First Uranium announces financial results for the three months ended June 30, 2012

• On July 20, 2012, the Implementation Date, as defined in the agreement (the "AGA Agreement") dated March 2, 2012 for the sale, indirectly, of all of the shares of Mine Waste Solutions (Proprietary) Limited ("MWS"), owner of the Corporation's tailings recovery project in South Africa, to AngloGold Ashanti Limited ("AGA") for US$335 million in cash (the "AGA Transaction"), occurred with the discharge of the security held for the benefit of the 7% secured convertible notes due March 31, 2013 (the "Canadian Notes") issued by First Uranium, the 11% secured convertible notes due March 31, 2013 (the "Rand Notes") issued by MWS, and the US$10 million loan facility (the "Gold One Loan") with Gold One International Limited ("Gold One").
  
  
• Of the proceeds from the AGA Transaction, US$25 million (the "AGA Deferred Payment") will be held in escrow until January 20, 2013 at which time, the AGA Deferred Payment, less any claims made and payable in accordance with the AGA Agreement, if any, will be paid to First Uranium.
  
  
• The US$10 million Gold One Loan plus accrued interest of US$220,643 was repaid in full.
  
  
• The termination fee under the Vulisango management agreement of ZAR9.6 million (US$1,181,030) was paid in full.
  
  
• The Canadian Notes, principal amount of Cdn$110 million (US$109,040,444) and the Rand Notes, principal amount of ZAR418.6 million (US$51,498,431), were redeemed in full on July 31, 2012.
  
  
• August 1, 2012, was the Implementation Date, as defined in the agreement (the "Gold One Agreement") dated March 30, 2012, as amended, of the sale of First Uranium Limited, a wholly-owned subsidiary of the Corporation, which owns all of the shares of Ezulwini Mining Company (Proprietary) Limited, to Gold One for US$70 million.
  
  
• Of the proceeds from the Gold One Transaction, US$5 million (the "Gold One Deferred Payment") will be held in escrow until February 1, 2013 at which time, the Gold One Deferred Payment, less any claims made and payable in accordance with the AGA Agreement, if any, will be paid to First Uranium.
  
  
• On August 13, 2012, the Corporation paid to the Indenture Trustee for distribution to holders of 4.25% unsecured convertible debentures (the "Debentures") issued by the Corporation, Cdn$142.5 million (US$142,957,464) representing 95% of the principal amount of the Debentures owing as of April 30, 2012 together with the unpaid interest on 100% of the principal amount the Debentures accruing from December 31, 2011 to March 2, 2012 (inclusive) in the amount of Cdn$1,100,343 (US$1,103,875)(together the 95% Payment Amount). It is expected that the registered holder, the Canadian Depository for Securities, will complete the payment to Debentureholders on August 15, 2012.
  
  
• In addition to the 95% Payment Amount, on August 13, 2012, the Corporation paid to the Indenture Trustee, Cdn$3 million (US$3,009,630) representing 2% of the principal amount of the Debentures owing as of April 30, 2012, for distribution on a pro rata basis to those Debenture holders who agreed on or before May 30, 2012, to vote in favour of the extraordinary resolution to approve the amendments to the Debenture indenture.  It is expected that the Indenture Trustee will complete the payment of this amount on August 15, 2012.
  
  
• The Debentures no longer meet the listing requirements of the Toronto Stock Exchange (the "TSX") and the Debentures were delisted at the close of business on August 13, 2012. The Corporation applied to list the Debentures on the NEX Board of TSX Venture Exchange ("NEX"). However, the NEX declined to accept the Debentures for listing, as following payment of 97% of the principal amount, the Debentures do not meet the minimum listing requirements of the NEX.
  
  
• Both the senior management team and the board of directors of the Corporation have been reduced in size.
  
  
• The Corporation no longer meets the original listing requirements of the TSX, and has voluntarily applied to delist from the TSX and applied for a listing of its units on the NEX.  The Corporation has received conditional approval from the NEX to list the units.  The conditions are customary and the Corporation believes that it will be able to satisfy such conditions which will allow for an orderly transition from the TSX to the NEX and no interruption in trading.
  
  
• Subject to listing the Corporation's units on the NEX and meeting the requirements for notice of record dates and payment dates of the NEX and the JSE Limited, the Corporation expects that it would be in a position to pay an initial distribution to shareholders in the amount of Cdn$0.125 per unit within four weeks of listing the units on the NEX. The Corporation will provide a further update when the date for listing on the NEX has been finalized.
  
  
• The lower initial distribution amount compared to the estimate of Cdn$0.22 per unit as of June 6, 2012, is due substantially to changes in the Cdn/USD and ZAR/USD exchange rates (approx. Cdn$0.065 per unit), lower than expected production and higher costs at the operations and gold price fluctuations (approx. Cdn$0.02 per unit), and taxes (approx. Cdn$0.01 per unit).
  
  
• In addition, following the release of the AGA Deferred Payment and the Gold One Deferred Payment, the settlement of all remaining obligations to the Debenture holders and the establishment of a reserve for any continuing and contingent obligations, the Board will determine an additional amount, from the amounts available from escrow, for the second distribution to the holders of the Units.

Results for Q1 2013

Gold sales for the three months ended June 30, 2012 ("Q1 2013") of 30,636 ounces, which is 11% lower than the 34,439 ounces sold for the three months ended June 30, 2011 ("Q1 2012"), and 7% lower than the 32,931 ounces sold during the three months ended March 31, 2012 ("Q4 2012"). The Corporation also sold 26,733 pounds of uranium in Q1 2013 compared to 31,407 pounds in Q1 2012 and 23,675 pounds in Q4 2012.

Total proceeds* (refer to note at end) from gold and uranium sold by the Corporation's two operations was US$44.2 million in Q1 2013 (Q1 2012: US$42.3 million; Q4 2012: US$48.0 million), which is 4% higher and 8% lower compared to Q1 2012 and Q4 2012, respectively.

Mine Waste Solutions ("MWS") generated US$26.7 million (Q1 2012: US$26.6 million; Q4 2012: US$33.9 million) in proceeds from 20,295 ounces of gold sold (Q1 2012: 21,546 ounces; Q4 2012: 24,862 ounces) at a Cash Cost** (refer to note at end) of US$847 per ounce (Q1 2012: US$663 per ounce; Q4 2012: US$790 per ounce).

Even though MWS's tonnage throughput for Q1 2013 was 7% lower compared to Q1 2012 with a resultant 6% drop in gold ounces sold, gold revenues improved slightly (1%) quarter-on-quarter due to on-average higher gold selling prices.

Since Q3 2012, MWS has experienced some challenges with the introduction of new material into the mining mix which resulted in lower average grade delivered to its gold circuits. Towards the end of Q4 2012, MWS's performance was further impacted negatively by recalcitrant clay levels at the Buffelsfontein #3 tailings dam that reduced volumes and hence content of feed material delivered to and extracted by the plant infrastructure. Consequently, the tonnage throughput (9%) and gold recoveries (13%) for Q1 2013 were lower compared to that of Q4 2012, resulting in a reduction of 18% in gold ounces sold. The lower ounces sold combined with on-average gold selling prices in Q1 2013 compared to Q4 2012 resulted in the 21% decrease in gold revenues from MWS.

The 20% increase in costs in Q1 2013 compared to Q1 2012 was due to a number of factors, including additional power costs of operating the new TSF, additional water costs and substantial increases to the cost of certain key reagents. The 13% increase in costs compared to Q4 2012 was driven by labour increases which was effective from the start of the quarter along with higher power costs due to tariff increases and winter rates taking effect during Q1 2013.

Due to the Corporation's decision to dispose of its principal assets at the start of Q4 2012, no amortization for the MWS assets was provided for on a consolidated basis since the start of the 2012 calendar year.

The 7% higher gross profit in Q1 2013 compared to Q1 2012 was primarily attributable to the fact that no amortization was provided for in Q1 2013. The 33% lower gross profit compared to Q4 2012 was attributable to the lower revenues along with higher costs in Q1 2013 as discussed above.

The Ezulwini Mine generated US$16.1 million (Q1 2012: US$13.8 million; Q4 2012: US$12.9 million) in proceeds from 10,341 ounces of gold sold (Q1 2012: 12,893 ounces; Q4 2012: 8,069 ounces) at a Cash Cost of US$1,614 per ounce (Q1 2012: US$2,344 per ounce; Q4 2012: US$2,217 per ounce).

Although the gold ounces sold was 20% lower compared to Q1 2012, gold revenues improved by 17%. The improvement in revenue was primarily due to on-average higher gold selling prices compared to Q1 2012, and further aided by the reduction in the ounces of gold delivered to Franco Nevada ("FN") at US$400 per ounce pursuant to the Ezulwini Gold Stream Transaction from effectively 40% of total gold production in Q1 2012 to 7% as of January 2012. Costs were significantly lower compared to Q1 2012 due to the restructuring process that was implemented towards the end of Q4 2012 along with various cost cutting initiatives that were implemented over the course of FY 2012.

The mine started to realize the benefits from the restructuring process that was implemented during Q4 2012 as can be seen by the 13% improvement in tonnes milled and a 2% improvement in gold recoveries that resulted in a 27% increase in gold ounces sold compared to Q4 2012. Consequently, gold revenues were also higher compared to Q4 2012, although the increase was slightly lower due to the on-average lower gold selling prices compared to the previous quarter. Costs were only 6% lower compared to Q4 2012 primarily as a result of labour increases that became effective at the start of Q1 2013, as well as higher power costs due to tariff increases and winter rates taking effect in during the quarter.

Due to the Corporation's decision to dispose of its principal assets at the start of Q4 2012, no amortization for the Ezulwini Mine assets was provided for on a consolidated basis since the start of the 2012 calendar year.

The improvement in revenues and the reduction in costs in Q1 2013 compared to Q1 2012 and Q4 2012 resulted in gross losses from the Ezulwini Mine decreasing substantially, by 97% and 89%, respectively.

The Corporation reported consolidated gross profits for Q1 2013 compared to consolidated gross losses for Q1 2012, primarily as a result of the improvement in performance and reduction in costs by the Ezulwini Mine quarter-on-quarter. The poor performance by MWS in Q1 2013 compared to Q4 2012 more than offset the improved performance and cost reductions from the Ezulwini Mine and resulted in a marginal decrease in gross profits compared to the previous quarter.

First Uranium's consolidated pre-tax profit of US$30.7 million in Q1 2013 showed a US$70.5 million improvement compared to the consolidated pre-tax loss of Q1 2012 (Q1 2012: US$39.8 million; Q4 2012: US$22.7 million). The primary driver for the improvement was the derivative income related to the Gold Stream Transactions of US$34.9 million recognized in Q1 2013 compared to a derivative expense of US$22.3 million recognized in Q1 2012.

The Corporation (including discontinued operations) generated US$4.1 million cash from its operations in Q1 2013, compared to cash utilized of US$5.4 million in Q1 2012. The Corporation utilized US$2.7 million during Q1 2013 (Q1 2012: US$15.9 million) on capital projects at the operations. The much lower capital expenditure in Q1 2013 compared to Q1 2012 reflects the completion of the major capital projects at MWS which occurred during Q3 2012.

As at June 30, 2012, current assets, including current assets from discontinued operations, were US$25.5 million (March 31, 2012: US$21.9 million) and included cash and cash equivalents of US$11.7 million (March 31, 2012: US$6.7 million). First Uranium's current assets, excluding current assets from discontinued operations, were US$3.0 million as at June 30, 2012 and included cash equivalents of US$2.3 million.


NOTES:
*Proceeds are non-IFRS measurements and investors are cautioned not to place undue reliance on it and are advised to read all IFRS accounting disclosures presented in the Corporation's Financial Statements.

**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 Corporation's Financial Statements.


Non-IFRS Measures

The Corporation believes that in addition to conventional measures prepared in accordance with IFRS, the Corporation and certain investors and analysts use certain other non-IFRS financial measures to evaluate the Corporation's performance including its ability to generate cash flow and profits from its operations. The Corporation 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 Corporation's Financial Statements for more detail.


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 Corporation'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 Corporation'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.



SOURCE First Uranium Corporation

Mary Batoff
+1 416 306 3072 or mary@firsturanium.ca
www.firsturanium.com