Cameco to Acquire Power Resources, Inc. and Central Electricity Generating Board Exploration (Canada) Ltd.

Saskatoon, Saskatchewan, Canada, October 14, 1996

Cameco Corporation announced today it has entered into a comprehensive agreement to purchase from a subsidiary of Magnox Electric plc, a UK entity, all of that company's North America uranium holdings. Cameco has agreed to pay $105 million (US) in cash for 100% of the outstanding shares of Power Resources, Inc. (PRI), a US uranium mining company and 100% of the outstanding shares of Central Electricity Generating Board Exploration (Canada) Ltd. (CEGBE Canada), a company involved primarily in Canadian uranium exploration. The purchase is subject to regulatory approval.

The purchase adds more than 1 million pounds U₃O₈ to Cameco's annual production and increases Cameco's already exceptional base of reserves and resources by adding 37 million pounds (or 10%) of recoverable uranium reserves and another 85 million pounds (or 40%) in the resource category. Cameco also gains interests in several well located exploration projects in Canada.

The deal also provides Cameco with access to important know-how in the application of in situ leach (ISL) technology, a low-cost method of extracting uranium from certain types of deposits.

"This acquisition enhances our uranium reserve base and production capability and gives us access to exceptional operating experience" said Bernard Michel, Cameco's chair, president and chief executive officer. "PRI's expertise will be most valuable in our ongoing assessment of other ISL opportunities. The strategic location of Highland's processing plant to Cameco's other ISL proprieties is also an added benefit."

PRI, with its head office in Denver, Colorado, is one of the largest uranium producers in the United States employing 67 people. It owns 74.25% and is the operator of the Highland ISL mine in Wyoming. Highland presently produces more than 1.3 million pounds U₃O₈ per year but has an annual capacity of 2 million pounds, adding about 6% to Cameco's current production capabilities.

Cameco intends to maintain its US presence, restructure its US uranium activities and increase production from existing undeveloped reserves and resources. Cameco presently owns about 32% of the Crow Butte ISL mine in Nebraska through its wholly owned subsidiary Geomex Minerals, Inc. and owns in Wyoming significant additional reserves which could be processed at the Highland facility.

"With the PRI purchase, Cameco will offer more flexibility to its customers and achieve greater geographical diversification," added Michel. "Similarly, the customers of PRI will benefit from this new association with Cameco."

"Integrating PRI into Cameco's asset base will advance the company towards achieving key strategic uranium objectives." said Michel."PRI brings valuable expertise and new opportunities to Cameco together with additional reserves and production potential at a time when the uranium market outlook appears favorable."

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

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