Mr. Tim Gitzel reports

CAMECO REPORTS FIRST QUARTER FINANCIAL RESULTS

Cameco Corp. has released its consolidated financial and operating results for the first quarter ended March 31, 2012, in accordance with international financial reporting standards.

"Our uranium business continues to drive our strong financial performance," said Tim Gitzel, president and chief executive officer. "This quarter, our sales volumes were up 33 per cent, and although spot and long-term uranium prices were lower relative to a year ago, our average realized price increased.

"We continue to make good progress with mine construction at Cigar Lake and with securing regulatory approvals required to expand production in the United States and in Kazakhstan.

"We will sustain our focus on our growth strategy, growth that we believe will be needed to fuel the world's increasing appetite for safe, clean, reliable and affordable energy."

                   FINANCIAL HIGHLIGHTS
                Three months ended March 31
    (in millions of dollars, except per share amounts)

                                         2012           2011

Revenue                                  $563           $461
Gross profit                              178            136
Net earnings                              132             91
Per common share ($) (diluted)           0.33           0.23
Adjusted net earnings (non-IFRS)          124             85
Per common share ($) (adjusted                                              
and diluted)                             0.31           0.21

First quarter

Net earnings attributable to the company's shareholders (net earnings) this quarter were $132-million (33 cents per share diluted) compared with $91-million (23 cents per share diluted) in the first quarter of 2011. On an adjusted basis, the company's earnings this quarter were $124-million (31 cents per share diluted) compared with $85-million (21 cents per share diluted) (non-IFRS (international financial reporting standards) measure, see adjusted net earnings) in the first quarter of 2011. Higher earnings in 2012 were mainly due to:

• Higher earnings from the company's uranium business based on higher sales volumes and realized prices;

• Lower income taxes;

• Partially offset by higher expenditures for exploration and administration.

See financial results by segment for more detailed discussion.

As part of the company's continuing work with its customers following the March, 2011, events, it expects to terminate a sales contract with one of its customers during the second quarter at a cost of about $30-million (U.S.), which would be recorded in the company's financial statements for the period ended June 30, 2012. It expects to be able to place the full quantity at higher prices and does not anticipate a significant impact on its financial results for 2012. The contract includes base-escalated pricing terms at rates well below current market prices, and provides for deliveries of 3.4 million pounds covering the years 2012 through 2016, of which 800,000 pounds is scheduled for 2012. It does not anticipate terminating any other sales arrangements, unless it is expected to be financially beneficial to it.

Uranium market update

Uncertainty remains in the market in the near to medium term as a result of the events in Japan that occurred one year ago in March. Nevertheless, the company continues to see a strong and promising growth profile for the nuclear industry in the long term.

Today, Japan continues work to rebuild its economy and the areas affected by the natural disasters. The world is watching while Japan decides what level of nuclear power it will depend on in the future. Currently, only one of Japan's nuclear reactors is operating, with this unit scheduled to be shut down for maintenance in May. Efforts remain under way to address safety concerns and gain the necessary political support to begin restarting reactors.

Much of the uranium market continues to be in a wait-and-see mode with limited long-term contracting occurring. Concerns about possible excess German and Japanese inventories and U.S. Department of Energy materials being introduced into the market continue to cause uncertainty. The company believes that utilities will continue to work with producers to manage these materials and minimize the impact on the market. Since utilities are well covered under existing contracts, the company expects the market demand to remain somewhat discretionary and prices relatively stable until more certainty around these inventories is gained.

Despite this near- to medium-term uncertainty, it continues to see a very strong and promising growth profile for the nuclear industry in the long term. Countries around the world, with very few exceptions, have reconfirmed their commitment to nuclear energy. China, India, France, Russia, South Korea, the United Kingdom, Canada, the United States and almost every other country with a nuclear program are maintaining nuclear as a part of their energy mix.

At the beginning of 2012, it expected 96 net new reactors to be built over the next decade, 63 of which were under construction. This translates into an expected average annual growth rate of about 3 per cent for global uranium consumption. Of those under construction, two South Korean reactors were brought on-line in the first quarter of the year.

In an industry reliant on finite secondary supplies to fulfill about 15 per cent of 2012 consumption requirements, and where a major source of this supply -- the Russian highly enriched uranium (HEU) commercial agreement -- ends after 2013, it is clear that new production will be needed. The end of the Russian HEU commercial agreement represents the equivalent of removing a mine producing 24 million pounds of uranium per year from the market at a time when a number of new projects have been put on hold -- projects previously expected to help fill the HEU gap.

The company is well positioned to meet the growing demand for uranium, given its extensive base of mineral reserves and resources located near existing infrastructure, diversified sources of supply, global exploration program and portfolio of long-term sales contracts. The company is preparing its assets and will continue to look for opportunities to make sure it is among the first to respond to changing market conditions with a continued focus on profitability.

Outlook for 2012

Over the next several years, it expects to invest significantly in expanding production at existing mines and advancing projects as it pursues its growth strategy. The projects are at various stages of development, from exploration and evaluation to construction.

The company expects its existing cash balances and operating cash flows will meet its anticipated capital requirements without the need for significant additional financing. Cash balances will decline as it uses the finances in its business and pursue its growth plans.

The company's outlook for 2012 reflects the growth expenditures necessary to help it achieve its strategy. It does not provide an outlook for the items in the table, "2012 financial outlook," that are marked with a dash.

                              2012 FINANCIAL OUTLOOK

                   Consolidated  Uranium       Fuel services  Electricity   

Production         -             21.7 million  13 to 14       -             
                                 lb            million kgU                  
Sales volume       -             31 to 33      Decrease       -             
                                 million lb    10% to 15%                   
Capacity factor    -             -             -              95%           
Revenue            Decrease      Decrease      Decrease       Increase      
compared with 2011 0% to 5%      0% to 5%(1)   10% to 15%     5% to 10%     
Average unit cost  -             Increase      Increase       Decrease      
of sales                         0% to 5%(2)   10% to 15%     5% to 10%     
(including D&A)
Direct             Increase      -             -              -             
administration     10% to 15%                                               
costs compared                                                             
with 2011(3)                                                                 
Exploration costs  -             Increase      -              -             
compared with 2011               15% to 20%                                 
Tax rate           Recovery of   -             -              -             
                   0% to 5%                                                 
Capital            $620-million(4) -           -              $70-million   

(1) Based on a uranium spot price of $51.75 (U.S.) per pound 
    (the Ux spot price as of April 30, 2012), a long-term price 
    indicator of $60.00 (U.S.) per pound (the Ux long-term indicator 
    on April 30, 2012) and an exchange rate of $1.00 (U.S.) for 
    $1.00 (Canadian).                                     
(2) This increase is based on the unit cost of sale for produced
    material and committed long-term purchases. If the company decides
    to make discretionary purchases in 2012 then it expects the average 
    unit cost of sales to increase further.                                                       
(3) Direct administration costs do not include stock-based compensation     
    expenses.                                                               
(4) Does not include its share of capital expenditures at BPLP.             

The company's customers choose when in the year to receive deliveries of uranium and fuel services products, so its quarterly delivery patterns, and therefore its sales volumes and revenue, can vary significantly. Based on current projections, it expects deliveries to be lowest in the second quarter while deliveries in the fourth quarter are expected to account for about one-third of its 2012 sales volumes. However, not all delivery notices have been received to date, which could alter the delivery patterns.

Sensitivity analysis

For the rest of 2012:

A change of $5 (U.S.) per pound in both the Ux spot price ($51.75 (U.S.) per pound on April 30, 2012) and the Ux long-term price indicator ($60.00 (U.S.) per pound on April 30, 2012) would change revenue by $46-million and net earnings by $27-million.

A change of $5 per megawatt hour in the electricity spot price would change the company's 2012 net earnings by $3-million based on the assumption that the spot price will remain below the floor price of $51.62 per MWh provided for under Bruce Power Limited Partnership's (BPLP) agreement with the Ontario Power Authority.

A one-cent change in the value of the Canadian dollar versus the U.S. dollar would change revenue by $7-million and adjusted net earnings by $3-million. This sensitivity is based on an exchange rate of $1.00 (U.S.) for $1.00 (Canadian).

Adjusted net earnings

Adjusted net earnings is a measure that does not have a standardized meaning or a consistent basis of calculation under IFRS (non-IFRS measure). It uses this measure as a more meaningful way to compare its financial performance from period to period. It believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate performance. Adjusted net earnings is the net earnings attributable to equity holders, adjusted to better reflect the underlying financial performance for the reporting period. The adjusted earnings measure reflects the matching of the net benefits of the company's hedging program with the inflows of foreign currencies in the applicable reporting period.

Adjusted net earnings is non-standard supplemental information and should not be considered in isolation or as a substitute for financial information prepared according to accounting standards. Other companies may calculate this measure differently so you may not be able to make a direct comparison with similar measures presented by other companies.

First quarter

Production volumes this quarter were 2 per cent higher compared with the first quarter of 2011 primarily due to higher production from McArthur River/Key Lake, partially offset by lower production at Inkai and Smith Ranch-Highland.

Uranium revenues this quarter were up 35 per cent compared with 2011, due to a 33-per-cent increase in sales volumes and a 2-per-cent increase in the Canadian dollar realized selling price.

The company's realized prices this quarter were higher than the first quarter of 2011 mainly due to higher U.S. dollar prices under fixed-price contracts. In the first quarter of 2012, its realized foreign exchange rate was $1.01, unchanged compared with the prior year.

Total cost of sales (including depreciation and amortization) increased by 32 per cent ($260-million compared with $197-million in 2011). This was mainly the result of the following:

• The 33-per-cent increase in sales volumes;

• Royalty charges in 2012 were $11-million higher due to increased deliveries of produced material and higher realized prices;

• Average unit costs for produced uranium were 1 per cent higher due to increased non-cash production costs at the company's ISR locations.

The net effect was a $41-million increase in gross profit for the quarter.

First quarter

Production volumes were 5 per cent higher than in 2011 due to operational issues at its UF6 conversion facility that resulted in a two-week shutdown in 2011.

Total revenue was $7-million higher than in 2011 due to a 17-per-cent increase in sales volumes, partially offset by a 3-per-cent decline in the average realized price for its fuel services products.

The company's Canadian dollar realized price for fuel services was affected by the mix of products delivered in the quarter. In 2012, a higher proportion of fuel services sales were for UF6, which typically yields a lower price than the other fuel services products.

The total cost of sales (including depreciation and amortization) increased by 7 per cent ($45-million compared with $42-million in the first quarter of 2011) due to the increase in sales volumes along with the mix of products delivered in the quarter. As a result of the product mix, the average unit cost of sales was 9 per cent lower for the quarter.

The net effect was a $4-million increase in gross profit.

Electricity results

First quarter

Total electricity revenue decreased slightly this quarter compared with the first quarter of 2011 due to lower output which was almost completely offset by higher realized prices. Realized prices reflect spot sales, revenue recognized under BPLP's agreement with the OPA and financial contract revenue. BPLP recognized revenue of $185-million this quarter under its agreement with the OPA, compared with $109-million in the first quarter of 2011. About 62 per cent of BPLP's output was sold under financial contracts this quarter, compared with 36 per cent in the first quarter of 2011. Pricing under these contracts was slightly higher than in 2011. From time to time BPLP enters the market to lock in the gains under these contracts.

The capacity factor was 85 per cent this quarter, down from 91 per cent in the first quarter of 2011 due to a higher volume of planned outage days when compared with last year. Operating costs were slightly higher at $241-million compared with $233-million in 2011.

The result was a 7-per-cent decrease in the company's share of earnings before taxes.

BPLP distributed $30-million to the partners in the first quarter. Its share was $9-million. Also, BPLP made capital calls of $16-million to the partners in the first quarter. Its share was $5-million. The partners have agreed that BPLP will distribute excess cash monthly, and will make separate cash calls for major capital projects.

McArthur River/Key Lake

At McArthur River/Key Lake production was 21 per cent higher in the first quarter compared with the same period last year. In the first quarter of 2011, the company decided to remove abandoned freezepipes from a production area, which disrupted production for the quarter. It has not experienced any production disruptions in 2012.

At McArthur River, drilling to install the freezewall in the upper mining area of zone 4 is progressing as planned. The company expects to start freezing upper zone 4 in 2013 and begin production from this area in 2014.

It is continuing to advance work on the environmental assessment for the Key Lake extension project. It has submitted the draft environmental impact statement to the regulators. Comments on the draft are expected before the end of the year.

Smith Ranch-Highland and Crow Butte

Production this quarter was 33 per cent lower compared with the same period last year due to lower production from Smith Ranch-Highland. The review process to obtain regulatory approvals has lengthened at Smith Ranch-Highland, which has increased the timeline to bring new well fields into production. However, regulatory approval for a new well field has been received and production rates were starting to increase near the end of the first quarter.

It continues to seek regulatory approvals to proceed with expansions at its various satellite operations in Wyoming and Nebraska. The regulators are working through a large volume of permit requests and they have started to receive approvals. It continues to communicate with them to ensure the company understands and meet its information needs in a timely manner.

It is commencing development of its North Butte satellite facility in Wyoming.

Inkai

Production for the quarter was 29 per cent lower compared with the same period last year. As the company's existing well fields mature, the grades decrease. Average grades at in situ recovery operations typically stabilize at levels lower than initial years as uranium is recovered from a mix of well fields of varying maturities. It continues to bring on additional well fields to maintain some new, typically higher grade, well fields in the production mix. It is also ramping up flow capacity at the Inkai operation in order to compensate for lower grades.

As announced on Aug. 31, 2011, it signed a memorandum of agreement with its partner, Kazatomprom, to increase production from blocks 1 and 2 to 5.2 million pounds of U3O8 (100-per-cent basis). Under the MOA, the company's share of Inkai's annual production will be 2.9 million pounds with the processing plant at full capacity. It will also be entitled to receive profits on 3.0 million pounds.

It continues to await government approval and an amendment to the resource use contract in order to implement the production increase.

It continues to proceed with delineation drilling and the engineering of infrastructure for the test leach facility at block 3.

Cigar Lake

It continued to make solid progress at Cigar Lake this quarter. It continued development of the Seru Bay pipeline, which it expects to be complete by mid-2012. It has resumed development in the north end of the mine, and construction of the underground processing facilities is under way.

The first components of the jet boring system are now on site. As the components arrive, the company is lowering them underground where the unit will be fully assembled in preparation for further testing.

It continues to advance shaft 2 and expects to reach the final depth of 500 metres by mid-2012.

It continued drilling freezeholes from surface and initiating the freezing process in the holes as they are ready to come on-line.

For the remainder of the year, it will focus on carrying out its plans and implementing the strategies it outlined in its annual management discussion and analysis.

The company continues to expect first commissioning in ore in mid-2013 and the first packaged pounds in the fourth quarter of 2013.

Cigar Lake is a key part of the company's plan to increase annual uranium production to 40 million pounds by 2018, and it is committed to bringing this valuable asset safely into production.

Millennium

As announced on March 2, 2012, it has entered into an agreement with Areva Resources Canada Inc. to purchase Areva's 27.94-per-cent interest in the Millennium project for $150-million.

The sale of the full amount of Areva's interest is subject to JCU (Canada) Exploration Co.'s rights of refusal on transfers under the terms of the Cree extension joint venture agreement. If JCU does not exercise its rights, the company will acquire the entire 27.94-per-cent interest from Areva and increase its ownership interest in the Millennium project to 69.9 per cent. If JCU elects to exercise its rights, it will acquire an additional 11.67-per-cent interest and it will acquire an additional 16.27-per-cent interest, resulting in its ownership interest in the Millennium project increasing to 58.23 per cent.

The company's ownership interest is dependent on JCU either exercising or waiving its rights under the Cree extension joint venture agreement. The company expects the transaction to close no later than June 6, 2012.

It continues to advance the project toward a development decision using the company's stage gate process.

Fuel services

Fuel services production totalled 4.5 million kilograms uranium this quarter, compared with 4.3 million kilograms uranium in the first quarter of 2011.

On Feb. 29, 2012, the Canadian Nuclear Safety Commission approved new operating licences for the Blind River refinery, the Port Hope conversion facility and Cameco Fuel Manufacturing. A five-year operating licence was granted for the Port Hope conversion facility, while Cameco Fuel Manufacturing and the Blind River refinery were granted 10-year operating licences. In addition to the new operating licence at the Blind River refinery, the annual licensed production capacity was increased from 18,000 tonnes uranium as UO3 to 24,000 tonnes uranium as UO3.

The collective agreement covering unionized employees at Cameco Fuel Manufacturing Inc. expires on June 1, 2012. Negotiations are in progress with the goal of reaching a new collective agreement.

Quarterly dividend notice

The company announced today that its board of directors approved a quarterly dividend of 10 cents per share on the outstanding common shares of the corporation that is payable on July 13, 2012, to shareholders of record at the close of business on June 29, 2012.

Conference call

The company invites you to join its first quarter conference call on Tuesday, May 1, 2012, at 1 p.m. ET.

The call will be open to all investors and the media. To join the call, please dial 866-223-7781 (Canada and United States) or 416-340-8018. An operator will put your call through. A live audio feed of the conference call will be available from a link at the company's website. See the link on the company's home page on the day of the call.

A recorded version of the proceedings will be available:

• On the company's website shortly after the call;

• On postview until midnight ET, June 1, 2012, by calling 800-408-3053 or 905-694-9451, passcode 7348055 followed by the number sign.

We seek Safe Harbor.