Cameco Announces Agreement with Cogema

Saskatoon, Saskatchewan, Canada, May 5, 1999

Cameco Corporation today announced a transaction in which Cogema Resources Inc. will acquire an interest in selected uranium assets for approximately $243 million subject to closing adjustments, representing a pre–tax gain of about $63 million to Cameco.

The transaction is subject to receipt of all necessary regulatory approvals and will be effective as of January 1,1999. In particular, Cogema will acquire 14% of McArthur River, 17% of Key Lake (where the McArthur River ore will be milled beginning in late 1999). Subject to other Midwest joint venture owners' first refusal rights, Cogema will also acquire Cameco's 20% interest in the Midwest Lake project.

After the transaction, Cameco will own 83% of the Key Lake operation and 70% of the McArthur River project. Cameco will continue to own 100% of the Rabbit Lake operation, where, subject to regulatory approval, it is planned to mill a portion of the ore from Cigar Lake.

(See table below for ownership changes).

"This transaction allows the company to monetize immediately a portion of the 483 million pounds U₃0₈ of reserves and resources at McArthur River, thus providing greater financial flexibility to pursue other growth opportunities which will enhance shareholder value," said Bernard Michel, Cameco's chair, president and chief executive officer. "During 1998, reserves at McArthur River were increased by 66 million pounds U₃0₈. We concluded that it was beneficial for Cameco and its shareholders to realize today some of the value associated with the additional reserves". The funds will initially be used to pay down debt.

Ownership Changes

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest publicly traded uranium 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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