Cameco's 1995 Earnings Surpass $100 Million

Saskatoon, Saskatchewan, Canada, February 7, 1996

Cameco Corporation reported today annual net earnings of $102 million ($1.95 per share) in 1995, an increase of 26% from earnings of $81 million ($1.56) in 1994. Increased uranium sales volumes and prices contributed significantly to the growth in earnings. Revenues grew by 14% to $395 million in 1995 from $348 million in 1994. Uranium products and services accounted for almost 95% of last year's revenues with the remainder coming from gold.

"1995 was the best year in Cameco's history, thanks to sales growth and a significant recovery in uranium prices," said Bernard Michel, Cameco's chair, president and chief executive officer. Cameco continues to supply annually more than 10% of the western world's uranium consumption and about 20% of its conversion services.

Cameco sold a record volume of uranium concentrates in 1995, up almost 10% from 1994 and at higher prices. Sales of conversion services remained strong.

Results from the Contact Lake gold operation in northern Saskatchewan did not meet the corporation's expectations in 1995. Ore grades were lower than anticipated which resulted in reduced production levels and higher unit costs.

Cash from operations fell in 1995 to $133 million ($2.54 per share) from $176 million ($3.38 per share) in 1994. The timing of sales and collection of corresponding receivables were such that the year end accounts receivable balance was relatively low in 1994. While this had enhanced 1994's cash flow, it also had the effect of reducing the amount collected in early 1995. In 1995, Cameco generated sufficient cash to pay $26 million in dividends and contribute about $100 million towards its investment activities.

Long-term debt increased to $196 million in 1995 from $62 million in 1994. Most of this increase can be attributed to Cameco's involvement in the Kumtor gold project in Kyrgyzstan.

Earnings from operations continued their upward trend of the past years, rising 22% in 1995 to $104 million ($1.98 per share) from $85 million ($1.63 per share) in 1994.

Spot prices climbed in 1995 to $12.20 (US) per pound U₃O₈ from $9.60 (US) per pound, an increase of more than 25% as a result of several factors.

Demand was bolstered when a major US uranium trader defaulted on some of its deliveries while it filed for bankruptcy protection, causing a number of utilities to enter the market to cover their unfilled requirements.

Inventories were reduced further by about 40 million pounds to cover the supply shortfall in 1995.

Future uranium supply from the Commonwealth of Independent States became more predictable during 1995, after the trade agreements between Kazakhstan, Uzbekistan and the United States were amended.

Also, at year end, it appeared that the sale of uranium derived from Russian and US highly enriched uranium (HEU) into the US market would likely be regulated under legislation expected to pass early in 1996. This legislation will lift much of the uncertainty surrounding the manner in which this material will be sold.

"The near-term prospects for the uranium market are better than they have been in years," said Michel. He noted that uranium production is half of consumption, excess inventories are being depleted and developing regions, particularly in Asia, are committing to nuclear power. "Cameco is well positioned with the largest, richest, lowest-cost uranium reserves in the world," concluded Michel.

Cameco also announced today that its board of directors has declared its regular quarterly dividend of $0.125 per share payable April 15, 1996 to shareholders of record on April 1, 1996.

Cameco is the world's largest publicly traded uranium company and a growing gold producer. Its products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today.

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