First Uranium Corporation - Q2 2011 PRODUCTION RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010 and AN UPDATE ON IMPROVEMENTS AT THE EZULWINI MINE

Oct 20, 2010, 02:02 ET from First Uranium Corporation

All amounts are in US dollars unless otherwise noted.

TORONTO and JOHANNESBURG, Oct. 20 /PRNewswire/ - First Uranium Corporation (TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company") today announced that during the three months ended September 30, 2010 ("Q2 2011"), 14,820 ounces of gold were produced from the Ezulwini Mine and 18,598 ounces of gold from the Mine Waste Solutions tailings recovery project ("MWS") in South Africa.

The Ezulwini Mine also produced 12,753 pounds of uranium in the form of yellowcake ("ammonium diuranate") and 31,408 pounds in the form of uranium.

Gold production at the Ezulwini Mine was slightly higher than last quarter and the upgraded backfill plant has been commissioned, which will enhance future production output. The MWS production build-up remains on-track and all projects are on schedule. MWS has delivered its third successive quarter of achieving, or improving on, its market guidance.

Q2 2011 PRODUCTION HIGHLIGHTS

  • The second phase of the backfill plant upgrade at the Ezulwini Mine has been commissioned and significant increases in production levels are becoming evident;
  • MWS continues to deliver with plant and tailings expansion projects remaining on-track;
  • All capital commitments re-prioritized to ensure efficient use of available cash;
  • Expected gold output for fiscal year 2011 remains at an annualized 80,000 ounces for the Ezulwini Mine and 72,000 ounces for MWS; and
  • Continuing cost control at both operations and the corporate office.

The following table summarizes the production from each operation during Q2 2011. Production from the previous four quarters has been included for comparison purposes.  

Quarterly Production Results

  Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010
MWS          
Tonnes of ore reclaimed (000s) 3,170 3,105 3,232 3,528 2,476
Average gold head grade (g/t) 0.35 0.36 0.34 0.34 0.36
Gold plant recovery (%) 52% 56% 56% 58% 47%
Gold produced (oz) 18,598 20,215 19,693 21,891 13,422
Ezulwini Mine          
Tonnes of ore hoisted 145,642 135,009 130,822 117,164 98,831
Tonnes of ore milled 146,854 132,963 129,532 108,503 94,599
Average gold recovery grade (g/t) 3.1 3.3 2.4 2.8 2.5
Gold produced (oz) 14,820 14,120 7,526 10,685 7,952
Yellowcake produced (lbs) 12,753 19,764 22,488 15,351 13,098
Uranium produced (lbs) 31,408 - 20,638 23,761 -

OPERATIONS OVERVIEW

Mine Waste Solutions

During Q2 2011, MWS continued to deliver into its plan. This represents the third successive quarter that MWS has either achieved or exceeded target. MWS remains on-track to increase its throughput from 1,200,000 tpm to 1,800,000 tpm by September 2011.

It is anticipated that the remaining capital program comprising the third gold plant module and the new Tailings Storage Facility, including adjoining infrastructure, will be completed on schedule by May 2011, which should allow for the re-structured Gold Wheaton completion test to be satisfied prior to September 1, 2011.

Ezulwini Mine

During Q2 2011, the mine's production build-up was negatively impacted by a seismic event that occurred on August 20, 2010. As a result, blasting activities in the Upper Elsburg were limited to allow for opening-up and support work in areas damaged by the seismic event.  The reduced blasting activities, which impacted extraction rates in the high-grade Elsburg Reefs for a period of approximately five weeks, resulted in the overall gold production increase being constrained at 14,820 ounces, which is a 5% increase quarter on quarter. Post the event, management resolved that the potential for seismic risks in the future could be significantly reduced by the introduction of backfill in all conventional panels in the shaft pillar. As a result, the modular backfill plant has been upgraded, expanded and was successfully re-commissioned on September 23, 2010.

The upgrade of the backfill plant has increased capacity by 500% from 50m3/shift to 250m3/shift. The resulting increased backfill capacity will allow the backfilling of mined-out drifts (voids), which will in turn, allow the safe extraction of pillars adjacent to these mined-out voids. This opportunity underpins management's confidence to achieve the 80,000 ounces annualised gold production plan for FY 2011. The increased backfill capacity will result in an overall reduction in the cost of production and a safer work environment due to a reduction in the risk of negative effects of future seismic activity.

OUTLOOK

Mine Waste Solutions: Remains on-track to achieve planned production metrics in Q3 FY11.

Ezulwini Mine: Incremental capacity improvements in the backfill plant will continue to underpin the mine's ramp up plan.

About First Uranium Corporation

First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on its goal of becoming a significant low-cost producer of uranium and gold through the expansion of the underground development to feed the new uranium and gold plants at the Ezulwini Mine and through the expansion of the plant capacity of the Mine Waste Solutions tailings recovery facility, both located 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 including, without limitation, statements regarding the timing and amount of estimated future production, processing and development plans and future plans and objectives of First Uranium are forward-looking statements (or forward-looking information) that involve various estimates, assumptions, risks and uncertainties.  For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form 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