Cameco Announces Exploration Results

Saskatoon, Saskatchewan, Canada, October 5, 1999

Cameco Corporation reports the discovery of high-grade uranium at one of its exploration projects in northern Saskatchewan. Drilling completed in winter and summer of 1999 on the La Rocque Lake claims has encountered uranium mineralization in grades of 8.2%, 19.1% and 29.9% U₃O₈ in three drill holes about 280 metres below surface. A total of 20 drill holes were completed during 1999 on these claims.

As preliminary exploration data, these results are not sufficient to draw conclusions as to the economic significance of the mineralization or the likelihood of the occurrence of a uranium deposit. Additional drilling is required and will take place in 2000.

"We are pleased with this discovery and look forward to further drilling next year," said Cameco's chair, president and chief executive officer Bernard Michel. "These results are encouraging for Cameco's long-term commitment to exploration in an industry with lead times as long as 15 years from discovery to production."

The La Rocque Lake claims in northern Saskatchewan are situated approximately 55 kilometres northwest of Cameco's Rabbit Lake operation and about 750 kilometres north of Saskatoon. The La Rocque Lake claims are part of the Dawn Lake joint venture, formed in 1977, which is owned 57.466% by Cameco, 23.086% by Cogema Resources Inc. and 19.448% by PNC Exploration (Canada) Co. Ltd. Cameco is the operator of the joint venture.

History

The La Rocque Lake claims have been intermittently explored since 1979. Of the 22 holes drilled to the end of 1998, only two holes (#16 and #17) encountered anomalous uranium, defined as any intercept exceeding 0.1% U₃O₈ for at least one metre of core length. Drilled in 1998, holes #16 and #17 had uranium intercepts of 0.93% U₃O₈ over 1.4 metres and 0.17% U₃O₈ over 3.8 metres respectively. The two holes are six kilometres apart. Only five of the 22 holes drilled to the end of 1998, including hole #17, are within 500 metres of the three holes drilled in 1999 which encountered uranium in excess of 8% U₃O₈.

Geological Environment

The high-grade uranium deposits of the Athabasca Basin of northern Saskatchewan are typically associated with the erosional boundary, or unconformity, between graphite-bearing metamorphic rocks of early Proterozoic age and middle Proterozoic sandstones. The term "unconformity deposits" has been used since the late 1970s to describe this class of high-grade uranium deposits. These include the deposits at McArthur River (reserves of 255 million pounds U₃O₈ in 668,000 tonnes at an average grade of 17% U₃O₈ and resources of 228 million pounds U₃O₈ in 859,000 tonnes at an average grade of 12% U₃O₈) and at Cigar Lake (reserves of 353 million pounds U₃O₈ in 1.2 million tonnes at an average grade of 14% U₃O₈). The La Rocque Lake claims are situated in a similar geological environment to those of the above-mentioned unconformity deposits.

1999 La Rocque Lake Program

The 1999 drilling program on the La Rocque Lake claims was completed in two phases involving 20 drill holes (#23 to #42 inclusive). Thirteen drill holes (#23 to #35 inclusive) were completed in March. Hole #34 encountered significant uranium mineralization at 8.2% U₃O₈. Seven additional drill holes (#36 to #42 inclusive) were completed in August to follow up the uranium mineralization intersected in hole #34. Holes #40 and #42 also encountered significant mineralization, at 29.9% U₃O₈ and 19.1% U₃O₈ respectively.

The high-grade uranium mineralization defined by holes #34, 40 and 42 has an apparent length of at least 200 metres and is considered to be open along strike in one direction. Further drilling is required to define the overall dimensions of the uranium mineralization and its continuity.

In summary, of the 20 drill holes completed in 1999, six intersected anomalous uranium. (See Table 1.) The six holes are #29, #30 and #31 as well as holes #34, #40, and #42 noted above which encountered high-grade mineralization. Holes #23 to #28 inclusive did not intersect significant results and are located more than one kilometre to the northeast of the uranium mineralization.

The 20 drill holes completed in 1999 totalled 6,915 metres. All holes were drilled as vertical holes except #36, which was drilled at an inclination of -65° and an azimuth of 127°. Drill hole spacing varies but was typically 200 metres between grid lines and 15 to 150 metres along grid lines. All drill holes were probed using a downhole radiometric logging tool. Mineralized zones, defined on the basis of both core examination and downhole radiometric logs, were split and sampled on a one-half metre (50-centimetres) interval, with samples consisting of one-half of the split core over the sample interval. Core recovery through the mineralized zones is very close to 100%. Drill hole #41 was abandoned before reaching the target depth because of poor drilling conditions.

Uranium mineralization in holes #34, #40 and #42 is predominantly pitchblende ranging in style from heavy disseminations to massive vitreous forms. The dominant accessory mineral is chalcopyrite, however other metals occurring in anomalous concentrations include nickel, lead, cobalt and vanadium. These metal associations are not unusual for unconformity uranium deposits.

As unconformity uranium deposits are typically elongate, horizontal, sausage-shaped bodies, the thicknesses of the mineralized intercepts listed in Table 1 are interpreted as true thicknesses in the vertical dimension. Further drilling is necessary to confirm this interpretation.

Sampling and Analysis

Sample preparation and chemical analysis was carried out at the Saskatchewan Research Council (SRC) in Saskatoon, using a hydrochloric and nitric acid digestion and induction coupled plasma spectrometry analysis. The SRC laboratory is certified under the proficiency testing program of the Standards Council of Canada and is ISO 9002 registered. Check analyses of the results from the three significant drill holes were carried out at Loring Laboratories of Calgary, Alberta, using a volumetric iron reduction in phosphoric acid procedure.

Qualified Person

The information in this document has been compiled by a qualified person, namely Dan E. Jiricka, P.Eng, P.Geo, who is a senior project geologist at Cameco and who is responsible for the design and conduct of the 1999 drill program on the La Rocque Lake claims.

Table 1: Significant 1999 Drilling Results, La Rocque Lake claims

Certain statements in this news release constitute forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Cameco or of the uranium or gold business to be materially different from future results, performance or achievements expressed or implied by those forward-looking statements. These factors are discussed in greater detail in Cameco's most recent annual information form and management's discussion and analysis which is on file with the Canadian provincial securities regulatory authorities and the United States Securities and Exchange Commission.

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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For further information, please contact:

Elaine Kergoat Manager, Media & Public Relations Cameco Corporation Phone: (306) 956-6315 Fax: (306) 956-6318

Alice Wong Director, Investor & Corporate Relations Cameco Corporation Phone: (306) 956-6337 Fax: (306) 956-6318

Map of the La Rocque Lake claims area.