Cameco Corporation: Mining Begins at McArthur River Uranium Operation.

SASKATOON, Saskatchewan--(BUSINESS WIRE)--Dec. 7, 1999--

Cameco(TSE:CCO.) (NYSE:CCJ)

Cameco Corporation today reports that mining has begun at the McArthur River underground uranium operation in northern Saskatchewan. McArthur River is the site of the largest known high-grade uranium deposit in the world.

Reaming of the first ore using the raisebore mining method, as well as the operation of the underground ore processing systems, was initiated December 6. This follows commissioning of the equipment in the past several weeks using waste rock. Both the mining of the ore and the underground ore preparation are achieved using conventional equipment in a fully contained environment.

"The equipment and systems are working as planned," said Bernard Michel, chair, president and chief executive officer of Cameco. "By achieving production at this time, McArthur River remains on schedule to ramp up to its full production capacity of 18 million pounds annually by 2002. Production during 2000 is expected to exceed 11 million pounds with commercial production targeted in the first half of the year."

At the McArthur River operation, ore is mined and ground to a mud-like slurry, pumped to the surface to tanks and stored until loaded into specially designed containers for the 80-kilometre truck haul to Key Lake. At Key Lake, a specifically designed unloading facility receives the ore which is then processed in the Key Lake mill. The first mine production from McArthur River will be transported to Key Lake later this month.

McArthur River is located 620 kilometres north of Saskatoon by air. It is operated and owned 70% by Cameco. The remaining 30% is owned by Cogema Resources Inc. McArthur River contains reserves of 255 million pounds at an average grade of 17% U3O8 and resources of 228 million pounds at an average grade of 12% U3O8. The orebody is located at a depth between 530 metres and 640 metres. The operation currently employs more than 400 people, half being residents of Saskatchewan's north. Capital expenditures to bring the project to production are about $420 million (CDN).

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

For diagrams and photos depicting the mining method used at McArthur River, see Cameco's web site at www.cameco.com/media/index.html