Reserves and Resources

Our mineral reserves and resources are the foundation of our company and fundamental to our success.

We have interests in a number of uranium properties. The tables in this section show our estimates of the reserves, measured and indicated resources and inferred resources at those properties. However, only three of the properties listed in those tables are material uranium properties for us: McArthur River and Inkai, which are being mined, and Cigar Lake, which is being developed.

We estimate and disclose mineral reserves and resources in five categories, using the definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum, and in compliance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101), developed by the Canadian Securities Administrators. You can find out more about these categories at www.cim.org.

About mineral resources

Mineral resources do not have demonstrated economic viability, but have reasonable prospects for economic extraction. They fall into three categories: measured, indicated and inferred. Our reported mineral resources are exclusive of mineral reserves.

• Measured and indicated mineral resources are sufficiently well defined that we can estimate them with enough confidence to apply technical and economic parameters and evaluate the economic viability of the deposit.
• measured resources: we can confirm geological and grade continuity to carry out production planning.
• indicated resources: we can reasonably assume geological and grade continuity to carry out mine planning.
• Inferred mineral resources are estimated using limited information. We do not have enough confidence to evaluate their economic viability in a meaningful way. You should not assume that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration.

About mineral reserves

Mineral reserves are measured and indicated mineral resources that can be mined economically at the time of reporting. They fall into two categories:

• proven reserves: economic extraction of measured resources is demonstrated by at least a preliminary feasibility study
• probable reserves: economic extraction of measured and/or indicated resources is demonstrated by at least a preliminary feasibility study

We use current geological models, an average uranium price of $56.50 (US) per pound U₃O₈, and current or projected operating costs and mine plans to estimate our mineral reserves, allowing for dilution and mining losses. We apply our standard data verification process for every estimate.

Changes this year

Our share of proven and probable mineral reserves went from 479 million pounds U₃O₈ at the end of 2009 to 476 million pounds at the end of 2010. The change was mostly the result of:

• mining and milling activities, which used 24 million pounds
• conversion of mineral resources to reserves from drilling and mine design updates at McArthur River, Rabbit Lake and Smith Ranch-Highland
• conversion of mineral reserves to resources at Inkai due to the production ramp up schedule and increased leaching recovery applied to a limited annual production rate

Measured and indicated mineral resources increased from 140 million pounds U₃O₈ at the end of 2009 to 142 million pounds at the end of 2010. The change was mostly the result of:

• addition of mineral resources at the new Phoenix deposit
• conversion of mineral resources to reserves at McArthur River and Rabbit Lake
• conversion of mineral reserves to resources at Inkai

At the end of 2010, our share of inferred mineral resources was nearly 357 million pounds U₃O₈ — a net gain of 3 million pounds, which came mostly from the new Powell zone at Rabbit Lake and drilling and new mining plans at McArthur River zone 4 south.

Qualified persons

The technical and scientific information discussed in this MD&A, including mineral reserve and resource estimates, for our material properties (McArthur River/Key Lake, Inkai and Cigar Lake) were prepared by, or under the supervision of, individuals who are qualified persons for the purposes of NI 43-101:

McArthur River/Key Lake

• Alain G. Mainville, director, mineral resources management, Cameco
• David Bronkhorst, vice-president, Saskatchewan mining south, Cameco
• Greg Murdock, technical superintendent, McArthur River, Cameco
• Les Yesnik, general manager, Key Lake, Cameco
• Lorne D. Schwartz, chief metallurgist, major projects – technical services, Cameco

Cigar Lake

• Alain G. Mainville, director, mineral resources management, Cameco
• C. Scott Bishop, principal mine engineer, major projects – technical services, Cameco
• Grant J.H. Goddard, vice-president, Saskatchewan mining north, Cameco
• Lorne D. Schwartz, chief metallurgist, major projects – technical services, Cameco

Inkai

• Alain G. Mainville, director, mineral resources management, Cameco
• Charles J. Foldenauer, operations director, JV Inkai

Important information about mineral reserve and resource estimates

Although we have carefully prepared and verified the mineral reserve and resource figures in this document, the figures are estimates, based in part on forward-looking information.

Estimates are based on our knowledge, mining experience, analysis of drilling results, the quality of available data and management's best judgment. They are, however, imprecise by nature, may change over time, and include many variables and assumptions including:

• geological interpretation
• extraction plans
• commodity prices
• recovery rates
• operating and capital costs

There is no assurance that the indicated levels of uranium will be produced, and we may have to re-estimate our mineral reserves based on actual production experience. Changes in the price of uranium, production costs or recovery rates could make it unprofitable for us to operate or develop a particular site or sites for a period of time. Click here for information about forward-looking information.

Please see our mineral reserves and resources section of our annual information form for the specific assumptions, parameters and methods used for McArthur River, Inkai and Cigar Lake mineral reserve and resource estimates.

Important information for US investors

While the terms measured, indicated and inferred mineral resources are recognized and required by Canadian securities regulatory authorities, the US Securities and Exchange Commission (SEC) does not recognize them. Under US standards, mineralization may not be classified as a 'reserve' unless it has been determined at the time of reporting that the mineralization could be economically and legally produced or extracted. US investors should not assume that:

• any or all of a measured or indicated mineral resource will ever be converted into proven or probable mineral reserves
• any or all of an inferred mineral resource exists or is economically or legally mineable, or will ever be upgraded to a higher category. Under Canadian securities regulations, estimates of inferred resources may not form the basis of feasibility or prefeasibility studies. Inferred resources have a great amount of uncertainty as to their existence and economic and legal feasibility.

The requirements of Canadian securities regulators for identification of 'reserves' are also not the same as those of the SEC, and mineral reserves reported by us in accordance with Canadian requirements may not qualify as reserves under SEC standards.

Other information concerning descriptions of mineralization, mineral reserves and resources may not be comparable to information made public by companies that comply with the SEC's reporting and disclosure requirements for US domestic mining companies, including Industry Guide 7.