Cameco Reports Record Revenue, Earnings and Cash Flows for 2006

Market Wire, February, 2007

Cameco Corporation (TSX: CCO) (NYSE: CCJ) today reported its unaudited financial results for the fourth quarter and year ended December 31, 2006. All numbers in this release are in Canadian dollars, unless otherwise stated. For a more detailed discussion of our financial results, see the management's discussion and analysis (MD&A) following this news release.

"The company recorded record revenue, earnings and cash flow for 2006, despite lower earnings in the fourth quarter compared to the previous year," said Jerry Grandey, president and chief executive officer of Cameco. "As we have indicated, quarterly results are not a good indicator of Cameco's annual results and the fourth quarter certainly demonstrates this."

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Financial Highlights
 ($ millions except           Three months       %     Year ended        %
 per share amounts)           ended Dec 31  Change         Dec 31   Change
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                              2006    2005            2006   2005
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Revenue (a)                    512     522      (2)  1,832  1,313       40
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Earnings from operations        36      59     (39)    335    121      177
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Cash provided by operations (b) 13      91     (86)    418    278       50
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Net earnings                    40      83     (52)    376    215       75
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Earnings per share (EPS) -
 basic ($)                    0.11    0.24     (54)   1.07   0.62       73
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EPS - diluted ($)             0.11    0.23     (52)   1.02   0.60       70
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EPS - adjusted and diluted
 ($)                          0.11    0.21     (48)   0.75   0.58       29
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Adjusted net earnings (c)       40      76     (47)    274    208       32
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(a) In 2006, revenue from Bruce Power Limited Partnership (BPLP) was
    proportionately consolidated. In 2005, consolidated revenue included
    Cameco's proportionate share of BPLP revenue following the
    restructuring of the partnership as of October 31, 2005. Prior to that
    date, we accounted for BPLP using the equity accounting method.
(b) After working capital changes.
(c) Net earnings for 2006 have been adjusted to exclude a $73 million
    ($0.19 per share diluted) recovery of future income taxes related to
    reductions in federal and provincial income tax rates and adjusted to
    exclude a $29 million gain ($0.08 per share diluted) on sale of our
    interest in the Fort a la Corne joint venture. Net earnings for the
    quarter and year ended December 31, 2005 have been adjusted to exclude
    $69 million ($0.19 per share diluted) in net earnings related to the
    gain on sale of Energy Resources of Australia Ltd shares as well as $62
    million ($0.17 per share diluted) in net loss related to the
    restructuring of the Bruce Power Limited Partnership. Adjusted net
    earnings is a non-GAAP measure used to provide a representative
    comparison of the financial results.

Fourth Quarter

For the three months ended December 31, 2006, our net earnings were $40 million ($0.11 per share diluted), $43 million lower than the net earnings of $83 million ($0.23 per share diluted) recorded in 2005. The decrease is due to lower earnings in the electricity and gold businesses, and a $20 million (pre-tax) charge at Cigar Lake. The write down results in a $15 million (pre-tax) charge in the fourth quarter of 2006. In addition, we expensed $5 million (pre-tax) in costs related to remediation activities at the project.

Cash from operations in the fourth quarter of 2006 was $13 million compared to $91 million in 2005. The decrease of $78 million was related to lower cash flows from the gold and electricity businesses.

In our uranium business, earnings before taxes declined to $49 million from $71 million in the fourth quarter of last year, primarily as a result of a lower reported sales volume in the quarter. Compared to the fourth quarter of 2005, revenue from our uranium business declined by $76 million to $242 million as a 36% increase in the realized selling price (in US dollars) was more than offset by a 42% decline in reported sales volumes.

The sales volumes were down due to timing of sales deliveries, which are at the discretion of our customers. For the past several years, the deliveries have been heavily weighted in the fourth quarter. In 2006, the timing of deliveries through the year was unusual, with a heavier weighting in the first quarter and lighter weighting in the fourth quarter.