TSXV: UAX
OTCQX: ATURF

VANCOUVER, July 27, 2011 /PRNewswire/ – Athabasca Uranium Inc. (“Athabasca” or
the “Company”) is pleased to announce that it has entered into an
agreement with an arm’s-length vendor by which the Company has the
option to earn a 100% interest in the Keefe Lake Project in northeast
Saskatchewan.

The 12,832-hectare Keefe Lake Project is comprised of three contiguous
claims on the eastern margin of the uranium-rich Athabasca Basin, the
most productive uranium-producing region in the world. The Project is
approximately 22 kilometers southeast of the McArthur River Mine, the
world’s largest high-grade uranium mine with proven and probable
reserves of 335.5 million pounds U₃O₈ and an average reserve grade of over 15%. The Keefe Lake Project was
most recently explored by Mega Uranium in 2007-2008, with approximately
$3,000,000 expended on exploration in a two phase work program that
included a Mag/EM airborne survey and a high-definition 2D seismic
reflection survey.

The Company can earn a 100% interest in the Project by paying an initial
$65,000 and issuing 3,500,000 common shares to the Vendor on regulatory
approval, by completing $5,000,000 in qualified exploration work on the
Project within five years, and by making an additional cash payment of
$1,500,000 on or before the fifth anniversary of the Agreement. A 2%
net smelter return royalty has been granted to the Vendor, of which 1%
may be purchased by the Company for $1,500,000. The Agreement is
subject to regulatory approval.

With this acquisition, the Company now controls over 52,000 hectares on
the shallow eastern side of the Athabasca Basin. “The Keefe Lake
Project is a marquee project which we believe is a true company-maker.
The preliminary work already completed there vaults the Company forward
nearly two full years on the exploration timeline. With one of the most
sophisticated ground surveys in the world already completed, the
Company will be able to immediately prioritize targets for diamond
drilling. The acquisition of this project was an opportunity that
Athabasca could not pass up – it is a project that we believe will add
value to the Company in the near term and for years to come,” commented
Gil Schneider, Athabasca President & CEO.

In 2008, Aeroquest International Ltd. completed a 737 line-kilometer
helicopter-borne geophysical survey over the Keefe Lake property. This
geophysical survey consisted of an AeroTEM IV (‘Oscar’ System) time
domain helicopter electromagnetic survey and a magnetic survey. The
survey was flown at 200-meter line spacing in a NW-SE flight direction.
The survey was successful in delineating multiple EM anomalies
coincident with magnetic lows and interpreted faults.

In 2007-2008 Kinetex Resources completed a high-definition 2D seismic
reflection survey on the northern two claim blocks of the Keefe Lake
Project to: (a) define the unconformity along all the lines and
generate a structural depth map of this subsurface contact; and (b)
establish relevant structural trends in the basement to identify
potential target areas for future mineral exploration. Approximately 50
kilometers of access line over the Keefe Lake Project were completed as
well as 69 line-kilometers of 2D seismic reflection data acquisition
over 8 seismic lines. This survey has been performed on several
important uranium deposits and mines in the Athabasca Basin, including
the McArthur River Mine, and the Millennium Deposit. Kinetex also
performed this survey for Hathor Exploration, which was instrumental in
the discovery of their Roughrider Zone.

Processing and interpretation of the survey data was completed by the
Seismic Laboratory of the Geology Department of the University of
Saskatchewan under the supervision of Zoltan Hajnal, PhD, Professor of
Geophysics. The seismic survey was successful in generating high
quality and regionally coherent data sets. The intersecting survey
lines provided sufficient information for establishment of the
prominent regional structural framework in the prospect area. The data
revealed, with significant details, the multi-phase deformation of the
subsurface. The high level of correlation between the seismic trends
and the magnetic signatures is a clear indication that the seismic data
reveal structural environments in the basement very promising for
mineral exploration in the prospect area.

About Athabasca Uranium

Athabasca Uranium Inc. is a junior uranium exploration and development
company trading on the TSX Venture Exchange under the symbol UAX. The
Company’s stated vision is to acquire and explore prospective
properties located in the uranium-rich Athabasca Basin in northeast
Saskatchewan, utilizing leading-edge technologies to become a
world-class uranium mining company. Additional information on
Athabasca Uranium, its properties and exploration activities is
available at the Company’s website: www.athabascauranium.com.

ON BEHALF OF THE BOARD OF DIRECTORS

“Gil Schneider”

Gil Schneider, President & CEO

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.

SOURCE Athabasca Uranium Inc.