ATHABASCA ANNOUNCES CLOSE OF FIRST TRANCHE OF PRIVATE PLACEMENT FOR PROCEEDS
OF $1,489,800 AND INCREASE IN OFFERING TO $3.1 MILLION

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
FOR DISSEMINATION IN THE UNITED STATES

       TSXV: UAX
US Symbol:  ATURF

VANCOUVER, Dec. 7 /CNW/ - Athabasca Uranium Inc. ("Athabasca" or the "Company") is pleased to announce that it has increased the size of its previously announced private placement (see press release dated November 25, 2010) to up to 7,826,087 flow through units (the "FT Units") at a price of $0.23 per FT Unit and up to 6,500,000 units (the "NFT Units") at a price of $0.20 per NFT Unit for aggregate gross proceeds of up to $3,100,000 (the "Offering").  Each FT Unit will consist of one common share in the capital of the Company which will be designated as a flow-through share pursuant to the Income Tax Act (Canada) and one share purchase warrant (a "FT Warrant").  Each FT Warrant will entitle the holder to purchase one common share in the capital of the Company (a "Share") at a price of $0.35 per Share for a period of one year from the closing of the Offering.  Each NFT Unit will consist of one Share and one share purchase warrant (a "NFT Warrant").  Each NFT Warrant will entitle the holder to purchase one Share at a price of $0.30 per Share for a period of one year from the closing of the Offering. The Company may pay finders fees on the Offering within the maximum amount permitted by the policies of the TSX Venture Exchange.

The Company is pleased to announce that it has closed the first tranche of the Offering and has issued 6,477,391 FT Units for gross proceeds of $1,489,800 of which 5,217,391 FT Units for proceeds of $1,200,000 were purchased by the MineralFields Group.  Each whole Warrant issued entitles the holder thereof to purchase one Share at a price of $0.35 per Share until December 6, 2011. The Company will renounce an amount equal to the gross proceeds derived from the sale of the FT Units to the purchasers thereof in accordance with the provisions of the Income Tax Act (Canada).   All securities issued in the closing of the first tranche will be subject to a hold period which expires April 7, 2011. 

The Company paid Limited Market Dealer Inc. ("LMD") a cash commission equal to 5% of the proceeds of the sale of FT Units by LMD (being $56,250, of which $8,025 was paid to Hugh Oswald) and issued to LMD finder's compensation options (the "Finder's Options") equal to 10% of the number of FT Units sold by LMD (being 489,130 Finder's Options).  Each Agent's Option entitles LMD to purchase a unit (an "Agent's Unit") at an exercise price of $0.23 per Agent's Unit until December 6, 2011.  Each Agent's Unit is comprised of one Share and one hundredth (1/100) of a non-transferable share purchase warrant (an "Agent's Warrant").  Each whole Agent's Warrant entitles LMD to purchase one additional Share at the price of $0.35 until December 6, 2011.

In connection with the initial closing, the Company also paid Leede Financial Markets Inc. ("Leede") a cash commission equal to 7% of the proceeds of the sale of FT Units by Leede (being $20,286) and issued to Leede finder's compensation warrants (the "Finder's Warrants") equal to 10% of the number of FT Units sold by Leede (being 126,000 Finder's Warrants).  Each Finder's Warrant entitles Leede to purchase a Share (a "Finder's Warrant Share") at an exercise price of $0.30 per Finder's Warrant Share until December 6, 2011.

Proceeds from the Offering will be used for exploration on the Company's properties in the Athabasca Basin region in Saskatchewan, for property acquisition and for general working capital and corporate purposes.

"We are very pleased to be entering into this relationship with MineralFields Group", said Gil Schneider, Chief Executive Officer. "This is an important milestone in the growth of Athabasca Uranium Inc. and we look forward to working with MineralFields Group as we develop our properties in the Athabasca Basin."

About MineralFields, Pathway and First Canadian Securities ®

MineralFields Group (a division of Pathway Asset Management), based in Toronto, Vancouver, Montreal and Calgary, is a mining fund with significant assets under administration that offers its tax-advantaged super flow-through limited partnerships to investors throughout Canada as well as hard-dollar resource limited partnerships to investors throughout the world. Pathway Asset Management also specializes in the manufacturing and distribution of structured products and mutual funds (including the Pathway Multi Series Fund Inc. corporate-class mutual fund series). Information about MineralFields Group is available at www.mineralfields.com.  First Canadian Securities ® (a division of Limited Market Dealer Inc.) is active in leading resource financings (both flow-through and hard dollar PIPE financings) on competitive, effective and service-friendly terms, and offers investment banking, mergers and acquisitions, and mining industry consulting, services to resource companies.  MineralFields and Pathway have financed several hundred mining and oil and gas exploration companies to date through First Canadian Securities ®.

About Athabasca Uranium

Athabasca Uranium Inc. is a uranium exploration and development company acquiring and exploring properties located in the uranium-rich Athabasca Basin in northeast Saskatchewan. The Company's stated vision is to explore the region using leading-edge technology to become a world-class uranium mining company. Additional information on Athabasca Uranium and its vision is available on the Company's website at www.athabascauranium.com.

ON BEHALF OF THE BOARD OF DIRECTORS

Gil Schneider, President & CEO

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements.  Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur.  Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements.  Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date such statements were made.  The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information:

For information, please contact the Company:
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E-mail: [email protected]