Cameco Will Not Proceed with SEU Blending at Port Hope

Saskatoon, Saskatchewan, Canada, September 23, 2005

Cameco Corporation announced today that it will not proceed with the slightly enriched uranium dioxide (SEU) blending project at its Port Hope conversion facility. SEU is the new uranium fuel proposed for use in the Bruce reactors in Ontario.

Cameco, which is responsible for procuring the fuel for the Bruce reactors, has recently identified several non-Canadian suppliers capable of supplying SEU blending services at competitive pricing. Cameco and Bruce Power determined it was necessary to seek an alternate location because the Port Hope conversion facility would likely not be able to supply SEU in time to meet Bruce Power's schedule for the new fuel project.

"There's no question that we could produce SEU safely while ensuring public safety and protecting the environment at Port Hope," said Bob Steane, vice-president, fuel services division. "However, our initial community consultation should have been more proactive. We needed to address public concerns about technical issues and that process ultimately took longer than the time we allotted."

"We regret the strong feelings and division that this project caused during the assessment period since our relationship with this community is important to us," Steane added. "We are committed to the Port Hope plant for the long term."

Bruce Power requires SEU for a power uprate project that is expected to enhance the safety and reliability of the Bruce B reactors. SEU is also the basis of the fuel required for the next generation of Candu reactors being developed by Atomic Energy of Canada Ltd.

When the SEU project was launched in January 2003, Cameco hoped to be in commercial production by the end of 2005. A Canadian Nuclear Safety Commission hearing was scheduled to consider the proposal on October 20, 2005.

Zircatec Precision Industries in Port Hope is expected to manufacture the SEU fuel bundles for the Bruce reactors as planned. The natural uranium component of SEU will be provided by Cameco.

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. The company's uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. Cameco's shares trade on the Toronto and New York stock exchanges.

Statements contained in this news release which are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause such differences, without limiting the generality of the following, include: volatility and sensitivity to market prices for uranium, electricity in Ontario and gold; the impact of the sales volume of uranium, conversion services, electricity generated and gold; competition; the impact of change in foreign currency exchange rates and interest rates; imprecision in reserve estimates; environmental and safety risks including increased regulatory burdens; unexpected geological or hydrological conditions; political risks arising from operating in certain developing countries; a possible deterioration in political support for nuclear energy; changes in government regulations and policies, including trade laws and policies; demand for nuclear power; replacement of production and failure to obtain necessary permits and approvals from government authorities; legislative and regulatory initiatives regarding deregulation, regulation or restructuring of the electric utility industry in Ontario; Ontario electricity rate regulations; weather and other natural phenomena; ability to maintain and further improve positive labour relations; operating performance of the facilities; success of planned development projects; and other development and operating risks.

Although Cameco believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this report. Cameco disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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