[cdn-nucl-l] Cameco Pursues Uranium Enrichment Business

["Adam McLean" <adam.mclean@utoronto.ca>]

Posted on the Cameco news service on July 22, 2002 and at:
http://www.cameco.com/media_gateway/news_releases/2002/2002-july-22.php

Adam

------------------

News Releases &
Updates 2002

Cameco Pursues Uranium Enrichment Business
Saskatoon, Saskatchewan, Canada, July 22, 2002 

Enrichment Backgrounder

Cameco Corporation announced today that it has signed a memorandum of
agreement (MOA) as an initial step toward entering a formal partnership
to establish a $1.1 billion (US) enrichment facility to be built in the
United States. The facility would use Urenco Limited's centrifuge, the
world's lowest cost and most advanced uranium enrichment technology. The
Urenco centrifuge is currently operating in the company's European
enrichment facilities.

The proposal to establish the US facility is being advanced by a
consortium including Urenco, Westinghouse Electric Company, Cameco and
three US utilities with nuclear plants, Exelon Generation Company,
Entergy Louisiana Inc. and Claiborne Energy Services Inc. (a
wholly-owned subsidiary of Duke Energy). 

Discussions about the project have already been initiated with the US
Nuclear Regulatory Commission.

Under the terms of the MOA, Cameco will obtain, upon entering the
partnership, an initial 20% interest in the project. Following receipt
of the NRC licence and a final restructuring of the partnership,
Cameco's interest will increase to 25%. 

"This proposal represents an excellent opportunity for Cameco, given
that the United States is the world's largest user of enrichment
services and Cameco's biggest customer base," said Bernard Michel,
Cameco's chair and chief executive officer. "We would enhance our
existing uranium and conversion business in the key US nuclear fuel
market, build our relationship with partners committed to the nuclear
business and advance our company's strategy to further integrate in the
nuclear fuel cycle." 

The project will proceed only if it receives licences and approvals from
the US Nuclear Regulatory Commission and other government agencies.

Cameco's involvement in the project is conditional upon: 

successful execution of a final partnership agreement

completion of a feasibility study that demonstrates an acceptable rate
of return

an ability to obtain project financing, and 

securing a portfolio of long-term contracts to support the project. 
Under the terms of the MOA, Cameco can withdraw from the project with no
further obligation.

Cameco's short-term commitment during the licensing phase (next three
years) is expected to be approximately $8.5 million (US). If the project
advances and Cameco's commitment is maintained through to construction
and operation, the company expects to meet its longer term financial
commitments through a combination of debt financing and internally
generated cash flow.

The proposed facility is expected to be in operation by 2007/2008 with
an initial capacity of 1 million SWU, ramping up to about 3 million SWU
by 2012. Siting of the plant is yet to be determined and once
operational, it will employ approximately 200 to 250 employees.

The US has the largest fleet of nuclear reactors in the world with
annual demand for enrichment services of approximately 11 million SWU.
Domestic production currently supplies about one-third of the country's
demand.

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's
largest uranium supplier. 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's shares trade on the Toronto and New York stock exchanges.

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; the impact of the sales volume
of uranium, conversion services, electricity generated 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.

- End - 

For investor inquiries, please contact:   For media inquiries, please
contact: 
Bob Lillie 
Manager, Investor Relations
Cameco Corporation
Phone: (306) 956-6639
Fax: (306) 956-6318 
   Jamie McIntyre
Director, Investor & Corporate Relations
Cameco Corporation
Phone: (306) 956-6337
Fax: (306) 956-6318