Forsys Metals Corp
TSX : FSY
FRANKFURT : F2T

Forsys Metals Corp

August 15, 2011 07:30 ET

Forsys Announces Second Quarter 2011 Financial and Operational Results

TORONTO, ONTARIO--(Marketwire - Aug. 15, 2011) - Forsys Metals Corp. ("Forsys" or the "Company")(TSX:FSY)(FRANKFURT:F2T)(NSX:FSY) announced today the release of its unaudited consolidated financial and operating results for the three months and six months ended June 30, 2011, together with its Management's Discussion and Analysis ("MD&A") for the corresponding period. These documents are posted on the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.forsysmetals.com.

Marcel Hilmer, Chief Executive Officer, commented, "During the second quarter, we saw significant progress at our exploration drilling program at Namibplaas with very encouraging results. This phase of the drilling program is now complete and we look forward to sharing with the market a National Instrument 43-101 ("NI 43-101") technical report, along with updates on the Valencia and Namibplaas consolidation plans, before year end."

The Company had a cash balance of $7,115,077 as at June 30, 2011.

Highlights from the MD&A include:

  • In its press release on July 11, 2011, Forsys announced further positive drill results from the Namibplaas uranium project 2011 drilling program. Latest drilling confirmed further significant intersections of uranium mineralization of approximately 200 ppm U3O8 or better. Since commencing the program in July 2010, a total of 33 diamond drill holes (8,527 metres) and 271 percussion drill holes (59,311 metres) have been completed. This phase of the drill program has now been completed and the Company will release a NI 43-101 resource statement in the third quarter of 2011.

  • The laboratory results from the August 2011 Mintek report on initial heap leach testing of Valencia ore showed significant potential with the conventional crush and the high pressure grinding row leach tests yielding 92% and 81% uranium extractions respectively. The Company expects improved recoveries in the Phase 2 studies that will focus on larger samples and optimization of processes. Simulus, a leading Perth based engineering group, have been appointed to complete the next optimization study.

  • The internal study on potential plant design efficiencies, improved recoveries and reduced capital and operating costs continues. This review also includes the economics of consolidating the Valencia and Namibplaas ore bodies and increasing the plant size and throughput.

  • In July 2011, the Namibian Ministry of Mines and Energy renewed Exclusive Prospecting Licence 3195, relating to the Ondundu Gold Project, for a further two years ending May 30, 2013. In addition, Forsys and Angus Mining (Namibia) Inc. ("Angus Mining") have now entered into an option agreement giving a local empowered Namibian corporation, Minden Investments Limited, the right to earn a 10% stake in the Ondundu project. This partnership facilitates the direct participation of the Namibian community in this project.

Company Outlook

Throughout the remainder of 2011, Forsys remains focused on advancing the design of a consolidated Valencia and Namibplaas project with an annual plant capacity of approximately 6.0 Mlbs of U3O8 from the two deposits. Preliminary pit designs and mining schedules are expected to confirm the production potential of a consolidated operation.

At the Namibplaas property, the Company is on target to complete a NI 43-101 technical report and resource estimate during the third quarter of 2011. The Company will then evaluate timing of the next phase of drilling.

The heap leach testing on the Valencia ore body will continue with the optimization of processes in Phase 2 underway.

In addition, the Company expects to receive additional drilling results for the Ondundu Project in the third quarter of 2011 from Angus Mining, the operator of Ondundu.

The Company is also progressing financing arrangements for the development of the Valencia Uranium Project as well as funding requirements, as needed, to complete the strategic plans outlined above.

Uranium Outlook

Following the tragic natural disasters in Japan on March 11, 2011 and the resulting issues with the Fukushima Daiichi nuclear plant, a number of countries have undertaken a preliminary review of their nuclear programs. With some exceptions, almost every country, is maintaining its nuclear program. The most significant exception is Germany which, with 17 nuclear reactors representing 5% of the global generating capacity, has decided to revert to its previous phase- out policy. Various industry and equity analyst reports are now indicating that although there may be a short-term slowdown in the nuclear power programs for some countries, the forecast demand for uranium in higher nuclear growth nations such as China, South Korea, India and Russia is expected to remain strong and supportive of a continued rise in the uranium price over the medium and longer term. It is Forsys' view that the underlying fundamentals and growth expectations of the uranium industry remain sound because of nuclear power's clean base load generating capacity.

The long-term contract price for uranium is reported on a monthly basis by Ux Consulting. It was US$62.00/lb at December 31, 2010 and had moved up to US$73.00/lb at the end of January 2011. At the end of July 2011, the monthly quote for the long-term contract price for uranium was US$68.00/lb.

About Forsys Metals Corp.

Forsys Metals Corp. is an emerging uranium producer with 100% ownership in the fully permitted Valencia Uranium Project and 70% ownership in the Namibplaas Uranium Project in Namibia, Africa a politically stable and mining friendly jurisdiction. Current NI 43-101 compliant reserves at Valencia are 60.5 Mlbs of U3O8 supporting a 17-year mine life and current Measured and Indicated resources are 75.5 Mlbs U3O8 with a further 8.4 Mlbs of Inferred U3O8.

On behalf of the Board of Directors of Forsys Metals Corp.

Marcel Hilmer, Chief Executive Officer

For further information visit our website at www.forsysmetals.com

Sedar Profile #00008536

(11-07)

Forward-Looking Information

This news release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Company. The following are important factors that could cause Forsys actual results to differ materially from those expressed or implied by such forward looking statements: fluctuations in uranium prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology; continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs; recovery rates, production estimates and estimated economic return; general market conditions; the uncertainty of future profitability; and the uncertainty of access to additional capital. Full description of these risks can be found in Forsys Annual Information Form, dated March 29, 2011, available on the Company's profile on the SEDAR website at www.sedar.com. These risks and uncertainties could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward looking information. Actual results and future events could differ materially from anticipated in such information. These and all subsequent written and oral forward looking information are based on estimates and opinions of management on the dates they are made and expressed qualified in their entirety by this notice. The Company assumes no obligation to update forward looking information should circumstances or management's estimates or opinions change.

Shares Outstanding: 80,130,231

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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