Saskatchewan Government Approves Development of McArthur River Project

Saskatoon, Saskatchewan, Canada, May 5, 1997

Cameco Corporation today is pleased to announce that it has received a report by the government of Saskatchewan giving the province's approval for the development of the McArthur River uranium project, subject to certain conditions.

The provincial government's decision follows a report submitted February 28, 1997 by a joint federal-provincial panel which recommended the project proceed.

With today's announcement by the Saskatchewan government, the project clears one of the last hurdles to development. Approval by the federal government is still required before the project can proceed.

The McArthur River deposit is the largest, high-grade orebody known in the world with reserves and resources of 416 million pounds U₃O₈ at an average grade of 15%. Cameco, as operator, proposes to mine the high-grade ore using remote-controlled methods which have been endorsed by the panel. Cameco proposes to transport the ore 80 kilometres to the existing Key Lake operation for milling. The resulting mill wastes, or tailings, will be deposited in a mined-out open pit at the Key Lake operation.

The provincial government approval requires Cameco to report on all construction, operation and environmental activities to ensure northern communities are informed as well as to conduct research and evaluate the potential for ongoing improvements in project operations related to environmental matters. In addition, the government will be reviewing the existing arrangements and possible options for implementing long-term monitoring of the project. Other issues, such as revenue sharing, which were raised by the panel and which are outside the project owners' area of responsibility, will be addressed by the Saskatchewan government.

The McArthur River project is owned 56% by Cameco, 28% by Uranerz Exploration and Mining Limited and 16% by Cogema Resources Inc. It is located 620 kilometres north of Saskatoon.

Total employment at Key Lake and McArthur River is anticipated to peak at 600 during the construction and early production phases and then level off at about 500 people. Currently, the Key Lake operation employs about 400 people while the McArthur River project employs about 70 people. Capital costs to bring McArthur River into production are estimated at about $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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