First Uranium reports results for the three and nine months ended December 31, 2007

First Uranium reports results for the three and nine months ended December 31,
2007
All amounts are in US dollars unless otherwise noted.

TORONTO and JOHANNESBURG, Feb. 13 /PRNewswire-FirstCall/ - First Uranium
Corporation (TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the
Company") today announced that it recorded a net loss of $4.1 million for the
three months ended December 31, 2007 ("Q3 2008") (Q3 2007: $3.8 million),
which was primarily the result of ongoing expenditures incurred in preparation
of the uranium and gold projects for production, along with general and
administrative expenses. Net income for the nine months ending December 31,
2008 ("2008 YTD") was $4.5 million (2007 YTD: $5.2 million) primarily the
result of foreign exchange gains on translation of net assets held in Canadian
dollars and South African rand into US dollars offset by ongoing expenditures.
As the Ezulwini Mine is still in a ramp-up phase and has not yet achieved
commercial levels of production, the revenue less cost of production from its
mining operations of $2.4 million during both Q3 2008 and 2008 YTD has been
capitalized against Mine infrastructure costs in Property, Plant and
Equipment.
Recent Highlights

During Q3 2008, First Uranium:
- toll-treated 27,951 tonnes of ore from the Ezulwini Mine (see
Definitions 2) at a recovered grade of 5.6 grams of gold per tonne,
producing 5,055 ounces of gold at a Cash Cost (see Definitions 1) of
$348 per ounce
- started drilling specific targets related to the possible expansion
of the existing Ezulwini Mine (the "Ezulwini Expansion Program")
- completed construction of the pump station at MWS (see Definitions 2)
and the 10.5-kilometre pipeline to the MWS gold plant at a total cost
of $11.7 million
- completed the clean up and processing of the remaining tailings of
the MWS # 2 tailings dam and commenced hydraulic mining and pumping
of material from the Buffelsfontein # 2 dam to the MWS gold plant
for processing during mid-December
- processed a total of 832,208 tonnes of tailings through the MWS gold
plant at a recovered grade of 0.275 grams of gold per tonne,
producing a total of 7,357 ounces of gold at a Cash Cost of $674 per
ounce
- completed a pre-feasibility study of MWS incorporating higher average
uranium and gold price assumptions and increased capital investment,
which projected the project's expected net present value ("NPV")
increasing by 71% to $505 million and its internal rate of return
("IRR") increasing from 69% to 151%
- entered into an interim off-take agreement with a third party
pursuant to which the third party will purchase yellowcake from First
Uranium from June 2008 until January 2009 at rates based upon the
then prevailing spot prices
- issued 6.1 million First Uranium shares to Waterpan Mining Consortium
("Waterpan") in connection with the acquisition of the remaining 10%
interest in Ezulwini Mining Company (Proprietary) Limited ("EMC")
which owns and operates the Ezulwini Mine, resulting in EMC becoming
wholly-owned by First Uranium (the "Waterpan Transaction")
- ended the period with $215.2 million in cash and cash equivalents

Subsequent to the end of Q3 2008, First Uranium:
- was granted an unconditional prospecting right for 6,843 hectares of
additional property adjacent to the Company's Ezulwini Mine
- filed the technical report for the pre-feasibility study of MWS, as
announced on December 19, 2007
- due to the significantly reduced supply of electrical power currently
available in South Africa, its national power utility ("Eskom")
developed concerns about its ability to supply power in the short and
medium term. As a result, First Uranium has had to impose voluntary
shut-downs of mine development and hoisting activity at the Ezulwini
Mine. Most recently, Eskom has implemented compulsory cut-backs of
power consumption on businesses and mining companies generally. The
specific effects of these measures mandated by Eskom on First
Uranium's operations and development projects and any modifications
thereto (the "Power Situation") have been and continue to be
analyzed. (see 'Preliminary Assessment of the Impact of the Power
Situation')

During Q4 2008, and prior to the Power Situation, First Uranium had
planned to: - commence the upgrading of the MWS gold plant to increase
the design
capacity from 500,000 tonnes per month to 630,000 tonnes per month,
with completion scheduled in Q4 2008
- upgrade MWS # 5 tailings dam to enable a deposition rate of 630,000
tonnes of material per month. The upgrade is expected to be completed
during Q4 2008.
- start on-site preparation for the construction of the additional gold
plant module and the two uranium plant modules at MWS

Gordon Miller, President and Chief Executive Officer of First Uranium
said, "We have, so far, been able to accomplish all the significant objectives
we have set out to do. While power supply reductions threaten our ability to
continue to do that, we have several alternatives to adjust our uses and
sources of power with the intent to start uranium production as close to plan
as the Power Situation will allow."
Preliminary Assessment of the Impact of the Power Situation
After a preliminary review of the feasibility of the Corporation
generating its own power, First Uranium's Board has concluded that the
Corporation's two projects are sufficiently robust to continue development as
planned based on the addition of power generation capacity.
The initial impact of this decision is as follows:

For the Ezulwini Mine:
- given the uncertainty of power supply at a third-party gold plant to
toll-treat the Corporation's ore, the Board has decided to postpone
the ramp-up of the underground production and to accelerate the shaft
refurbishment program
- the weekly operating plan to date has been to focus on mine
development and hoisting for three days and on shaft rehabilitation
for four days; henceforth the intention is to focus entirely on shaft
refurbishment until the operation's gold plant is commissioned in
April 2008
- the first 50,000 tonne per month module of the gold plant is on
schedule for commissioning in April 2008 using existing generator
capacity; should Eskom power not be forthcoming, the Ezulwini Mine
has existing generator capacity of 13 MVA ("1 Megavolt Ampere
= 1 Mega Watt") which will be utilized
- the first 50,000 tonne per month module of the uranium plant remains
on schedule for commissioning in June 2008; a feasibility study of
power generation options is underway to reduce power reliance on
Eskom
- commissioning of the remaining modules of the gold and uranium plant
will be deferred by approximately a year to January 2010 to coincide
with the corresponding mine development plan

For MWS:
- the current MWS operation is at present unaffected by the Power
Situation as it has been drawing additional power from Buffelsfontein
Gold Mines Limited ("BGM")
- upgrading of the MWS gold plant to increase the design capacity to
630,000 tonnes per month remains on schedule for completion in Q4
2008
- the expansion of the current operations, however, will require
additional power; a power generation feasibility study has been
initiated with the expected result that the expansion will be delayed
by approximately three months

The decision to invest in generating our own power is a temporary measure
until the Power Situation has normalized which may take several years. It is
expected that the Corporation will be able to monetize a significant portion
of its investment in owner generated power at that time.
Financial Highlights

-------------------------------------------------------------------------
Q3 Q3 2008 2007
(thousands of dollars) 2008 2007 YTD YTD
-------------------------------------------------------------------------
Revenue 6,623 - 15,069 -
-------------------------------------------------------------------------
Operating loss (4,484) (1,575) (9,838) (4,225)
-------------------------------------------------------------------------
Net income (loss) for
the period (3,998) (3,787) 4,524 (5,239)
-------------------------------------------------------------------------

Revenue

During Q3 2008, a total of 12,412 ounces of gold were produced and sold
from the Ezulwini Mine and MWS, at an average price of $873 per ounce.
Combined production during 2008 YTD totaled 25,956 ounces of gold, which were
sold at an average price of $742 per ounce.
Revenue during Q3 2008 and 2008 YTD as presented above was generated from
the processing of MWS tailings material and sale of the related gold.
As the Ezulwini Mine is still in a ramp-up phase and has not yet achieved
commercial levels of production, the revenue less cost of production from its
mining operations of $2.4 million has been capitalized against Mine
infrastructure costs in Property, Plant and Equipment.
Operating loss

Operating loss includes the following:
- in Q3 2008, gold was produced at average Cash Costs of $348 and
$674 per ounce at the Ezulwini Mine and MWS, respectively. The
relatively high average cash costs at MWS can be attributed to the
diminishing resources taken from the MWS # 2 tailings dam, which
necessitated a low-volume, high-cost mechanical load and placement
operation.
- for Q3 2007 and 2007 YTD, employee compensation costs, consulting and
professional fees were $0.6 million and $2.6 million, respectively
- higher general, consulting and administrative expenses in Q3 2008 and
2008 YTD primarily reflect the higher project development activities,
the costs of corporate offices in Johannesburg and Toronto and other
expenses of operating a public company, which were not applicable in
Q3 2007 and 2007 YTD.
- the Q3 2008 stock-based compensation expense reflects the amortized
cost of 1,223,001 stock options granted during FY 2007 and the
amortized cost of 325,715 stock options granted during 2008 YTD
- during Q3 2008, pumping costs not capitalized at the Ezulwini Mine
were included in expenditures until hoisting commenced at the end of
October 2007. As of November 2007, pumping costs are included in the
cost of production, which has been capitalized to Mine infrastructure
costs in Property, Plant and Equipment

Non-operating income and expenses

Non-operating income and expenses for the periods reported included:
- interest income in Q3 2008 and 2008 YTD represents interest earned on
the net proceeds from the Offering and the Debentures.
- interest expense in Q3 2008 and 2008 YTD consists of the interest
paid on the Debentures.
- foreign exchange gains on translation in Q3 2008 and for 2008 YTD
reflect the strengthening of the Canadian dollar and the South
African Rand against the US dollar

Cash and Capital Expenditures

Cash and cash equivalents at the end of Q3 2008 were $215.2 million as
compared with $154.6 million at the end of Q3 2007. The increase in cash was
primarily attributable to the net proceeds of $130.6 million received from the
sale of the Debentures in May 2007, offset by $28.0 million and $76.4 million
of cash utilized for capital expenditure at the Company's two mining
operations during Q3 2008 and 2008 YTD, respectively.
The Company currently holds its funds in cash and bank-sponsored
guaranteed investment certificates. It has no exposure to asset-backed
commercial paper.
Production Overview
The build-up of production at the Ezulwini Mine during Q3 2008 resulted in
the toll-treatment of 27,951 tonnes of ore at a yield of 5.6 grams of gold per
tonne, producing 5,055 ounces of gold at a cash cost of $348 per ounce.
Production during the first two months of Q3 2008 was negatively influenced by
the lower than planned grades, but this was more than offset in December, when
Ezulwini's production exceeded the planned rate due to higher than expected
grades. During Q3 2008, 247.5 metres were developed, bringing the total metres
developed in the shaft pillar to 833 metres. Progressive grades encountered on
the MA and MB raises in the shaft pillar to date were 5.09 and 5.81 grams of
gold per tonne, respectively.
Stoping for de-stressing of the 41 level MB raise has resulted in an area
of 712 square metres being mined at an in-situ stope grade of 4.74 grams per
tonne. In the Middle Elsburg ("ME") uranium and gold section, stope production
in the newly re-established 45 10B stope commenced in Q3 2008 and has resulted
in an area of 1,059 square metres being mined at an in-situ stope grade of
25.78 grams of gold per tonne.
As of the end of December 2007, the clean-up process on surface and
underground has generated a stockpile in excess of 124,000 tonnes containing
an average grade of 1.1 grams per tonne of gold or approximately 2,800 ounces
of recoverable gold, assuming an average recovery rate of 64%. This stockpile
is expected to be utilized during mill commissioning, which is currently
scheduled for April 2008.
At MWS, production activities during Q3 2008 were limited to hydraulic
mining using high pressure water cannons to slurry the tailings, clean up and
processing of material from the MWS # 2 tailings dam. As a result of the late
commissioning of the production infrastructure at the Buffelsfontein # 2
tailings dam it was necessary to continue hydraulic mining MWS # 2 tailings
dam until December rather than October, as previously anticipated.
The project to construct the initial long-life pump station and 10.5-
kilometre pipeline was initiated in June 2007 and, while it was delayed due to
late delivery of slurry pumps and heavy rains that fell during October making
construction difficult, these new production facilities were commissioned in
mid-December.
As the resources in the MWS # 2 tailings dam neared exhaustion during Q3
2008, it was necessary to use mechanical loading and placement of the remnant
material, in addition to hydraulic mining, which resulted in increased
handling costs relative to a normal reclamation operation in addition to the
reduced tonnages. As a result, only 770,436 tonnes of tailings (0.4 million
tonnes in Q1 2008 and 1.2 million tonnes in Q2 2008) were reclaimed from the
MWS # 2 tailings dam during Q3 2008.
The pump station and the pipeline between the Buffelsfontein property and
the MWS gold plant were completed and commenced operation during December 2007
which enabled the Company to stop mining from the MWS # 2 tailings dam and to
initiate the hydraulic mining of the Buffelsfontein # 2 tailings dam on the
Buffelsfontein property. The material from the Buffelsfontein # 2 tailings dam
is being transported via the pipeline to the MWS gold plant for processing.
Full commissioning of the introduction of the material from Buffelsfontein # 2
tailings dam to the plant is ongoing.
The high pressure pump train located at Buffelsfontein # 2 tailings dam is
performing as designed, despite having a low utilization of 75% during the
quarter. Once the second train of standby pumps is, the utilization is
expected to increase to 95%, which will sustain production at or better than
the planned rate of 20,800 tonnes per day. In the meantime, production rates
have reached 20,000 tonnes per day.
During December, 61,772 tonnes of material from the Buffelsfontein # 2
tailings dam were processed through the MWS gold plant. The initial lower
daily tonnages at the start of the hydraulic mining of the Buffelsfontein # 2
tailings dam were the result of vegetation restricting the flow of material to
the pump station. By the end of December, the vegetation was sufficiently
removed to allow the daily tonnages to exceed 17,000 tonnes per day.
To date, the achieved grade of 0.36 grams of gold per tonne mined from the
Buffelsfontein # 2 tailings dam is in line with the resource estimates for the
initial mining benches, although lower than the planned 0.40 grams of gold per
tonne. The grade is expected to improve as the lower portion of the dam is
mined resulting in higher grade material being treated.
Definitions

1. "Cash Costs" are costs directly related to the physical activities of
producing gold, and include mining, processing and other plant costs,
third-party refining and smelting costs, marketing expense, on-site
general and administrative costs, royalties, in-mine drilling
expenditures that are related to production and other direct costs.
Sales of by-product metals 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. Total cash costs per ounce is a non-GAAP
measurement and investors are cautioned not to place undue reliance
on it and are urged to read all GAAP accounting disclosures presented
in the consolidated financial statements and accompanying footnotes.

2. First Uranium is currently focused on the rehabilitation and bringing
into production of the Ezulwini underground uranium and gold mine
(the "Ezulwini Mine") and the recovery of uranium and gold from the
existing and future surface tailings at the Buffelsfontein mine
through gold and uranium plants originally planned to be constructed
near the tailings at the Buffelsfontein mine (the "Buffelsfontein
Tailings Recovery Project"). In June 2007, the Company acquired Mine
Waste Solutions (Proprietary) Limited ("MWS"), an existing tailings
treatment company which had an operating gold recovery plant in
place. As a result of the MWS purchase, First Uranium changed its
plans for the Buffelsfontein Tailings Recovery Project so that the
historical and future tailings from the Buffelsfontein mine (the
"Buffelsfontein Tailings") will now be transported by pipeline to the
MWS site and processed through MWS's existing gold plant and, subject
to their completion, through the new uranium recovery plant and
additional gold recovery facilities which are currently being
constructed at the MWS site. For greater clarity, the Buffelsfontein
Tailings Recovery Project, as enhanced and modified by the addition
of MWS, will henceforth be referred to as MWS.

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
availability of electrical power, the possible addition of owner-operated
power generation, 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 "goal", "objective",
"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 Company's expectations as at November 9, 2007; (ii)
actual results may differ materially from the Company's expectations if known
and unknown risks or uncertainties affect its business, or if estimates or
assumptions prove inaccurate; (iii) the Company 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 Company 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) consistent supply of sufficient power will be
available to develop and operate the projects as planned; (ii) approvals to
transfer or grant, as the case may be, mining rights will be obtained; (iii)
metal prices, exchange rates and discount rates applied in the preliminary
economic assessments are achieved; (iv) mineral resource estimates are
accurate; (v) the technology used to develop and operate its two projects has,
for the most part, been proven and will work effectively; (vi) that labour and
materials will be sufficiently plentiful as to not impede the projects or add
significantly to the estimated cash costs of operations; (vii) that Black
Economic Empowerment ("BEE") investors will maintain their interest in the
Company and their investment in the Company's common shares to a sufficient
level to continue to support the Company'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.
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 Mine Waste Solutions 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 and nine months ended December 31, 2007

The interim consolidated financial statements contained herein have not
been audited by the Corporation's independent auditors.

First Uranium Corporation
Consolidated Balance Sheets (unaudited)
(in United States Dollars)
December 31 March 31
2007 2007
Notes US$'000 US$'000
-------------------------------------------------------------------------

ASSETS

Current assets
Cash and cash equivalents 215,216 138,914
Amounts receivable 5 14,038 1,713
Inventories 6 2,461 292
Receivables from related party 21 - 6,763
-------------------------------------------------------------------------
231,715 147,682
-------------------------------------------------------------------------

Non-current assets
Property, plant and equipment 7 166,677 30,954
Asset retirement funds 8 5,144 2,791
Loan to related party 21 1,019 -
-------------------------------------------------------------------------
172,840 33,745
-------------------------------------------------------------------------

-------------------------------------------------------------------------
Total assets 404,555 181,427
-------------------------------------------------------------------------
-------------------------------------------------------------------------

LIABILITIES

Current liabilities
Accounts payable and accrued
liabilities 10 19,112 5,702
Payables to related party 21 832 -
-------------------------------------------------------------------------
19,944 5,702
-------------------------------------------------------------------------

Non-current liabilities
Senior unsecured convertible
debentures 11 103,668 -
Future tax liability 15 10,342 -
Asset retirement obligations 12 14,172 5,377
-------------------------------------------------------------------------
128,182 5,377
-------------------------------------------------------------------------

SHAREHOLDERS' EQUITY
Share capital 13 215,637 182,673
Equity portion of senior unsecured
convertible debentures 11 46,504 -
Contributed surplus 14 4,549 2,460
Accumulated deficit (10,261) (14,785)
-------------------------------------------------------------------------
256,429 170,348
-------------------------------------------------------------------------

-------------------------------------------------------------------------
Total equity and liabilities 404,555 181,427
-------------------------------------------------------------------------
-------------------------------------------------------------------------

See accompanying notes to the Consolidated Financial Statements

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

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
Notes US$'000 US$'000 US$'000 US$'000
-------------------------------------------------------------------------

Revenue 6,633 - 15,069 -
Cost of sales (5,433) - (13,030) -
-------------------------------------------------------------------------

1,200 - 2,039 -

Other Income 1,379 - 2,276 -

Expenditures
General,
consulting and
administrative
expenditures (4,058) (706) (8,548) (3,356)
Stock-based
compensation 14 (1,079) (519) (2,513) (519)
Pumping,
feasibility and
rehabilitation
costs (1,880) (350) (2,948) (350)
Amortization of
property, plant
and equipment 7 (46) - (144) -
-------------------------------------------------------------------------
(7,063) (1,575) (14,153) (4,225)
-------------------------------------------------------------------------

Operating loss (4,484) (1,575) (9,838) (4,225)
Interest income 4,467 529 12,840 422
Interest expense (1,629) - (4,087) (101)
Accretion expense
on convertible
debentures 11 (3,724) - (8,103) -
Foreign exchange
gains 16 1,245 (2,741) 13,636 (1,335)
-------------------------------------------------------------------------

Net income (loss)
before income
taxes (4,125) (3,787) 4,448 (5,239)
Provision for
income taxes 15 127 - 76 -
-------------------------------------------------------------------------
Net income (loss)
for the period (3,998) (3,787) 4,524 (5,239)
Accumulated
deficit at the
beginning of
the period (6,263) (8,309) (14,785) (6,857)
-------------------------------------------------------------------------
Accumulated
deficit at the
end of the
period (10,261) (12,096) (10,261) (12,096)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Basic and diluted
(loss) income
per common
share ($) 17 (0.03) (0.04) 0.04 (0.06)

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

Net (loss)
income (3,998) (3,787) 4,524 (5,239)
Adjustments - - - -
-------------------------------------------------------------------------
Comprehensive
(loss) income 3 (3,998) (3,787) 4,524 (5,239)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

See accompanying notes to the Consolidated Financial Statements

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

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
Notes US$'000 US$'000 US$'000 US$'000
-------------------------------------------------------------------------

Net (loss)
income before
taxes (4,125) (3,787) 4,448 (5,239)
Changes not
affecting cash:
- Interest
income 18.1 (48) (414) (146) -
- Interest
expense 18.2 - - - (101)
- Accretion
expense on
convertible
debentures 11 3,724 - 8,103 -
- Amortization
on property,
plant and
equipment 524 - 1,483 -
- Stock-based
compensation 14 1,079 519 2,648 519
-------------------------------------------------------------------------
Net income (loss)
after interest
and non-cash
items 1,154 (3,682) 16,536 (4,821)
Movement in
working capital:
- (Increase)/
decrease in
inventories 448 - (759) -
- Increase in
accounts
receivable (5,848) - (11,079) -
- Increase in
net
(receivables
from)/
payables to
related
parties 18.3 (460) (13,682) 6,576 (7,498)
- Increase/
(decrease)
in accounts
payable and
accrued
liabilities (7,835) 2,057 (1,951) 3,461
-------------------------------------------------------------------------
Cash flows
(utilized in)
generated from
operating
activities (12,541) (15,307) 9,323 (8,858)
-------------------------------------------------------------------------

Additions to
property, plant
and equipment 18.4 (28,035) (11,726) (76,395) (16,945)
Rehabilitation
costs incurred - - (272) -
Net cash movement
on acquisition
of MWS 18.5 - - 1,249 -
-------------------------------------------------------------------------
Cash flows from
investing
activities (28,035) (11,726) (75,419) (16,945)
-------------------------------------------------------------------------

Issuance of
senior unsecured
convertible
debentures 11 - 177,696 130,561 178,470
Bridging loan
to facilitate
Waterpan
transaction 13 43,618 - 43,618 -
Repayment of
bridging loan
pursuant to
Waterpan
transaction 14 (43,618) - (43,618) -
Proceeds from
shares 13 506 - 848 -
-------------------------------------------------------------------------
Cash flows from
financing
activities 506 177,696 131,409 178,470
-------------------------------------------------------------------------

Net effect of
exchange rate
changes on cash
held in foreign
currencies 954 2,741 10,989 1,335

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

Net (decrease)
increase in cash
and cash
equivalents for
the period (39,116) 153,404 76,302 154,002

Cash and cash
equivalents at
beginning of
the period 254,332 1,158 138,914 560
-------------------------------------------------------------------------
Cash and cash
equivalents at
end of
the period 215,216 154,562 215,216 154,562
-------------------------------------------------------------------------
-------------------------------------------------------------------------

See accompanying notes to the Consolidated Financial Statements

First Uranium Corporation
Notes to the Consolidated Financial Statements (unaudited)
December 31, 2007

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

First Uranium Corporation ("First Uranium" or "the Corporation") is a
Canadian resource company focused on the development of uranium and
gold projects in South Africa. See Note 7 "Property, Plant and
Equipment" for a description of the projects. The Corporation has a
primary listing on the Toronto Stock Exchange ("TSX") and a secondary
listing on the Johannesburg Stock Exchange ("JSE"). First Uranium
owns 100% of First Uranium Limited ("FUL"), which in turn holds 100%
of First Uranium (Proprietary) Limited ("FUSA") and 100% of Ezulwini
Mining Company (Proprietary) Limited ("EMC"), which owns and operates
the Ezulwini Mine.

During the three months ending June 30, 2007, the Corporation
acquired all the issued and outstanding shares of Mine Waste
Solutions (Proprietary) Limited and its subsidiary, Chemwes
(Proprietary) Limited (collectively "MWS"), an existing tailings
treatment company which had an operating gold recovery plant in
place. As a result of the MWS purchase, First Uranium changed its
plans for the Buffelsfontein Tailings Recovery Project so that the
historical and future tailings from the Buffelsfontein mine (the
"Buffelsfontein Tailings") will now be transported by pipeline to the
MWS site and processed through MWS's existing gold plant and, subject
to their completion, through the new uranium recovery plant and
additional gold recovery facilities which are currently being
constructed at the MWS site. For greater clarity, the Buffelsfontein
Tailings Recovery Project, as enhanced and modified by the addition
of MWS, will henceforth be referred to as MWS.

During the three months ending December 31, 2007, First Uranium
issued 6.1 million shares to Waterpan Mining Consortium ("Waterpan")
completing the purchase of the remaining 10% interest in EMC as
contemplated in the Corporation's initial public offering in December
2006 ("the Offering") (the "Waterpan transaction") and as disclosed
in the Offering documents and in the annual financial statements for
the year ending March 31, 2007 and the interim financial statements
for the three months ending June 30, 2007 and September 30, 2007.
This transaction resulted in EMC becoming wholly-owned by First
Uranium. First Uranium and Waterpan collaborated to effect this
transaction considering the terms of the Offering and as such the
acquisition of the remaining 10% interest in EMC is accounted for
under Canadian GAAP as a continuity of interests. Certain adjustments
have been reflected in the financial statements to reflect the
acquisition as if the share exchange had been effective for the
period from inception to December 31, 2007.

The reporting currency of the Corporation is the US dollar, and all
amounts in these financial statements are in US dollars (US$), except
where otherwise indicated.

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") for preparation of
the interim financial statements. 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 in
Note 3 "Changes in accounting policies". These unaudited interim
consolidated financial statements do not include all disclosures
required by GAAP for annual financial statements, and accordingly
should be read in conjunction with the Corporation's audited
consolidated financial statements for the year ended March 31, 2007.

2.1 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.

2.2 Inventories

Inventories include ore stockpiles, gold in process and supplies and
spares, and are recorded at the lower of cost or net realizable
value. The cost of ore stockpiles and gold produced is determined
principally by the weighted average cost method using related
production costs. Costs of gold produced inventories include costs
such as milling costs, mining costs and mine general and
administration costs but excluding transport, refining and taxes. Net
realizable value is determined with reference to current market
prices. Stockpiles consist of ore to be processed through the
processing plant. The stockpiles have been sampled and evaluated and
are on surface. All ore is expected to be fully processed within the
life of mine. Spares and consumable stores are valued at weighted
average cost after appropriate impairment of redundant and slow
moving items.

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. There were no
transitional effects and as a result no adjustments have been
recorded 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. At
this time the Corporation has none of the elements that will give
rise to comprehensive income.

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 arises. 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 receivables from related party

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

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 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.

Accounting Changes

In July 2006, the Canadian Institute of Chartered Accountants (CICA)
issued a new version of Section 1506 of the CICA Handbook,
"Accounting Changes". This new standard establishes criteria for
changing accounting policies, together with the accounting treatment
and disclosure of changes in accounting policies and estimates, and
correction of errors. This new section was adopted by the Company on
January 1, 2007 with no impact on results.

Accounting policy choice for transaction costs

On June 1, 2007, CICA Emerging Issues Committee issued Abstract
no. 166, "Accounting Policy Choice for Transaction Costs"
(EIC - 166). This EIC addresses the accounting policy choice of
expensing or adding transaction costs related to the acquisition of
financial assets and financial liabilities that are classified as
other than held-for-trading. Specifically, it requires the same
accounting policy choice be applied to all similar financial
instruments classified as other than held-for-trading, but permits a
different policy choice for financial instruments that are not
similar. EIC - 166 requires retroactive application to all
transaction costs accounted for in accordance with Section 3855. The
current recognition policy for transaction costs is consistent with
this guidance.

Future accounting standards

The CICA has issued the following new sections which are effective
for interim periods beginning on or after October 1, 2007. These new
standards relate only to disclosure and presentation and will have no
impact on the Company's results.

Financial instruments - disclosures

Section 3862, "Financial Instruments - Disclosures", describes the
required disclosure for the assessment of the significance of
financial instruments for an entity's financial position and
performance and of the nature and extent of risk arising from
financial instruments to which the entity is exposed and how the
entity manages those risks.

Financial instruments - presentation

Section 3863, "Financial Instruments - Presentation", establishes
standards for presentation of the financial instruments and non-
financial derivatives. It carries forward the presentation related
requirement of Section 3861, "Financial Instruments - Disclosure and
Presentation".

Capital disclosures

Section 1535, "Capital Disclosures", establishes standards for
disclosing information about an entity's capital and how it is
managed. It describes the disclosure of the entity's objectives,
policies and processes for managing capital, the quantitative data
about what the entity regards as capital, whether the entity has
complied with any capital requirements, and, if it has not complied,
the consequences of such non compliance.

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
US$1.9 million 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$32.3 million was paid for the MWS
acquisition in the form of an issuance of 3.1 million First Uranium
common shares valued at US$31.6 million and US$0.7 million 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 have not been completed. Furthermore, the future
income tax assets and liabilities are not yet complete due to the
inherent complexity associated with these valuations. The preliminary
purchase price allocation 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:

Reported at Reported at
December 31, September 30,
2007 Adjustments 2007
US$'000 US$'000 US$'000
---------------------------------------------------------------------
Current assets 4,608 - 4,608
Asset retirement fund 1,950 - 1,950
Property, plant and equipment 40,430 - 40,430
---------------------------------------------------------------------
Total assets acquired 46,988 - 46,988
---------------------------------------------------------------------

Current liabilities 1,476 - 1,476
Lease obligations 28 - 28
Asset retirement obligation 2,777 - 2,777
Future tax liability 10,445 - 10,445
---------------------------------------------------------------------
Total liabilities assumed 14,726 - 14,726
---------------------------------------------------------------------

---------------------------------------------------------------------
Net assets acquired 32,262 - 32,262
---------------------------------------------------------------------
---------------------------------------------------------------------

Current assets include cash and cash equivalents of US$1.3 million
(net of transaction costs) (see Note 18.5).

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 excess of the purchase consideration over the net book value of
MWS of US$35.2 million was attributed to the tailings for processing
of US$29.5 million and US$5.6 million adjustment of the fair value of
property, plant and equipment obtained with the MWS acquisition less
the related future tax liability arising on these assets.

5. AMOUNTS RECEIVABLE

December 31 March 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Trade receivables 5,017 99
Value Added Tax and Goods and Services Tax 8,866 1,463
Prepayments and advances 73 144
Deposits and guarantees 82 7
---------------------------------------------------------------------
14,038 1,713
---------------------------------------------------------------------
---------------------------------------------------------------------
6. INVENTORIES

December 31 March 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Gold work-in-progress 751 -
Spares and consumables 835 292
Stockpiles 875 -
---------------------------------------------------------------------
2,461 292
---------------------------------------------------------------------
---------------------------------------------------------------------

7. PROPERTY, PLANT AND EQUIPMENT

Accumulated Net carrying
Cost amortization amount
December 31, 2007 US$'000 US$'000 US$'000
---------------------------------------------------------------------
Land and buildings 3,826 (32) 3,794
Mine infrastructure 27,558 - 27,558
Mining assets 64,127 - 64,127
Tailings for processing 29,642 (1,108) 28,534
Mining rights 82 - 82
Plant and equipment 41,191 (135) 41,056
Motor vehicles 862 (74) 788
Office furniture and equipment 366 (15) 351
Computer equipment and software 476 (89) 387
---------------------------------------------------------------------
Total 168,130 (1,453) 166,677
---------------------------------------------------------------------
---------------------------------------------------------------------

Accumulated Net carrying
Cost amortization 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$101.4 million (March 31, 2007: US$29.0 million) related
to the Ezulwini Mine and US$64.3 million (March 31, 2007:
US$0.8 million) related to MWS.

Included in the US$64.3 million net carrying value related to the
MWS, is US$28.5 million relating to the Tailings for processing
acquired with the MWS acquisition as well as US$5.4 million
adjustment of the fair value of property, plant and equipment
obtained with the MWS acquisition (see Note 4).

As at December 31, 2007, all property, plant and equipment were owned
by the Corporation, except for motor vehicles with a net carrying
value of US$0.02 million which are held under capitalized lease
contracts.

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

Ezulwini Mine

The Ezulwini Mine project involves the recommissioning of an
underground uranium and gold mining operation located on the
outskirts of the town of Westonaria in Gauteng Province, South
Africa. The Corporation has substantially completed the
re-commissioning of the Ezulwini Mine and has been in the process of
ramping up underground production. 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.

EMC purchased certain surface and underground assets relating to the
Ezulwini Mine for a total consideration of US$7.8 million, effective
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 12 - Asset retirement obligations) 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 capitalized as part of mining
infrastructure.

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

MWS

MWS is a uranium and gold tailings recovery operation located in the
western portion of the Witwatersrand Basin. With the MWS acquisition
(see Note 4), the Corporation acquired an existing operating gold
mine tailings re-processing facility and an historic uranium plant,
adjacent to the Buffelsfontein property, where the Buffelsfontein
Tailings are now being treated. The Corporation commissioned the pump
station and 10.5-kilometre pipeline between the MWS property and the
Buffelsfontein property during December 2007 and hydraulic mining of
the Buffelsfontein tailings dams commenced. MWS is also in the
process of expanding the plant facilities on the MWS property.

During December 2006, FUSA entered into an agreement to acquire
surface tailings from Buffelsfontein Gold Mines Limited ("BGM"), a
subsidiary of Simmer & Jack (the "Buffelsfontein Tailings and Rights
Agreement"). It was originally contemplated that the transaction
would be recognized upon the satisfaction of the conditions precedent
in the Buffelsfontein Tailings and Rights Agreement. While the
conditions have not yet been satisfied, MWS commenced processing the
material from the Buffelsfontein tailings dams and receiving the
benefits thereof, in December 2007 and consequently MWS assumed the
asset retirement obligation related to the Buffelsfontein tailings
dams (see Note 12 - Asset retirement obligations). The corresponding
asset of US$6.2 million associated with the Buffelsfontein tailings
dams is capitalized as part of tailings for processing and amortized
over the estimated life of the Buffelsfontein tailings dams.

8. ASSET RETIREMENT FUNDS
December 31 March 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Balance, beginning of the period 2,791 -
Trust fund assumed on acquisition of
Ezulwini mine - 2,686
Trust fund assumed on acquisition of MWS
(see Note 4) 1,950 -
Investment income 146 82
Contributions in respect of guarantee - 103
Costs incurred - (80)
Foreign exchange differences 257 -
---------------------------------------------------------------------
Balance, closing of the period 5,144 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 primarily of 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
---------------------------------------------------------------------
Ezulwini environmental
DME rehabilitation provision 5,427
Murray and Roberts Ezulwini shaft
Cementation (Pty) Ltd rehabilitation project 2,174
Eskom Holdings Ltd Electricity accounts 1,228
---------------------------------------------------------------------

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

December 31 March 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Trade payables 17,083 5,302
Accruals 2,029 400
---------------------------------------------------------------------
19,112 5,702
---------------------------------------------------------------------
---------------------------------------------------------------------

The trade payables primarily relate to committed purchases for
capital expenditure of US$11.5 million and US$2.4 million at the
Ezulwini Mine and MWS, respectively.

11. 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$135.1 million (Cdn$150 million). 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$46.5 million 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$135.1 million (Cdn$150 million) less conversions. The amounts
accreted during the three and nine months ending December 31, 2007
were US$3.7 million and US$8.1 million respectively. The cost of
issuing the Debentures amounted to US$4.5 million.

As at December 31, 2007, no portion of the Debenture had been
converted. Interest paid for the three and nine months ending
December 31, 2007 amounted to US$1.6 million and US$ 4.1 million.

12. ASSET RETIREMENT OBLIGATIONS

December 31 March 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Balance, beginning of the period 5,377 -
Provision assumed on acquisition of the
Ezulwini Mine - 5,133
Provision assumed on acquisition of MWS
(see Note 4) 2,777 -
Provision assumed with commencement of
hydraulic mining of the Buffelsfontein
tailings dams 6,231 -
Accretion expense 59 244
Rehabilitation costs (272) -
---------------------------------------------------------------------
Balance, closing of the period 14,172 5,377
---------------------------------------------------------------------
---------------------------------------------------------------------

The environmental rehabilitation provision assumed 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 that confirmed the
provision at March 31, 2007 was sufficient.

The environmental rehabilitation provision assumed as part of the MWS
acquisition is to be partly funded by its rehabilitation trust fund
(see Note 8). During April 2007, an independent valuation of the
rehabilitation provision was completed by GCS (Proprietary) Limited,
a water environmental engineering and science consultancy company.
The provision was based on the estimated net cost to rehabilitate the
mine.

The environmental rehabilitation provision associated with the
Buffelsfontein tailings dams was assumed with the commencement of the
hydraulic mining of the Buffelsfontein tailings dams in December
2007. Management estimated the respective environmental
rehabilitation provision assumed at US$ 6.2 million (see Note 7).

13. SHARE CAPITAL

Number of shares
December 31 March 31 December 31 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
pursuant to the
Waterpan
transaction 6,141 - - -
---------------------------------------------------------------------
Balance adjusted
with shares issued
to Waterpan 127,827 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 123 800 848 728
Contributed surplus
relating to stock
options exercised - - 559 27
---------------------------------------------------------------------
131,044 121,686 239,690 206,726
Less: Share issue
costs - - (24,053) (24,053)
---------------------------------------------------------------------
Balance, closing
of period 131,044 121,686 215,637 182,673
---------------------------------------------------------------------
---------------------------------------------------------------------

Authorized

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

Issued and outstanding

On June 1, 2006, 800,000 stock options were exercised for proceeds of
US$0.7 million.

During December 2006, First Uranium issued 33.35 million shares
pursuant to the Offering at Cdn$7 per share for gross proceeds of
US$201.8 million;

On June 6, 2007, First Uranium issued 3,093,980 shares valued at
US$31.6 million relating to the acquisition of MWS (see Note 4).

On December 14, 2007, First Uranium issued 6.1 million shares
pursuant to the Offering (see Note 1).

During the three and nine months ending December 31, 2007, 71,430 and
122,525 stock options were exercised respectively, at an exercise
price of Cdn$7 per share.

14. CONTRIBUTED SURPLUS - STOCK-BASED COMPENSATION

The Corporation maintains a stock-option plan (the "Option Plan") for
employees, officers, directors and for certain consultants who
provide 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 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:

December 31 March 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Balance, beginning of period 2,460 27
Transfer to share capital relating to
stock options exercised (559) (27)
Stock options granted during the period 2,648 2,460
---------------------------------------------------------------------
Balance, end of period 4,549 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:

December 31 September 30 June 30 March 31
2007 2007 2007 2007
---------------------------------------------------------------------
Expected dividend
yield 0% 0% 0% 0%
Expected volatility
of the
Corporation's
share price 63% 63% 56% 85%
Risk free interest
rate - Canadian
rates 4.75% 4.75% 4.81% 3.90%
Expected life 3 years 3 years 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 three and nine months ending December 31, 2007, 209,286
and 325,715 stock options were granted respectively 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
Number of options exercise price (Cdn$)
December 31 March 31 December 31 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 325,715 1,223,001 10.48 7.30
Exercised during
the period (122,525) (800,000) (7.00) (1.00)
Forfeited during
the period (76,192) - (7.00) -
---------------------------------------------------------------------
Outstanding options
at end of period 1,349,999 1,223,001 8.73 7.30
---------------------------------------------------------------------
---------------------------------------------------------------------

The stock-based compensation expense recognized in the statements of
operations and deficit was US$1.1 million and US$2.5 million for the
three and nine months ending December 31, 2007. respectively. For
both the three and nine months ending December 31, 2006, the stock-
based compensation expense was US$0.5 million. During the three and
nine months ending December 31, 2007 US$0.06 and US$0.2 million
stock-based compensation was capitalized to the projects. No stock-
based compensation was capitalized to projects during the three and
nine months ending December 31, 2006. As at December 31, 2007, the
aggregate unexpensed and fair value of unvested stock options granted
amounted to US$0.8 million (March 31, 2007: US$2.9 million).

The following table summarizes information about the First Uranium's
outstanding stock options at December 31, 2007:

Options outstanding Options exercisable
Weighted Weighted Weighted Weighted
average average Number of average average
Exercise Number of remaining exercise options remaining exercise
price options life price exercis- life price
ranges Cdn$ outstanding (years) (Cdn$) able (years) (Cdn$)
-------------------------------------------------------------------------
7.00 to 8.99 928,427 8.97 7.94 237,955 8.97 7.06
9.00 to 11.99 361,572 9.67 10.05 120,523 9.67 10.05
12.00 to 13.99 60,000 9.41 12.87 20,000 9.41 12.87
-------------------------------------------------------------------------
1,349,999 9.18 8.73 378,478 9.22 8.32
-------------------------------------------------------------------------
-------------------------------------------------------------------------

15. TAXATION

Provision for income taxes

The reconciliation of income taxes attributable to operations
computed at the statutory tax rates to income tax recovery, using a
statutory tax rate of 35.47% for the three and nine months ending
December 31, 2007 (three and nine months ending December 31, 2006:
36.12%), is as follows:

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
---------------------------------------------------------------------
Net (loss) income
before taxation (4,125) 786 4,448 (1,452)
---------------------------------------------------------------------
---------------------------------------------------------------------

Income tax payable
(receivable) at
statutory rate (1,463) 284 1,577 (525)
Difference between
Canadian rates and
foreign jurisdiction (300) (95) (345) 41
Change in valuation
allowance (229) - (834) -
Adjustment for
future tax rate
difference 3,385 (170) 1,924 417
Permanent differences (1,419) (19) (2,514) 67
Other (101) - 116 -
---------------------------------------------------------------------
(127) - (76) -
---------------------------------------------------------------------
---------------------------------------------------------------------

Future tax liability

Dec 31 Mar 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Capital assets 11,043 -
Non-capital loss carry-forwards (995) (1,602)
Share issue costs (7,405) (6,629)
Foreign resource expenses (1,136) (1,099)
Foreign exchange (3,142) (850)
---------------------------------------------------------------------
(1,635) (10,180)
Less: Valuation allowance 11,977 10,180
---------------------------------------------------------------------
10,342 -
---------------------------------------------------------------------
---------------------------------------------------------------------

As at December 31, 2007, the Corporation had non-capital losses of
approximately US$3.3 million that may be applied against earnings in
future years. These losses are expected to expire in 2026.

Due to uncertainties in the Corporation's ability to utilize its net
operating losses in all of its operations, the Corporation has
provided a valuation allowance against those future tax assets for
which uncertainty exist.

16. FOREIGN EXCHANGE GAINS

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------------------------
Foreign exchange gains 1,245 (2,741) 13,636 (1,335)
---------------------------------------------------------------------

The Corporation's assets are held in Canadian dollars ("Cdn$") and
South African Rand ("ZAR"), while its accounts are presented in
US dollars. The foreign exchange gains on translation during the
three and nine months ending December 31, 2007 reflect the
strengthening of the Canadian dollar and the South African Rand
against the US dollar.

The majority of the Corporation's funds are currently held in
Canadian dollar denominated short-term deposits bearing interest at
4.85% per annum. The approval of the South African Reserve Bank
("SARB"), which was required in connection with the issue of the
Debentures, includes a condition that the Corporation transfers the
net Debenture proceeds to bank accounts of the Corporation in South
Africa and convert the funds to ZAR, by May 3, 2008.

17. BASIC AND DILUTED (LOSS) EARNINGS PER SHARE

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
---------------------------------------------------------------------

Basic (loss)
earnings per
share of (US$) (0.03) (0.04) 0.04 (0.06)
is calculated
based on net
(loss) income
for the period
of (US$'000) (3,998) (3,787) 4,524 (5,239)
and a weighted
average number
of shares
outstanding
of ('000) 129,614 94,975 128,622 95,243
---------------------------------------------------------------------

Diluted (loss)
earnings per
share of (US$) (0.03) (0.04) 0.04 (0.06)
is calculated
based on net
(loss) income
for the period
of (US$'000) (3,998) (3,787) 4,524 (5,239)
and a diluted
weighted
average number
of shares
outstanding
of ('000) 129,993 93,048 128,642 89,393
---------------------------------------------------------------------

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.

The Waterpan transaction is accounted for under Canadian GAAP as a
continuity of interests. As a result the weighted average number of
shares outstanding has been adjusted to reflect the acquisition as if
the share exchange had been effective for the period from inception
to December 31, 2007 (see Note 1).

18. NOTES TO THE CASH FLOW STATEMENT

18.1 Non-cash interest income

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------------------------
Total interest
income (4,467) (529) (12,840) (422)
Add back: Cash
interest income 4,419 115 12,694 422
---------------------------------------------------------------------
(48) (414) (146) -
---------------------------------------------------------------------
---------------------------------------------------------------------

18.2 Non-cash interest expense

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------------------------
Total interest
expense (1,629) - (4,087) (101)
Add back: Cash
interest paid 1,629 - 4,087 -
---------------------------------------------------------------------
- - - (101)
---------------------------------------------------------------------
---------------------------------------------------------------------

18.3 Decrease in net receivables from related parties

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------------------------
Increase in
receivables
from related
parties (1,019) 457 5,744 1,052
Increase in
payable to
related
parties 559 2,361 832 4,085
Add back:
- Interest
income
accrued
on amounts
receivable - 63 - 133
- Interest
expense
accrued on
amounts
payable - (204) - (348)
---------------------------------------------------------------------
(460) 2,677 6,576 4,922
---------------------------------------------------------------------
---------------------------------------------------------------------

18.4 Additions to property, plant and equipment

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------------------------
Total additions
to property,
plant and
equipment (48,122) (11,726) (96,482) (16,945)
Add back:
- Asset
associated
with
Buffelsfontein
tailings dams 6,231 - 6,231 -
- Accrued
capital
expenditure 13,856 - 13,856 -
---------------------------------------------------------------------
(28,035) (11,726) (76,395) (16,945)
---------------------------------------------------------------------
---------------------------------------------------------------------

18.5 Net cash movement on acquisition of MWS

Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2007
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------------------------
Cash and cash
equivalents taken
over on date of
acquisition - - 1,954 -
Less: Expenses
related to
MWS acquisition - - (705) -
---------------------------------------------------------------------
- - 1,249 -
---------------------------------------------------------------------
---------------------------------------------------------------------

19. COMMITMENTS

Capital commitments
December 31 March 31
2007 2007
US$'000 US$'000
---------------------------------------------------------------------
Ezulwini Mine 53,390 14,836
MWS 3,393 -
---------------------------------------------------------------------
Total contractual obligations 56,783 14,836
---------------------------------------------------------------------
---------------------------------------------------------------------

The capital commitments are payable within one year.

SOURCE First Uranium Corporation

Bob Tait, VP Investor Relations, at (416) 558-3858 or bob@firsturanium.com/
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