EXHIBIT 99.3




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Managements discussion and analysis
 February 14, 2011
 2010 Highlights
    
    
    4About Cameco
    
    
    7About the nuclear energy industry
    
    
    9Our strategy
    
    
    15Financial results
    
    
    28Our operations and development projects
    
    
    53Mineral reserves and resources
    
    
    84Additional information
    
    
    90
  we, us, our Cameco




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Managements discussion and analysis
   Important information for US investors
 Caution about forward-looking information
 forward-looking information forward-looking statements forward-looking information.
  
    
    It typically includes words and phrases about the future, such as: believe, estimate,
anticipate, expect, plan, intend, predict, goal, target, project, potential, strategy and
outlook (see examples on page 2).
    
    It represents our current views, and can change significantly.
    
    It is based on a number of material assumptions,including those weve listed below, which
may prove to be incorrect.
    
    Actual results and events may be significantly different from what we currently expect, due
to the risks associated with our business. We list a number of these material risksbelow. We
recommend you also review our annual information form, which includes a discussion of other
material risks that could cause actual results to differ significantly from our current
expectations.
  Managements discussion and analysis




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Examples of forward-looking information in this MD&A
 
    
    our expectations about future worldwide uranium supply and demand
    
    spot prices in 2011 are expected to be volatile
    
    our goal for doubling annual production by 2018 to 40 million pounds and our expectation
that existing cash balances and operating cash flows will meet anticipated capital
requirements without the need for any significant additional financing to reach this goal
    
    our 2011 objectives
    
    the outlook for each of our operating segments for 2011, and our consolidated outlook for
the year
    
    our expectation that we will invest significantly in expanding production at our existing
mines and advancing projects as we pursue our growth strategy
    
    our expectation that cash balances will decline gradually as we use the funds in our
business and to pursue our growth plans
    
    our expectation that for the next several years our capital expenditures will be similar to
2011
    
    our expectation that our operating and investment activities in 2011 will not be
constrained by the financial covenants in our general credit facilities
    
    our uranium price sensitivity analysis
    
    forecast production at our uranium operations from 2011 to 2015
    
    our expectation that Inkai will receive all the necessary approvals and permits to meet its
2011 and future annual production targets
    
    the likely terms and volumes to be covered by long-term delivery contracts that we enter
into in 2011 and in future years
    
    future production at our fuel services operations
    
    future royalty and tax payments and rates
    
    our future plans for each of our uranium operating properties, development projects and
projects under evaluation, and fuel services operating sites
    
    our mid-2013 target for initial production from Cigar Lake, the expected benefits of our
surface freeze strategy and our 2011 Cigar Lake plans
    
    our mineral reserve and resource estimates
    
    the discussion of the expected impact of International Financial Reporting Standards
(IFRS) on our financial statements, internal control over financial reporting and disclosure
controls and procedures, our business activities in general, and our estimate of IFRS opening
statement of financial position and interim period financial results
 Material risks
 
    
    actual sales volumes or market prices for any of our products or services are lower than we
expect for any reason, including changes in market prices or loss of market share to a
competitor
    
    we are adversely affected by changes in foreign currency exchange rates, interest rates or
tax rates
    
    production costs are higher than planned, or necessary supplies are not available, or not
available on commercially reasonable terms
    
    our estimates of production, purchases, costs, decommissioning or reclamation expenses, or
our tax expense estimates, prove to be inaccurate
    
    we are unable to enforce our legal rights under our existing agreements, permits or
licences, or are subject to litigation or arbitration that has an adverse outcome
    
    there are defects in, or challenges to, title to our properties
    
    our mineral reserve and resource estimates are inaccurate, or we face unexpected or
challenging geological, hydrological or mining conditions
    
    we are affected by environmental, safety and regulatory risks, including increased
regulatory burdens or delays
    
    we cannot obtain or maintain necessary permits or approvals from government authorities
    
    we are affected by political risks in a developing country where we operate
    
    we are affected by terrorism, sabotage, blockades, accident or a deterioration in political
support for, or demand for, nuclear energy
    
    there are changes to government regulations or policies, including tax and trade laws and
policies
    
    our uranium and conversion suppliers fail to fulfil delivery commitments
    
    delay or lack of success in remediating and developing Cigar Lake
    
    we are affected by natural phenomena, including inclement weather, fire, flood and
earthquakes
    
    our operations are disrupted due to problems with our own or our customers facilities, the
unavailability of reagents, equipment, operating parts and supplies critical to production,
lack of tailings capacity, labour shortages, labour relations issues, strikes or lockouts,
underground floods, cave ins, tailings dam failures, and other development and operating risks
    
    new IFRS standards or changes in the standards or their interpretation
 cameco corporation




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Material assumptions
 
    
    sales and purchase volumes and prices for uranium, fuel services and electricity
    
    expected production costs
    
    expected spot prices and realized prices for uranium, and other factors discussed on page
43, Price sensitivity analysis: uranium
    
    tax rates, foreign currency exchange rates and interest rates
    
    decommissioning and reclamation expenses
    
    mineral reserve and resource estimates
    
    the geological, hydrological and other conditions at our mines
    
    our Cigar Lake remediation and development plans succeed
    
    our ability to continue to supply our products and services in the expected quantities and
at the expected times
    
    our ability to comply with current and future environmental, safety and other regulatory
requirements, and to obtain and maintain required regulatory approvals
    
    our operations are not significantly disrupted as a result of political instability,
nationalization, terrorism, sabotage, blockades, breakdown, natural disasters, governmental or
political actions, litigation or arbitration proceedings, the unavailability of reagents,
equipment, operating parts and supplies critical to production, labour shortages, labour
relations issues, strikes or lockouts, underground floods, cave ins, tailings dam failure,
lack of tailings capacity, or other development or operating risks
    
    our IFRS related forecasts are not significantly impacted by new IFRS standards or
changes in the standards or their interpretation or changes in our policy choices
 Managements discussion and analysis




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2010 Highlights
    
    
    uranium double our annual production to 40 million pounds by 2018 from existing assets
    
    fuel services invest in our fuel services business to support our overall growth in the
nuclear business
    
    electricity maintain steady cash flow while looking at options to extend the operating
life of the four Bruce B units
  Strong financial performance
  HighlightsDecember 31($ millions except where indicated)
    
    
    
    
    
    2010
    
    
    2009
    
    
    changeRevenue
    
    
    
    
    
    
    2,124
    
    
    
    2,315
    
    
    
    (8
    )%Gross profit
    
    
    
    
    
    
    744
    
    
    
    750
    
    
    
    (1
    )%Net earnings
    
    
    
    
    
    
    515
    
    
    
    1,099
    
    
    
    (53
    )%$  per common share (diluted)
    
    
    
    
    
    
    1.30
    
    
    
    2.82
    
    
    
    (54
    )%Adjusted net earnings (non-GAAP, see page 29)
    
    
    
    
    496
    
    
    
    528
    
    
    
    (6
    )%$  per common share (adjusted and diluted)
    
    
    
    
    1.25
    
    
    
    1.35
    
    
    
    (7
    )%Cash provided by operations (after working capital changes)
    
    
    
    
    507
    
    
    
    690
    
    
    
    (27
    )%Average realized prices
    
    $US/lb
    
    
    43.63
    
    
    
    38.25
    
    
    
    14
    %Uranium
    
    $Cdn/lb
    
    
    45.81
    
    
    
    45.12
    
    
    
    2
    %Fuel services
    
    $Cdn/kgU
    
    
    
    16.86
    
    
    
    17.84
    
    
    
    (5
    )%Electricity
    
    $Cdn/MWh
    
    
    58
    
    
    
    64
    
    
    
    (9
    )%
 Shares and stock options outstanding
  
    
    394,435,383 common shares and one Class B share outstanding
    
    7,432,998 stock options outstanding, with exercise prices ranging from $5.88 to $46.88
 Dividend policy
  cameco corporation




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Excellent progress this year
  
    
    Achieved the best safety performance in our history, exceeding 2009s award winning
performance.
    
    Received approval for production flexibility at McArthur River, which allowed us to exceed
our production target by 6%.
    
    Extended Rabbit Lakes expected mine life by two years to 2017.
    
    Continued to ramp up production at Inkai and exceeded 2009 production by 136%.
    
    Finished dewatering the underground development at Cigar Lake, substantially completed
securing the underground development areas and began implementing a surface freeze strategy we
expect will provide a number of benefits. You can read more about this on page 73.
 6
    Highlights
    
    
    
    2010
    
    
    2009
    
    
    changeUranium
    
    Production volume (million lbs)
    
    
    22.8
    
    
    
    20.8
    
    
    
    10
    %Sales volume (million lbs)
    
    
    29.6
    
    
    
    33.9
    
    
    
    (13
    )%Revenue ($ millions)
    
    
    1,374
    
    
    
    1,551
    
    
    
    (11
    )%Fuel services
    
    Production volume (million kgU)
    
    
    15.4
    
    
    
    12.3
    
    
    
    25
    %Sales volume (million kgU)
    
    
    17.0
    
    
    
    14.9
    
    
    
    14
    %Revenue ($ millions)
    
    
    301
    
    
    
    276
    
    
    
    9
    %Electricity
    
    Output (100%) (TWh)
    
    
    25.9
    
    
    
    24.6
    
    
    
    5
    %Revenue (100%)
    
    
    1,509
    
    
    
    1,640
    
    
    
    (8
    )%Our share of earnings before
taxes ($ millions)
    
    
    166
    
    
    
    224
    
    
    
    (26
    )%
 Managements discussion and analysis




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Key market facts
  
    
    The world is increasingly recognizing the benefits of nuclear energy as it searches for
alternatives to carbon-based electricity generation, and for energy diversification and
security.
    
    At the start of 2011, there were 441 commercial nuclear power reactors operating in 30
countries, providing about 14% of the worlds electricity.
    
    At the start of 2011, there were 65 reactors under construction and, by 2020, we estimate
104 new reactors (net) to come on line.
    
    Most of this new build is being driven by rapidly developing countries like China and
India, which have severe energy deficits and want clean sources of electricity to improve
their environment and sustain economic growth.
    
    Over the next decade, demand for uranium to fuel existing and new reactors, and build
strategic inventories is expected to grow by an average of 2.5% per year.
    
    To meet global demand over the next 10 years, we expect 66% of uranium supply will come
from mines that are currently in operation, 16% from finite sources of secondary supply
(mainly Russian highly enriched uranium (HEU), government inventories and limited recycling),
and 18% will have to come from new sources of supply.
    
    With uranium assets on three continents, including high-grade reserves and low-cost mining
operations in Canada, and investments that cover the nuclear fuel cycle  we are ideally
positioned to benefit from the worlds growing need for clean, reliable energy.
 cameco
corporation




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About Cameco
  
 
 Uranium
  Product
 
    
    uranium concentrates
(U3O8)
 Mineral reserves and resources
  
    
    approximately 475 million pounds proven and probable
  
    
    approximately 140 million pounds measured and indicated and 355 million pounds inferred
  
    
    focused on four continents
 Operating properties
 
    
    McArthur River and Key Lake, Saskatchewan
    
    Rabbit Lake, Saskatchewan
    
    Smith Ranch-Highland, Wyoming
    
    Crow Butte, Nebraska
    
    Inkai, Kazakhstan
 Development project
 
    
    Cigar Lake, Saskatchewan
 Projects under evaluation
 
    
    Inkai blocks 1 and 2 production increase, Kazakhstan
    
    Inkai block 3, Kazakhstan
    
    McArthur River extension, Saskatchewan
    
    Kintyre, Australia
    
    Millennium, Saskatchewan
 Fuel services
  Products
 
    
    uranium trioxide (UO3)
    
    uranium hexafluoride (UF6) 
(control about 35% of western world capacity)
    
    uranium dioxide
(UO2) 
(the worlds only commercial producer of natural
UO2)
    
    fuel bundles, reactor components and monitoring equipment used by Candu reactors
 Operations
 
    
    Blind River refinery, Ontario 

(refines U3O8 to UO3)
    
    Port Hope conversion facility, Ontario 

(converts UO3 to UF6 or UO2)
    
    Cameco Fuel Manufacturing Inc., Ontario 

(manufactures fuel bundles and reactor components)
    
    a toll conversion agreement with Springfields Fuels Ltd. (SFL), Lancashire, United Kingdom (UK) 

(to convert UO3 to UF6  expires in 2016)
  Managements discussion and analysis




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Electricity
  Capacity
 
    
    3,260 megawatts (MW) (100% basis)
 (about 15% of Ontarios electricity)
  -
    
    uranium concentrates-
    
    conversion services-
    
    fuel fabrication services
 Global presence
 
 cameco corporation




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About the nuclear energy industry
  
 Nuclear power is a clean source of electricity, and generation capacity is growing
  2
 Managements discussion and analysis




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
    
    China was operating 13 reactors, building between 25 and 30 and planning more. We expect a
net increase of 54 reactors by 2020.
    
    India was operating 19 reactors and had several under construction. We expect a net
increase of 13 reactors by 2020.
   2
 cameco corporation




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Demand for uranium is growing
 3 8 3 8
 
  Managements discussion and analysis




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primary
production sources,
 secondary supply sources
 new sources of supply.
 6
  Despite this growth, challenges remain
   The long-term outlook is positive
  
    
    we expect demand to continue to exceed worldwide production
    
    secondary supplies currently filling the shortfall are finite
    
    primary production needs to increase to meet future demand
  cameco corporation




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The industry in 2010
 World consumption and production
   6 2
 
 Industry prices
 3 8
 2010
    
    
    2009
    
    
    changeUranium($US/lb U3O8)1Average spot market price
    
    
    46.83
    
    
    
    46.06
    
    
    
    2
    %Average long-term price
    
    
    60.92
    
    
    
    65.50
    
    
    
    (7
    )%Fuel services($US/kgU UF6)1Average spot market price North America
    
    
    9.11
    
    
    
    7.16
    
    
    
    27
    % Europe
    
    
    9.83
    
    
    
    8.82
    
    
    
    11
    %Average long-term price North America
    
    
    12.21
    
    
    
    11.91
    
    
    
    3
    % Europe
    
    
    13.27
    
    
    
    13.20
    
    
    
    1
    %Note: the industry does not publish UO2prices.Electricity($/MWh)Average Ontario electricity spot price
    
    
    36
    
    
    
    30
    
    
    
    20
    %
 
 1
    
    Average of prices reported by TradeTech and Ux Consulting (Ux) Managements discussion and analysis




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Contract volumes
   
 cameco
corporation




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Our strategy
   
    
    a large portfolio of low-cost mining operations and geographically diverse uranium assets
    
    controlling interests in the worlds largest high-grade uranium reserves
    
    extensive mineral reserves and resources to support our growth strategy
    
    excellent growth potential from existing assets, combined with an advanced global
exploration program
    
    multiple sources of conversion and the ability to increase production
    
    a strong customer base and a worldwide marketing presence
    
    an extensive portfolio of long-term sales contracts supported by long-life assets
    
    innovative technology and experience operating in technically challenging environments
    
    an enterprise-wide risk management system tied directly to our strategy and objectives
    
    conservative financial management and the financial strength to support our growth
    
    among the first to build relationships in emerging markets
      
    
    uranium double our annual production to 40 million pounds by 2018 from existing assets
    
    fuel services invest in our fuel services business to support our overall growth in the
nuclear business
    
    electricity maintain steady cash flow while gaining exposure to new opportunities
  Managements discussion and analysis




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Uranium: doubling production by 2018
  
    
    operating properties
    
    development projects
    
    projects under evaluation
  
    Operating properties
    cameco
corporation




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Development project
  Projects under evaluation
  
    
    The McArthur River extension is expected to expand our existing mining area, which is part
of the most prolific high-grade uranium system in the world.
 
    
    Under a memorandum of understanding with our Inkai partner, National Atomic Company
KazAtomProm Joint Stock Company (Kazatomprom), we are in discussions to increase annual
production from blocks 1 and 2, which would result in our share increasing to 5.7 million
pounds.
 
    
    Inkai block 3, in Kazakhstan, has the potential to become a significant source of
production.
 
    
    Our acquisition in 2008 of a 70% interest in Kintyre, in Australia, adds potential for
low-cost production and diversifies our production by geography and deposit type.
 
    
    Millennium is a uranium deposit in northern Saskatchewan that we expect will take advantage
of the mill at Key Lake.
  
 2010 managements discussion and analysis  17




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Growth beyond 2018
  Exploration
   Acquisition
    Assumptions
  18  cameco corporation




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Material risks that could prevent us from reaching our target
 
    
    we cannot locate additional reserves and identify appropriate methods of
mining to maintain and increase production levels at McArthur River
    
    our partner or the Kazakh government does not support an increase in production to the
expected level at Inkai, blocks 1 and 2, or we dont reach the full production level as
quickly as we expect
    
    we cannot bring block 3 into production at Inkai if the feasibility study is not favourable
or we cannot secure partner or government approval
    
    remediation and development at Cigar Lake is not completed on schedule, or we do not reach
the full production level as quickly as we expect
    
    development of Kintyre is delayed due to political, regulatory or indigenous people issues
    
    we cannot obtain a favourable feasibility study for Kintyre or the Millennium project, or
we cannot reach agreement with our project partners to move ahead with production at Kintyre
or Millennium
 
    
    the Key Lake mill does not have enough capacity to handle anticipated production increases, and
we arent able to expand its capacity or to identify alternative milling arrangements
    
    the projects under evaluation do not proceed or, if they do, are not completed on schedule
or dont reach full production levels as quickly as we expect
    
    uranium prices and development and operating costs make it uneconomical to develop projects
under consideration
    
    we cannot obtain or maintain necessary permits or approvals from government authorities
    
    disruption in production or development due to natural phenomena, labour disputes,
political risks, blockades or other acts of social or political activism, lack of tailings
capacity, or other development and operation risks
 Fuel services: capturing synergies
  6
 Electricity: capturing added value
  2010 managements discussion and analysis  19




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Building on our strengths
 World-class assets
  Strong customer relationships
  Uranium price leverage
  Financial strength
  Disciplined portfolio management
  Focused risk management
  Innovation
  Reputation
  20  cameco corporation




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Managing our growth
   
    
    outstanding financial performance
    
    a safe, healthy and rewarding workplace
    
    a clean environment
    
    supportive communities
  Focus on long-term sustainability
    Outstanding financial performance
  Managing contracts
 2 6
      2010 managements discussion and analysis  21




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Managing our supply
  
    
    from our own production
 
    
    by purchasing uranium under both spot and long-term purchase agreements  mostly under the
Russian HEU commercial agreement
 
    
    from our existing inventory  we target inventories of about six months of forward sales
of uranium concentrates and UF6
  Managing our costs
     22  cameco corporation




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A safe, healthy and rewarding workplace
    A clean environment
   Reducing our impact
        2010 managements discussion and analysis  23




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Supportive communities
    
    
    50% of the employees at our mines were local residents
 
    
    78% of services to our northern minesites  approximately $295 million  went to northern
businesses
 
    
    we engaged in project discussions with communities impacted by our operations and
exploration activities, making 120 community visits to give them information and garner
grassroots support early in the process
 
    
    we donated over $2.5 million to northern and aboriginal initiatives for youth, health and
wellness, education and literacy, and culture and recreation
 
    
    provided $100,000 in scholarships to post-secondary students
   24  cameco corporation




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Measuring our results
  2010 objectives
    
    Results
    
    2011 objectivesThis is forward-looking information.
See page 1 for more information.Outstanding financial performanceProduction
    
    Exceeded
    
    Production
    
    Produce 21.5 million pounds of
U3O8 and between 14
million and 16 million kgU from fuel
services.
    
    
    
    Our share of
U3O8
production was 22.8 million
pounds, or 106% of plan.
    
    
    
    Produce 21.9 million pounds of
U3O8 and between 15
million and 16 million kgU from fuel
services.
    
    We produced 15.4 million
kgU at fuel services.Financial measuresCorporate performance
    
    Exceeded
    
    Corporate performance
    
    Achieve budgeted net earnings and
cash flow from operations (before working
capital changes).
    
    
    
    Net earnings were higher
than budget. 

Cash flow from operations
before working capital changes was
higher than budget.
    
    
    
    Achieve budgeted net earnings and
cash flow from operations (before working
capital changes).Costs
    

    
    
    
    Costs
    
    Strive for unit costs below
budget.
    
    
    
    Unit costs for uranium
production and fuel services were
below budget.
    
    
    
    Strive for unit costs below
budget.GrowthCigar Lake
    
    Exceeded
    
    Cigar Lake
    
    Access and secure underground
workings and continue with remediation
work on schedule. Reinitiate shaft 2
development.
Update the technical report.
    
    
    
    Successfully dewatered and
re-entered the mine using
innovative technology.


Resumed shaft 2
development.

Issued technical report.
    
    
    
    Advance the project towards
mid-2013 startup by completing
remediation of all underground workings
and advancing shaft 2 sinking.Inkai
    
    Partially achieved
    
    Inkai
    
    Advance Inkai block 3 delineation
and begin a feasibility study. 
Initiate a feasibility study to
increase production at Inkai blocks 1 and
2, and secure necessary regulatory
approvals.
    
    
    
    Block 3 delineation was
advanced and supported initiation
of a 5-year resource appraisal
work plan and test leach facility
required by the Kazakh
authorities. 
Approval in principle to
operate blocks 1 and 2 at 3.9
million pounds per annum (100%
basis) was received, but not for
design capacity of 5.2 million
pounds per annum.
    
    
    
    Advance block 3 mineral resource
delineation and the engineering design of
a test leach facility. Advance
construction of site infrastructure.
Receive approval to increase
annual production from blocks 1 and 2 to
design capacity of 5.2 million pounds per
annum (100% basis).
Pursue our longer term objective
of receiving approval to double annual
production from blocks 1 and 2 by
advancing the conversion joint venture
project with Kazatomprom.
 2010 managements discussion and analysis  25




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2010 objectives
    
    Results
    
    2011 objectivesOutstanding financial performanceGrowth(continued)Kintyre
    
    Achieved
    
    Kintyre
    
    Advance project
evaluation to allow a
production decision as soon
as possible.
    
    
    
    Completed
delineation
drilling and core
logging.
Made
progress on
environmental
baseline studies,
supporting
submission of an
environmental
scoping document to
the Australian
regulator.
    
    
    
    Continue to
advance project
evaluation to allow a
production decision as
soon as possible.Exploration and innovation
    
    Exceeded
    
    Exploration and innovation
    
    Replace mineral
reserves and resources at the
rate of annual
U3O8
production based on a
three-year rolling average.
Continue to advance
extension of McArthur River
and the Millennium project to
provide future sources of
production.
Support production
growth and improved operating
efficiencies through targeted
research, development and
technological innovation.
    
    
    
    Additions
to reserves and
resources exceeded
production by an
average of 8
million pounds per
year in each of the
last three years
(2008 to 2010).
The
McArthur River
extension project
and the Millennium
project were
advanced through
the stage gate
process.Camecos
Research Centre
advanced a number
of projects aimed
at improving our
environmental
performance and
process
efficiencies at our
operations.
    
    
    
    Replace mineral
reserves and resources at
the rate of annual
U3O8
production based on a
three-year rolling
average.
Support
production growth and
improved operating
efficiencies through
targeted research,
development and
technological innovation.McArthur River extension
    
    Advance the
underground exploration
drifts to the north of
current mining areas and
initiate a feasibility
study.Millennium
    
    Continue to
advance the Millennium
project toward a project
decision.Management
    
    Achieved
    
    Management
    
    Continue integrating
portfolio management into our
management, planning and
budgeting processes.
Deliver planned
capital projects within 10%
of budget.
    
    
    
    Portfolio
management is now
fully integrated
into the planning
and budgeting
process. 
Capital
projects were
delivered within
10% of budget.
    
    
    
    Sustain and grow
production in accordance
with our strategy to
double uranium production
by 2018 by advancing
pipeline uranium projects
through the stage gate
process. 
Deliver planned
capital projects within
10% of budget.Safe, healthy and rewarding workplace
    
    Strive for no
lost-time injuries at all
Cameco-operated sites and, at
a minimum, maintain a
long-term downward trend in
combined employee and
contractor injury frequency
and severity, and radiation
doses.
    
    Exceeded
    
    Overall,
exceptionally
strong safety
performance in
2010.
Lost-time
incident frequency
for employees and
contractors was
0.24 per 200,000
hours worked
compared to a
target of 0.5 
the best
performance in
Camecos history.
Medical aid
frequency and
severity were also
significantly
better than target.
    
    
    
    Strive for no
lost-time injuries at all
Cameco-operated sites
and, at a minimum,
maintain a long-term
downward trend in
combined employee and
contractor injury
frequency and severity,
and radiation doses.
Complete
implementation of the
risk standard and
integrate it into our
quality management
system. Adopt a risk
policy and implement
improvements to the risk
governance structure at
the management and board
level.
    
    Develop a formal
implementation plan for the
risk standard and begin
implementation.
    
    Achieved
    
    All
operations met or
exceeded their 2010
implementation
milestones.
 26  cameco corporation




---



##### 



2010 objectives
    
    Results
    
    2011 objectivesClean environment
    
    Strive for
zero reportable
environmental
incidents, reduce the
frequency of
incidents and have no
significant incidents
at Cameco-operated
sites.

    
    Achieved
    
    There were 22
reportable
environmental
incidents, an
improvement over 2009
(28 incidents), and
below our long-term
average of 30. There
were no significant
environmental
incidents.
    
    
    
    Strive for
zero reportable
environmental
incidents, reduce the
frequency of
incidents and have no
significant incidents
at Cameco-operated
sites.
Improve
year-over-year
performance in
corporate
environmental
leadership
indicators.
    
    Improve
year-over-year
performance in
corporate
environmental
leadership
indicators.
    
    Achieved
    
    Five out of
eight key performance
indicators showed an
improvement relative
to 2009.Supportive communities
    
    Build
awareness and support
for Cameco through
community investment,
business development
programs and public
relations.
    
    Achieved
    
    We received
positive feedback
from our annual polls
in Port Hope and
Saskatchewan.
We were named
one of Canadas Top
100 employers, and
one of the top 10
companies to work for
in Canada.
    
    
    
    Develop
long-term
relationships by
engaging with
stakeholders
important to our
sustainability.
Ensure
support from our
employees, impacted
communities,
investors,
governments and the
general public
through
communications,
community investment
and business
development.
    
    Advance our
projects by securing
support from
indigenous
communities affected
by our operations.
    
    Achieved
    
    Established
and maintained
positive
relationships with
groups impacted by
our various operating
activities.
 2010 managements discussion and analysis  27




---



##### 



Financial results
  2010 consolidated financial results
    
    
    29Outlook for 2011
    
    
    35Liquidity and capital resources
    
    
    362010 financial results by segment
    
    
    42Uranium
    
    
    42Fuel services
    
    
    45Electricity
    
    
    46Fourth quarter results
    
    
    48Fourth quarter consolidated results
    
    
    48Quarterly trends
    
    
    49Fourth quarter results by segment
    
    
    50
 cameco corporation




---



##### 



2010 consolidated financial results
   Highlights
    
    
    
    
    
    
    
    
    
    
    
    
    
    change fromDecember 31 ($ millions except per share amounts)
    
    2010
    
    2009
    
    2008
    
    2009 to 2010Revenue
    
    
    2,124
    
    
    
    2,315
    
    
    
    2,183
    
    
    
    (8
    )%Gross profit
    
    
    744
    
    
    
    750
    
    
    
    829
    
    
    
    (1
    )%Net earnings
    
    
    515
    
    
    
    1,099
    
    
    
    450
    
    
    
    (53
    )%$ per common share (basic)
    
    
    1.31
    
    
    
    2.83
    
    
    
    1.29
    
    
    
    (54
    )%$ per common share (diluted)
    
    
    1.30
    
    
    
    2.82
    
    
    
    1.28
    
    
    
    (54
    )%Adjusted net earnings (non-GAAP, see below)
    
    
    496
    
    
    
    528
    
    
    
    525
    
    
    
    (6
    )%$ per common share (adjusted and diluted)
    
    
    1.25
    
    
    
    1.35
    
    
    
    1.49
    
    
    
    (7
    )%Cash provided by operations (after working capital changes)
    
    
    507
    
    
    
    690
    
    
    
    530
    
    
    
    (27
    )%
 Net earnings
  
    
    selling our interest in Centerra and recording an after tax gain of $374 million in 2009
 
    
    recording an after tax profit of $19 million relating to unrealized mark-to-market gains on
financial instruments, compared to a gain of $189 million in 2009
 
    
    lower earnings in our electricity business due to a decline in realized prices
 
    
    higher exploration expenses, which rose by $47 million mainly due to evaluation activities
at Kintyre and Inkai block 3
 Three-year trend
    Adjusted net earnings (non-GAAP measure)
  2010 Managements discussion and analysis




---



##### 



($ millions)
    
    2010
    
    2009
    
    2008Net earnings(GAAP measure)
    
    
    515
    
    
    
    1,099
    
    
    
    450Adjustments(after tax)Earnings from discontinued operations
    
    
    
    
    
    
    (382
    )1
    
    
    (84
    )1Unrealized gains on financial instruments
    
    
    (19
    )
    
    
    (189
    )
    
    
    166Stock option expense (recovery)
    
    
    
    
    
    
    
    
    
    
    (33
    )Investment writedowns
    
    
    
    
    
    
    
    
    
    
    26Adjusted net earnings(non-GAAP measure)
    
    
    496
    
    
    
    528
    
    
    
    525
 
 1
    
    We have changed our method for determining adjusted earnings to
exclude all amounts related to our investment in Centerra. Previously, we had
included our share of operating income from Centerra in our adjusted earnings
measure.  ($ millions)Adjusted net earnings  2009
    
    
    528Change in gross profit by segment
(we calculate gross profit by deducting from revenue the cost of products and
services sold, and depreciation, depletion and reclamation (DDR))Uranium
    
    Lower sales volume
    
    
    (62
    )Higher realized prices ($US)
    
    
    188Foreign exchange impact on realized prices
    
    
    (168
    )Lower costs
    
    
    57change  uranium
    
    
    15Fuel services
    
    Higher sales volume
    
    
    7Lower realized prices ($Cdn)
    
    
    (17
    )Lower costs
    
    
    20change  fuel services
    
    
    10Electricity
    
    Higher sales volume
    
    
    13Lower realized prices ($Cdn)
    
    
    (70
    )Lower costs
    
    
    16change  electricity
    
    
    (41
    )Other changesExploration expense
    
    
    (47
    )Administration expense
    
    
    (20
    )Realized gains on derivatives & foreign exchange
    
    
    33Reduced losses from associated companies
    
    
    26Interest expense
    
    
    13Income taxes
    
    
    (35
    )Miscellaneous
    
    
    14Adjusted net earnings - 2010
    
    
    496
 cameco corporation




---



##### 



Three-year trend
   
    
    higher profits from our electricity business, relating to a higher realized selling price
 
    
    partially offset by lower profits in our uranium business, which were impacted by higher
unit costs
  
    
    lower profits from our electricity business, relating to a lower realized selling price
 
    
    higher exploration expenses
 
    
    higher income taxes
 
    
    partially offset by improved profits in the uranium business, relating to the lower cost of
sales
 Revenue
  ($ millions)Revenue  2009
    
    
    2,315UraniumLower sales volume
    
    
    (191
    )Higher realized prices ($Cdn)
    
    
    20Fuel servicesHigher sales volume
    
    
    38Lower realized prices ($Cdn)
    
    
    (17
    )ElectricityHigher sales volume
    
    
    29Lower realized prices ($Cdn)
    
    
    (70
    )Revenue  2010
    
    
    2,124
 Financial results by segment
 Three-year trend
   Average realized prices
 change from2010
    
    2009
    
    2008
    
    2009 to 2010Uranium1
    
    $US/lb
    
    
    43.63
    
    
    
    38.25
    
    
    
    39.52
    
    
    
    14
    %$Cdn/lb
    
    
    45.81
    
    
    
    45.12
    
    
    
    43.91
    
    
    
    2
    %Fuel services
    
    $Cdn/kgU
    
    
    16.86
    
    
    
    17.84
    
    
    
    15.85
    
    
    
    (5
    )%Electricity
    
    $Cdn/MWh
    
    
    58
    
    
    
    64
    
    
    
    57
    
    
    
    (9
    )%
 
 1
    
    Average realized foreign exchange rate ($US/$Cdn): 2010  $1.05, 2009  $1.18 and
2008  $1.11. 2010 Managements discussion and analysis




---



##### 



Outlook for 2011
  
    
    higher sales volumes in the uranium and fuel services businesses
 
    
    increases in realized prices in the uranium and fuel services businesses
 
    
    partially offset by lower realized prices for electricity
  Corporate expenses
 Administration
 ($ millions)
    
    2010
    
    2009
    
    changeDirect administration
    
    
    141
    
    
    
    122
    
    
    
    16
    %Stock-based compensation
    
    
    15
    
    
    
    14
    
    
    
    7
    %Total administration
    
    
    156
    
    
    
    136
    
    
    
    15
    %
   Outlook for 2011
  Exploration
  Outlook for 2011
  Interest and other charges
  cameco corporation




---



##### 



Gains and losses on derivatives
  Income taxes
   
    
    A higher proportion of taxable income was earned in jurisdictions with higher tax rates.
 
    
    In 2009, certain future tax liabilities recognized in prior years were reduced.
 
    
    In 2009, the statutory income tax rate in Canada was reduced, allowing us to reduce our
provision for future income taxes.
  Income Tax Act
 Outlook for 2011
  Foreign exchange
    2010 Managements discussion and analysis




---



##### 




    
    The value of the US dollar relative to the Canadian dollar was $1.00 (US) for $0.99 (Cdn),
down from $1.00 (US) for $1.05 (Cdn) at December 31, 2009. The exchange rate averaged $1.00
(US) for $1.03 (Cdn) over the year.
 
    
    Our effective exchange rate for the year, after allowing for hedging, was about $1.00 (US)
for $1.05 (Cdn), compared to $1.00 (US) for $1.18 (Cdn) in 2009.
 
    
    We had foreign currency contracts of $1.3 billion (US) and EUR 93 million at December 31,
2010. The US currency contracts had an average exchange rate of $1.00 (US) for $1.03 (Cdn).
 
    
    The mark-to-market gain on all foreign exchange contracts was $47 million compared to a $67
million gain at December 31, 2009.
   Sensitivity analysis
  cameco corporation




---



##### 



Outlook for 2011
    Financial results by segment
 2011 Financial outlook 1
 Consolidated
    
    Uranium
    
    Fuel services
    
    ElectricityProduction
    
    
    
    21.9 million lbs
    
    15 to 16 million kgU
    
    Sales volume
    
    
    
    31 to 33 million lbs
    
    Increase 10% to 15%
    
    Capacity factor
    
    
    
    
    
    
    
    89%Revenue
compared to 2010
    
    Increase
10% to 15%
    
    Increase
15% to 20%2
    
    Increase
5% to 10%
    
    Decrease
10% to 15%Unit cost of
product sold
(including DDR)
    
    
    
    Increase 0% to 5%3
    
    Increase
2% to 5%
    
    Increase
10% to 15%Direct
administration
costs compared
to 20104
    
    Increase
15% to 20%
    
    
    
    
    
    Exploration costs
compared
to 2010
    
    
    
    Decrease 5% to 10%
    
    
    
    Tax rate
    
    Recovery of 0% to 5%
    
    
    
    
    
    Capital expenditures
    
    $575 million5
    
    
    
    
    
    $80 million
 
 1
    
    Commencing January 1, 2011, we will be reporting our financial results in
accordance with IFRS. The information in our 2011 financial outlook has been prepared in
accordance with IFRS and our policy choices thereunder to date. A discussion about our
transition to IFRS begins on page 91.2
    
    Based on a uranium spot price of $73.00 (US) per pound (the Ux spot price as of
February 7, 2011), a long-term price indicator of $73.00 (US) per pound (the Ux long-term
indicator on January 31, 2011) and an exchange rate of $1.00 (US) for $1.00 (Cdn).3
    
    This increase is based on the unit cost of sale for produced material. If we decide to
make discretionary purchases in 2011 then we expect the overall unit cost of product sold to
increase further.4
    
    Direct administration costs do not include stock-based compensation expenses. See page
32 for more information.5
    
    Does not include our share of capital expenditures at BPLP. Sensitivity analysis
  
    
    a change of $5 (US) per pound in each of the Ux spot price ($73.00 (US) per pound on
February 7, 2011) and the Ux long-term price indicator ($73.00 (US) per pound on January 31,
2011) would change revenue by $34 million and net earnings by $26 million.
 
    
    a change of $5 in the electricity spot price would change our 2011 net earnings by $2
million, based on the assumption that the spot price will remain below the floor price
provided for under BPLPs agreement with the Ontario Power Authority (OPA).
 2010 Managements discussion and analysis




---



##### 



Liquidity and capital resources
     Financial condition
 2010
    
    
    2009Cash position($ millions)
(cash, cash equivalents, short-term investments)
    
    
    1,260
    
    
    
    1,304Cash provided by operations($ millions)
(net cash flow generated by our operating activities after changes
in working capital)
    
    
    507
    
    
    
    690Cash provided by operations/net debt
(net debt is total consolidated debt, less cash and cash equivalents)
    
    
    n/a
    
    
    
    n/aNet debt/total capitalization
(total capitalization is total long-term debt and equity)
    
    
    n/a
    
    
    
    n/a
 Credit ratings
  Security
    
    DBRS
    
    
    S&PCommercial paper
    
    R-1 (low)
    
    
    A-1 (low)1Senior unsecured debentures
    
    A (low)
    
    
    BBB+
 
 1
    
    Canadian National Scale Rating. The Global Scale Rating is A-2. cameco corporation




---



##### 



Liquidity
 ($ millions)
    
    2010
    
    
    2009Cash and cash equivalents at beginning of year
    
    
    1,304
    
    
    
    64Cash from operations
    
    
    507
    
    
    
    690Investment activitiesAdditions to property, plant and equipment
    
    
    (470
    )
    
    
    (393
    )Dispositions
    
    
    
    
    
    
    871Acquisitions
    
    
    
    
    
    
    Other investing activities
    
    
    11
    
    
    
    (36
    )Financing activitiesChange in debt
    
    
    (10
    )
    
    
    (231
    )Issue of shares
    
    
    18
    
    
    
    442Dividends
    
    
    (106
    )
    
    
    (93
    )Other financing activities
    
    
    10
    
    
    
    Exchange rate on changes on foreign currency cash balances
    
    
    (4
    )
    
    
    (10
    )Cash and short-term investments at end of year
    
    
    1,260
    
    
    
    1,304
 Cash from operations
  Investing activities
  Acquisitions and divestitures
  Talvivaara Agreement
  2010 Managements discussion and analysis




---



##### 



Capital spending
  (Camecos share in $ millions)
    
    2010 plan
    
    
    2010 actual
    
    
    2011 planGrowth capitalCigar Lake
    
    
    111
    
    
    
    90
    
    
    
    176Inkai
    
    
    4
    
    
    
    5
    
    
    
    9McArthur River
    
    
    
    
    
    
    
    
    
    
    14Millennium
    
    
    
    
    
    
    
    
    
    
    6US ISR
    
    
    
    
    
    
    
    
    
    
    13Total growth capital
    
    
    115
    
    
    
    95
    
    
    
    218Sustaining capitalMcArthur River/Key Lake
    
    
    220
    
    
    
    165
    
    
    
    169US ISR
    
    
    53
    
    
    
    45
    
    
    
    38Rabbit Lake
    
    
    56
    
    
    
    49
    
    
    
    85Inkai
    
    
    18
    
    
    
    5
    
    
    
    19Fuel services
    
    
    29
    
    
    
    20
    
    
    
    32Other
    
    
    9
    
    
    
    8
    
    
    
    14Total sustaining capital
    
    
    385
    
    
    
    292
    
    
    
    357Capitalized interest
    
    
    52
    
    
    
    48
    
    
    
    Total uranium & fuel services
    
    
    552
    1
    
    
    435
    
    
    
    575Electricity(our 31.6% share of BPLP)
    
    
    41
    
    
    
    35
    
    
    
    80
 
 1
    
    We updated our 2010 capital cost estimate in the Q2 MD&A to $510 million and in the Q3
MD&A to $475 million.  Outlook for investing activities
  
    
    growth capital at Cigar Lake
 
    
    sustaining capital at Rabbit Lake
  
    
    McArthur River/Key Lake At McArthur River, the largest component is mine development at
about $50 million. Other projects include site facility expansion and equipment purchases. At
Key Lake, construction of the new acid, steam and oxygen plants continues at an estimated cost
of $30 million. Additional work to revitalize the mill will also be undertaken, as well as
work on the tailings facilities.
 cameco corporation




---



##### 




    
    US in situ recovery (ISR) Wellfield construction and well installation is the largest
project at approximately $25 million. We also plan to work on the development of the Gas Hills
and North Butte projects.
 
    
    Rabbit Lake At Eagle Point, the largest project includes mine development at about $20
million. Other projects include dewatering systems, continued work on mine ventilation
expansion and replacement of components of the acid plant estimated at $24 million.
  Financing activities
    
    
    We issued approximately 26.7 million common shares, netting $440 million, and put in place
or renewed $600 million in revolving lines of credit.
 
    
    We issued 10-year debentures bearing interest at a rate of 5.67%, netting $495 million. At
the same time, we cancelled a $500 million revolving credit facility that was to mature in
June 2010.
 
    
    We renewed a $100 million revolving credit facility until February 2011, and sold our
interest in Centerra, netting $871 million.
 Long-term contractual obligations
 December 31, 2010
    
    
    
    
    
    2012
    
    
    2014
    
    
    2016 and($ millions)
    
    2011
    
    
    and 2013
    
    
    and 2015
    
    
    beyond
    
    
    TotalLong-term debt
    
    
    13
    
    
    
    31
    
    
    
    337
    
    
    
    572
    
    
    
    953Interest on long-term debt
    
    
    53
    
    
    
    105
    
    
    
    96
    
    
    
    113
    
    
    
    367Provision for reclamation
    
    
    14
    
    
    
    23
    
    
    
    22
    
    
    
    406
    
    
    
    465Provision for waste disposal
    
    
    1
    
    
    
    2
    
    
    
    2
    
    
    
    33
    
    
    
    38Other liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    374
    
    
    
    374Total
    
    
    81
    
    
    
    161
    
    
    
    457
    
    
    
    1,498
    
    
    
    2,197
  
    
    A $500 million, unsecured revolving credit facility that matures November 30, 2012. In
addition to borrowing directly from this facility, we can use up to $100 million of it to
issue letters of credit, and we keep up to $400 million available to provide liquidity for our
commercial paper program, as necessary. The facility ranks equally with all of our other
senior debt. At December 31, 2010, there was nothing outstanding under this credit facility,
and nothing outstanding under our commercial paper program.
 
    
    A $100 million, unsecured revolving credit facility that matures on February 4, 2012. At
December 31, 2010, there was nothing outstanding under this credit facility.
 
    
    Approximately $600 million in short-term borrowing and letters of credit provided by
various financial institutions. We use these facilities mainly to provide financial assurance
for future decommissioning and reclamation of our operating sites, and as overdraft
protection. At December 31, 2010, we had approximately $550 million outstanding in letters of
credit.
  
    
    $300 million bearing interest at 4.7% per year, maturing on September 16, 2015
 
    
    $500 million bearing interest at 5.67% per year, maturing on September 2, 2019
 2010 Managements discussion and analysis




---



##### 



Debt covenants
  
    
    our funded debt to tangible net worth ratio must be 1:1 or less
 
    
    our tangible net worth must be more than $1.25 billion
 
    
    other customary covenants and events of default
   Off-balance sheet arrangements
  
    
    purchase commitments
 
    
    financial assurances
 Purchase commitments
 December 31, 2010
    
    
    
    
    
    2012
    
    
    2014
    
    
    2016 and($ millions)
    
    2011
    
    
    and 2013
    
    
    and 2015
    
    
    beyond
    
    
    TotalPurchase commitments1
    
    
    266
    
    
    
    620
    
    
    
    173
    
    
    
    6
    
    
    
    1,065
 
 1
    
    Denominated in US dollars, converted to Canadian dollars as of December 31, 2010 at
the rate of $0.99.   
    
    About 27 million pounds U3O8 equivalent from 2011 to 2014. Of these,
about 23 million pounds are from our agreement with Techsnabexport Joint Stock Company (Tenex)
to buy uranium from dismantled Russian weapons (the Russian HEU commercial agreement) through
2013.
 
    
    Over 36 million kgU as UF6 in conversion services from 2011 to 2016 primarily
under our agreements with Springfields Fuels Ltd. (SFL) and Tenex.
 
    
    Almost 1.1 million Separative Work Units (SWU) of enrichment services to meet existing
forward sales commitments under agreements with a non-western supplier.
   cameco corporation




---



##### 



Financial assurances
 December 31($ millions)
    
    2010
    
    
    2009
    
    
    changeStandby letters of credit
    
    
    550
    
    
    
    592
    
    
    
    (7
    )%BPLP guarantees
    
    
    82
    
    
    
    87
    
    
    
    (6
    )%Total
    
    
    632
    
    
    
    679
    
    
    
    (7
    )%
   Balance sheet
 December 31
    
    
    
    
    
    
    
    
    
    
    
    
    
    change from($ millions except per share amounts)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2009 to 2010Inventory
    
    
    543
    
    
    
    453
    
    
    
    398
    
    
    
    20
    %Total assets
    
    
    7,671
    
    
    
    7,394
    
    
    
    7,011
    
    
    
    4
    %Long-term financial liabilities
    
    
    1,465
    
    
    
    1,471
    
    
    
    1,800
    
    
    
    (1
    )%Dividends per common share
    
    
    0.28
    
    
    
    0.24
    
    
    
    0.24
    
    
    
    17
    %
    2010 Managements discussion and analysis




---



##### 



2010 financial results by segment
 
 Uranium
 Highlights
    
    2010
    
    
    2009
    
    
    changeProduction volume (million lbs)
    
    
    22.8
    
    
    
    20.8
    
    
    
    10
    %Sales volume (million lbs)
    
    
    29.6
    
    
    
    33.9
    
    
    
    (13
    )%Average spot price ($US/lb)
    
    
    46.83
    
    
    
    46.06
    
    
    
    2
    %Average realized price($US/lb)
    
    
    43.63
    
    
    
    38.25
    
    
    
    14
    %($Cdn/lb)
    
    
    45.81
    
    
    
    45.12
    
    
    
    2
    %Average unit cost of sales ($Cdn/lb U3O8) (including DDR)
    
    
    28.40
    
    
    
    30.59
    
    
    
    (7
    )%Revenue ($ millions)
    
    
    1,374
    
    
    
    1,551
    
    
    
    (11
    )%Gross profit ($ millions)
    
    
    503
    
    
    
    488
    
    
    
    3
    %Gross profit (%)
    
    
    37
    
    
    
    31
    
    
    
    19
    %
     3 8
 
    
    the 13% decline in sales volumes
 
    
    average unit costs for produced uranium were 6% lower
 
    
    average unit costs for purchased uranium were 17% lower due to fewer purchases at spot
prices
 
    
    a lower proportion of sales of purchased uranium, which carries a higher cash cost
   Unit cash cost of sale
    
    
    Quantity sold($Cdn/lb U3O8)
    
    
    (million lbs)2010
    
    
    2009
    
    
    change
    
    
    2010
    
    
    2009
    
    
    changeProduced
    
    
    22.45
    
    
    
    23.86
    
    
    
    (1.41
    )
    
    
    20.0
    
    
    
    20.9
    
    
    
    (0.9
    )Purchased
    
    
    25.11
    
    
    
    30.22
    
    
    
    (5.11
    )
    
    
    9.6
    
    
    
    13.0
    
    
    
    (3.4
    )Total
    
    
    23.32
    
    
    
    26.33
    
    
    
    (3.01
    )
    
    
    29.6
    
    
    
    33.9
    
    
    
    (4.3
    )
 cameco corporation




---



##### 



Outlook for 2011
 3 8
 3 8
  Price sensitivity analysis: uranium
 not
  Expected realized uranium price sensitivity under various spot price assumptions
  ($US/lb U3O8)Spot prices
    
    $20
    
    
    $40
    
    
    $60
    
    
    $80
    
    
    $100
    
    
    $120
    
    
    $1402011
    
    
    38
    
    
    
    41
    
    
    
    47
    
    
    
    52
    
    
    
    57
    
    
    
    63
    
    
    
    682012
    
    
    36
    
    
    
    40
    
    
    
    50
    
    
    
    58
    
    
    
    68
    
    
    
    77
    
    
    
    862013
    
    
    43
    
    
    
    45
    
    
    
    54
    
    
    
    63
    
    
    
    73
    
    
    
    82
    
    
    
    902014
    
    
    44
    
    
    
    47
    
    
    
    55
    
    
    
    64
    
    
    
    74
    
    
    
    83
    
    
    
    912015
    
    
    40
    
    
    
    45
    
    
    
    55
    
    
    
    65
    
    
    
    75
    
    
    
    85
    
    
    
    94
    Sales
 
    
    sales volumes on average of 32 million pounds per year
 Deliveries
 
    
    customers take the maximum quantity allowed under each contract (unless they have already
provided a delivery notice indicating they will take less)
 
    
    we defer a portion of deliveries under existing contracts for 2011 and 2012
 Prices
 
    
    the average long-term price indicator is the same as the average spot price for the entire
year (a simplified approach for this purpose only). Since 1996, the long-term price indicator
has averaged 13% higher than the spot price. This differential has varied significantly.
Assuming the long-term price is at a premium to spot, the prices in the table will be higher.
 
    
    we deliver all volumes that we dont have contracts for at the spot price for each scenario
 Inflation
 
    
    is 2.0% per year
 2010 Managements discussion and analysis




---



##### 



Tiered royalties
  3 8
 Realized
    
    Tier 1 royalty
    
    
    Tier 2 royalty
    
    
    Tier 3 royaltyprice
    
    6% x
    
    
    4% x
    
    
    5% x($Cdn)
    
    (sales price - $17.51)
    
    
    (sales price - $26.27)
    
    
    (sales price - $35.03)
    
    
    Total royalties25
    
    
    44,940
    
    
    
    
    
    
    
    
    
    
    
    44,94035
    
    
    104,940
    
    
    
    34,920
    
    
    
    
    
    
    
    139,86045
    
    
    164,940
    
    
    
    74,920
    
    
    
    49,850
    
    
    
    289,71055
    
    
    224,940
    
    
    
    114,920
    
    
    
    99,850
    
    
    
    439,71065
    
    
    284,940
    
    
    
    154,920
    
    
    
    149,850
    
    
    
    589,71075
    
    
    344,940
    
    
    
    194,920
    
    
    
    199,850
    
    
    
    739,71085
    
    
    404,940
    
    
    
    234,920
    
    
    
    249,850
    
    
    
    889,710
 cameco corporation




---



##### 



Fuel services
 6 2
 Highlights
    
    2010
    
    
    2009
    
    
    changeProduction volume (million kgU)
    
    
    15.4
    
    
    
    12.3
    
    
    
    25
    %Sales volume (million kgU)
    
    
    17.0
    
    
    
    14.9
    
    
    
    14
    %Realized price ($Cdn/kgU)
    
    
    16.86
    
    
    
    17.84
    
    
    
    (5
    )%Average unit cost of sales ($Cdn/kgU) (including DDR)
    
    
    13.39
    
    
    
    14.47
    
    
    
    (7
    )%Revenue ($ millions)
    
    
    301
    
    
    
    276
    
    
    
    9
    %Gross profit ($ millions)
    
    
    60
    
    
    
    50
    
    
    
    20
    %Gross profit (%)
    
    
    20
    
    
    
    18
    
    
    
    11
    %
 6
  6
 6
  Outlook for 2011
   2010 Managements discussion and analysis




---



##### 



Electricity
 BPLP
  Highlights($ millions except where indicated)
    
    2010
    
    
    2009
    
    
    changeOutput  terawatt hours (TWh)
    
    
    25.9
    
    
    
    24.6
    
    
    
    5
    %Capacity factor

(the amount of electricity the plants actually produced for sale
as a percentage of the amount they were capable of producing)
    
    
    91
    %
    
    
    87
    %
    
    
    5
    %Realized price ($/MWh)
    
    
    58
    
    
    
    64
    1
    
    
    (9
    )%Average Ontario electricity spot price ($/MWh)
    
    
    36
    
    
    
    30
    
    
    
    20
    %Revenue
    
    
    1,509
    
    
    
    1,640
    
    
    
    (8
    )%Operating costs(net of cost recoveries)
    
    
    930
    
    
    
    905
    
    
    
    3
    %Cash costs
    
    
    785
    
    
    
    770
    
    
    
    2
    %Non-cash costs
    
    
    145
    
    
    
    135
    
    
    
    7
    %Income before interest and finance charges
    
    
    579
    
    
    
    735
    
    
    
    (21
    )%Interest and finance charges
    
    
    36
    
    
    
    4
    
    
    
    800
    %Cash from operations
    
    
    643
    
    
    
    754
    
    
    
    (15
    )%Capital expenditures
    
    
    111
    
    
    
    123
    
    
    
    (10
    )%Distributions
    
    
    525
    
    
    
    610
    
    
    
    (14
    )%Operating costs ($/MWh)
    
    
    36
    
    
    
    35
    1
    
    
    3
    %
 
 1
    
    Based on actual generation of 24.6 TWh plus deemed generation
of 1.2 TWh. Deemed generation in 2010 was insignificant. Our earnings from BPLP
 Highlights($ millions except where indicated)
    
    2010
    
    
    2009
    
    
    changeBPLPs earnings before taxes (100%)
    
    
    543
    
    
    
    731
    
    
    
    (26
    )%Camecos share of pretax earnings before adjustments (31.6%)
    
    
    172
    
    
    
    231
    
    
    
    (26
    )%Proprietary adjustments
    
    
    (6
    )
    
    
    (7
    )
    
    
    (14
    )%Earnings before taxes from BPLP
    
    
    166
    
    
    
    224
    
    
    
    (26
    )%
    cameco corporation




---



##### 



Outlook for 2011
   2010 Managements discussion and analysis




---



##### 



Fourth quarter results
 
 Fourth quarter consolidated results
 Three months endedHighlights
    
    December 31($ millions except per share amounts)
    
    2010
    
    
    2009
    
    
    changeRevenue
    
    
    673
    
    
    
    659
    
    
    
    2
    %Gross profit
    
    
    245
    
    
    
    206
    
    
    
    19
    %Net earnings
    
    
    207
    
    
    
    598
    
    
    
    (65
    )%$  per common share (basic)
    
    
    0.52
    
    
    
    1.52
    
    
    
    (66
    )%$  per common share (diluted)
    
    
    0.52
    
    
    
    1.52
    
    
    
    (66
    )%Adjusted net earnings (non-GAAP, see page 29)
    
    
    191
    
    
    
    170
    
    
    
    12
    %$  per common share (adjusted and diluted)
    
    
    0.48
    
    
    
    0.43
    
    
    
    12
    %Cash provided by operations (after working capital changes)
    
    
    120
    
    
    
    188
    
    
    
    (36
    )%
    Three months endedDecember 31($ millions)
    
    2010
    
    
    2009Net earnings(GAAP measure)
    
    
    207
    
    
    
    598Adjustments(after tax)Earnings from discontinued operations
    
    
    
    
    
    
    (424
    )1Unrealized gains on financial instruments
    
    
    (16
    )
    
    
    (4
    )Adjusted net earnings(non-GAAP measure)
    
    
    191
    
    
    
    170
 
 1
    
    We have changed our calculation of adjusted earnings to exclude
amounts related to our investment in Centerra. In previous years, this
calculation included our share of earnings from Centerra.  cameco corporation




---



##### 



Three months endedDecember 31($ millions)
    
    2010
    
    
    2009Direct administration
    
    
    47
    
    
    
    39Stock-based compensation
    
    
    8
    
    
    
    3Total administration
    
    
    55
    
    
    
    42
 
 Quarterly trends
 Highlights($ millions except per share amounts)
    
    2010
    
    
    2009Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1
    
    
    Q4
    
    
    Q3
    
    
    Q2
    
    
    Q1Revenue
    
    
    673
    
    
    
    419
    
    
    
    546
    
    
    
    486
    
    
    
    659
    
    
    
    518
    
    
    
    645
    
    
    
    493Net earnings
    
    
    207
    
    
    
    98
    
    
    
    68
    
    
    
    142
    
    
    
    598
    
    
    
    172
    
    
    
    247
    
    
    
    82$  per common share (basic)
    
    
    0.52
    
    
    
    0.25
    
    
    
    0.17
    
    
    
    0.37
    
    
    
    1.52
    
    
    
    0.44
    
    
    
    0.64
    
    
    
    0.23$  per common share (diluted)
    
    
    0.52
    
    
    
    0.25
    
    
    
    0.17
    
    
    
    0.36
    
    
    
    1.52
    
    
    
    0.44
    
    
    
    0.64
    
    
    
    0.22Adjusted net earnings (non-GAAP, see page 29)
    
    
    191
    
    
    
    80
    
    
    
    114
    
    
    
    111
    
    
    
    170
    
    
    
    94
    
    
    
    161
    
    
    
    103$  per share diluted
    
    
    0.48
    
    
    
    0.20
    
    
    
    0.29
    
    
    
    0.28
    
    
    
    0.43
    
    
    
    0.24
    
    
    
    0.41
    
    
    
    0.27Earnings from continuing operations
    
    
    207
    
    
    
    98
    
    
    
    68
    
    
    
    142
    
    
    
    174
    
    
    
    195
    
    
    
    269
    
    
    
    79$  per common share (basic)
    
    
    0.52
    
    
    
    0.25
    
    
    
    0.17
    
    
    
    0.37
    
    
    
    0.44
    
    
    
    0.49
    
    
    
    0.68
    
    
    
    0.23$  per common share (diluted)
    
    
    0.52
    
    
    
    0.25
    
    
    
    0.17
    
    
    
    0.36
    
    
    
    0.44
    
    
    
    0.49
    
    
    
    0.68
    
    
    
    0.23Cash provided by operations
    
    
    120
    
    
    
    (18
    )
    
    
    272
    
    
    
    133
    
    
    
    188
    
    
    
    175
    
    
    
    147
    
    
    
    180
  
    
    Our financial results are strongly influenced by the performance of our uranium segment,
which accounted for 68% of consolidated revenues in the fourth quarter of 2010.
 
    
    The timing of customer requirements, which tend to vary from quarter to quarter, drives
revenue in the uranium and fuel services segments.
 
    
    Net earnings do not trend directly with revenue due to unusual items and transactions that
occur from time to time. We use adjusted net earnings, a non-GAAP measure, as a more
meaningful way to compare our results from period to period (see page 29 for more
information).
 
    
    Cash from operations tends to fluctuate as a result of the timing of deliveries and product
purchases in our uranium and fuel services segments.
 
    
    Quarterly results are not necessarily a good indication of annual results due to the
variability in customer requirements noted above.
 2010 Managements discussion and analysis




---



##### 



Fourth quarter results by segment
 Uranium
 Three months endedDecember 31Highlights
    
    2010
    
    
    2009
    
    
    changeProduction volume (million lbs)
    
    
    6.4
    
    
    
    6.7
    
    
    
    (4
    )%Sales volume (million lbs)
    
    
    9.1
    
    
    
    10.0
    
    
    
    (9
    )%Average spot price ($US/lb)
    
    
    58.29
    
    
    
    45.96
    
    
    
    27
    %Average realized price($US/lb)
    
    
    48.50
    
    
    
    40.64
    
    
    
    19
    %($Cdn/lb)
    
    
    50.10
    
    
    
    43.51
    
    
    
    15
    %Average unit cost of sales ($Cdn/lb U3O8) (including DDR)
    
    
    29.89
    
    
    
    30.29
    
    
    
    (1
    )%Revenue ($ millions)
    
    
    461
    
    
    
    443
    
    
    
    4
    %Gross profit ($ millions)
    
    
    181
    
    
    
    132
    
    
    
    37
    %Gross profit (%)
    
    
    39
    
    
    
    30
    
    
    
    30
    %
    3 8
 
    
    the 9% decline in sales volumes
 
    
    average unit costs for produced uranium were 26% higher
 
    
    average unit costs for purchased uranium were 14% lower due to fewer purchases at spot
prices
   Unit cash cost of sale
    
    
    Quantity soldThree months ended
    
    ($Cdn/lb U3O8)
    
    
    (million lbs)December 31
    
    2010
    
    
    2009
    
    
    change
    
    
    2010
    
    
    2009
    
    
    changeProduced
    
    
    22.30
    
    
    
    17.73
    
    
    
    4.57
    
    
    
    5.5
    
    
    
    5.1
    
    
    
    0.4Purchased
    
    
    29.93
    
    
    
    34.72
    
    
    
    (4.79
    )
    
    
    3.6
    
    
    
    4.9
    
    
    
    (1.3
    )Total
    
    
    25.30
    
    
    
    26.19
    
    
    
    (0.89
    )
    
    
    9.1
    
    
    
    10.0
    
    
    
    (0.9
    )
 cameco corporation




---



##### 



Fuel services
 6 2
 Three months endedDecember 31Highlights
    
    2010
    
    
    2009
    
    
    changeProduction volume (million kgU)
    
    
    3.9
    
    
    
    3.9
    
    
    
    Sales volume (million kgU)
    
    
    6.3
    
    
    
    6.0
    
    
    
    5
    %Realized price ($Cdn/kgU)
    
    
    14.59
    
    
    
    14.89
    
    
    
    (2
    )%Average unit cost of sales ($Cdn/kgU) (including DDR)
    
    
    12.87
    
    
    
    12.43
    
    
    
    4
    %Revenue ($ millions)
    
    
    93
    
    
    
    91
    
    
    
    2
    %Gross profit ($ millions)
    
    
    11
    
    
    
    13
    
    
    
    (15
    )%Gross profit (%)
    
    
    12
    
    
    
    14
    
    
    
    (14
    )%
  6
   2010 Managements discussion and analysis




---



##### 



Electricity
 BPLP
  Three months endedHighlights
    
    December 31($ millions except where indicated)
    
    2010
    
    
    2009
    
    
    changeOutput  terawatt hours (TWh)
    
    
    6.6
    
    
    
    6.4
    
    
    
    3
    %Capacity factor 
(the amount of electricity the plants actually produced for sale
as a percentage of the amount they were capable of producing)
    
    
    91
    %
    
    
    89
    %
    
    
    2
    %Realized price ($/MWh)
    
    
    60
    
    
    
    62
    1
    
    
    (3
    )%Average Ontario electricity spot price ($/MWh)
    
    
    32
    
    
    
    30
    
    
    
    7
    %Revenue
    
    
    393
    
    
    
    422
    
    
    
    (7
    )%Operating costs(net of cost recoveries)
    
    
    221
    
    
    
    218
    
    
    
    1
    %Cash costs
    
    
    184
    
    
    
    183
    
    
    
    1
    %Non-cash costs
    
    
    37
    
    
    
    35
    
    
    
    6
    %Income before interest and finance charges
    
    
    172
    
    
    
    204
    
    
    
    (16
    )%Interest and finance charges
    
    
    7
    
    
    
    1
    
    
    
    600
    %Cash from operations
    
    
    146
    
    
    
    229
    
    
    
    (36
    )%Capital expenditures
    
    
    37
    
    
    
    40
    
    
    
    (3
    )%Distributions
    
    
    120
    
    
    
    220
    
    
    
    (45
    )%Operating costs ($/MWh)
    
    
    33
    
    
    
    32
    1
    
    
    3
    %
 
 1
    
    Based on actual generation of 6.4 TWh plus deemed generation of 0.4 TWh in the
fourth quarter. Our earnings from BPLP
 Three months endedHighlights
    
    December 31($ millions except where indicated)
    
    2010
    
    
    2009
    
    
    changeBPLPs earnings before taxes (100%)
    
    
    165
    
    
    
    203
    
    
    
    (19
    )%Camecos share of pretax earnings before adjustments (31.6%)
    
    
    52
    
    
    
    64
    
    
    
    (19
    )%Proprietary adjustments
    
    
    (1
    )
    
    
    (2
    )
    
    
    (50
    )%Earnings before taxes from BPLP
    
    
    51
    
    
    
    62
    
    
    
    (18
    )%
     cameco corporation




---



##### 



Our operations and development projects
  UraniumOperating propertiesMcArthur River and Key Lake
    
    
    58Rabbit Lake
    
    
    63Smith Ranch-Highland
    
    
    65Crow Butte
    
    
    67Inkai
    
    
    69Development projectCigar Lake
    
    
    72Projects under evaluationInkai blocks 1 and 2 production increase (see Inkai, above)
    
    
    69Inkai block 3 (see Inkai, above)
    
    
    69McArthur River extension (see McArthur River, above)
    
    
    58Kintyre
    
    
    77Millennium
    
    
    78Exploration
    
    
    79Fuel servicesRefiningBlind River refinery
    
    
    80Conversion and fuel manufacturingPort Hope conversion services
    
    
    81Fuel Manufacturing
    
    
    81Springfields Fuels
    
    
    81ElectricityBruce Power Limited Partnership
    
    
    83
 2010 Managements discussion and analysis




---



##### 



Managing the risks
    Regulatory risks
  
    
    obtain and renew the licences and other approvals we need to operate, to increase
production at our mines and to develop new mines. If we do not receive the regulatory
approvals we need, or do not receive them at the right time, then we may have to delay, modify
or cancel a project, which could increase our costs and delay or prevent us from generating
revenue from the project. Regulatory review, including the review of environmental matters, is
a long and complex process.
 
    
    comply with the conditions in these licences and approvals. In a number of instances, our
right to continue operating facilities, increase production at our mines and develop new mines
depends on our compliance with these conditions.
 
    
    comply with the extensive laws and regulations that govern our activities, including our
growth plans. Environmental legislation imposes very strict standards and controls on almost
every aspect of our operations and the mines we plan to develop, and are becoming more
stringent in Canada and the US. Examples of these controls include that:
    we must complete an environmental assessment before we can begin developing a new mine or
make any significant change to a plan that has already been approved
    we increasingly need regulatory approval to make changes to our operational processes,
which can take a significant amount of time because it may require an environmental assessment or
an extensive review of supporting information. The complexity of this process can be further
compounded when regulatory approvals are required from multiple agencies.
  Environmental risks
    cameco corporation




---



##### 




    
    $76 million in environmental protection, monitoring and assessment programs, a decrease of
17% compared to 2009
 
    
    $34 million in health and safety programs, unchanged compared to 2009.
  Operational risks
  
    
    environmental damage
 
    
    industrial and transportation accidents
 
    
    labour shortages, disputes or strikes
 
    
    cost increases for contracted or purchased materials, supplies and services
 
    
    shortages of required materials and supplies
 
    
    transportation disruptions
 
    
    electrical power interruptions
 
    
    equipment failures
 
    
    non-compliance with laws and licences
 
    
    catastrophic accidents
 
    
    fires
 
    
    blockades or other acts of social or political activism
 
    
    natural phenomena, such as inclement weather conditions, floods and earthquakes
 
    
    unusual, unexpected or adverse mining or geological conditions
 
    
    underground floods
 
    
    ground movement or cave ins
 
    
    tailings pipeline or dam failures
 
    
    technological failure of mining methods
  2010 Managements discussion and analysis




---



##### 



Uranium  production overview
   
    
    We increased production by 5% over 2009.
 
    
    We obtained approval for production flexibility, which allowed us to exceed our production
target by 6%.
  
    
    We added mineral reserves, extending the estimated mine life by two years to 2017.
  
    
    We continued to ramp up production and exceeded our 2009 production by 136%.
 
    
    Production was 13% higher than our plan at the beginning of the year due to the completion
of the processing facilities and a stable acid supply.
 Uranium production
 Three months ended
    
    
    Year endedCamecos share
    
    December 31
    
    
    December 31(million lbs U3O8)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010 planMcArthur River/Key Lake
    
    
    4.0
    
    
    
    4.0
    
    
    
    13.9
    
    
    
    13.3
    
    
    
    13.1Rabbit Lake
    
    
    1.3
    
    
    
    1.4
    
    
    
    3.8
    
    
    
    3.8
    
    
    
    3.6Smith Ranch-Highland
    
    
    0.4
    
    
    
    0.5
    
    
    
    1.8
    
    
    
    1.8
    
    
    
    1.8Crow Butte
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.7
    
    
    
    0.8
    
    
    
    0.7Inkai
    
    
    0.5
    
    
    
    0.6
    
    
    
    2.6
    
    
    
    1.1
    
    
    
    2.3Total
    
    
    6.4
    
    
    
    6.7
    
    
    
    22.8
    
    
    
    20.8
    
    
    
    21.5
    1
 
 1
    
    We updated our 2010 plan in our Q3 MD&A to 22 million pounds. Outlook
 3 8
 Camecos share of production  annual forecast to 2015
 Current forecast(million lbs U3O8)
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015McArthur River/Key Lake
    
    
    13.1
    
    
    
    13.1
    
    
    
    13.1
    
    
    
    13.1
    
    
    
    13.1Rabbit Lake
    
    
    3.6
    
    
    
    3.6
    
    
    
    3.6
    
    
    
    3.6
    
    
    
    3.6US ISR
    
    
    2.5
    
    
    
    3.1
    
    
    
    3.1
    
    
    
    3.7
    
    
    
    3.8Inkai
    
    
    2.7
    
    
    
    3.1
    
    
    
    3.1
    
    
    
    3.1
    
    
    
    3.1Cigar Lake
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    2.0
    
    
    
    5.6Total
    
    
    21.9
    
    
    
    22.9
    
    
    
    23.9
    
    
    
    25.5
    
    
    
    29.2
   cameco corporation




---



##### 




    
    obtain final approval to produce at an annual rate of 3.9 million pounds (our share 2.3
million pounds)
 
    
    obtain the necessary permits and approvals to produce at an annual rate of 5.2 million
pounds (our share 3.1 million pounds)
 
    
    ramp up production to an annual rate of 5.2 million pounds this year
    
 This forecast is forward-looking information. It is based on the assumptions and subject to the
material risks discussed on pages 2 and 3, and specifically on the assumptions and risks listed
here. Actual production may be significantly different from this forecast. Assumptions
 
    
    we achieve our forecast production for each operation, which requires, among other things,
that our mining plans succeed, processing plants are available and function as designed, we
have sufficient tailings capacity and our reserve estimates are accurate
 
    
    we obtain or maintain the necessary permits and approvals from government authorities
 
    
    our production is not disrupted or reduced as a result of natural phenomena, labour
disputes, political risks, blockades or other acts of social or political activism, shortage
or lack of supplies critical to production, equipment failures or other development and
operation risks
 Material risks that could cause actual results to
differ materially
 
    
    we do not achieve forecast production levels for each operation because of a change in our
mining plans, processing plants are not available or do not function as designed, lack of
tailings capacity or for other reasons
 
    
    we cannot obtain or maintain necessary permits or government approvals
 
    
    natural phenomena, labour disputes, political risks, blockades or other acts of social or
political activism, shortage or lack of supplies critical to production, equipment failures or
other development and operation risks disrupt or reduce our production
 2010 Managements discussion and analysis




---



##### 



Uranium  operating properties
 
 
 McArthur River/Key Lake
    Location
    
    Saskatchewan, CanadaOwnership
    
    69.805%  McArthur River83.33%  Key LakeEnd product
    
    U3O8ISO certification
    
    ISO 14001 certifiedDeposit type
    
    undergroundEstimated reserves
    
    234.2 million pounds  proven and probable(our share)Average reserve grade
    
    U3O8  15.24%1Estimated resources
    
    11.8 million pounds (measured and indicated)(our share)
    
    104.8 million pounds (inferred)Mining methods
    
    currently: raiseboringunder development: boxhole boringLicensed capacity
    
    mine and mill: 18.7 million pounds per year
(can be exceeded  see Licensingbelow)Total production 2000 to 2010
    
    191.1 million pounds (McArthur River/Key Lake) (100% basis)1983 to 2002
    
    209.8 million pounds (Key Lake) (100% basis)2010 production
    
    13.9 million pounds (our share)2011 forecast production
    
    13.1 million pounds (our share)Estimated decommissioning cost
    
    $36.1 million  McArthur River$120.7 million  Key Lake
 1 Change in Average Reserve Grades
 cameco corporation




---



##### 



Background
  Ground freezing
  Planning for the future  Zone 4
 Raisebore mining
  
    
    drilling a series of overlapping holes through the ore zone from a raisebore chamber in
waste rock above the ore
 
    
    collecting the broken ore at the bottom of the raises using line-of-sight remote-controlled
scoop trams, and transporting it to a grinding circuit
 
    
    filling each raisebore hole with concrete once it is complete
 
    
    removing the equipment and filling the entire chamber with concrete when all the rows of
raises in a chamber are complete
 
    
    starting the process again with the next raisebore chamber
  
   2010 Managements discussion and analysis




---



##### 



Boxhole boring
    2010 update
 Production
 3 8
 Licensing
 New mining areas
   Change in Average Reserve Grades
  
    
    for our proven reserves: in 2010 the average grade is 17.29%, up from 15.72% in 2009
 
    
    for our probable reserves: in 2010 the average grade is 13.49%, down from 26.33% in 2009
   Mill revitalization
  
    
    building the acid, steam and oxygen processing plants
 
    
    securing our existing tailings capacity
 Operational upgrades
  cameco corporation




---



##### 



Tailings capacity
 Key Lake extension project
  
    
    allow continued processing of ore from the McArthur River mine and other potential mine
developments
 
    
    increase long-term capacity of the Deilmann tailings management facility by allowing us to
deposit tailings to a higher elevation
 
    
    increase annual mill production capacity to 25 million pounds U3O8
 Licensing
 3 8
  Exploration
 McArthur River extension
   Labour relations
  Planning for the future
 Production
 3 8
 New mining zones
    2010 Managements discussion and analysis




---



##### 



Tailings capacity
  
    
    complete the detailed design for the stabilization of the Deilmann tailings management
facility pitwalls
 
    
    start to relocate the infrastructure necessary to allow us to flatten the slope of the
pitwalls
 
    
    advance work on the environmental assessment for the Key Lake extension project
 Exploration
 McArthur River extension project
 Managing ongoing risks
  Water inflow risk
    
    
    Ground freezing Before mining, we drill freezeholes and freeze the ground to form an
impermeable freezewall around the area being mined. Ground freezing reduces but does not
eliminate the risk of water inflows.
 
    
    Mine development We carry out extensive grouting and careful placement of mine
development away from known groundwater sources whenever possible. In addition, we assess all
planned mine development for relative risk, and apply extensive additional technical and
operating controls for all higher risk development.
 
    
    Pumping capacity and treatment limits  Our standard for this project is to secure
pumping capacity of at least one and a half times the estimated maximum sustained inflow. We
review our dewatering system and requirements at least once a year and before beginning work
on any new zone.
  Key Lake tailings capacity risk
    Tailings
capacity
  cameco corporation




---



##### 



Uranium  operating properties
 
 
 Rabbit Lake
  Location
    
    Saskatchewan, CanadaOwnership
    
    100%End product
    
    U3O8ISO certification
    
    ISO 14001 certifiedDeposit type
    
    undergroundEstimated reserves
    
    25.5 million pounds (proven and probable)Average reserve grade
    
    U3O8 0.76%Estimated resources
    
    4.0 million pounds (indicated)10.2 million pounds (inferred)Mining method
    
    vertical blast-hole stopingLicensed capacity
    
    mill: maximum 16.9 million pounds per year; currently 11 millionTotal production 1975 to 2010
    
    182.5 million pounds2010 production
    
    3.8 million pounds2011 forecast production
    
    3.6 million poundsEstimated decommissioning cost
    
    $105.2 million
 2010 update
 Production
  Continued to upgrade the mill
  Worked to extend the mine life
   2010 Managements discussion and analysis




---



##### 



Planning for the future
 Production
  Milling
  Exploration
  Reclamation
  Managing our risks
  cameco corporation




---



##### 



Uranium  operating properties
 
 
 Smith Ranch-Highland
   Location
    
    Wyoming, USOwnership
    
    100%End product
    
    U3O8ISO certification
    
    ISO 14001 certifiedEstimated reserves
    
    8.0 million pounds (proven and probable)Average reserve grade
    

U3O8 0.09%Estimated resources
    
    22.5 million pounds (measured and indicated)6.6 million pounds (inferred)Mining method
    
    in situ recovery (ISR)Licensed capacity
    
    mine: 2 million pounds per yearmill: 4 million pounds per year including Highland millTotal production 2002 to 2010
    
    13.6 million pounds2010 production
    
    1.8 million pounds2011 forecast production
    
    1.8 million poundsEstimated decommissioning cost
    
    $111.5 million (US)
 2010 update
 Production
  Upgrades
  Licensing
  2010 Managements discussion and analysis




---



##### 



Planning for the future
 Production
  Reynolds Ranch expansion
   Exploration
  Managing our risks
  cameco corporation




---



##### 



Uranium  operating properties
 
 
 Crow Butte
  Location
    
    Nebraska, USOwnership
    
    100%End product
    
    U3O8ISO certification
    
    ISO 14001 certifiedEstimated reserves
    
    3.1 million pounds (proven and probable)Average reserve grade
    

U3O8 0.12%Estimated resources
    
    11.2 million pounds (measured and indicated)
5.6 million pounds (inferred)Mining method
    
    in situ recovery (ISR)Licensed capacity
(mine and mill)
    
    1 million pounds per yearTotal production 2002 to 2010
    
    6.8 million pounds2010 production
    
    0.7 million pounds2011 forecast production
    
    0.7 million poundsEstimated decommissioning cost
    
    $35.2 million (US)
 2010 update
 Production
  Licensing
  2010 Managements discussion and analysis




---



##### 



Planning for the future
 Production
  Managing our risks
  cameco corporation




---



##### 



Uranium  operating properties
 
 
 Inkai
   Location
    
    Central KazakhstanOwnership
    
    60%End product
    
    U3O8ISO certification
    
    BSI OHSAS 18001
ISO 14001 certifiedEstimated reserves
(our share)
    
    72.9 million pounds (proven and probable)Average reserve grade
    

U3O8 0.07%Estimated resources
(Our share)
    
    18.3 million pounds (measured and indicated)
153.0 million pounds (inferred)Mining method
    
    in situ recovery (ISR)Licensed capacity
(mine and mill)
    
    approved in principle: 3.9 million pounds per year
(our share 2.3 million pounds per year)application: expect to submit for 5.2 million pounds per year
(our share 3.1 million pounds per year)2010 production
    
    2.6 million pounds (our share)2011 forecast production
    
    2.7 million pounds (our share)Estimated decommissioning cost
    
    $7 million (US)
 2010 update
 Production
  Operations
  2010 Managements discussion and analysis




---



##### 



Project funding
  
    
    $314 million (US) of principal outstanding on the loan.
 
    
    a nominal amount of accrued interest and financing fees on the loan. In 2010, Inkai paid
$49 million (US) in accrued interest and financing fees.
   Licensing
  
    
    increase annual production from blocks 1 and 2 to 3.9 million pounds of
U3O8 (100% basis)
 
    
    amend the block 3 licence to provide for a five-year appraisal period to carry out
delineation drilling, mineral resource estimation, construction and operation of a test leach
facility, and to complete a feasibility study
  Block 3 exploration
   Uranium conversion project
 Doubling production 6
 Planning for the future
 Production
  Block 3 exploration
  
    
    continue delineation drilling
 
    
    begin developing infrastructure and engineering for the test leach facility
 Doubling production
  
    
    targets future annual production capacity at 10.4 million pounds (our share 5.7 million
pounds). While the existing project ownership would not change, our share of the additional
capacity under the memorandum would be 50%.
 
    
    contemplates studying the feasibility of constructing a uranium conversion facility as well
as other potential collaborations in uranium conversion
  cameco corporation




---



##### 



Managing our risks
 Regulatory approvals
   
    
    obtain final approval to produce at an annual rate of 3.9 million pounds (our share 2.3
million pounds)
 
    
    obtain the necessary permits and approvals to produce at an annual rate of 5.2 million
pounds (our share 3.1 million pounds)
 
    
    ramp up production to an annual rate of 5.2 million pounds this year
   Taxes
  Supply of sulphuric acid
  Political risk
        2010 Managements discussion and analysis




---



##### 



Uranium  development project
 
 
 Cigar Lake
   Location
    
    Saskatchewan, CanadaOwnership
    
    50.025%End product
    
    U3O8Deposit type
    
    undergroundEstimated reserves
(our share)
    
    104.7 million pounds (proven and probable)Average reserve grade
    

U3O8 17.04%Estimated resources
(our share)
    
    0.6 million pounds (measured and indicated)
66.8 million pounds (inferred)Mining method
    
    jet boringTarget production date
    
    mid-2013Target annual production
(our share)
    
    9 million pounds after rampupEstimated decommissioning cost
    
    $27.7 million (to the end of construction)
 Background
 Development
  cameco corporation




---



##### 



Mining method
  
    
    Bulk freezing The sandstone that overlays the deposit and basement rocks is
water-bearing, with large volumes of water under significant pressure. We will freeze the ore
zone and surrounding rock in the area to be mined, to prevent water from entering the mine and
to help stabilize weak rock formations.
 In the past, bulk freezing has been done from underground. In 2010, however, we tested and began
to implement an innovative surface freeze strategy, which we expect will provide the following
benefits:
 
    
    reduce risk to the production schedule by advancing the availability of frozen ground and
simplifying construction activities underground by moving some of the freezing infrastructure
to surface
 
    
    move up to 10 million pounds forward in the production schedule
 
    
    improve mining costs and economics of the project
 We expect the capital cost for surface freezing will be $80 to $85 million (100% basis). Our plan
is to use a hybrid freezing approach. We will use surface freezing to shorten the rampup period
and utilize underground freezing for the longer term development of the mine.
 
    
    Jet boring After many years of test mining, we selected jet boring, a non-entry mining
method, which we have developed and adapted specifically for this deposit. This method is new
to the uranium mining industry. Overall, our initial test program was a success and met all
initial objectives. This method, however, has not been proven at full production. As we ramp
up production, there may be some technical challenges, which could affect our production
plans.
  2010 Managements discussion and analysis




---



##### 



Milling
  2010 update
  
    
    completed dewatering the underground development
 
    
    substantially completed cleanup, inspection, assessment and securing of the underground
development areas
 
    
    we prepared the ground around shaft 2 for freezing in preparation to resume shaft sinking
 
    
    began implementing a surface freeze strategy we expect will shorten the rampup period for
the project by bringing forward uranium production into the early years and improve mining
costs and project economics
 
    
    increased installed pumping capacity
 
    
    completed backfilling of the 420 and 465 metre levels
 
    
    resumed underground development in the south end of the mine
 
    
    completed the 2010 surface drilling program
 Costs
  
    
    invested $492 million for our share of the construction costs to develop Cigar Lake
 
    
    invested $262 million related to test mining and infrastructure development (prior to our
2005 development decision)
 
    
    expensed $81 million in remediation expenses, including about $17 million in 2010
 Exploration
  Planning for the future
  
    
    finish restoring all remaining underground mine systems, infrastructure and underground
development areas
 
    
    complete the work to secure the mine
 
    
    resume underground construction
 
    
    complete the sinking of shaft 2
 
    
    complete the surface ore loadout facilities
 
    
    procure additional equipment for the jet boring system
 
    
    work to obtain regulatory approval of the environmental assessment that will allow the
release of treated water directly to Seru Bay of Waterbury Lake
 
    
    work to obtain regulatory approval for the Cigar Lake mine plan
 Technical report
   cameco corporation




---



##### 



Production
    Assumptions
 
    
    natural phenomena, an equipment failure or other causes do not result in a material delay
or disruption in our plans
 
    
    there are no additional water inflows
 
    
    the seals or plugs used for previous water inflows do not fail
 
    
    there are no labour disputes or shortages
 
    
    we obtain contractors, equipment, operating parts, supplies, and regulatory permits and
approvals when we need them
 
    
    our mine plans are achieved, our processing plants are available and function as designed,
sufficient tailings capacity is available and our mineral reserve estimates are accurate
 Material risks
 
    
    an unexpected geological, hydrological or underground condition, such as an additional
water inflow, further delays our progress
 
    
    we cannot obtain or maintain the necessary regulatory permits or approvals
 
    
    natural phenomena, labour disputes, equipment failure, delay in obtaining the required
contractors, equipment, operating parts or supplies, or other reasons cause a material delay
or disruption in our plans
 
    
    our mining plans change or do not succeed, our processing plants are not available or do
not function as designed, sufficient tailings capacity is not available and our mineral
reserve estimates are not accurate
 Managing our risks
    Bulk freezing
  Mine development
  2010 Managements discussion and analysis




---



##### 



Pumping capacity and treatment limits
    cameco corporation




---



##### 



Uranium  projects under evaluation
 
 Kintyre
  Location
    
    Western AustraliaOwnership
    

    70%End product
    
    U3O8Deposit type
    
    open pit
 Background
  2010 update
  
    
    began the process for negotiating a mine development agreement with the Martu, the native
land title holders for this property
    
    built a construction camp to support the prefeasibility assessment of the project
    
    completed a delineation drilling program
    
    carried out metallurgical testing to define the milling process
    
    initiated mining and infrastructure studies for the prefeasibility study
    
    initiated a hydrogeological drilling program to confirm process water supply
    
    carried out environmental baseline studies
    
    submitted the environmental referral document to initiate the environmental assessment
process and submitted the environmental scoping document
    
    trained and hired a significant number of Martu people
 Planning for the future
  
    
    generate a National Instrument 43-101 mineral resource estimate
    
    complete a memorandum of understanding for a mine development agreement with the Martu
    
    carry out further exploration drilling to test potential extensions of the deposit
    
    submit an environmental review and management program
    
    complete the prefeasibility study and decide whether to proceed to the feasibility stage
 Managing the risks
  2010 Managements discussion and analysis




---



##### 



Uranium  projects under evaluation
 
 Millennium
  Location
    
    Saskatchewan, CanadaOwnership
    

    42%End product
    
    U3O8Deposit type
    
    undergroundEstimated resources
    
    21.4 million pounds (indicated)(our share)
    
    4.3 million pounds (inferred)
 Background
  2010 update
  
    
    completed our mine design with positive results achieved
    
    continued work on the environmental assessment, preparing us to submit the environmental
impact statement late in 2011 or early 2012
 Planning for the future
  
    
    complete the environmental assessment work and submit the environmental impact study to the
regulators late in 2011 or early 2012
    
    undertake additional studies and design work required to advance the project
 Managing the risks
   cameco corporation




---



##### 



Uranium  exploration
  
 2010 update
 Brownfield exploration
   Regional exploration
   Plans for 2011
  Brownfield exploration
  Regional exploration
  2010 Managements discussion and analysis




---



##### 



Fuel services  refining
 
 Blind River refinery
 3 8 3
 Location
    
    Ontario, CanadaOwnership
    

    100%End product
    
    UO3ISO certification
    
    ISO 14001 certifiedLicensed capacity
    
    approved: 18 million kgU as UO3 per yearapplication: 24 million kgU as UO3 per yearEstimated decommissioning cost
    
    $36 million
 2010 update
 Production
 3
 Managing our risks
  cameco corporation




---



##### 



Fuel services  conversion and fuel manufacturing
 6
 
 Port Hope conversion services
 2
 Location
    
    Ontario, CanadaOwnership
    
    100%End product
    
    UF6, UO2ISO certification
    
    ISO 14001 certifiedLicensed capacity
    
    12.5 million kgU as UF6 per year2.8 million kgU as UO2 per yearEstimated decommissioning cost
    
    $96 million
 
 Cameco Fuel Manufacturing Inc. (CFM)
  Location
    
    Ontario, CanadaOwnership
    

    100%End product
    
    Candu fuel bundles and componentsISO certification
    
    ISO 9001 certifiedLicensed capacity
    
    1.2 million kgU as UO2as finished bundlesEstimated decommissioning cost
    
    $18 million
 
 Springfields Fuels Ltd. (SFL)
  Location
    
    Lancashire, UKToll-processing agreement
    
    annual conversion of 5 million kgU as UO3 to UF6Licensed capacity
    
    6.0 million kgU as UF6 per year
 2010 Managements discussion and analysis




---



##### 



2010 update
 Production
 6
 Port Hope conversion facility cleanup and modernization (Vision 2010)
  Collective agreement
  Community outreach
  
    
    holding a series of community forums
    
    making presentations to municipal council
    
    reaching out using community newsletters, newspaper advertising, public displays, open
houses and a website dedicated to the Port Hope community
  Planning for the future
 Production
  Port Hope conversion facility cleanup and modernization (Vision 2010)
  
    
    continue with the environmental assessment process for this project
    
    finalize the environmental impact statement
 Managing our risks
  cameco corporation




---



##### 



Electricity
 
 Bruce Power Limited Partnership (BPLP)
  Location
    
    Ontario, CanadaOwnership
    

    31.6%ISO certification
    
    ISO 14001 certifiedExpected reactor life
    
    2018 to 2021Term of lease
    
    2018  right to extend for up to 25 yearsGeneration capacity
    
    3,260 MW
 Background
  2
 2010 update
 Output
  Collective agreements
  Planning for the future
 Output
  Managing our risks
   2010 Managements discussion and analysis




---



##### 



Mineral reserves and resources
   National Instrument 43-101  Standards of Disclosure for Mineral Projects (NI 43-101)
 About mineral resources
  
    
    Measured and indicated mineral resources are sufficiently well defined that we can estimate
them with enough confidence to apply technical and economic parameters and evaluate the
economic viability of the deposit.
    
    measured resources: we can confirm geological and grade continuity to carry out production
planning.
    
    indicated resources: we can reasonably assume geological and grade continuity to carry out
mine planning.
    
    Inferred mineral resources are estimated using limited information. We do not have enough
confidence to evaluate their economic viability in a meaningful way. You should not assume
that all or any part of an inferred mineral resource will be upgraded to an indicated or
measured mineral resource as a result of continued exploration.
 About mineral reserves
  
    
    proven reserves: economic extraction of measured resources is demonstrated by at least a
preliminary feasibility study
    
    probable reserves: economic extraction of measured and/or indicated resources is
demonstrated by at least a preliminary feasibility study
 3 8
 Changes this year
 3 8
 
    
    mining and milling activities, which used 24 million pounds
    
    conversion of mineral resources to reserves from drilling and mine design updates at
McArthur River, Rabbit Lake and Smith Ranch-Highland
    
    conversion of mineral reserves to resources at Inkai due to the production ramp up schedule
and increased leaching recovery applied to a limited annual production rate
 3 8
 
    
    addition of mineral resources at the new Phoenix deposit
    
    conversion of mineral resources to reserves at McArthur River and Rabbit Lake
 cameco corporation




---



##### 




    
    conversion of mineral reserves to resources at Inkai
 3 8
 Qualified persons
  McArthur River/Key Lake
    
    Alain G. Mainville, director, mineral resources management, Cameco
    
    David Bronkhorst, vice-president, Saskatchewan mining south, Cameco
    
    Greg Murdock, technical superintendent, McArthur River, Cameco
    
    Les Yesnik, general manager, Key Lake, Cameco
    
    Lorne D. Schwartz, chief metallurgist, major projects technical services, CamecoCigar Lake
    
    Alain G. Mainville, director, mineral resources management, Cameco
    
    C. Scott Bishop, principal mine engineer, major projects  technical services,Cameco
    
    Grant J.H. Goddard, vice-president, Saskatchewan mining north, Cameco
    
    Lorne D. Schwartz, chief metallurgist, major projects  technical services, CamecoInkai
    
    Alain G. Mainville, director, mineral resources management, Cameco
    
    Charles J. Foldenauer, operations director, JV Inkai
 Important information about mineral reserve and resource estimates
   
    
    geological interpretation
    
    extraction plans
    
    commodity prices
    
    recovery rates
    
    operating and capital costs
   Important information for US investors
  
    
    any or all of a measured or indicated mineral resource will ever be converted into proven
or probable mineral reserves
 2010 Managements discussion and analysis




---



##### 




    
    any or all of an inferred mineral resource exists or is economically or legally mineable,
or will ever be upgraded to a higher category. Under Canadian securities regulations,
estimates of inferred resources may not form the basis of
feasibility or prefeasibility studies. Inferred resources have a great amount of uncertainty as to
their existence and economic and legal feasibility.
   cameco corporation




---



##### 



Mineral reserves
  Proven and probable
 Proven
    
    
    
    Probable
    
    
    
    Total mineral reservesCamecosshare of
    
    
    
    EstimatedGrade
    
    
    Content
    
    
    
    
    
    
    
    Grade
    
    
    Content
    
    
    
    
    
    
    
    Grade
    
    
    Content
    
    
    content
    
    
    
    metallurgicalProperty
    
    Mining method
    
    
    Tonnes
    
    
    %U3O8
    
    
    (lbs U3O8)
    
    
    
    Tonnes
    
    
    %U3O8
    
    
    (lbs U3O8)
    
    
    
    Tonnes
    
    
    %U3O8
    
    
    (lbs U3O8)
    
    
    (lbs U3O8)
    
    
    
    recovery (%)McArthur River
    
    underground
    
    
    
    458.5
    
    
    
    17.29
    
    
    
    174.8
    
    
    
    
    540.2
    
    
    
    13.49
    
    
    
    160.7
    
    
    
    
    998.7
    
    
    
    15.24
    
    
    
    335.5
    
    
    
    234.2
    
    
    
    
    98.7Cigar Lake
    
    underground
    
    
    
    130.5
    
    
    
    25.62
    
    
    
    73.7
    
    
    
    
    426.8
    
    
    
    14.41
    
    
    
    135.6
    
    
    
    
    557.3
    
    
    
    17.04
    
    
    
    209.3
    
    
    
    104.7
    
    
    
    
    98.5Rabbit Lake
    
    underground
    
    
    
    39.6
    
    
    
    0.62
    
    
    
    0.5
    
    
    
    
    1,478.1
    
    
    
    0.77
    
    
    
    25.0
    
    
    
    
    1,517.7
    
    
    
    0.76
    
    
    
    25.5
    
    
    
    25.5
    
    
    
    
    96.7Key Lake
    
    open pit
    
    
    
    61.9
    
    
    
    0.52
    
    
    
    0.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61.9
    
    
    
    0.52
    
    
    
    0.7
    
    
    
    0.6
    
    
    
    
    98.7Inkai
    
    ISR
    
    
    
    4,817.2
    
    
    
    0.08
    
    
    
    8.9
    
    
    
    
    75,810.0
    
    
    
    0.07
    
    
    
    112.7
    
    
    
    
    80,627.2
    
    
    
    0.07
    
    
    
    121.6
    
    
    
    72.9
    
    
    
    
    85.0Gas Hills-Peach
    
    ISR
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,403.8
    
    
    
    0.13
    
    
    
    19.0
    
    
    
    
    6,403.8
    
    
    
    0.13
    
    
    
    19.0
    
    
    
    19.0
    
    
    
    
    72.0North Butte-Brown Ranch
    
    ISR
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,803.2
    
    
    
    0.10
    
    
    
    8.2
    
    
    
    
    3,803.2
    
    
    
    0.10
    
    
    
    8.2
    
    
    
    8.2
    
    
    
    
    80.0Smith Ranch-Highland
    
    ISR
    
    
    
    1,243.4
    
    
    
    0.11
    
    
    
    3.1
    
    
    
    
    2,707.7
    
    
    
    0.08
    
    
    
    4.9
    
    
    
    
    3,951.1
    
    
    
    0.09
    
    
    
    8.0
    
    
    
    8.0
    
    
    
    
    80.0Crow Butte
    
    ISR
    
    
    
    922.2
    
    
    
    0.11
    
    
    
    2.3
    
    
    
    
    282.2
    
    
    
    0.13
    
    
    
    0.8
    
    
    
    
    1,204.4
    
    
    
    0.12
    
    
    
    3.1
    
    
    
    3.1
    
    
    
    
    85.0Total
    
    
    
    
    
    7,673.3
    
    
    
    
    
    
    
    264.0
    
    
    
    
    91,452.0
    
    
    
    
    
    
    
    466.9
    
    
    
    
    99,125.3
    
    
    
    
    
    
    
    730.9
    
    
    
    476.2
 Notes
  in situ recovery
  
    
    use an average uranium price of $56.50 (US)/lb U3O8
    
    are based on the average exchange rate at December 31, 2010 ($1.00 US=$0.99 Cdn)
   Metallurgical recovery
  Estimates for Inkai
   
    
    obtain final approval to produce at an annual rate of 3.9 million pounds (our share 2.3
million pounds)
    
    obtain the necessary permits and approvals to produce at an annual rate of 5.2 million
pounds (our share 3.1 million pounds)
    
    ramp up production to an annual rate of 5.2 million pounds this year
 2010 Managements discussion and analysis




---



##### 



cameco corporation




---



##### 



Mineral resources
  Measured and indicated
 Measured
    
    
    
    Indicated
    
    
    
    Total measured and indicatedCamecosMining
    
    
    
    
    
    
    Grade
    
    
    Content
    
    
    
    
    
    
    
    Grade
    
    
    Content
    
    
    
    
    
    
    
    Grade
    
    
    Content
    
    
    shareProperty
    
    method
    
    
    Tonnes
    
    
    % U3O8
    
    
    (lbs U3O8)
    
    
    
    Tonnes
    
    
    % U3O8
    
    
    (lbs U3O8)
    
    
    
    Tonnes
    
    
    % U3O8
    
    
    (lbs U3O8)
    
    
    (lbs U3O8)McArthur River
    
    underground
    
    
    
    85.9
    
    
    
    6.28
    
    
    
    11.9
    
    
    
    
    22.2
    
    
    
    10.23
    
    
    
    5.0
    
    
    
    
    108.1
    
    
    
    7.09
    
    
    
    16.9
    
    
    
    11.8Cigar Lake
    
    underground
    
    
    
    8.4
    
    
    
    2.07
    
    
    
    0.4
    
    
    
    
    15.6
    
    
    
    2.35
    
    
    
    0.8
    
    
    
    
    24.0
    
    
    
    2.27
    
    
    
    1.2
    
    
    
    0.6Rabbit Lake
    
    underground
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    348.0
    
    
    
    0.52
    
    
    
    4.0
    
    
    
    
    348.0
    
    
    
    0.52
    
    
    
    4.0
    
    
    
    4.0Dawn Lake
    
    open pit, underground
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    347.0
    
    
    
    1.69
    
    
    
    12.9
    
    
    
    
    347.0
    
    
    
    1.69
    
    
    
    12.9
    
    
    
    7.4Millennium
    
    underground
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    507.8
    
    
    
    4.55
    
    
    
    50.9
    
    
    
    
    507.8
    
    
    
    4.55
    
    
    
    50.9
    
    
    
    21.4Phoenix
    
    underground
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89.9
    
    
    
    17.98
    
    
    
    35.6
    
    
    
    
    89.9
    
    
    
    17.98
    
    
    
    35.6
    
    
    
    10.7Tamarack
    
    underground
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    183.8
    
    
    
    4.42
    
    
    
    17.9
    
    
    
    
    183.8
    
    
    
    4.42
    
    
    
    17.9
    
    
    
    10.3Inkai
    
    ISR
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,386.3
    
    
    
    0.08
    
    
    
    30.5
    
    
    
    
    18,386.3
    
    
    
    0.08
    
    
    
    30.5
    
    
    
    18.3Gas Hills-Peach
    
    ISR
    
    
    
    1,964.2
    
    
    
    0.08
    
    
    
    3.4
    
    
    
    
    1,418.2
    
    
    
    0.07
    
    
    
    2.3
    
    
    
    
    3,382.4
    
    
    
    0.08
    
    
    
    5.7
    
    
    
    5.7North Butte-Brown Ranch
    
    ISR
    
    
    
    762.1
    
    
    
    0.08
    
    
    
    1.4
    
    
    
    
    4,012.0
    
    
    
    0.07
    
    
    
    6.0
    
    
    
    
    4,774.1
    
    
    
    0.07
    
    
    
    7.4
    
    
    
    7.4Smith Ranch-Highland
    
    ISR
    
    
    
    2,079.1
    
    
    
    0.11
    
    
    
    4.9
    
    
    
    
    13,906.5
    
    
    
    0.06
    
    
    
    17.6
    
    
    
    
    15,985.6
    
    
    
    0.06
    
    
    
    22.5
    
    
    
    22.5Crow Butte
    
    ISR
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,466.2
    
    
    
    0.21
    
    
    
    11.2
    
    
    
    
    2,466.2
    
    
    
    0.21
    
    
    
    11.2
    
    
    
    11.2Ruby Ranch
    
    ISR
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,215.3
    
    
    
    0.08
    
    
    
    4.1
    
    
    
    
    2,215.3
    
    
    
    0.08
    
    
    
    4.1
    
    
    
    4.1Ruth
    
    ISR
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,080.5
    
    
    
    0.09
    
    
    
    2.1
    
    
    
    
    1,080.5
    
    
    
    0.09
    
    
    
    2.1
    
    
    
    2.1Shirley Basin
    
    ISR
    
    
    
    89.2
    
    
    
    0.16
    
    
    
    0.3
    
    
    
    
    1,638.2
    
    
    
    0.11
    
    
    
    4.1
    
    
    
    
    1,727.4
    
    
    
    0.12
    
    
    
    4.4
    
    
    
    4.4Total
    
    
    
    
    
    4,988.9
    
    
    
    
    
    
    
    22.3
    
    
    
    
    46,637.5
    
    
    
    
    
    
    
    205.0
    
    
    
    
    51,626.4
    
    
    
    
    
    
    
    227.3
    
    
    
    141.9
 Inferred
 CamecosMining
    
    
    
    
    
    
    Grade
    
    
    Content
    
    
    shareProperty
    
    method
    
    
    Tonnes
    
    
    % U3O8
    
    
    (lbs U3O8)
    
    
    (lbs U3O8)McArthur River
    
    underground
    
    
    
    506.1
    
    
    
    13.46
    
    
    
    150.2
    
    
    
    104.8Cigar Lake
    
    underground
    
    
    
    480.4
    
    
    
    12.61
    
    
    
    133.5
    
    
    
    66.8Rabbit Lake
    
    underground
    
    
    
    369.4
    
    
    
    1.26
    
    
    
    10.2
    
    
    
    10.2Millennium
    
    underground
    
    
    
    217.8
    
    
    
    2.12
    
    
    
    10.2
    
    
    
    4.3Phoenix
    
    underground
    
    
    
    23.8
    
    
    
    7.27
    
    
    
    3.8
    
    
    
    1.1Tamarack
    
    underground
    
    
    
    45.6
    
    
    
    1.02
    
    
    
    1.0
    
    
    
    0.6Inkai
    
    ISR
    
    
    
    254,696.0
    
    
    
    0.05
    
    
    
    255.1
    
    
    
    153.0Gas Hills-Peach
    
    ISR
    
    
    
    861.5
    
    
    
    0.07
    
    
    
    1.3
    
    
    
    1.3North Butte-Brown Ranch
    
    ISR
    
    
    
    640.6
    
    
    
    0.06
    
    
    
    0.9
    
    
    
    0.9Smith Ranch-Highland
    
    ISR
    
    
    
    6,370.1
    
    
    
    0.05
    
    
    
    6.6
    
    
    
    6.6Crow Butte
    
    ISR
    
    
    
    2,349.4
    
    
    
    0.11
    
    
    
    5.6
    
    
    
    5.6Ruby Ranch
    
    ISR
    
    
    
    56.2
    
    
    
    0.14
    
    
    
    0.2
    
    
    
    0.2Ruth
    
    ISR
    
    
    
    210.9
    
    
    
    0.08
    
    
    
    0.4
    
    
    
    0.4Shirley Basin
    
    ISR
    
    
    
    508.0
    
    
    
    0.10
    
    
    
    1.1
    
    
    
    1.1Total
    
    
    
    
    
    267,335.8
    
    
    
    
    
    
    
    580.1
    
    
    
    356.9
 Notes
 in situ recovery
   2010
Managements discussion and analysis   89




---



##### 



Additional information
 Related party transactions
  Critical accounting estimates
            90  cameco
corporation




---



##### 



Controls and procedures
   Internal Control  Integrated Framework
 New accounting pronouncements
     Phase 1: Preliminary study and diagnostic  complete
  
    
    completed a high-level impact assessment
 
    
    prioritized areas to evaluate in phase 2
 
    
    developed a detailed plan for convergence and implementation
 
    
    determined which information technology systems need to be modified to meet IFRS reporting
requirements. We tested and implemented systems modifications by June 30, 2009.
 Phase 2: Detailed component evaluation  complete
  
    
    assessed the impact of the adoption of IFRS on our results of operations, financial
position and financial statement disclosures
 
    
    developed a detailed, systematic gap analysis of accounting and disclosure differences
between Canadian GAAP and IFRS, which will help us make final decisions about accounting
policies and our overall conversion strategy
 
    
    specified all changes we needed to make to existing business processes
 Phase 3: Embedding  in progress
  
    
    carry out the changes to our business processes
 
    
    receive the audit committees approval of our accounting policy changes
 2010 Managements discussion
and analysis   91




---



##### 




    
    complete the training process for our audit committee, board members and staff
 
    
    communicate the impact of the IFRS transition to external stakeholders
 
    
    collect the financial information we need to create our 2010 and 2011 financial statements
under IFRS
 
    
    receive the boards approval of the new statements
 Progress update
 Opening statement of financial position and interim period financial results
under IFRS
    Asset impairment
  
    
    We compare the carrying value of the asset with undiscounted future cash flows to see
whether there is an impairment.
 
    
    If there is an impairment, we measure it by comparing the carrying value of the asset with
its fair value.
  
    
    Compare the carrying value of the asset with the higher of its fair value less costs to
sell or its value in use.
 Opening statement of financial
position and interim period financial results under IFRS
 Employee benefits
  Employee Benefits
 92  cameco
corporation




---



##### 



First-Time Adoption of International Financial Reporting Standards
 Share-based payments
 Share-Based Payments
  Provisions (including asset retirement obligations)
 Provisions, Contingent Liabilities and Contingent Assets
 
    
    there is a present obligation due to a past transaction or event
 
    
    it is probable (i.e. more likely than not) that an outflow of resources will be required to
settle the obligation, and
 
    
    the obligation can be reliably estimated
   
    
    When there is a range of equally possible outcomes, IFRS uses the midpoint of the range as
the best estimate, while Canadian GAAP uses the low end of the range.
 
    
    Under IFRS, material provisions are discounted to their present value.
 Joint ventures
 Interests in Joint Ventures Joint
Arrangements
 Income taxes
   Convertible debentures
    2010
Managements discussion and analysis   93




---



##### 



Exploration expenses
  IFRS 6, Exploration for and Evaluation of Mineral Resources
  First-time adoption of IFRS
   Business combinations
    
    There is an option to apply IFRS 3, Business Combinations,retrospectively or prospectively. 
We have elected to apply IFRS 3 prospectively to all business combinations that occurred before the transition date, except as required under IFRS 1.Fair value as deemed cost
    
    There is an option to choose to use the fair value of an item of property, plant and equipment as deemed cost at the transition date or a previous
revaluation under Canadian GAAP as deemed cost under IFRS. 
We have elected not to use fair value as deemed cost on transition. Instead, these items are reported at cost as determined under IFRS.Share-based payments
    
    There is an option to apply IFRS 2, Share-Based Payments,to all equity instruments granted on or before November 7, 2002, and to those granted
after November 7, 2002 only if they had not vested by the transition date. 
We have elected to apply IFRS 2 to all equity instruments granted after November 7, 2002 that had not vested as of January 1, 2010, and to all
liabilities arising from share-based payment transactions that existed at January 1, 2010.Borrowing costs
    
    There is an option to apply IAS 23, Borrowing Costs,retrospectively, using a date we specify, or to capitalize borrowing costs for all qualifying
assets when capitalization begins on or after January 1, 2010. 
We have elected to apply IAS 23 prospectively. For all qualifying assets, we will expense the borrowing costs we were capitalizing before January 1,
2010, and capitalize the borrowing costs that take effect on or after that date.Employee benefits
    
    IAS 19, Employee Benefits, requires entities to defer or amortize certain actuarial gains and losses, subject to certain provisions (corridor
approach), or to immediately recognize them in equity. 
We have elected to recognize cumulative actuarial gains and losses on benefit plans in retained earnings at the transition date.
 94  cameco
corporation




---



##### 



Differences in 
currency translation
    
    IAS 21, The Effects of Changes in Foreign Exchange Rates, requires the retrospective calculation of currency translation
differences from the date a subsidiary or associate was formed or acquired. 
IFRS 1 provides the option of resetting cumulative translation gains and losses to zero at the transition date. 
We have elected to reset all cumulative translation gains and losses to zero in retained earnings at the transition date.Decommissioning liabilities
    
    There is an option to apply International Financial Reporting Interpretations Committee 1 (IFRIC 1), Changes in Existing
Decommissioning, Restoration and Similar Liabilities, retrospectively or prospectively.IFRIC 1 will require us to add or deduct a change in our obligations to dismantle, remove and restore items of property,
plant and equipment from the cost of the asset it relates to. The adjusted amount is then depreciated prospectively over
the assets remaining useful life. 
We have elected to adopt IFRIC 1 prospectively at the transition date.
 Opening statement of financial position and interim period financial results under IFRS
   2010
Managements discussion and analysis   95




---



##### 



Opening statement of financial position
 Jan 1, 2010effect of($ millions)
    
    Cdn GAAP
    
    
    transition
    
    
    IFRSAssetsCurrent assetsCash and cash equivalents
    
    
    1,101
    
    
    
    
    
    
    
    1,101Short-term investments
    
    
    203
    
    
    
    
    
    
    
    203Accounts receivable
    
    
    447
    
    
    
    2
    
    
    
    449Inventories
    
    
    453
    
    
    
    (8
    )
    
    
    445Supplies and prepaid expenses
    
    
    169
    
    
    
    
    
    
    
    169Current portion of long-term receivables, investments and other
    
    
    155
    
    
    
    
    
    
    
    1552,528
    
    
    
    (6
    )
    
    
    2,522Property, plant and equipment (1, 2, 3, 10)
    
    
    4,068
    
    
    
    (351
    )
    
    
    3,717Intangible assets
    
    
    98
    
    
    
    
    
    
    
    98Long-term receivables, investments and other (4, 5, 6)
    
    
    667
    
    
    
    (291
    )
    
    
    376Investments in equity-accounted investees (4)
    
    
    
    
    
    
    222
    
    
    
    222Deferred tax assets (9)
    
    
    33
    
    
    
    (9
    )
    
    
    24Total assets
    
    
    7,394
    
    
    
    (435
    )
    
    
    6,959Liabilities and shareholders equityCurrent liabilitiesAccounts payable and accrued liabilities
    
    
    503
    
    
    
    2
    
    
    
    505Current tax liabilities
    
    
    31
    
    
    
    
    
    
    
    31Short-term debt
    
    
    77
    
    
    
    
    
    
    
    77Dividends payable
    
    
    24
    
    
    
    
    
    
    
    24Current portion of long-term debt
    
    
    12
    
    
    
    
    
    
    
    12Current portion of other liabilities
    
    
    29
    
    
    
    
    
    
    
    29Deferred tax liabilities (9)
    
    
    87
    
    
    
    (1
    )
    
    
    86763
    
    
    
    1
    
    
    
    764Long-term debt
    
    
    953
    
    
    
    
    
    
    
    953Provision for reclamation
    
    
    258
    
    
    
    (258
    )
    
    
    Provisions (2)
    
    
    
    
    
    
    315
    
    
    
    315Other liabilities (5, 6, 10)
    
    
    245
    
    
    
    72
    
    
    
    317Deferred tax liabilities (9)
    
    
    167
    
    
    
    (146
    )
    
    
    212,386
    
    
    
    (16
    )
    
    
    2,370Minority interest
    
    
    164
    
    
    
    (164
    )
    
    
    Shareholders equityShare capital (8)
    
    
    1,512
    
    
    
    297
    
    
    
    1,809Contributed surplus
    
    
    132
    
    
    
    
    
    
    
    132Retained earnings
    
    
    3,159
    
    
    
    (767
    )
    
    
    2,392Other components of equity (7)
    
    
    41
    
    
    
    51
    
    
    
    92Total shareholders equity attributable to equity holders
    
    
    4,844
    
    
    
    (419
    )
    
    
    4,425Non-controlling interest
    
    
    
    
    
    
    164
    
    
    
    164Total shareholders equity
    
    
    4,844
    
    
    
    (255
    )
    
    
    4,589Total liabilities and shareholders equity
    
    
    7,394
    
    
    
    (435
    )
    
    
    6,959
 96  cameco
corporation




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##### 



Interim period financial results
 2010 changes in earnings
    
    Three months ended($ millions)
    
    March 31
    
    
    June 30
    
    
    Sept 30Net earnings  Canadian GAAP
    
    
    142
    
    
    
    68
    
    
    
    98Accounting differencesBorrowing costs1
    
    
    (10
    )
    
    
    (11
    )
    
    
    (11
    )Decommissioning provision2
    
    
    (2
    )
    
    
    (1
    )
    
    
    2In-process research & development4
    
    
    3
    
    
    
    3
    
    
    
    3BPLP  pension and maintenance costs10
    
    
    
    
    
    
    8
    
    
    
    (2
    )Income taxes  tax effect on differences9
    
    
    3
    
    
    
    
    
    
    
    1Income taxes  IFRS accounting difference9
    
    
    6
    
    
    
    
    
    
    
    8All other
    
    
    1
    
    
    
    
    
    
    
    Total accounting differences
    
    
    1
    
    
    
    1
    
    
    
    1Net earnings  IFRS
    
    
    143
    
    
    
    69
    
    
    
    99AdjustmentsUnrealized losses (gains) on financial instruments
    
    
    (31
    )
    
    
    46
    
    
    
    (18
    )Adjusted net earnings (non-GAAP measure)
    
    
    112
    
    
    
    115
    
    
    
    81
 
 1
    
    We have elected under IFRS 1 not to apply IAS 23, Borrowing Costs,retrospectively to
borrowing costs incurred on the construction of qualifying assets that commenced prior to
January 1, 2010. Accordingly, we have expensed all borrowing costs that had been previously
capitalized under Canadian GAAP. New guidance from the IASB is pending and it is possible that
our accounting may change as a result. At January 1, 2010, the effect was a $330 million
decrease in property, plant and equipment and a corresponding decrease in retained earnings.2
    
    We have elected under IFRS 1 to apply IFRIC 1, Changes in Existing Decommissioning,
Restoration and Similar Liabilities,prospectively to changes in decommissioning liabilities
that occurred prior to January 1, 2010. There are no new liabilities recognized as a result of
the transition to IFRS. However, the measurement of existing liabilities according to the IFRS
standards provides a different result. At January 1, 2010, the effect was a $55 million
increase in provisions, a $55 million decrease in property, plant and equipment and a $110
million decrease in retained earnings.Canadian GAAP requires the unwinding of the discount (accretion) to be recorded as an operating
cost and allocated to inventory whereas IFRS requires accretion to be reflected as a financing
cost. The net result in the interim periods was an increase in reported expenses with a
corresponding decrease in product inventories.3
    
    IFRS requires the reversal of any previously recorded impairment losses where
circumstances have changed such that the impairments have been reduced. We reviewed our
previously recorded impairment losses and reversed a portion of the charges relating to
certain of our in situ recovery mine assets located in the United States. At January 1, 2010,
the effect was a $35 million increase in property, plant and equipment with a corresponding
increase in retained earnings.4
    
    Under IFRS, in-process research and development (IPR&D) that meets the definition of
an intangible asset is capitalized with amortization commencing when the asset is ready for
use (i.e. when development is complete). Under Canadian GAAP, we have been amortizing IPR&D
related to the acquisition of our interest in GE-Hitachi Global Laser Enrichment LLC, a
development stage entity. At January 1, 2010, the effect was a $20 million increase to
investments in equity accounted investees and a corresponding increase in retained earnings.For the interim periods, we reversed the full amount amortized under Canadian GAAP. 2010
Managements discussion and analysis   97




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##### 



5
    
    We have elected under IFRS 1 to reclassify all cumulative actuarial gains and losses
for all defined benefit plans existing at January 1, 2010 to retained earnings at that date.
At January 1, 2010, the effect was a $15 million decrease in long-term receivables,
investments and other, other liabilities and a corresponding decrease in retained earnings.6
    
    As a result of BPLP also transitioning to IFRS, we have recorded our share of BPLPs
transition adjustments. The most significant of BPLPs IFRS transition adjustments results
from cumulative actuarial losses. BPLP reclassified cumulative actuarial gains and losses for
all defined benefit plans existing at January 1, 2010 to retained earnings at that date. The
effect was a $137 million decrease in long-term receivables, investments and other, other
liabilities and a corresponding decrease in retained earnings.7
    
    We have elected under IFRS 1 to deem all foreign currency translation differences that
exist at the date of transition to IFRS to be zero at the date of transition. At January 1,
2010, the effect was a $50 million adjustment to the cumulative translation adjustment account
and a corresponding decrease in retained earnings.8
    
    Under IFRS, we have concluded that our convertible debentures issued in 2003 and
settled in 2008 will be treated as a hybrid instrument with a debt component and a conversion
feature to be accounted for as a derivative. A derivative is required to be measured at fair
value at each reporting date with changes in value being recorded in earnings. For purposes of
our IFRS transition, we have measured the fair value of the conversion feature as at the
redemption date and recorded a $297 million increase in share capital offset by a
corresponding decrease in retained earnings.9
    
    As a result of the changes in our opening balances on
transition to IFRS, we have reduced our deferred tax liabilities by
$138 million.


For the interim periods, the adjustments relating to income tax expense reflect the tax effects of other adjustments as well as an
IFRS accounting difference related to intra-group transactions. Under IFRS, deferred tax assets and liabilities are recognized for
intra-group transactions whereas Canadian GAAP allows for the recognition of deferred tax assets and liabilities only when the
transaction is with a third party.10
    
    On transition to IFRS all actuarial losses were reclassified to retained earnings.
Under IFRS, future actuarial gains and losses will be recognized through other comprehensive
income to equity. Under Canadian GAAP, we have been amortizing the actuarial losses related to
our interest in BPLP. As well, under IFRS, the costs of major inspections are capitalized and
amortized over the period to the next inspection. Under Canadian GAAP, we have been expensing
the inspection costs related to our interest in BPLP. Other updates
     98  cameco
corporation




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2010
Managements discussion and analysis   99