TSX Commentary

First Uranium (FIU) – $1.50 – The Stars Need to Align: Downgrading to Sector Underperform
Sector Underperform (prev. Sector Perform), Speculative Risk, Price Target: $1.50 (prev. $4.00)
On February 2, 2010, First Uranium provided an update on recent developments related to the North West Provincial government’s recent decision to withdraw First Uranium’s (FIU) environmental authorization (EA) for the new Tailings Storage Facility (TSF). In addition, FIU also provided a FQ3/10 production update and provided revised production guidance for fiscal 2010, 2011, 2012 and 2013. FIU has indicated that based on these recent discussions, it remains cautiously optimistic that the EA will be reinstated; however, given the track record with respect to this permit, RBC CM remains hesitant and has assumed that the permit will be granted in late-2011 to match the company’s guidance. RBC CM estimates that FIU will require between $100M and $150M in new funding, and posits that debt is highly unlikely and equity will be challenging and dilutive. RBC CM assumes that FIU will operate MWS at a reduced rate until 2012 at which time it is able to resume full production. Without the tailings permit, MWS’s value is severely diminished. RBC CM believes that until FIU has its operations, permitting and balance sheet issues under control, the company will underperform its peers.