Quarterly Text

Cameco Announces Third Quarter Financial Results for 2000

To Our Shareholders

Highlights from Bernard Michel, Chair and Chief Executive Officer

"With the continuing delay in the recovery of the uranium spot market price, the company has determined that a writedown of its in situ leach assets in the United States would be justified. Cameco continues to be strong financially and management remains confident of the long-term fundamentals of the uranium industry."

"The investment in Bruce Power leverages our expertise in the nuclear fuel business and exemplifies our strategy to grow profitably in the nuclear industry."

"I am pleased to announce that the McArthur River mine has achieved commercial production effective November 1, 2000."

"Despite the weakness in the uranium market in 2000, Cameco's net earnings are moderately higher than one year ago, before special items."

Financial Highlights

		Nine Months Ended			Nine Months Ended
		September 30/00			September  30/99			Change
Revenue ($ millions)		444			498			-11%
Earnings (loss) from operations ($ millions)		(62)			40			-255%
Cash provided by operations ($ millions)		140			175			-20%
Net earnings (loss) attributable to common shares before special items ($ millions)		30			25			20%
Net earnings (loss) attributable to common shares ($ millions)		(91)			53			-272%
Earnings per share before special items ($)		0.54			0.45			20%
Earnings (loss) per share ($)		(1.62)			0.93			-274%
Average uranium spot price for the period (US$/lb U3O8)		8.56			10.41			-18%
Cameco's average realized gold price for the period (US$/ounce)		320			345			-7%
Average spot market gold price for the period (US$/ounce)		282			273			3%

Consolidated Financial Results

Improved Earnings per Share Before Writedown

For the nine months ended September 30, 2000, Cameco recorded net earnings of $30 million ($0.54 per share) before a one-time, non-cash charge of $121 million after tax ($2.16 per share).

Including the writedown, the company posted a net loss of $91 million ($1.62 per share). The charge follows a review of the carrying value of all Cameco's uranium mining and conversion fixed assets prompted by the continuing delay in the recovery of uranium prices. The review was based on forward price projections by third-party industry experts and on Cameco's own forecast. The impact on earnings amounted to $121 million, net of a $7 million deferred tax recovery.

This represents all of the value associated with the company's ISL uranium producing assets at Highland (Wyoming) and Crow Butte (Nebraska) as well as a portion of the carrying values of some ISL properties designated for future development.

The purchase of the majority of these assets (through the purchase of shares of Power Resources, Inc.) was negotiated in 1996 when the spot market price exceeded $16.00 (US) per pound. Since that time, the spot market price has declined significantly and at September 30, 2000 was $7.40 (US) per pound.

Cameco plans to continue to produce 800,000 pounds U₃O₈ per year at Crow Butte and to gradually reduce annual production at Highland to 300,000 pounds by 2003, with the option of increasing production when prices warrant.

The writedown, combined with cost-cutting initiatives, is expected to have a favourable impact on future costs. Cameco will continue to maintain its US presence and leverage its ISL investment in the development of cost-competitive production centres in other areas of the world.

Earnings Comparisons

Excluding the effect of this writedown and the gain on sale and writedown recorded during the same period last year, earnings would have been $30 million ($0.54 per share) in 2000 compared to $25 million ($0.44 per share) for the first nine months of 1999. The reason for this improvement was lower expenses for interest, exploration and income tax which together exceeded the reduction in gross profits. Weaker realized prices for both nuclear and gold products and lower deliveries of uranium concentrates have had a negative influence on gross profits. In 2000, lower prices have caused the overall gross profit margin to decline to 23% from 25% in 1999.

Cash Flow

During the first nine months, Cameco generated cash from operations, after working capital changes, of $140 million ($2.51 per share) compared to $175 million ($3.06 per share) in 1999. This decrease was related primarily to lower revenue which was the result of reduced volume and weaker prices.

Capital expenditures for property, plant and equipment, primarily for the development and commissioning of the McArthur River mine, declined by $93 million to $81 million.

Balance Sheet

At September 30, 2000, total uranium inventories declined by 5% to $402 million compared to $421 million at December 31, 1999.

Compared to the end of 1999, both accounts receivable and accounts payable have declined significantly. Receivables, which reflect sales revenue, are typically higher in December than at any other time of the year. Payables have declined due mainly to the timing of product purchases.

Cameco has now completed its share repurchase program. A total of 2.9 million shares were repurchased at a cost of $59 million or $20.39 per share.

Segmented Financial Results

Nuclear Business

During the first nine months of 2000, revenue from the nuclear business decreased by 13% to $368 million compared to $421 million in 1999 due primarily to lower deliveries of uranium concentrates. The U₃O₈ sales volume was 12% lower than in the first nine months of 1999. This volume decrease was due to normal variations in delivery patterns and it is expected that much of the shortfall will be made up by year's end. A 6% decline in the average realized price for uranium concentrates also had a negative influence on revenue. This reflected weaker spot prices which were on average 18% lower than in the first nine months of 1999. The average realized price for conversion services also decreased by about 4% but remained well above the current spot price level for conversion services.

The total cost of products and services sold, including depreciation, depletion and reclamation, was $30 million less than the $311 million reported in 1999, reflecting the decreased sales volume. The unit cost for uranium was comparable to 1999 while the unit costs for conversion services have increased moderately due to lower production.

Excluding the effect of the writedown and last year's gain on sale, pre-tax profits from the nuclear business fell by $21 million or 21% compared to 1999 and the gross profit margin dropped to 23% from 26% a year earlier.

Gold Business

During the first nine months of 2000, revenue from the gold business was equal to the $76 million reported in 1999 as greater sales volume offset an 8% decline in the average realized selling price. Cameco's average realized price for gold has declined from $345 (US) to $320 (US) per ounce due to less favourable hedge positions.

Year-to-date 2000, gold production at Kumtor was 7% greater than in the previous year. Production in the third quarter of 2000 improved by 21% over the same period in 1999 due mainly to higher grade ore, averaging 5.20 grams per tonne, up from 4.57 grams. Kumtor's cash cost per ounce was $165 (US) to date in 2000 compared to $178 (US) in 1999.

In 2000, the gross profit margin for gold was 23% compared to 16% in 1999. The effect of the lower gold price has been more than offset by reduced unit cash costs and a lower depreciation rate.

Kumtor Gold Company's hedge position at the end of September was 949,690 ounces, one-third being Cameco's share. It is expected that these hedges will yield prices ranging from $310 (US) to $320 (US) per ounce.

The mark-to-market gain on Cameco's share of the hedge position was $8 million (US) at September 30, 2000 based on a spot market gold price of $274 (US) per ounce.

Outlook

In 2000, Cameco expects annual uranium sales volumes to be down marginally compared to 1999. Although the average spot price for the year is expected to be about 18% lower than in 1999, the impact on the average realized uranium price is forecast to be only a fraction of that decline as a result of floor prices in certain contracts and of the mix of pricing mechanisms in the company's long-term contract portfolio. About 60% of Cameco's contracts are sensitive to changes in the spot price at the time of delivery. The remaining 40% typically have either a fixed price or a base price which is escalated by inflation or other factors.

For the remainder of the year, a $1.00 (US) change in the U₃O₈ spot price from current levels would change revenue by about $2 million (Cdn), net earnings by about $1 million (Cdn) and cash flow by about $2 million (Cdn).

The fourth quarter will have the largest uranium and conversion sales volumes of the year although realized uranium pricing is projected to be slightly below the average for the year.

Cameco's uranium production for 2000 is expected to be about 16 million pounds, down slightly from last year, and includes the revised production schedule for 2000 at McArthur River. During the two-year rampup phase at the McArthur River mine, uranium production costs are expected to be higher than at full production of 18 million pounds which is expected in 2002.

Kumtor's total production for 2000 is expected to be about 650,000 ounces (Cameco's share is one-third), an increase over 1999 due to increases in average grade and mill feed tonnages. The cash cost per ounce in 2000 is projected to be approximately $160 (US) per ounce.

Regarding capital expenditures, Cameco's corporate-wide forecast is about $115 million for the year.

Uranium Spot Market

The uranium spot market volume for the nine months to September 30 was about 8 million pounds U₃O₈ compared to 19 million pounds for the same period in 1999. For the year, the spot market volume is expected to be only about 12 to 14 million pounds U₃O₈, compared to 24 million pounds last year. The restricted spot price averaged $7.40 (US) per pound U₃O₈ on September 30, 2000, a decrease of 9% from $8.10 (US) at the end of the second quarter. During the quarter, spot market supplies were more than sufficient to meet the limited demand.

The spot market price for uranium conversion services increased slightly, ending the quarter at $2.50 (US) per kgU. The conversion market remains over-supplied due to the availability of secondary supplies.

Uranium Long-Term Market

In the quarter, the long-term market was active, continuing the trend that began late in 1999. Long-term market volumes are expected to reach up to 80 million pounds U₃O₈ for the year compared to about 60 million pounds in 1999.

The long-term price indicator published by TradeTech concerning deliveries to take place before 2008 edged slightly lower in the quarter, down $0.25 (US) to end the quarter at $9.25 (US) per pound U₃O₈.

Market Developments

The Swedish government has decided not to close the second Barseback nuclear power plant in July 2001, as previously announced, citing the lack of emissions-free replacement power and the potential for power shortages in southern Sweden.

In Switzerland, after a national referendum rejected new energy taxes to subsidize the development of renewable energy sources, the parliament has decided not to place time limits on the operation of its nuclear plants.

In the Czech Republic the first unit of the Temelin nuclear plant started generating electricity in October and a second unit is expected to start generating in about 15 months.

In Taiwan, it was announced in late October that the construction of the Lungmen nuclear plant would be cancelled. The Legislative Yuan, which had already allocated funds to build the project, has announced its intention to challenge this decision.

Operation and Development Updates

During the quarter at McArthur River, efforts were directed to improving the high grade ore mining and handling systems. McArthur River mine production of 2.7 million pounds U₃O₈ was achieved in the quarter, bringing the year-to-date total to 6.3  million pounds. For the full year, production of some 10 million pounds (Cameco's share is 70%) is anticipated, down slightly from the previous forecast.

Commercial production at McArthur River was achieved as of November 1, 2000, the company being satisfied that mine commissioning is substantially complete and well on its way to achieving, as planned, the nominal 18 million pounds annual capacity in 2002.

Cameco's share of production at the Key Lake mill, including McArthur River ore, is 4.7 million pounds U₃O₈ to September 30, 2000. Cameco's share of production from all mine operations, to date is 11.2 million pounds.

Investment in Bruce Power

On October 12, 2000, the company announced its investment in a 15% interest in the Bruce Power Limited Partnership (Bruce Power) which is 85% owned by British Energy (BE). Cameco will contract with Bruce Power to manage its fuel procurement activities and therefore views this investment as an extension of its core business in uranium and conversion services. The arrangement secures a significant amount of long-term uranium business for the company and is an attractive investment in a growth sector of the economy. Cameco's investment is expected to have a positive impact on cash flow from operations and significantly increase earnings after two years. The deal is expected to close late in 2000.

In July 2000, Bruce Power entered into a long-term lease arrangement with Ontario Power Generation Inc. relating to the facilities at the Bruce nuclear site. This agreement is expected to close in the summer of 2001.

BE has a track record of safety and operational excellence and is an international pioneer in the world's increasingly deregulated electricity markets. BE has offered the two main unions at the Bruce site a 5% interest in Bruce Power.

Other Corporate Updates

On October 6, 2000, Cameco became part of the Dow Jones Sustainability Group Index—the first index to track the performance of the world's leading sustainability-driven companies. The index measures the long-term shareholder value created by a group of companies that responsibly manage the economic, environmental and social parts of their businesses.

Due to the recently called Canadian federal election, proposed legislation introduced by the federal government to allow more foreign ownership of the company's shares will not proceed at this time. The new federal government will decide whether or not to proceed with the legislation. The proposed changes would have allowed individual non-residents to hold a maximum of 15% of the company's shares, up from 5%, and non-residents in total to vote up to 25% of the company's shares, up from 20%.

Forward-Looking Statements

Certain statements in this report to shareholders constitute forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Cameco or of the nuclear or gold business to be materially different from future results, performance or achievements expressed or implied by those forward-looking statements. These factors are discussed in greater detail in Cameco's most recent annual information form and management's discussion and analysis on file with the Canadian provincial securities regulatory authorities and the United States Securities and Exchange Commission.

For Further Information Contact:

Bob Lillie Manager, Investor Relations Cameco Corporation Phone: (306) 956-6639 Fax: (306) 956-6318

Elaine Kergoat Manager, Media and Public Relations Cameco Corporation Phone: (306) 956-6315 Fax: (306) 956-6318

Profile

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium supplier. The company's competitive position is based on its large high grade reserves and low-cost operations. Cameco is also one of the world's largest commercial providers of uranium conversion services. 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 also produces gold. The company's shares trade on the Toronto and New York stock exchanges.

Investor Information

Common Shares CCO The Toronto Stock Exchange CCJ New York Stock Exchange Preferred Securities CCJPR New York Stock Exchange

Investor Inquiries Cameco Corporation 2121, 11th Street West Saskatoon, Saskatchewan S7M 1J3 Phone: (306) 956-6400 Fax:     (306) 956-6318 Web: www.cameco.com

Transfer Agent CIBC Mellon Trust Company 320 Bay Street, P.O. Box 1 Toronto, Ontario M5H 4A6 Phone: 800-387-0825 (North America) Phone: (416) 643-5500 (outside North America)