Saskatoon, Saskatchewan, Canada, October 31, 2001

Cameco Corporation today reported its financial results for the quarter and year-to-date periods ended September 30, 2001.

HIGHLIGHTS OF THE QUARTER

• Revenue rises 23% on higher uranium sales 
• Earnings per share up significantly to $0.27
• Bruce Power contributes $8 million in after-tax earnings
• Cameco joins the S&P/TSE 60 index 
• Half of the year's uranium deliveries expected in the fourth quarter.

Financial Highlights

CONSOLIDATED FINANCIAL RESULTS

In comparing the results for 2001 to the previous year, the following discussion excludes the writedown of mineral properties taken in the third quarter of 2000.

Third quarter. For the three months ended September 30, 2001, net earnings attributable to common shares increased by $5 million to $15 million ($0.27 per share) compared to $10 million ($0.18 per share) during the same period last year. This increase was mainly due to the inclusion of Cameco's share of earnings from Bruce Power which amounted to about $8 million after tax. The earnings from Bruce were partially offset by lower earnings in the nuclear segment caused mainly by a reduction in the selling prices for mine concentrates and conversion services. Although spot prices are rising for both concentrates and conversion, there is a timing lag before they are reflected in realized prices. Earnings from the gold business were also lower than in the previous year due to a decline in the average realized selling price.

Earnings from operations, which are calculated before earnings from Bruce Power, were $13 million in the third quarter of 2001 compared to $20 million in 2000. The aggregate gross profit margin declined to 16% from 24% a year earlier.

Year-to-date. For the first nine months of 2001, net earnings attributable to common shares were $28 million ($0.51 per share) compared to $30 million ($0.54 per share) during the same period last year. The decline was mainly attributable to lower sales volumes and realized prices in the nuclear segment compared to the first nine months of 2000. The reduction in earnings from the nuclear business was partially offset by the recognition of earnings from Bruce Power and improved results in the gold segment where a lower realized price was more than offset by reduced costs and higher sales. The effective tax rate for the nine-month period was 28% compared to 45% in the previous year due mainly to a greater proportion of pre-tax earnings being derived from gold operations outside of Canada where they are subject to a lower tax rate.

Earnings from operations were $36 million in the first nine months of 2001 compared to $65 million in 2000. The aggregate gross profit margin declined to 20% from 23% in the previous year.

Cash flow from operating activities of $54 million was 61% lower than in 2000 reflecting reduced nuclear sales volumes and an increase in working capital.

SEGMENTED FINANCIAL RESULTS

Nuclear Business

*Earnings before taxes.

Third quarter. Revenue from the nuclear business increased by 36% to $141 million from $104 million in 2000 due mainly to a 72% increase in sales volume for uranium concentrates. As the timing of deliveries of U₃O₈ and conversion services within a calendar year is at the discretion of customers, Cameco's quarterly delivery patterns can vary significantly. A 10% decrease in the average realized selling price for uranium concentrates partially offset the effect of the higher volume.

Revenue from conversion services was about 7% lower than in the previous year due mainly to a decline in the realized price.

The total cost of products and services sold, including depreciation, depletion and reclamation (DDR), was $122 million in the third quarter of 2001 compared to $80 million in 2000. This increase reflects the higher sales volume for uranium concentrates during the quarter.

Earnings before taxes (EBT) from the nuclear business increased by $7 million or 32% to $29 million in the third quarter of 2001 while the profit margin for the quarter declined to 14% from 23% in 2000.

Year-to-date. Revenue from the nuclear business declined by 20% to $293 million from $368 million in 2000 due primarily to uranium concentrates deliveries which were16% lower than in the first nine months of 2000. Revenue was also impacted by a 7% decline in the average realized selling price for uranium concentrates which reflected a higher percentage of sales being delivered into market-related contracts and the realization of lower prices on other deliveries. The decline in the realized price was mitigated somewhat by more favourable exchange rates due to a weaker Canadian dollar.

Nuclear revenue was also influenced by lower deliveries of conversion services which declined by 8% compared to the first nine months of 2000.

During the first nine months of 2001, the total cost of products and services sold, including DDR, was $244 million compared to $282 million in 2000, reflecting the decreased sales volumes. The average unit costs for nuclear products were similar to the previous year. Expenditures for uranium exploration were $1 million lower than in 2000. 

EBT from the nuclear business was $53 million, a decrease of $25 million or 32% in the first nine months of 2001 and the profit margin declined to 17% from 23% in 2000.

Gold Business

Third Quarter. Revenue from the gold business declined by $5 million or 15% compared to last year due primarily to a 15% decrease in selling price. Cameco's realized price for gold has declined from $328 (US) in the third quarter of 2000 to $280 (US) per ounce this past quarter due to less favourable hedge positions and lower spot market prices.

Gold production at Kumtor was 6% greater than in the third quarter of 2000 due to a reduction of in-circuit inventory. The ore grade, recovery rate and throughput were all similar to the previous year. Kumtor's cash cost per ounce was $148 (US) compared to $155 (US) in 2000.

Kumtor Gold Company's (KGC) hedge position at the end of September was 1,271,000 ounces, one-third being Cameco's share. It is expected that these hedges will yield average prices in the range of $297 (US) to $302 (US) per ounce. There was no significant mark-to-market difference on Cameco's share of the hedge position at September 30, 2001. Considering this hedge position, the sensitivity of Cameco's 2001 earnings and cash flow to changes in the gold price is not material.

Year-to-Date. Revenue from the gold business rose by $10 million or 13% compared to the same period last year, reflecting a 22% increase in sales volume which more than offset a decline in the average realized selling price. Cameco's realized price for gold has declined from $320 (US) in the first nine months of 2000 to $285 (US) per ounce this year. 

Gold production at Kumtor was 23% greater than in the first nine months of 2000 due mainly to higher ore grade which averaged 5.17 grams per tonne compared to 4.49 grams, an increase of 15%. An improved recovery rate, which rose to 84% from 81%, also contributed to the increased production. Kumtor's cash cost per ounce was $139 (US) in the first nine months of 2001 compared to $165 (US) in 2000. 

The gross profit margin for gold was 29% in the first nine months compared to 22% in 2000. The lower realized price has been more than offset by a reduced unit cost. 

Corporate Expenses

During the first nine months of 2001, costs for administration increased by $3 million compared to the previous year.  Interest expense rose by $1 million reflecting less interest being capitalized.

Bruce Power 

On May 12, 2001, the Bruce Power Limited Partnership (Bruce Power) finalized its long-term lease with Ontario Power Generation to operate the Bruce nuclear power plants.  The lease arrangement is for a period of 18 years with an option to extend for an additional 25 years. Cameco also finalized agreements with British Energy related to our 15% interest in Bruce Power and has become the exclusive supplier of fuel to Bruce Power.

The Bruce nuclear facility consists of four operating Bruce B reactors and four Bruce A reactors which are currently not in service. Two of the Bruce A reactors are slated for restart by the summer of 2003, subject to regulatory approvals. The net capacity of the operating reactors is currently 3,160 megawatts (MW). With the anticipated restart of the two Bruce A reactors, the total Bruce operating capacity is expected to increase to 4,660 MW, representing 20% of Ontario's electricity needs.

Cameco has committed to invest up to $100 million in Bruce Power, of which an initial payment of $57 million was made in May 2001. The balance of the committed amount may be required depending on the net result of operating cash flows less capital expenditures, largely related to the Bruce A restart program. In addition, Cameco provided $43 million for the purchase of fabricated fuel inventory, of which $19 million was outstanding at September 30, 2001.

The operating highlights for the Bruce Power partnership (100%) for the period from May 12 to September 30, 2001 are as follows:

		to Sept 30/01
	Output (terawatt hours)	10.2
	Capacity factor (%)	94.5
	($ million)
	Revenue	$395
	Operating costs	279
	Profit before interest & taxes	116
	Interest	26
	Profit before taxes	$ 90

Cameco's share of earnings before taxes for this period is $13 million and has been fully reported in the third quarter.

Note: Capacity factor represents the amount of electricity actually produced as a percentage of the amount of electricity the plants are capable of producing for sale for a given period.

CASH FLOW

During the first nine months of 2001, Cameco generated cash from operations of $54 million ($0.97 per share) compared to $140 million ($2.51 per share) in 2000. This decrease was largely attributable to lower revenues and an increase in working capital, mainly uranium inventory. During the first nine months of 2001, the quantity of uranium produced and purchased exceeded sales by a considerable margin. In the first nine months of 2000, operating cash flow was bolstered by a reduction of working capital. Excluding the changes in other operating items, cash from operations was $101 million compared to $131 million in 2000. This decline was primarily due to the lower deliveries and prices in the nuclear business to date in 2001.

Cash used in investing activities increased to $105 million from $81 million due primarily to the investment in Bruce Power which totaled $76 million at September 30, 2001 including outstanding amounts for fabricated fuel. Expenditures for property, plant and equipment were $41 million lower than in 2000 due mainly to the completion of construction at McArthur River. In the second quarter, Cameco received an $11 million (US) repayment of principal on the subordinated loan to KGC.

BALANCE SHEET

At September 30, 2001, total inventories had increased by 5% to $382 million compared to $365 million at December 31, 2000. This increase reflects the production and purchases in excess of sales in the nuclear business during the first nine months.

Total long-term debt increased to $380 million from $294 million at December 31, 2001. At September 30, 2001, Cameco's net debt to capitalization ratio was 16%, up from 13% at the end of 2000. Cash flow to date in 2001 has been limited by the year's deliveries being heavily skewed to the last quarter of the year.

TRENDS AND UNCERTAINTIES

The most significant factors impacting the financial performance of Cameco are:

• the market price for U₃O₈,
• sales volumes for nuclear products,
• foreign exchange rates between the Canadian and US dollars,
• the market price for gold,
• the unit costs of production, and
• the quantity and profitability of electricity generated by Bruce Power.

Uranium Spot Market

The spot price (restricted) on September 30, 2001 was $9.50 (US) per pound U₃O₈, compared to $8.75 (US) at June 30, 2001, an increase of about 8.5%. The spot price was $7.40 (US) at the end of the third quarter of 2000.

Spot demand was steady over the quarter. Spot supply, while sufficient to meet demand, has not been aggressively priced, and consequently the spot price continued its rise through the quarter.

The spot market volume in the nine months ended September 30, 2001 was approximately 10 million pounds U₃O₈, compared to 9 million pounds for the same period in 2000. This compares to an average of 14 million pounds for the same period over the past five years.

The spot market price for uranium conversion services increased by a further 7% during the quarter to $5.25 (US) per kgU from $4.90 (US) at June 30, 2001. This compares to $2.50 (US) per kgU at the end of the third quarter of 2000.

Uranium Long-Term Market

The long-term market has been active in 2001 with long-term contracting reported by one market analyst to have already exceeded 50 million pounds U₃O₈. For the year, long-term contracting is still expected to be about 75 million pounds U₃O₈, compared to 65 million pounds U₃O₈ in 2000.

The long-term price indicator, published by TradeTech, is at $10.50 (US) per pound U₃O₈ at September 30, 2001, up from the $10.00 (US) at the end of last quarter. The price at the end of the third quarter last year was $9.25 (US).

International Expansion of Nuclear Generating Capacity

The South Korean government has reaffirmed the country's plan to construct an additional 10 nuclear power plants by 2011. Nuclear power currently generates about 40% of electricity in South Korea and construction of these plants will maintain this share. South Korea is expecting base load electricity demand to grow at a rate of 2% per year through 2015, requiring the installation, on average, of 1,500 MW to be added each year and one-third of that is expected to be nuclear.

Russia has announced that electricity generated by nuclear power in Russia will increase from the current 15% to 20% in the next five to seven years. Russia plans to build five new 1,000 MW reactors in that time frame. Previously, Russia had announced plans for the life extension of the first generation reactors and capacity increases at several existing plants. Ukraine has also announced plans for the life extension of its nuclear power plants by 10 to 15 years.

Fossil Fuels Come With Heavy External Costs

The European Commission has reported, after a 10-year research project, that if environmental and public health costs were included in the price of power generation, nuclear power costs compare very favourably to those of other power generation methods. The cost of producing electricity from coal would increase by 100% and that of natural gas increase by 30%, if these costs were included.

Gold Market Review

During the third quarter of 2001, the average spot market gold price was $274 (US) per ounce compared to $268 (US) in the second quarter. The increase in prices was largely due to the events of September 11th and gold ended the quarter at $293 (US). 

Central Asian Gold and Uranium Operations

The Kumtor mine is located in Kyrgyzstan and the Inkai project is in Kazakhstan. These countries share borders with Uzbekistan and Tajikistan which in turn share borders with northern Afghanistan. The military operations in that region do not pose a threat to the company's assets at this time. Normal operations including inbound shipments continue on schedule. The company has granted expatriate personnel who are concerned about their safety the option of leaving. No employees have elected to do so. The company continues to monitor the situation closely and is in contact with Canadian and American embassies in the region.

Foreign Exchange

Most of the company's revenues are in US dollars.  At September 30, 2001 Cameco had sold forward $682 million (US) at an average spot exchange rate of $1.5035.

During the quarter, the Canadian dollar weakened against the US dollar from $1.5177 at the end of the second quarter to $1.5790 as of September 30, 2001.  As a result, Cameco's mark-to-market position was a loss of $26 million.

Other Corporate Developments

On October 9, 2001, Standard & Poor's announced that Cameco was being added to the S&P/TSE 60, effective October 12th. This index is a market-weighted benchmark of the 60 largest Canadian public companies and is co-managed by Standard & Poor's and the Toronto Stock Exchange (TSE). The effects of the announcement were immediate as index fund managers who track the "60" placed their orders for Cameco shares.

OUTLOOK FOR 2001

Uranium Production

Cameco expects its share of production for the year to total approximately 18.5 million pounds. At McArthur River, production is expected to be approximately at the 18 million pound design capacity (Cameco share 12.5 million pounds).

Nuclear Revenue and Margins

Nuclear revenue for the year is expected to be modestly lower than the level achieved in 2000 reflecting lower prices. Nuclear sales volumes and the percentage of contracts with market-related pricing are expected to be similar to last year. The effective tax rate for the year is expected to be lower than the 48% rate recorded in 2000 but above the 28% rate for the first nine months of 2001.

For the fourth quarter, revenue in the nuclear business is expected to nearly double in comparison to the third quarter reflecting both higher volume and price for uranium concentrates. Approximately 50% of the year's uranium concentrate deliveries and revenue is expected in the fourth quarter compared to about 36% in the same period last year.

Delivery risks previously noted regarding two Californian utility customers have been resolved to Cameco's satisfaction.

For the last quarter of the year, a $1.00 (US) change in the U₃O₈ spot price from current levels would change revenue by about $4 million (Cdn), net earnings by about $2 million (Cdn) and cash flow by about $2 million (Cdn).

Consolidated earnings for the fourth quarter are expected to be higher than the third quarter due primarily to increased deliveries in the nuclear business. Corporate expenses and interest costs are likely to be consistent with the first three quarters while the effective tax rate is projected to increase due to a proportionately greater contribution to pre-tax earnings from the nuclear segment.

Gold Business

Fourth quarter revenue from the gold business is expected to be moderately higher than in the third quarter due to the realization of more favourable hedge prices. The unit cash cost is expected to be similar to the third quarter.

The impact of higher ore grades mined to date and better recovery rates in 2001 are expected to continue and result in annual production of approximately 750,000 ounces (Cameco's share 250,000 ounces), up 12% from last year. Production in 2002 is expected to be approximately 650,000 ounces due to lower grade ore.

Bruce Power

Cameco's investment in Bruce Power is unlikely to contribute to fourth quarter earnings due to the planned outage at Bruce B unit five which began on September 22, 2001 and will last into the first quarter of 2002. The scope and duration of this outage was identified during the due diligence process and incorporated into our investment analysis.

As previously disclosed, financial results in the near term are projected to be modest as a number of one-time costs will be incurred as business improvements are implemented. The investment in Bruce Power is expected to contribute significantly to Cameco's earnings and cash flows beginning in 2003.

Capital Expenditures

In 2001, capital expenditures are projected to be about $120 million including the investment in Bruce Power. Within this total, expenditures to maintain existing capacity at all operations are expected to be about $20 million.

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 has an interest in the Bruce nuclear generating plant in Ontario and also produces gold. The company's shares trade on the Toronto and New York stock exchanges.

FORWARD-LOOKING STATEMENTS

Statements contained in this news release which are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause such differences, without limiting the generality of the following, include: volatility and sensitivity to market prices for uranium, electricity in Ontario and gold; competition; the impact of change in foreign currency exchange rates and interest rates; imprecision in reserve estimates; environmental and safety risks including increased regulatory burdens; unexpected geological or hydrological conditions; political risks arising from operating in certain developing countries; a possible deterioration in political support for nuclear energy; changes in government regulations and policies, including trade laws and policies; demand for nuclear power; replacement of production and failure to obtain necessary permits and approvals from government authorities; legislative and regulatory initiatives regarding deregulation, regulation or restructuring of the electric utility industry in Ontario; Ontario electricity rate regulations; weather and other natural phenomena; ability to maintain and further improve positive labour relations; operating performance of the facilities; success of planned development projects; and other development and operating risks.

CONFERENCE CALL

Cameco is hosting a conference call on Thursday, November 1, 2001 from 11:00 a.m. to 12:00 noon Eastern time (10:00 a.m. to 11:00 a.m. Saskatoon time) to discuss the third quarter results. To join the call, please dial (416) 641-6680 or (800) 379-5831. A recorded version of the call will be available shortly after the call on the company's web site www.cameco.com or by telephone replay until midnight, Thursday, November 15 by calling (416) 626-4100 and entering the code 19816100.

For further information, please contact:

Bob Lillie  Manager, Investor Relations Cameco Corporation Phone: (306) 956-6639 Fax: (306) 956-6318

Jamie McIntyre Director, Investor and Corporate Relations Cameco Corporation Phone:(306) 956-6337 Fax:(306) 956-6318

INVESTOR INFORMATION

Common Shares CCO The Toronto Stock Exchange CCJ New York Stock Exchange Preferred Securities CCJPR New York Stock Exchange

Investor Inquiries Cameco Corporation 2121, 11th Street West Saskatoon, Saskatchewan S7M 1J3 Phone: (306) 956-6400 Fax:     (306) 956-6318 Web: www.cameco.com

Transfer Agent CIBC Mellon Trust Company 320 Bay Street, P.O. Box 1 Toronto, Ontario M5H 4A6 Phone: (800) 387-0825 (North America) Phone:  (416) 643-5500 (outside North America)

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