Cameco to Develop Uranium Mine in Kazakhstan.

Business Editors

SASKATOON, Saskatchewan--(BUSINESS WIRE)--April 1, 2004

Cameco Corporation (NYSE:CCJ) (TSX:CCO) and the National Atomic Company of Kazakhstan (KazAtomProm) announced today that they plan to develop the Inkai uranium deposit in Kazakhstan through their Inkai Joint Venture (JV Inkai). Cameco owns 60% of Inkai and KazAtomProm owns 40%. JV Inkai has approved the technical and financial conclusions of the feasibility study that estimated a total capital cost of $38 million (US) to build an in situ leach mine. Subject to regulatory approval, the mine is expected to achieve commercial production in 2007 and ramp up to 2.6 million pounds annually by 2009. JV Inkai will assess if this production level can be increased.

Cameco has a loan agreement to provide up to $40 million (US) to JV Inkai for project development and had provided $19.5 million by December 31, 2003. The loan is expected to be repaid through Inkai production. Additional financing arrangements will be made, as required, to complete the project.

"Inkai provides greater diversity of supply geographically and is another building block toward our vision to become a dominant nuclear energy company producing uranium fuel and generating clean electricity," said Jerry Grandey, Cameco's president and CEO.

Cameco estimates there are 91.5 million pounds of proven and probable reserves that would provide an estimated mine life of well over 30 years. Additional work is required to confirm other resources that have been identified in the surrounding area.

"Our investment in Inkai will enable us to provide our customers with another source of uranium at a time when there is increasing demand for reliable, long-term supplies," Grandey added. "This operation will be cost competitive with the best uranium mines in the world."

"We are pleased to work with Cameco to develop this quality deposit in Kazakhstan," said Moukhtar Dzhakishev, president of KazAtomProm. "We have been collaborating for more than six years and the advancement of this project will strengthen our long-term relationship."

Inkai has a number of advantages including low production costs, competitive tax rates, large orebodies and favourable geological conditions with excellent orebody permeability requiring fewer injection and production wells.

JV Inkai will submit an environmental assessment and design plan for construction of the commercial facility to Kazakh regulatory authorities for approval before the end of the year. Cameco expects construction to begin early in 2005, with completion scheduled for 2007. Inkai will employ up to 200 workers during construction and will require approximately 230 employees once full production is reached. Approximately 97% of the employees will be hired locally.

The Inkai deposit is located in south central Kazakhstan, about 370 kilometres northwest of the regional capital of Shymkent and some 1,000 kilometres northwest of Almaty. Small-scale test mining was conducted in the vicinity of Inkai in the late 1980s. JV Inkai began testing mining in 2002 in order to gather information for the feasibility study. In 2003 the test mine produced 0.2 million pounds U3O8 and is expected to continue to produce about 0.3 to 0.6 million pounds annually through 2007.

Cameco estimated the reserves for the Inkai deposit mine (as of December 31, 2003) on a 100% basis as follows:

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                                                            Cameco's
                                               Content         Share
                         Tonnes     Grade     (million      (million
Reserves             (thousands)   (%U3O8)    lbs U3O8)     lbs U3O8)
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Proven                   22,700      0.06         28.3          17.0
Probable                 63,700      0.05         63.2          37.9
Total                    86,400      0.05         91.5          54.9
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Resources
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Indicated                 3,600      0.04          2.9           1.7
Inferred                253,918      0.05        268.0         160.8
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The qualified person for the Inkai reserve and resource estimates in this news release is Raymond Jean-Francois Chauvet, geological engineer and professional geoscientist, who was director, mining resources and methods at Cameco. Production from the Inkai test mine continues to support the lab and field testing that was initially completed by Volk Geology located in Almaty, Kazakhstan.

ISL mining involves the use of an oxidant added to natural groundwater to liberate uranium directly from the undisturbed underground orebody. Water carrying the oxidant is injected through a series of perimeter wells and flows through the permeable orebody to production wells. The uranium-bearing solution is then pumped to the surface process plant for recovery.

Cameco owns and operates two ISL mining operations in the United States, one each in Wyoming and Nebraska. These two mines currently account for all primary uranium production in the United States. KazAtomProm controls and operates three ISL mines in Kazakhstan.

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. 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.

Although Cameco believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this report. Cameco disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.