Cameco Announces First Quarter Results for 2000

Saskatoon, Saskatchewan, Canada, April 28, 2000

To Our Shareholders

Highlights from Bernard Michel, Chair, President and Chief Executive Officer

"We recognize the long-term value of Cameco's shares at current prices and we plan to complete the repurchase program announced in October 1999."

"The commissioning of the McArthur River mine is progressing and remains on track to achieve commercial production in the latter part of the year."

"Cameco's first quarter earnings were similar to a year ago despite lower prices for uranium and gold."

"Our strong cash flow was higher than one year ago primarily because we are beginning to reduce our uranium inventories."

Financial Highlights

Consolidated Financial Results

Earnings

In the first quarter of 2000, net earnings attributable to common shares were unchanged at $9 million ($0.17 per share) compared to 1999. Earnings from operations were comparable to the previous year.

The gross profit margin declined to 23% from 25% in 1999 due mainly to a lower average realized price for uranium concentrates. The impact of the reduced margin was offset by lower expenses for interest and exploration. Interest expense has declined as a result of reduced debt levels and foreign exchange gains. Earnings also benefitted from a reduced effective tax rate which dropped to 48% from 51% a year ago.

Cash Flow

During the quarter, Cameco generated cash from operations, after working capital changes, of $50 million ($0.88 per share) compared to $34 million ($0.59 per share) in 1999. This increase was related primarily to inventory levels which decreased during the first three months of this year whereas they had increased during the same period in 1999. Also during the quarter, cash used for investing activities, the majority of which was for the development and commissioning of the McArthur River mine, declined by $10 million to $41 million. All costs incurred at the mine will be recorded as capital expenditures until commercial production is declared.

Balance Sheet

At March 31, 2000, total inventories amounted to $415 million compared to $421 million at December 31, 1999. Cameco will continue reducing its uranium inventory during the period of production ramp up at McArthur River.

In comparison to the previous year end, both accounts receivable and accounts payable have declined significantly. Receivables, which reflect sales revenue, are typically higher in December than in March. Payables have declined due primarily to the timing of product purchases.

During the quarter, Cameco continued to repurchase its shares for cancellation bringing the total to about 1.2 million shares at a cost of $26 million. Cameco is authorized under applicable securities laws to repurchase a maximum of 2.9 million shares as per the announced program in effect until September 28, 2000.

Segmented Financial Results

Nuclear Business

In the first quarter of 2000, revenue from the nuclear business increased by 2% to $123 million compared to $121 million in 1999. The sales volume for U₃O₈ rose by 8% while conversion services volumes were up 20% over the previous year. Both increases were due to normal variations in delivery patterns and are not expected to be maintained throughout the year. Revenue was negatively influenced by a lower realized price for uranium concentrates, a result of a weaker spot price which was, on average, about 11% lower than in the first quarter of 1999. Also, the realized price for conversion services was slightly lower.

Year-to-date 2000, the total cost of products and services sold, including depreciation, depletion and reclamation (DDR), rose by $6 million to a total of $94 million, reflecting mainly the increased sales volume. This total consists of a greater proportion of cash costs due to a higher percentage of sales commitments filled by purchased material which does not have a DDR component. The benefit of commercial production at McArthur River will help reverse these cost trends.

During the quarter, the nuclear business gross profit margin declined to 24% from 27% in the first quarter of 1999 due primarily to the lower realized price for uranium. Pre-tax profits from the nuclear business were $2 million less than in the previous year. Lower prices more than offset the benefit of the increased volume.

Gold Business

In the first quarter of 2000, revenue from the gold business declined by $7 million (27%) as a result of lower volume and price. In the quarter, gold production at the Kumtor mine was about 18% less than in 1999 due to lower ore grade, as anticipated in the mining plan. The ore grade averaged 3.64 grams per tonne during the quarter and is expected to improve later in the year. For the quarter, recovery averaged 79%.

Compared to the first quarter of 1999, Cameco's average realized price for gold has declined by 5% from $348 (US) to $329 (US) per ounce as a result of less favourable hedge positions. For 2000, the realized price is expected to average between $300 (US) and $320 (US) per ounce. Kumtor's cash cost per ounce was $205 (US) for the first quarter. However, for the year, the cash cost per ounce is projected to be slightly lower than the $179 (US) per ounce reported for 1999.

In 2000, the gross profit margin for gold was unchanged at 16%. The effect of the lower gold price was offset by a lower depreciation rate following the writedown of Cameco's carrying value for Kumtor in 1999.

Expenses for gold exploration declined by about $1 million compared to the first quarter of 1999.

Kumtor Gold Company's (KGC) hedge position at the end of March 2000 was 1,153,000 ounces, Cameco's share is one-third. The estimated realized prices are expected to be $307 (US) to $323 (US) per ounce.

The mark-to-market gain on Cameco's share of these hedge positions was $8 million (US) at March 31, 2000 based on the spot market gold price of $277 (US) per ounce.

Based upon the approved life of mine plan, KGC should be able to meet its obligations to the senior lenders if realized gold prices average at least $220 (US) per ounce over the remaining life of the mine.

Outlook

For the year 2000, assuming current uranium prices continue, some decrease in the nuclear revenue is anticipated compared to 1999. Cameco expects annual uranium deliveries to be similar to 1999. The company's long-term uranium contract portfolio continues to hold a mix of pricing mechanisms. About 60% of the contracts are sensitive to changes in the spot price at the time of delivery. The remaining 40% specify either a fixed price or a base price which is escalated by inflation or another factor.

For the remainder of the year, a $1.00 (US) change in the U₃O₈ spot price from current levels would change revenue by about $11 million (Cdn), net earnings by about $4 million (Cdn) and cash flow by about $7 million (Cdn).

During the two-year ramp up phase at the McArthur River mine, unit production costs are anticipated to be higher than at full production of 18 million pounds, expected to be reached in 2002.

For gold, realized prices are expected to be less than last year's. Kumtor's total production for 2000 is forecasted at 645,000 ounces (Cameco's share is one-third), an increase over 1999 due to improved grades and higher mill feed tonnage.

Uranium Spot Market

The uranium spot market volume for the quarter was 4 million pounds U₃O₈ compared to 8 million pounds for the first quarter of 1999. The annual spot market volume is expected to be about 20 million pounds U₃O₈ compared to 24 million pounds last year. The restricted spot price published by Trade Tech was $9.20 (US) per pound U₃O₈ on March 31, 2000, a decrease of 4% from $9.60 (US) at the end of 1999. During the quarter, spot sellers were eager to capture limited sales opportunities resulting in a slow but steady decline in the spot price.

The spot market price for uranium conversion service also declined, ending the quarter at $2.45 (US) per kg U compared to $2.55 (US) at the end of 1999. The conversion market remains over-supplied due to the availability of secondary supplies.

Uranium Long-Term Market

Since the beginning of the year, the long-term market has been active, continuing the trend that began in the fourth quarter of 1999. Industry experts forecast that long-term market volumes will be in the 70 to 80 million pounds U₃O₈ range for the year compared to about 60 million pounds in 1999.

Due to aggressive offers by a few sellers, the long-term price indicator published by TradeTech declined, ending the quarter at $9.50 (US) per pound U₃O₈ , compared to $10.00 (US) at the end of 1999.

Market Developments

In 1999, the US nuclear reactor fleet achieved a record average capacity factor of about 86%, up from 74% five years earlier. Higher capacity utilization results in increased consumption of uranium.

Consolidation of the nuclear power industry in the US and in Europe is happening rapidly and purchase prices for nuclear plants have increased significantly. The recent acquisition of two units by Entergy Operations Inc. from the New York Power Authority for over $900 million (US) indicates the confidence that committed nuclear operators have in the competitiveness of nuclear power in a deregulated US electricity market.

Operation and Development Updates

Mine commissioning at McArthur River remains on track to achieve commercial production in the second half of the year.

Some 1.2 million pounds of U₃O₈ were mined to March 31, 2000 which is consistent with the startup plan. The production target for 2000 remains at 11 million pounds U₃O₈ . Cameco's share is 70%.

During the past quarter, from the experience gained during commissioning, various components of the mining, underground processing, underground conveyance and surface transportation systems were adapted to the conditions which were encountered.

Generally the raiseboring method selected to mine the McArthur River orebody is proving satisfactory. It is achieving good directional controls and rates of advance consistent with expectations. The anticipated grade of the deposit is being confirmed.

These encouraging results are being accomplished with 2.4 metre diameter reaming heads. Testing of a 3.0 metre unit has been initiated and has demonstrated promising productivity improvements.

Difficulties were faced with the underground ore conveyance and processing facilities and caused the underground ore storage capacity located between the mining and grinding stages to become temporarily unavailable thereby restricting the overall output of the mine. Following regulatory approvals, construction began on modifications to the underground facilities. The improved systems, including the underground ore storage capacity, will become operational during the second quarter.

The procedures used to protect employees from radiation exposures, arising from mining high grade uranium ore, are working well.

The Port Hope conversion facility received certification under ISO 14001, the most widely recognized international standard for environmental management systems.

Forward-Looking Statements

Certain statements in this report to shareholders 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 on file with the Canadian provincial securities regulatory authorities and the United States Securities and Exchange Commission.

For Further Information Contact:

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

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

Profile

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. The company's competitive position is based on its large high-grade reserves and low-cost operations. Cameco is also one of the world's largest commercial providers of uranium conversion services. The company's uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. Cameco also produces gold. The company's shares trade on the Toronto and New York stock exchanges.

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