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Uranium Price

Annual Report

1 9 9 8
O V E R V I E W

Cameco, with its head office in

Saskatoon, Saskatchewan, is

the world's largest uranium

producer. In Canada, the

company owns and operates

the world's largest, high-grade

uranium operations, located in

northern Saskatchewan and the

country's only uranium

processing facilities, located in

Ontario. Through its wholly

owned American subsidiaries,

Cameco obtains production

from in situ leach uranium

facilities in Wyoming and

Nebraska. The company's

uranium products are used to

fuel nuclear energy plants, one

of the cleanest sources of

electricity generation. Cameco

also operates a gold mine in

Kyrgyzstan in Central Asia.

The company explores for

minerals in North America,

Australia and Asia.

Earnings From Operations Per Share ($)

In 1998, earnings from operations reflected lower commodity prices, increases product costs and asset writedowns.

Cash Flow Per Share ($)

Cameco will generate sufficient cash flow to cover $200 million of capital expenditures in 1999.

Net Earnings Per Share ($)

Despite the depressed markets and writedowns of assets Cameco recorded $44 million in profits in 1998.

H i g h l i g h t s

	1998	1997	Change
Financial ($ millions except per share amounts)
Revenue	$ 719	$ 643	+12%
Earnings from operations	104	151	-31%
Net earnings attributable to common shares	44	82	-46%
Cash from operations	235	162	+45%

Earnings per share	$0.76	$1.51	-50%
Cash flow per share	$4.11	$2.98	+38%


Weighted average number of paid common shares (millions)	57	54	+6%

Total debt to capitalization	24%	14%	+71%


Production (Cameco's share)
Uranium concentrates (million lbs U₃O₈)	27¹	19	+42%
Uranium conversion (tU)	11,169	12,594	-11%
Gold (oz)	244,385¹	202,454	+21%

Currency is expressed in Canadian dollars unless otherwise noted.
¹ Includes production from Uranerz Exploration and Mining Limited and Uranerz U.S.A., Inc. beginning January 1, 1998.

A note to shareholders
Unlike many resource companies, Cameco does not publish production costs, sales volumes or realized prices. The company is one of only a small number of uranium producers in an industry with few buyers. Generally, our competitors - including state-owned enterprises or large companies in which uranium makes only a supplementary contribution to earnings - do not release this information. For Cameco to do so would compromise our competitive position and ultimately, our shareholders' investment.

Forward - looking statements:
Certain statements contained in this annual report, including information under the headings: message to shareholders, marketing - nuclear business, uranium operations, gold operations, environment and safety, and management's discussion and analysis, constitute forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such forward-looking statements. Such factors include among others; volatility and sensitivity to market prices for uranium and gold, competition, the impact of changes in foreign currency exchange rates, environmental risks, political risk arising from operating in certain developing countries, changes in government regulations, and policies including trade laws and policies, demand for nuclear power, replacement of production, receipt of permits and approvals from government authorities as well as other operating and development risks. As a result of the foregoing and other factors, no assurance can be given as to the future results, levels of activity and achievements.