Cameco Increases McArthur River Uranium Reserves.

Business Editors

SASKATOON, Saskatchewan--(BUSINESS WIRE)--Jan. 25, 2001

Cameco Corporation (NYSE:CCJ)(TSE:CCO.) announced today that reserves at McArthur River, the world's largest, highest grade uranium mine, increased by more than 50%.

Cameco's share of proven and probable reserves rose from 178 million pounds U3O8 at an average grade of 17% U3O8 on December 31, 1999 to 275 million pounds at 21% U3O8 on December 31, 2000. (See table below for more details.)

"This substantial increase in McArthur River reserves reinforces Cameco's already strong asset base and builds on our position as a world leader in the uranium business," said Bernard Michel, Cameco's chair and chief executive officer. "These additional reserves will extend the life of the operation providing even more long-term security to our customers and shareholders."

The reserves were revised by professional geoscientists at Cameco after analyzing the underground drilling performed since 1994, particularly during 1999 - 2000, and the results of the initial year of mine production.

The McArthur River mine, owned 70% by Cameco and 30% by Cogema Resources, Inc., produced in excess of 11 million pounds U3O8 during 2000 and is on track to ramp up to full production of 18 million pounds by 2002.

The McArthur River mine is located 620 air kilometres north of Saskatoon and about 80 kilometres northeast of the Key Lake operation.

As of December 31, 1999, the McArthur River uranium reserves and resources were:

              Tonnes   Average Grade     Total      Cameco's Share
            (thousands)  (% U3O8)    (million lbs.  (million lbs.
                                         U3O8)          U3O8)
Proven
 Reserves       505        22.15        246.5          172.1
Probable
 Reserves       163         2.42          8.7            6.1
                ---        -----        -----          -----
Total
 Reserves       668        17.33        255.2          178.2

Indicated
 Resources      859        12.02        227.8          159.0

Additional reserves were derived from resources by re-estimate after extensive underground drilling.

As of December 31, 2000, following the extension of the underground drilled area into Zones 3 and 4, the re-estimate of Zones 1 and 2 and the removal of the mined material, the reserve and resource figures are:

              Tonnes   Average Grade     Total      Cameco's Share
            (thousands)  (% U3O8)    (million lbs.  (million lbs.
                                         U3O8)          U3O8)
Proven
 Reserves       768        21.00        355.5          248.2
Probable
 Reserves        77        23.04         39.0           27.2
                ---        -----        -----          -----
Total
 Reserves       845        21.18        394.5          275.4

Indicated
 Resources      614        10.74        145.4          101.5

Change in
 Reserves      +177          N/A       +139.3          +97.2
Change in
 Resources     -245          N/A        -82.4          -57.5
McArthur River ore mined during 2000     11.2            7.8
McArthur River ore milled during 2000    10.4            7.3

Technical Background

This revision has been conducted by J.F. Chauvet and A.G. Mainville, professional geoscientists respectively director and chief geologist of mining resources and methods, Cameco.

The mineralization, as identified from surface drillings from 1988 to 1991, extends along a fault called P2 North Fault over a distance of 1,800 metres. This mineralization is of the "unconformity" type, being at the contact between the older Wollaston Lake series of various gneisses and the more recent Athabasca sandstones.

The uranium concentration is structurally controlled by the P2 Fault which runs N 45 degrees E and dips 45 - 50 degrees SE with a 70 metre average vertical offset. It occurs in "zones" of variable importance hosted either by the sandstones, the fault zone, or predominantly pelitic gneisses.

The main characteristic of these zones is the very high ore grade which can exceed locally 70% U3O8. Average grades of 30% U3O8 over several metres are common in drill holes and were confirmed during mining.

The McArthur mine was established in 1993 - 1994 and underground drilling campaigns allowed the definition of mineralized zones in the central part of the deposit, over a length of 550 metres. Some 370 underground exploration holes have been drilled so far, as well as over 100 freeze holes and production pilot holes.

Ore production by the raise boring method began at the end of 1999 in the "Zone 2" area and has yielded in excess of 11 million pounds of U3O8 in the first year. The 2001 production is expected to exceed 15 million pounds U3O8.

This production appears to be well in excess of the amount predicted by the current resource models, a fact that may be due to the conservative approach used by the estimators, as well as other factors which are under study.

Estimates of resources are mostly from radiometric data collected by probing of the underground holes. After a careful study of each hole to eliminate the possible influence of radon, these data are converted into grades on a 10 centimetre basis using a complex series of formulas that take into account the physical characteristics of the mineralization, the probe detectors and each drill hole. All the probes are tested before each probing operation and the quality of the results evaluated by several experienced geologists and the qualified persons. After geological interpretation and delimitation of the mineralized volumes, the resources are estimated by geostatistical methods. Additional check estimates gave comparable results. Reserves are then selected from the resource model, according to mineability.

Resources do not include reserves. Reserves are calculated without inclusion of any external dilution for the grade of the ore is such that dilution is deliberately added to allow mill processing in compliance with operating license requirements. Reserves are also exceptionally calculated without provision for mine recovery, the first mining results showing a much higher uranium production than anticipated by the models.

Mining methods other than the currently used raise boring method will be employed in the future to recover parts of the ore body that may have been left in situ through mining. This will be accomplished as the grade of the material is exceptionally high being ten times the grade normally extracted in the industry.

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.