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Notes

Notes to Consolidated Financial Statements:

Accounting Policies
These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and follow the same accounting principles and methods of application as the most recent annual consolidated financial statements, except as noted below. The financial statements should be read in conjunction with Cameco's annual consolidated financial statements included in the 2001 annual report.

Stock-Based Compensation
Effective January 1, 2002, Cameco adopted the new CICA Handbook Section 3870, which requires that a fair value based method of accounting be applied to direct awards of stock to employees. Under the new standard Cameco is allowed to continue its existing policy of recording no compensation cost on the grant of stock options to employees with the addition of pro forma information. Cameco has applied the pro forma disclosure provisions of the new standard to awards granted on or after January 1, 2002. The pro forma effect of awards granted prior to January 1, 2002 has not been included.

The standard requires the disclosure of pro forma net earnings and earnings per share information as if the entity had accounted for employee stock options under the fair value method. The fair value of the options issued in the quarter was determined using the Black-Scholes option pricing model with the following assumptions: risk-free rate of 5.0%; dividend yield of 1.2%; a volatility factor of the expected market price of Cameco's shares of 20.0%; and a weighted-average expected option life of 5 years. On February 26, 2002, Cameco granted 477,900 options at a strike price of $43.84. The fair value of these options was determined to be $10.83 per share. For purposes of pro forma disclosures, the estimated fair value of the options is being amortized to income over the vesting period. The total charge has been adjusted for an expected forfeiture rate of 17%. For the three months ended March 31, 2002, Cameco's pro forma net earnings attributable to common shares was $4.8 million, basic earnings per share was $0.09 and diluted earnings per share was $0.09.

Property and Business Acquisitions
On March 5, 2002, Cameco's wholly-owned subsidiary, Cameco Gold Inc. (CGI), acquired a 52% interest in AGR Limited (AGR). AGR is an Australia-based exploration company whose principal asset is a 95% interest in the Boroo gold deposit located in Mongolia. The Boroo project is currently in the development stage. The total purchase price of $16.8 million (US) was financed with $12.0 million (US) in cash and a promissory note in the amount of $4.8 million (US). In exchange, AGR issued 240 million shares to CGI. The promissory note matures on February 26, 2003 and is expected to be settled by the transfer to AGR of a 60% interest in CGI's Gatsuurt gold exploration property which neighbors Boroo. CGI has also committed to provide an additional $3 million (US) for further exploration in return for an incremental 4% interest in AGR.

The fair values of the net assets acquired are as follows:

(Millions (Cdn))
Cash	$16.9
Other working capital	4.4
Property, plant and equipment	28.9
Minority interest	(23.2)

Net assets acquired	$27.0

Financed by:
Cash	$19.3
Promissory note	7.7

	$27.0

Long-Term Debt
Cameco's long-term revolving credit facility matures in February 2003. Accordingly, all amounts supported by this facility have been classified as current liabilities. At March 31, 2002, such amounts totalled $99.5 million.

Cameco's contingent obligation under guarantees of the repayment of Kumtor senior debt exceeds the amount included in Cameco's long-term debt at March 31, 2002 by $98.1 million.

Share Capital:
a) At March 31, 2002, there were 55,922,440 common shares outstanding.
b) Options in respect of 2,404,933 shares are outstanding under the stock option plan and are exercisable up to 2010. Upon exercise of certain existing options, additional options in respect of 301,050 shares would be granted.

5.	Interest and Other At March 31, 2002, a foreign exchange gain of $0.8 million is included in income (2001 - $0.2 million).

6.	Segmented Information

	For the three months ended March 31, 2002	Uranium	Conversion	Gold	Total

	Revenue	$72,113	$26,073	$25,808	$123,994
	Expenses
	Products and services sold	46,867	17,385	13,238	77,490
	Depreciation, depletion and reclamation	13,636	3,080	6,925	23,641
	Exploration	2,552	-	1,745	4,297
	Research & development	-	568	-	568
	Other income	(205)	-	-	(205)
	Earnings from Bruce Power				2,244
	Non-segmented expenses				7,053

	Earnings before income taxes	9,263	5,040	3,900	8,906
	Income taxes				1,566

	Net earnings				7,340
	Preferred securities charges, net of tax				2,396

	Net earnings attributable to common shares				$4,944


	For the three months ended March 31, 2001	Uranium	Conversion	Gold	Total

	Revenue	$27,485	$18,174	$24,635	$70,294
	Expenses
	Products and services sold	18,651	8,588	10,750	37,989
	Depreciation, depletion and reclamation	8,224	2,146	6,619	16,989
	Exploration	2,012	-	1,968	3,980
	Research & development	-	514	-	514
	Other income	(297)	-	-	(297)
	Non-segmented expenses				7,556

	Earnings before income taxes	(1,105)	6,926	5,298	3,563
	Income taxes				438

	Net earnings				3,125
	Preferred securities charges, net of tax				2,357

	Net earnings attributable to common shares				$768

7.	Comparative Figures Certain comparative figures for the prior period have been reclassified to conform to the current period's presentation.