Cameco Reports Nine-Month Net Earnings of $106 Million

Saskatoon, Saskatchewan, Canada, October 16, 1996

Cameco Corporation today reported nine-month financial results showing net earnings of $106 million ($2.00 per share) to September 30, 1996 up 49% compared to $71 million ($1.36 per share) for the same period in 1995.

Revenues climbed by more than 70% to $457 million from last year's nine-month sales of $268 million. The improvement in net earnings and revenues was due primarily to increases in uranium concentrate sales volumes and average selling prices. Uranium sales volumes were up 60% compared to last year while the average selling price rose by 17%. Conversion sales volumes were also up 32% at prices which remained steady.

"Cameco has capitalized on a strengthening uranium market to achieve superior financial results during the first nine months of this year," said Bernard Michel, Cameco's chair, president and chief executive officer. "We expect 1996 will be an excellent year for revenues and earnings based on current information."

Cash from operations for the nine months ended September 30, 1996 was $87 million ($1.65 per share), up $11 million from the previous year. Cash receipts from sales were $151 million higher than during the first nine months of 1995. This was offset by a $121 million increase in cash applied to operating activities because of expenditures related to producing higher volumes of uranium and gold, increased levels of uranium purchases and royalty payments.

"Cameco anticipates the trend of strong pre-tax earnings and cash flow will continue in future years," Michel said but noted, as previously reported, that beginning in 1997 recording of deferred income taxes will reduce net earnings. However, the company expects it will not have to pay significant cash taxes until after the year 2000.

Since the end of September 1995, Cameco's long-term debt has risen by $33 million to $199 million as of September 30, 1996. Most of this increase can be attributed to Cameco's investment in the Kumtor gold project.

In 1996, revenues sensitivity to the uranium spot price is such that a change of $1.00 (US) per pound U₃O₈ for the remainder of the year would change revenues by about $2 million (CDN).

During the third quarter, the uranium spot price averaged $16.26 (US) per pound U₃O₈ compared to $16.34 (US) during the second quarter of 1996 and $11.79 (US) in the third quarter of 1995. The spot price weakened during the third quarter due to the low spot market demand being met by adequate supply.

"However, the long-term uranium market fundamentals remain favorable, with excess inventories being drawn down as uranium demand continues to outpace production," said Michel.

Cameco, with its head office in Saskatoon, Saskatchewan, 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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