First American Railways Reports First Revenues in Second Quarter 1997 Results.

HOLLYWOOD, Fla.--(BUSINESS WIRE)--August 14, 1997 --

Durango & Silverton Scenic Rail Operations Ahead of Last Year; Company Receives First Cars for Florida Fun-Train

First American Railways, Inc. (Nasdaq: FTRN), an entertainment and scenic rail company, today announced revenues of $2,633,585 for the second quarter ended June 30, 1997, the first revenues for the Company since its inception in 1996. These revenues were generated by The Durango and Silverton Narrow Gauge Railroad, ("D&SNG") which the Company recently acquired. D&SNG generated operating income of $922,428 for the quarter which, when consolidated with the results from the Company's Florida Fun-Train and other operations, resulted in an operating loss of $227,063 which narrowed from $236,524 in the second quarter of 1996. The Florida Fun-Train is anticipated to commence operations this fall. Net loss for the second quarter of 1997 was $872,909 or ($0.09) per share, versus $567,213, or ($0.07) per share for second quarter of 1996.

"Our second quarter results confirm that First American Railways is now a revenue generating company, an accomplishment we did not anticipate until after our planned launch of the Florida Fun-Train which is expected later this year," said Raymond Monteleone, President of First American Railways. "This revenue was derived solely from operating The Durango & Silverton Narrow Gauge Railroad which we acquired in March. Moreover, these numbers reflect an increase in Durango's revenue of approximately $200,000 over the same period last year primarily due to increases in ticket prices and selected train concessions which we instituted in April."

First American Railways also announced today that the first three railcars for the Company's Florida Fun-Train have arrived at its facilities in Hollywood, Florida and are being utilized for limited promotional activities. The Florida Fun-Train will provide the millions of tourists that vacation in Florida each year an opportunity to enjoy a convenient and fun-filled travel experience between Central and South Florida. The trip will connect the state's most popular tourist destinations including Walt Disney World, Universal Studios and Sea World with the beautiful beaches, cruise ports and vibrant nightlife of Fort Lauderdale, Boca Raton, Miami and South Beach.

"The arrival of the initial Florida Fun-Train cars is another important milestone that ensures the Company will be an exciting entertainment and transportation option for tourists visiting Florida," added Monteleone. "Prior to the commencement of the Florida Fun-Train's operations this fall, we will be further utilizing the cars for various promotional events for members of the travel industry, our marketing partners and investment professionals."

First American Railways, Inc. provides innovative, quality entertainment passenger rail service through the development of "Fun-Trains" and the acquisition of "Scenic Destination Railroads." The Company is currently preparing the launch of the Florida Fun-Train which is anticipated to commence operations between Central and South Florida this fall. The Company also owns and operates the Colorado-based Durango & Silverton Narrow Gauge Railroad, a registered National Historic Landmark, which accommodates approximately 200,000 passengers annually.

First American Railways' mission is:

To be the recognized leader in providing innovative, quality entertainment- based passenger rail service, offering our customers, communities, employees and shareholders an experience which exceeds

their expectations.

-0- Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements contained herein regarding the expectations with respect to future revenues and business expansion, and recently acquired businesses are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of First American Railways, Inc., which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Factors that might affect such forward-looking statements include, among others, overall economic and business conditions, the prompt institution of Florida Fun-Train services (which require the prompt delivery of railcars and the completion of terminal sites), the demand for the company's services, competitive factors, regulatory approvals and the uncertainty of consummation of pending or proposed third party agreements, unscheduled rail equipment repairs or commitments. Additional factors which may affect the company's business and performance are set forth in the company's filings with the Securities and Exchange Commission. -0-

                      First American Railways, Inc.

                  Consolidated Statements of Operations

                          Three Months Ended      Six Months Ended
                                June 30,              June 30,
                            1997        1996      1997         1996

Revenue                $ 2,633,585       -    $ 2,633,585          -

Cost of revenue          1,186,004       -      1,186,004          -
Gross profit             1,447,581       -      1,447,581          -

Selling, general and
 administrative            525,153       -        525,153          -

Development of Florida
 Fun-Train               1,149,491  236,524     1,883,276    391,894

Operating loss            (227,063)(236,524)     (960,848)  (391,894)

Interest expense, net      553,418  187,461       593,019    188,085

Amortization of loan costs  92,428  121,399       142,090    121,399

Expenses from offerings
 not completed                   -   21,829             -     57,829

Net loss             $ (872,909) $ (567,213)$ (1,695,957)$ (759,207)

Weighted average
 number of
  common shares
   outstanding        9,691,663   7,736,905    9,405,875  6,193,452

Net loss per
 common share           $ (0.09)    $ (0.07)     $ (0.18)  $  (0.12)

CONTACT: First American Railways, Inc.

Michael Acierno [phone]

Tara Monteleone McGinn [phone]

or

MWW/STRATEGIC COMMUNICATIONS, INC.

Investor Relations - [phone]

Contact: Carolyn Bancone ([e-mail])

Rich Tauberman ([e-mail])