Environmental Review Panel Recommends Approval of McArthur River Project

Saskatoon, Saskatchewan, Canada, February 28, 1997

Cameco Corporation today announces it has received the report of the federal-provincial panel reviewing the McArthur River uranium project.

The panel recommends that development of McArthur River be approved, subject to certain conditions.

The report has been submitted by the panel to the two governments, which are expected to respond with their decisions in the coming months. "On this timetable, we consider that McArthur River remains on track for construction to begin this summer for a 1999 production startup," said Bernard Michel, Cameco's chair, president and chief executive officer.

The panel recommends approval of the mining of McArthur River ore and "cautious" approval of the tailings management facility.

Cameco, as operator, proposes to mine the high-grade ore at McArthur River using remote-controlled methods. The panel endorses the proposed mining methods, describing them as "well developed and likely achievable by current industry standards."

Cameco proposes to transport the ore 80 kilometres to Key Lake for milling. The resulting mill wastes, or tailings, will be deposited in a mined-out open pit at the Key Lake operation. While the panel supports the proposed in-pit disposal method, it is of the opinion that monitoring will be required for a "much longer time" than suggested in the environmental impact statement.

"We are pleased with the general recommendations in this report and we acknowledge the panel's view that monitoring requirements, particularly after decommissioning, should not be underestimated," Michel said. "Indeed, we have stated that decommissioning plans should not be finalized too early as our experience shows that they often need to be revised as the decommissioning date approaches. This ensures that the final plans will conform with the environmental guidelines of the day, accommodate changes at the site and incorporate the best known practices."

McArthur River is the largest, high-grade uranium deposit in the world with reserves and resources of 416 million pounds at an average grade of 15% U₃O₈. It is owned 56% by Cameco, 28% by Uranerz Exploration and Mining Limited and 16% by Cogema Resources Inc. The project is located 620 kilometres north of Saskatoon and 80 kilometres northeast of the Key Lake uranium mine, currently the largest, high-grade uranium operation in the world with annual production of 14 million pounds. Ore reserves at Key Lake will be depleted in the next few years and production from McArthur River is intended to replace production from Key Lake. Annual production of 18 million pounds is planned for McArthur River.

If approved by the governments, total employment at Key Lake and McArthur River will peak at 600 during the construction and early production phases and then level off at about 530 people. Currently, the Key Lake operation employs almost 400 people while the McArthur River project employs about 70 people. Capital costs to bring McArthur River into production are estimated at $400 million.

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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