Cigar Lake update

3 April 2007

Cameco is facing a more than two-year delay in developing its Cigar Lake uranium project with production start up targeted for 2010, subject to remediation following a flooding incident.

Cameco's share of capital costs, including mill modifications, to bring Cigar Lake into production is estimated at C$508 million ($406 million) including C$234 million ($187 million) spent on construction to date. The increase from the last estimate of C$330 million ($264 million), provided a year ago, is primarily due to site costs during the extended construction period, increased energy costs and several additions including increased dewatering capacity and plans to freeze more underground areas.

Cameco's share of flood remediation costs, estimated at C$46 million ($37 million), comes in addition to the capital costs. More detailed information will be available in a technical report available from the end of March 2007. Cameco now expects to complete the work necessary to seal off the water inflow in the third quarter of 2007, assuming that the current pace of drilling is maintained. Shaft sinking will continue with completion scheduled for 2010.

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