Cameco Completes Uranerz Acquisition

Saskatoon, Saskatchewan, Canada, August 11, 1998

Cameco Corporation is pleased to announce it has acquired 100% of Uranerz Exploration and Mining Limited (UEM), Saskatoon, Saskatchewan and Uranerz U.S.A., Inc. (UUS), Denver, Colorado from their parent company, Uranerzbergbau-GmbH (UEB). The $489 million (Cdn) payment (representing $483 million plus accrued interest of $6 million) has been financed through existing credit facilities.

"This acquisition increases Cameco's uranium reserves and resources and uranium production levels by about 30%, solidifying Cameco's already strong position in the global uranium industry," said Cameco's chair, president and chief executive officer, Bernard Michel. "Cameco's uranium reserves and resources now amount to about 450 million and 350 million pounds U₃O₈ respectively. Cameco's share of production, on an annualized basis, will be about 28 million pounds U₃O₈ this year. In addition," Michel noted, "the transaction brings to Cameco the benefit of a more diversified customer base as a result of the new portfolio of contracts held by UEM and UUS."

UEM's principal assets included a 33.33% interest in the Key Lake and Rabbit Lake uranium mines and a 27.92% interest in the McArthur River uranium project, all located in northern Saskatchewan. As a result of the acquisition, Cameco owns 100% of both the Key Lake and Rabbit Lake uranium mines, which produced a total of 26.1 million pounds U₃O₈ in 1997, and 83.77% of the McArthur River project, which is currently under development. McArthur River is the world's largest known highest grade uranium deposit with reserves and resources of more than 400 million pounds U₃O₈ at an average grade of 15%. It is operated by Cameco and expected to begin production in late 1999. In addition, Cameco acquired a 20% share of the Midwest uranium project located in northern Saskatchewan, which is scheduled for development within the next decade and operated by Cogema Resources Inc.

The transaction also includes the 57.69% interest held by UUS in the Crow Butte uranium mine in Nebraska, bringing Cameco's total interest in this operation to 90%, and uranium and gold exploration properties in northern Saskatchewan and the United States. In addition Cameco acquired, subject to certain third-party consents, rights to an additional one-third interest in the Inkai uranium joint venture in the Central Asian country of Kazakhstan.

Integral to the Uranerz acquisition was the agreement by Cameco to acquire from Rheinbraun AG (one of the parent companies of UEB) all of its B class shares of Energy Resources of Australia Ltd. (ERA) for approximately $56 million (Cdn). As a result, Cameco will hold a 6.45% interest in ERA which operates the Ranger mine in the Northern Territory of Australia. In 1997, Ranger produced about 10.6 million pounds U₃O₈. The acquisition of the ERA shares is subject to third-party consents and to the approval by the Australian foreign investment regulatory authorities.

Cameco is harnessing the power of the world's richest uranium assets and growing its nuclear and gold businesses. The company's uranium products are used to fuel nuclear energy plants, one of the cleanest sources of electricity generation.

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