vote FOR the transactions at the special meeting of Shareholders on June 13, 2012 and send a strong message to Olma Investments that both the AngloGold and Gold One transactions will benefit ALL Shareholders and debtholders.

Shareholders and debtholders are reminded to vote their proxy FOR the transactions and all related proposals before the proxy voting deadline on Monday, June 11, 2012 at 5:00 p.m. (Toronto time).

If you have any questions about the information contained in the Management Information Circulars or require assistance with voting your securities, please contact Kingsdale Shareholder Services Inc. by telephone at 1-866-581-1571 toll-free in North America, or at 1-416-867-2272 outside of North America (collect calls accepted), or by email at contactus@kingsdaleshareholder.com.

BY ORDER OF THE BOARD

(Signed) "Peter M. Surgey"

Peter M. Surgey
Chairman
First Uranium Corporation

Any questions and requests for assistance may be directed to the Proxy Solicitation Agent:

The Exchange Tower
130 King Street West, Suite 2950, P.O. Box 361
Toronto, Ontario
M5X 1E2
www.kingsdaleshareholder.com

North American Toll Free Phone:
1-866-581-1571
Email: contactus@kingsdaleshareholder.com

Facsimile: 416-867-2271
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Outside North America, Banks and Brokers Call Collect: 416-867-2272

SOURCE First Uranium Corporation