Cameco Corp (TSX:CCO)
Shares Issued 344,453,250
Last Close 6/2/2008 $41.36
Tuesday June 03 2008 - News Release

Ms. Alice Wong reports

CAMECO AND KAZATOMPROM PROGRESS TOWARD CONVERSION PLANT

Cameco Corp. and Kazatomprom are establishing a new legal entity, Ulba Conversion LLP, to further advance the development work of a 12,000-tonne, UF6 conversion facility at the Ulba metallurgical plant in Ust-Kamenogorsk, Kazakhstan. Ownership of Ulba Conversion will be Kazatomprom 51 per cent and Cameco 49 per cent. Azamat Belyalov, currently director general of JV Akbastau JSC, a uranium mining company, has been appointed director general of the new entity.

The two companies entered into a memorandum of understanding (MOU) last year to co-operate on the development of uranium conversion capacity and to pursue additional uranium production. Kazatomprom is owned by the Kazakh government.

Cameco and Kazatomprom have agreed to begin the first stage of the feasibility study to evaluate a conversion plant based on the results of a detailed scoping study. This first stage will be financed by the two companies based on their participating interest and is expected to be completed in the next year. Cameco will provide the technology for the conversion plant and potentially hold an interest of up to 49 per cent.

Cameco and Kazatomprom are also making progress on their plans to double future production from the Inkai uranium deposit, raising total annual production to 10.4 million pounds on a time frame to be confirmed. A project feasibility study is complete and is being reviewed by the partners.

The Inkai project is located in Kazakhstan and is owned and operated by joint venture Inkai (JVI), which consists of Cameco (60 per cent) and Kazatomprom (40 per cent). JVI has constructed a full-scale in situ recovery mine and mill that is targeting commercial production in 2008 and plans to ramp up to 5.2 million pounds of annual production in 2010 (Cameco's share is 3.1 million pounds). While the existing project ownership would not change, Cameco's interest in additional capacity would be 50 per cent with the remainder held by Kazatomprom. Cameco's share of 10.4 million pounds of annual production would be 5.7 million pounds.

Cameco and Kazatomprom continue to progress toward binding agreements based on the MOU. These agreements will require various government approvals to implement.

Kazatomprom, one of the world's largest uranium producers, has significant uranium resources with ambitious plans to grow its uranium production capacity in Kazakhstan. This will contribute to increased future demand for conversion capacity.