EXHIBIT 99.2

Cameco Corporation

2016
Consolidated Audited Financial Statements

February 8, 2017





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LOGO

Cameco Corporation

2016 consolidated financial statements

February 8,
2017



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Report of managements accountability

The accompanying consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards as issued by
the International Accounting Standards Board. Management is responsible for ensuring that these statements, which include amounts based upon estimates and judgments, are consistent with other information and operating data contained in the annual
financial review and reflect the corporations business transactions and financial position.

Management is also responsible for the information
disclosed in the managements discussion and analysis including responsibility for the existence of appropriate information systems, procedures and controls to ensure that the information used internally by management and disclosed externally
is complete and reliable in all material respects.

In addition, management is responsible for establishing and maintaining an adequate system of internal
control over financial reporting. The internal control system includes an internal audit function and a code of conduct and ethics, which is communicated to all levels in the organization and requires all employees to maintain high standards in
their conduct of the Companys affairs. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and that the Companys assets are appropriately accounted for and
adequately safeguarded. Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the criteria established in Internal Control  Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Companys system of internal control over financial reporting was effective as at December 31, 2016.

KPMG LLP has audited the consolidated financial statements in accordance with Canadian generally accepted auditing standards and the standards of the Public
Company Accounting Oversight Board (United States).

The board of directors annually appoints an audit and finance committee comprised of directors who
are not employees of the corporation. This committee meets regularly with management, the internal auditor and the shareholders auditors to review significant accounting, reporting and internal control matters. Both the internal and
shareholders auditors have unrestricted access to the audit and finance committee. The audit and finance committee reviews the consolidated financial statements, the report of the shareholders auditors, and managements discussion
and analysis and submits its report to the board of directors for formal approval.



|                                                       |  |                                                                   
|------------------------------------------------------ |  | ------------------------------------------------------------------
|Original signed by Tim S. Gitzel                       |  | Original signed by Grant E. Isaac                                 
|President and Chief Executive Officer
February 8, 2017 |  | Senior Vice-President and Chief Financial Officer
February 8, 2017



2



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Independent auditors report

To the Shareholders and Board of Directors of Cameco Corporation:

We have audited the accompanying consolidated financial statements of Cameco Corporation, which comprise the consolidated statements of financial position as
at December 31, 2016 and December 31, 2015, the consolidated statements of earnings, comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and
other explanatory information.

Managements responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

Auditors responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian
generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial
statements present fairly, in all material respects, the consolidated financial position of Cameco Corporation as at December 31, 2016 and December 31, 2015 and its consolidated financial performance and its consolidated cash flows for the
years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Original
signed by KPMG LLP

Chartered Professional Accountants

February 8, 2017

Saskatoon, Canada



3



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Consolidated statements of earnings



|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|-------------------------------------------------------------------------- |  | ---- | -- |  | ---- | - | --------- | ---- |  | - | --------- | -
|For the years ended December 31
($Cdn thousands, except per share amounts) |  | Note |    |  | 2016 |   |           | 2015 | 
|                                                                           |  |      |   
|Revenue from products and services                                         |  |      |    |  |      | $ | 2,431,404 |      |  | $ | 2,754,378 |  
|                                                                           |  |      |   
|Cost of products and services sold                                         |  |      |    |  |      |   | 1,596,235 |      |  |   | 1,744,815 |  
|Depreciation and amortization                                              |  |      |    |  |      |   | 371,689   |      |  |   | 312,518   |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Cost of sales                                                              |  |      |    |  |      |   | 1,967,924 |      |  |   | 2,057,333 |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Gross profit                                                               |  |      |    |  |      |   | 463,480   |      |  |   | 697,045   |  
|                                                                           |  |      |   
|Administration                                                             |  |      |    |  |      |   | 206,652   |      |  |   | 186,810   |  
|Impairment charges                                                         |  |      | 8  |  |      |   | 361,989   |      |  |   | 215,488   |  
|Exploration                                                                |  |      |    |  |      |   | 42,579    |      |  |   | 40,259    |  
|Research and development                                                   |  |      |    |  |      |   | 4,952     |      |  |   | 6,587     |  
|Other operating income                                                     |  |      | 15 |  |      |   | (34,075   | )    |  |   |          |  
|Loss on disposal of assets                                                 |  |      | 8  |  |      |   | 23,168    |      |  |   | 2,326     |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Earnings (loss) from operations                                            |  |      |    |  |      |   | (141,785  | )    |  |   | 245,575   |  
|Finance costs                                                              |  |      | 18 |  |      |   | (111,906  | )    |  |   | (103,615  | )
|Gain (loss) on derivatives                                                 |  |      | 25 |  |      |   | 34,407    |      |  |   | (280,610  | )
|Finance income                                                             |  |      |    |  |      |   | 4,379     |      |  |   | 5,417     |  
|Share of loss from equity-accounted investees                              |  |      |    |  |      |   |          |      |  |   | (758      | )
|Other income                                                               |  |      | 19 |  |      |   | 60,671    |      |  |   | 54,723    |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Loss before income taxes                                                   |  |      |    |  |      |   | (154,234  | )    |  |   | (79,268   | )
|Income tax recovery                                                        |  |      | 20 |  |      |   | (94,355   | )    |  |   | (142,630  | )
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Net earnings (loss)                                                        |  |      |    |  |      | $ | (59,879   | )    |  | $ | 63,362    |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Net earnings (loss) attributable to:                                       |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Equity holders                                                             |  |      |    |  |      |   | (61,611   | )    |  |   | 65,286    |  
|Non-controlling interest                                                   |  |      |    |  |      |   | 1,732     |      |  |   | (1,924    | )
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Net earnings (loss)                                                        |  |      |    |  |      | $ | (59,879   | )    |  | $ | 63,362    |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Earnings (loss) per common share attributable to equity holders:           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Basic                                                                      |  |      | 21 |  |      | $ | (0.16     | )    |  | $ | 0.16      |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                           |  |      |   
|Diluted                                                                    |  |      | 21 |  |      | $ | (0.16     | )    |  | $ | 0.16      |  
|                                                                           |  |      |    |  |      |   |           |      |  |   |           |  

See accompanying notes to consolidated financial statements.



4



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Consolidated statements of comprehensive income



|                                                          |  |      |  |  |      |   |          |      |  |   |         |  
|--------------------------------------------------------- |  | ---- |  |  | ---- | - | -------- | ---- |  | - | ------- | -
|For the years ended December 31
($Cdn thousands)          |  | Note |  |  | 2016 |   |          | 2015 | 
|                                                          |  |      | 
|Net earnings (loss)                                       |  |      |  |  |      | $ | (59,879  | )    |  | $ | 63,362  |  
|                                                          |  |      | 
|Items that will not be reclassified to net earnings:      |  |      |  |  |      |   |          |      |  |   |         |  
|Remeasurements of defined benefit liability [note
24]1    |  |      |  |  |      |   | (2,109   | )    |  |   | 2,015   |  
|Items that are or may be reclassified to net earnings:    |  |      |  |  |      |   |          |      |  |   |         |  
|Exchange differences on translation of foreign operations |  |      |  |  |      |   | (77,341  | )    |  |   | 182,089 |  
|Unrealized gains on
available-for-sale assets2            |  |      |  |  |      |   | 3,790    |      |  |   | 22      |  
|                                                          |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Other comprehensive income (loss), net of taxes           |  |      |  |  |      |   | (75,660  | )    |  |   | 184,126 |  
|                                                          |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Total comprehensive income (loss)                         |  |      |  |  |      | $ | (135,539 | )    |  | $ | 247,488 |  
|                                                          |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Other comprehensive income (loss) attributable to:        |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Equity holders                                            |  |      |  |  |      | $ | (75,826  | )    |  | $ | 184,288 |  
|Non-controlling interest                                  |  |      |  |  |      |   | 166      |      |  |   | (162    | )
|                                                          |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Other comprehensive income (loss) for the year            |  |      |  |  |      | $ | (75,660  | )    |  | $ | 184,126 |  
|                                                          |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Total comprehensive income (loss) attributable to:        |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Equity holders                                            |  |      |  |  |      | $ | (137,437 | )    |  | $ | 249,574 |  
|Non-controlling interest                                  |  |      |  |  |      |   | 1,898    |      |  |   | (2,086  | )
|                                                          |  |      |  |  |      |   |          |      |  |   |         |  
|                                                          |  |      | 
|Total comprehensive income (loss) for the year            |  |      |  |  |      | $ | (135,539 | )    |  | $ | 247,488 |  
|                                                          |  |      |  |  |      |   |          |      |  |   |         |  



|1 | Net of tax (2016 - $834; 2015 - $(666))
|- | ---------------------------------------

|2 | Net of tax (2016 - $(399); 2015 - $(3))
|- | ---------------------------------------

See accompanying notes to consolidated financial statements.



5



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Consolidated statements of financial position



|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|--------------------------------------------------------------- |  | ---- | -- |  | ---- | - | --------- | ---- |  | - | --------- | -
|As at December 31
($Cdn thousands)                              |  | Note |    |  | 2016 |   |           | 2015 | 
|                                                                |  |      |   
|Assets                                                          |  |      |    |  |      |   |           |      |  |   |           |  
|Current assets                                                  |  |      |    |  |      |   |           |      |  |   |           |  
|Cash and cash equivalents                                       |  |      |    |  |      | $ | 320,278   |      |  | $ | 458,604   |  
|Accounts receivable                                             |  |      | 6  |  |      |   | 242,482   |      |  |   | 246,865   |  
|Current tax assets                                              |  |      |    |  |      |   | 11,552    |      |  |   | 493       |  
|Inventories                                                     |  |      | 7  |  |      |   | 1,287,939 |      |  |   | 1,285,266 |  
|Supplies and prepaid expenses                                   |  |      |    |  |      |   | 169,084   |      |  |   | 180,544   |  
|Current portion of long-term receivables, investments and other |  |      | 10 |  |      |   | 10,498    |      |  |   | 12,193    |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|Total current assets                                            |  |      |    |  |      |   | 2,041,833 |      |  |   | 2,183,965 |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                |  |      |   
|Property, plant and equipment                                   |  |      | 8  |  |      |   | 4,655,586 |      |  |   | 5,228,160 |  
|Goodwill and intangible assets                                  |  |      | 9  |  |      |   | 203,310   |      |  |   | 217,130   |  
|Long-term receivables, investments and other                    |  |      | 10 |  |      |   | 512,484   |      |  |   | 449,236   |  
|Investments in equity-accounted investees                       |  |      |    |  |      |   |          |      |  |   | 2,472     |  
|Deferred tax assets                                             |  |      | 20 |  |      |   | 835,985   |      |  |   | 713,674   |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|Total non-current assets                                        |  |      |    |  |      |   | 6,207,365 |      |  |   | 6,610,672 |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|Total assets                                                    |  |      |    |  |      | $ | 8,249,198 |      |  | $ | 8,794,637 |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                |  |      |   
|Liabilities and shareholders equity                            |  |      |    |  |      |   |           |      |  |   |           |  
|Current liabilities                                             |  |      |    |  |      |   |           |      |  |   |           |  
|Accounts payable and accrued liabilities                        |  |      | 11 |  |      | $ | 312,900   |      |  | $ | 317,856   |  
|Current tax liabilities                                         |  |      |    |  |      |   | 36,413    |      |  |   | 56,494    |  
|Dividends payable                                               |  |      |    |  |      |   | 39,579    |      |  |   | 39,579    |  
|Current portion of other liabilities                            |  |      | 14 |  |      |   | 60,744    |      |  |   | 241,113   |  
|Current portion of provisions                                   |  |      | 15 |  |      |   | 19,619    |      |  |   | 16,595    |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|Total current liabilities                                       |  |      |    |  |      |   | 469,255   |      |  |   | 671,637   |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                |  |      |   
|Long-term debt                                                  |  |      | 13 |  |      |   | 1,493,327 |      |  |   | 1,492,237 |  
|Other liabilities                                               |  |      | 14 |  |      |   | 122,988   |      |  |   | 132,142   |  
|Provisions                                                      |  |      | 15 |  |      |   | 889,163   |      |  |   | 918,163   |  
|Deferred tax liabilities                                        |  |      | 20 |  |      |   | 15,937    |      |  |   | 35,179    |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|Total non-current liabilities                                   |  |      |    |  |      |   | 2,521,415 |      |  |   | 2,577,721 |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                |  |      |   
|Shareholders equity                                            |  |      |    |  |      |   |           |      |  |   |           |  
|Share capital                                                   |  |      |    |  |      |   | 1,862,646 |      |  |   | 1,862,646 |  
|Contributed surplus                                             |  |      |    |  |      |   | 216,213   |      |  |   | 209,115   |  
|Retained earnings                                               |  |      |    |  |      |   | 3,019,872 |      |  |   | 3,241,902 |  
|Other components of equity                                      |  |      |    |  |      |   | 159,640   |      |  |   | 233,357   |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|Total shareholders equity attributable to equity holders       |  |      |    |  |      |   | 5,258,371 |      |  |   | 5,547,020 |  
|                                                                |  |      |   
|Non-controlling interest                                        |  |      |    |  |      |   | 157       |      |  |   | (1,741    | )
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|Total shareholders equity                                      |  |      |    |  |      |   | 5,258,528 |      |  |   | 5,545,279 |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  
|                                                                |  |      |   
|Total liabilities and shareholders equity                      |  |      |    |  |      | $ | 8,249,198 |      |  | $ | 8,794,637 |  
|                                                                |  |      |    |  |      |   |           |      |  |   |           |  

Commitments and contingencies [notes 8, 15, 20]

See accompanying notes to consolidated financial statements.



6



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Consolidated statements of changes in equity



|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|----------------------------------------------- |  | ------------------------------ | --------- |  | ------------------ | - | ------- | ---------------- |  | - | -------------------------- | - |  | ------------------------ | ------- | - | ----- | - | ----- | ----------------------- |  | - | ------------ | - |  | - | ------ | - |  | - | --------- | -
|                                                |  | Attributable to equity holders |           |  |                    |   |         |                  | 
|($Cdn thousands)                                |  | Sharecapital                   |           |  | Contributedsurplus |   |         | Retainedearnings |  |   | Foreigncurrencytranslation |   |  | Available-for-saleassets |         |   | Total |   |       | Non-controllinginterest |  |   | Total equity |  
|                                                |  |                                |           |  |                    |   |         |                 
|Balance at January 1, 2016                      |  | $                              | 1,862,646 |  |                    | $ | 209,115 |                  |  | $ | 3,241,902                  |   |  | $                        | 233,918 |   |       | $ | (561  | )                       |  | $ | 5,547,020    |   |  | $ | (1,741 | ) |  | $ | 5,545,279 |  
|                                                |  |                                |           |  |                    |   |         |                 
|Net earnings (loss)                             |  |                                |          |  |                    |   |        |                  |  |   | (61,611                    | ) |  |                          |        |   |       |   |      |                         |  |   | (61,611      | ) |  |   | 1,732  |   |  |   | (59,879   | )
|Other comprehensive income (loss)               |  |                                |          |  |                    |   |        |                  |  |   | (2,109                     | ) |  |                          | (77,507 | ) |       |   | 3,790 |                         |  |   | (75,826      | ) |  |   | 166    |   |  |   | (75,660   | )
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|                                                |  |                                |           |  |                    |   |         |                 
|Total comprehensive income (loss)               |  |                                |          |  |                    |   |        |                  |  |   | (63,720                    | ) |  |                          | (77,507 | ) |       |   | 3,790 |                         |  |   | (137,437     | ) |  |   | 1,898  |   |  |   | (135,539  | )
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|                                                |  |                                |           |  |                    |   |         |                 
|Share-based compensation                        |  |                                |          |  |                    |   | 14,101  |                  |  |   |                           |   |  |                          |        |   |       |   |      |                         |  |   | 14,101       |   |  |   |       |   |  |   | 14,101    |  
|Restricted and performance                      |  |                                |          |  |                    |   |        |                  |  |   |                           |   |  |                          |        |   |       |   |      |                         |  |   |             |   |  |   |       |   |  |   |          |  
|share units released                            |  |                                |          |  |                    |   | (7,003  | )                |  |   |                           |   |  |                          |        |   |       |   |      |                         |  |   | (7,003       | ) |  |   |       |   |  |   | (7,003    | )
|Dividends                                       |  |                                |          |  |                    |   |        |                  |  |   | (158,310                   | ) |  |                          |        |   |       |   |      |                         |  |   | (158,310     | ) |  |   |       |   |  |   | (158,310  | )
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|                                                |  |                                |           |  |                    |   |         |                 
|Balance at December 31, 2016                    |  | $                              | 1,862,646 |  |                    | $ | 216,213 |                  |  | $ | 3,019,872                  |   |  | $                        | 156,411 |   |       | $ | 3,229 |                         |  | $ | 5,258,371    |   |  | $ | 157    |   |  | $ | 5,258,528 |  
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|                                                |  |                                |           |  |                    |   |         |                 
|Balance at January 1, 2015                      |  | $                              | 1,862,646 |  |                    | $ | 196,815 |                  |  | $ | 3,333,099                  |   |  | $                        | 51,667  |   |       | $ | (583  | )                       |  | $ | 5,443,644    |   |  | $ | 160    |   |  | $ | 5,443,804 |  
|                                                |  |                                |           |  |                    |   |         |                 
|Net earnings (loss)                             |  |                                |          |  |                    |   |        |                  |  |   | 65,286                     |   |  |                          |        |   |       |   |      |                         |  |   | 65,286       |   |  |   | (1,924 | ) |  |   | 63,362    |  
|Other comprehensive income (loss)               |  |                                |          |  |                    |   |        |                  |  |   | 2,015                      |   |  |                          | 182,251 |   |       |   | 22    |                         |  |   | 184,288      |   |  |   | (162   | ) |  |   | 184,126   |  
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|                                                |  |                                |           |  |                    |   |         |                 
|Total comprehensive income (loss)               |  |                                |          |  |                    |   |        |                  |  |   | 67,301                     |   |  |                          | 182,251 |   |       |   | 22    |                         |  |   | 249,574      |   |  |   | (2,086 | ) |  |   | 247,488   |  
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|                                                |  |                                |           |  |                    |   |         |                 
|Share-based compensation                        |  |                                |          |  |                    |   | 16,853  |                  |  |   |                           |   |  |                          |        |   |       |   |      |                         |  |   | 16,853       |   |  |   |       |   |  |   | 16,853    |  
|Dividends                                       |  |                                |          |  |                    |   |        |                  |  |   | (158,313                   | ) |  |                          |        |   |       |   |      |                         |  |   | (158,313     | ) |  |   |       |   |  |   | (158,313  | )
|Restricted and performance share units released |  |                                |          |  |                    |   | (4,553  | )                |  |   |                           |   |  |                          |        |   |       |   |      |                         |  |   | (4,553       | ) |  |   |       |   |  |   | (4,553    | )
|Change in ownership interest in subsidiary      |  |                                |          |  |                    |   |        |                  |  |   | (185                       | ) |  |                          |        |   |       |   |      |                         |  |   | (185         | ) |  |   | 185    |   |  |   |          |  
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  
|                                                |  |                                |           |  |                    |   |         |                 
|Balance at December 31, 2015                    |  | $                              | 1,862,646 |  |                    | $ | 209,115 |                  |  | $ | 3,241,902                  |   |  | $                        | 233,918 |   |       | $ | (561  | )                       |  | $ | 5,547,020    |   |  | $ | (1,741 | ) |  | $ | 5,545,279 |  
|                                                |  |                                |           |  |                    |   |         |                  |  |   |                            |   |  |                          |         |   |       |   |       |                         |  |   |              |   |  |   |        |   |  |   |           |  

See accompanying notes to consolidated financial statements.



7



---

Consolidated statements of cash flows



|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|------------------------------------------------------------------- |  | ---- | -- |  | ---- | - | -------- | ---- |  | - | -------- | -
|For the years ended December 31
($Cdn thousands)                    |  | Note |    |  | 2016 |   |          | 2015 | 
|                                                                    |  |      |   
|Operating activities                                                |  |      |    |  |      |   |          |      |  |   |          |  
|Net earnings (loss)                                                 |  |      |    |  |      | $ | (59,879  | )    |  | $ | 63,362   |  
|Adjustments for:                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|Depreciation and amortization                                       |  |      |    |  |      |   | 371,689  |      |  |   | 312,518  |  
|Deferred charges                                                    |  |      |    |  |      |   | (95,873  | )    |  |   | 5,834    |  
|Unrealized loss (gain) on derivatives                               |  |      |    |  |      |   | (110,358 | )    |  |   | 92,166   |  
|Share-based compensation                                            |  |      | 23 |  |      |   | 14,101   |      |  |   | 16,853   |  
|Loss on sale of assets                                              |  |      |    |  |      |   | 23,168   |      |  |   | 2,326    |  
|Finance costs                                                       |  |      | 18 |  |      |   | 111,906  |      |  |   | 103,615  |  
|Finance income                                                      |  |      |    |  |      |   | (4,379   | )    |  |   | (5,417   | )
|Share of loss in equity-accounted investees                         |  |      |    |  |      |   |         |      |  |   | 758      |  
|Impairment charges                                                  |  |      | 8  |  |      |   | 361,989  |      |  |   | 215,488  |  
|Other income                                                        |  |      | 19 |  |      |   | (1,630   | )    |  |   | (54,409  | )
|Other operating income                                              |  |      | 15 |  |      |   | (34,075  | )    |  |   |         |  
|Income tax recovery                                                 |  |      | 20 |  |      |   | (94,355  | )    |  |   | (142,630 | )
|Interest received                                                   |  |      |    |  |      |   | 1,838    |      |  |   | 3,922    |  
|Income taxes paid                                                   |  |      |    |  |      |   | (102,628 | )    |  |   | (92,758  | )
|Other operating items                                               |  |      | 22 |  |      |   | (69,134  | )    |  |   | (71,618  | )
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|Net cash provided by operations                                     |  |      |    |  |      |   | 312,380  |      |  |   | 450,010  |  
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|                                                                    |  |      |   
|Investing activities                                                |  |      |    |  |      |   |          |      |  |   |          |  
|Additions to property, plant and equipment                          |  |      |    |  |      |   | (216,908 | )    |  |   | (358,562 | )
|Decrease (increase) in long-term receivables, investments and other |  |      |    |  |      |   | (3,080   | )    |  |   | 17,557   |  
|Proceeds from sale of property, plant and equipment                 |  |      |    |  |      |   | 2,168    |      |  |   | 198      |  
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|Net cash used in investing                                          |  |      |    |  |      |   | (217,820 | )    |  |   | (340,807 | )
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|                                                                    |  |      |   
|Financing activities                                                |  |      |    |  |      |   |          |      |  |   |          |  
|Decrease in debt                                                    |  |      |    |  |      |   |         |      |  |   | (10      | )
|Interest paid                                                       |  |      |    |  |      |   | (70,446  | )    |  |   | (69,507  | )
|Dividends paid                                                      |  |      |    |  |      |   | (158,310 | )    |  |   | (158,313 | )
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|Net cash used in financing                                          |  |      |    |  |      |   | (228,756 | )    |  |   | (227,830 | )
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|                                                                    |  |      |   
|Decrease in cash and cash equivalents, during the year              |  |      |    |  |      |   | (134,196 | )    |  |   | (118,627 | )
|Exchange rate changes on foreign currency cash balances             |  |      |    |  |      |   | (4,130   | )    |  |   | 10,648   |  
|Cash and cash equivalents, beginning of year                        |  |      |    |  |      |   | 458,604  |      |  |   | 566,583  |  
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|Cash and cash equivalents, end of year                              |  |      |    |  |      | $ | 320,278  |      |  | $ | 458,604  |  
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|                                                                    |  |      |   
|Cash and cash equivalents is comprised of:                          |  |      |    |  |      |   |          |      |  |   |          |  
|Cash                                                                |  |      |    |  |      | $ | 79,730   |      |  | $ | 240,603  |  
|Cash equivalents                                                    |  |      |    |  |      |   | 240,548  |      |  |   | 218,001  |  
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  
|Cash and cash equivalents                                           |  |      |    |  |      | $ | 320,278  |      |  | $ | 458,604  |  
|                                                                    |  |      |    |  |      |   |          |      |  |   |          |  

See accompanying notes to consolidated financial statements.



8



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Notes to consolidated financial statements

For the years ended December 31, 2016 and 2015



|1. | Cameco Corporation
|-- | ------------------

Cameco Corporation is incorporated under the Canada Business Corporations Act. The
address of its registered office is 2121 11th Street West, Saskatoon, Saskatchewan, S7M 1J3. The consolidated financial statements as at and for the year ended December 31, 2016 comprise Cameco Corporation and its subsidiaries (collectively,
the Company or Cameco) and the Companys interests in associates and joint arrangements. The Company is primarily engaged in the exploration for and the development, mining, refining, conversion, fabrication and trading of uranium for sale as
fuel for generating electricity in nuclear power reactors in Canada and other countries.



|2. | Significant accounting policies
|-- | -------------------------------



|A. | Statement of compliance
|-- | -----------------------

These consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

These consolidated financial
statements were authorized for issuance by the Companys board of directors on February 8, 2017.



|B. | Basis of presentation
|-- | ---------------------

These consolidated financial statements are presented in Canadian dollars, which
is the Companys functional currency. All financial information is presented in Canadian dollars, unless otherwise noted. Amounts presented in tabular format have been rounded to the nearest thousand except per share amounts and where otherwise
noted.

The consolidated financial statements have been prepared on the historical cost basis except for the following material items which are measured
on an alternative basis at each reporting date:



|                                                              |  |                                                                                   
|------------------------------------------------------------- |  | ----------------------------------------------------------------------------------
|Derivative financial instruments                              |  | Fair value                                                                        
|Available-for-sale financial assets                           |  | Fair value                                                                        
|Liabilities for cash-settled share-based payment arrangements |  | Fair value                                                                        
|Net defined benefit liability                                 |  | Fair value of plan assets less the present value of the defined benefit obligation

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may vary from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates
are revised and in any future periods affected. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5.

This summary of significant accounting policies is a description of the accounting methods and practices that have been used in the preparation of these
consolidated financial statements and is presented to assist the reader in interpreting the statements contained herein. These accounting policies have been applied consistently to all entities within the consolidated group.



9



---

|C. | Consolidation principles
|-- | ------------------------



|i. | Business combinations
|-- | ---------------------

The acquisition method of accounting is used to account for the acquisition of
subsidiaries by the Company. The Company measures goodwill at the acquisition date as the fair value of the consideration transferred, including the recognized amount of any non-controlling interests in the
acquiree, less the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognized immediately in
earnings. In a business combination achieved in stages, the acquisition date fair value of the Companys previously held equity interest in the acquiree is also considered in computing goodwill.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred and equity interests issued by the Company. Consideration
also includes the fair value of any contingent consideration and share-based compensation awards that are replaced mandatorily in a business combination.

The Company elects on a transaction-by-transaction basis whether to measure
any non-controlling interest at fair value, or at their proportionate share of the recognized amount of the identifiable net assets of the acquiree, at the acquisition date.

Acquisition-related costs are expensed as incurred, except for those costs related to the issue of debt or equity instruments.



|ii. | Subsidiaries
|--- | ------------

The consolidated financial statements include the accounts of Cameco and its subsidiaries.
Subsidiaries are entities over which the Company has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Company and are deconsolidated from the date that control ceases.



|iii. | Investments in equity-accounted investees
|---- | -----------------------------------------

Camecos investments in equity-accounted investees
include investments in associates.

Associates are those entities over which the Company has significant influence, but not control or joint control, over
the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity, but can also arise where the Company holds less than 20% if it has the power to be
actively involved and influential in policy decisions affecting the entity.

Investments in associates are accounted for using the equity method. The
equity method involves the recording of the initial investment at cost and the subsequent adjusting of the carrying value of the investment for Camecos proportionate share of the earnings or loss and any other changes in the associates
net assets, such as dividends. The cost of the investment includes transaction costs.

Adjustments are made to align the accounting policies of the
associate with those of the Company before applying the equity method. When the Companys share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest is reduced to zero, and the recognition of
further losses is discontinued except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, Cameco resumes recognizing its share of
those profits only after its share of the profits equals the share of losses not recognized.



|iv. | Joint arrangements
|--- | ------------------

A joint arrangement can take the form of a joint operation or joint venture. All
joint arrangements involve a contractual arrangement that establishes joint control.



10



---

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint operation may or may not be structured through a separate vehicle. These arrangements involve joint control of one or more of the assets acquired or
contributed for the purpose of the joint operation. The consolidated financial statements of the Company include its share of the assets in such joint operations, together with its share of the liabilities, revenues and expenses arising jointly or
otherwise from those operations. All such amounts are measured in accordance with the terms of each arrangement.

A joint venture is a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint venture is always structured through a separate vehicle. It operates in the same way as other entities, controlling the assets
of the joint venture, earning its own revenue and incurring its own liabilities and expenses. Interests in joint ventures are accounted for using the equity method of accounting, whereby the Companys proportionate interest in the assets,
liabilities, revenues and expenses of jointly controlled entities are recognized on a single line in the consolidated statements of financial position and consolidated statements of earnings. The share of joint ventures results is recognized in the
Companys consolidated financial statements from the date that joint control commences until the date at which it ceases.



|v. | Transactions eliminated on consolidation
|-- | ----------------------------------------

Intra-group balances and transactions, and any unrealized
income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the
extent of the Companys interest in the investee. Unrealized losses are eliminated in the same manner as unrealized gains, but only to the extent that there is no evidence of impairment.



|D. | Foreign currency translation
|-- | ----------------------------

Items included in the financial statements of each of Camecos
subsidiaries, associates and joint arrangements are measured using their functional currency, which is the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Canadian
dollars, which is Camecos functional and presentation currency.



|i. | Foreign currency transactions
|-- | -----------------------------

Foreign currency transactions are translated into the respective
functional currency of the Company and its entities using the exchange rates prevailing at the dates of the transactions. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated to the functional
currency at the exchange rate at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. The
applicable exchange gains and losses arising on these transactions are reflected in earnings with the exception of foreign exchange gains or losses on provisions for decommissioning and reclamation activities that are in a foreign currency, which
are capitalized in property, plant and equipment.



|ii. | Foreign operations
|--- | ------------------

The assets and liabilities of foreign operations, including goodwill and fair value
adjustments arising on acquisition, are translated to Canadian dollars at exchange rates at the reporting dates. The revenues and expenses of foreign operations are translated to Canadian dollars at exchange rates at the dates of the transactions.

Foreign currency differences are recognized in other comprehensive income. When a foreign operation is disposed of, in whole, the relevant amount in the
foreign currency translation account is transferred to earnings as part of the gain or loss on disposal.

When the settlement of a monetary item
receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of the net investment in a foreign operation,
and are recognized in other comprehensive income and presented within equity in the foreign currency translation account.



11



---

|E. | Cash and cash equivalents
|-- | -------------------------

Cash and cash equivalents consists of balances with financial institutions
and investments in money market instruments, which have a term to maturity of three months or less at the time of purchase.



|F. | Inventories
|-- | -----------

Inventories of broken ore, uranium concentrates, and refined and converted products are
measured at the lower of cost and net realizable value.

Cost includes direct materials, direct labour, operational overhead expenses and depreciation.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Consumable supplies and spares are valued at the lower of cost or replacement value.



|G. | Property, plant and equipment
|-- | -----------------------------



|i. | Buildings, plant and equipment and other
|-- | ----------------------------------------

Items of property, plant and equipment are measured at cost
less accumulated depreciation and impairment charges. The cost of self-constructed assets includes the cost of materials and direct labour, borrowing costs and any other costs directly attributable to bringing the assets to the location and
condition necessary for them to be capable of operating in the manner intended by management, including the initial estimate of the cost of dismantling and removing the items and restoring the site on which they are located.

When components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and
equipment and depreciated separately.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment, and are recognized in earnings.



|ii. | Mineral properties and mine development costs
|--- | ---------------------------------------------

The decision to develop a mine property within a project
area is based on an assessment of the commercial viability of the property, the availability of financing and the existence of markets for the product. Once the decision to proceed to development is made, development and other expenditures relating
to the project area are deferred as part of assets under construction and disclosed as a component of property, plant and equipment with the intention that these will be depreciated by charges against earnings from future mining operations. No
depreciation is charged against the property until the production stage commences. After a mine property has been brought into the production stage, costs of any additional work on that property are expensed as incurred, except for large development
programs, which will be deferred and depreciated over the remaining life of the related assets.

The production stage is reached when a mine property is
in the condition necessary for it to be capable of operating in the manner intended by management. The criteria used to assess the start date of the production stage are determined based on the nature of each mine construction project, including the
complexity of a mine site. A range of factors is considered when determining whether the production stage has been reached, which includes, but is not limited to, the demonstration of sustainable production at or near the level intended (such as the
demonstration of continuous throughput levels at or above a target percentage of the design capacity).



12



---

|iii. | Depreciation
|---- | ------------

Depreciation is calculated over the depreciable amount, which is the cost of the asset
less its residual value. Assets which are unrelated to production are depreciated according to the straight-line method based on estimated useful lives as follows:



|                       |  |                
|---------------------- |  | ---------------
|Land                   |  | Not depreciated
|Buildings              |  | 15 - 25 years  
|Plant and equipment    |  | 3 - 15 years   
|Furniture and fixtures |  | 3 - 10 years   
|Other                  |  | 3 - 5 years    

Mining properties and certain mining and conversion assets for which the economic benefits from the asset are consumed in a
pattern which is linked to the production level are depreciated according to the unit-of-production method. For conversion assets, the amount of depreciation is measured
by the portion of the facilities total estimated lifetime production that is produced in that period. For mining assets and properties, the amount of depreciation or depletion is measured by the portion of the mines proven and probable
mineral reserves recovered during the period.

Depreciation methods, useful lives and residual values are reviewed at each reporting period and are
adjusted if appropriate.



|iv. | Borrowing costs
|--- | ---------------

Borrowing costs on funds directly attributable to finance the acquisition, production
or construction of a qualifying asset are capitalized until such time as substantially all the activities necessary to prepare the qualifying asset for its intended use are complete. A qualifying asset is one that takes a substantial period of time
to prepare for its intended use. Capitalization is discontinued when the asset enters the production stage or development ceases. Where the funds used to finance a project form part of general borrowings, interest is capitalized based on the
weighted average interest rate applicable to the general borrowings outstanding during the period of construction.



|v. | Repairs and maintenance
|-- | -----------------------

The cost of replacing a component of property, plant and equipment is
capitalized if it is probable that future economic benefits embodied within the component will flow to the Company. The carrying amount of the replaced component is derecognized. Costs of routine maintenance and repair are charged to products and
services sold.



|H. | Goodwill and intangible assets
|-- | ------------------------------

Goodwill arising from the acquisition of subsidiaries is initially
recognized at cost, measured as the excess of the fair value of the consideration paid over the fair value of the identifiable net assets acquired. At the date of acquisition, goodwill is allocated to the cash generating unit (CGU), or group of CGUs
that is expected to receive the economic benefits of the business combination. Goodwill is subsequently measured at cost, less accumulated impairment losses.

Intangible assets acquired individually or as part of a group of assets are initially recognized at cost and measured subsequently at cost less accumulated
amortization and impairment losses. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. The cost of a group of intangible assets acquired in a transaction,
including those acquired in a business combination that meet the specified criteria for recognition apart from goodwill, is allocated to the individual assets acquired based on their relative fair values.

Intangible assets that have finite useful lives are amortized over their estimated remaining useful lives.Amortization methods and useful lives are
reviewed at each reporting period and are adjusted if appropriate.



|I. | Leased assets
|-- | -------------

Leases which result in the Company receiving substantially all the risks and rewards of
ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is
accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between finance cost and the reduction of the outstanding liability. The finance cost is allocated to
each period of the lease term to produce a constant periodic rate of interest on the remaining balance of the liability.



13



---

Lease agreements that do not meet the recognition criteria of a finance lease are classified and recognized as
operating leases and are not recognized in the Companys consolidated statements of financial position. Payments made under operating leases are charged to income on a straight-line basis over the lease term.



|J. | Finance income and finance costs
|-- | --------------------------------

Finance income comprises interest income on funds invested and gains
on the disposal of available-for-sale financial assets. Interest income and interest expense are recognized in earnings as they accrue, using the effective interest
method. Finance costs comprise interest and fees on borrowings, unwinding of the discount on provisions and costs incurred on redemption of debentures.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are expensed in the period incurred.



|K. | Research and development costs
|-- | ------------------------------

Expenditures on research are charged against earnings when incurred.
Development costs are recognized as assets when the Company can demonstrate technical feasibility and that the asset will generate probable future economic benefits.



|L. | Impairment
|-- | ----------



|i. | Non-derivative financial assets
|-- | -------------------------------

Financial assets not classified
as fair value through profit and loss are assessed at each reporting date to determine whether there is objective evidence of impairment. Objective evidence that financial assets (including equity securities) are impaired can include default or
delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security. In
addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

Impairment losses on available-for-sale financial assets are recognized by
transferring the cumulative loss that has been recognized in other comprehensive income, and presented in equity, to earnings. The cumulative loss that is removed from other comprehensive income and recognized in earnings is the difference between
the acquisition cost, net of any principal payment and amortization, and the current fair value, less any impairment loss previously recognized in earnings.

If, in a subsequent period, the fair value of an impaired available-for-sale
debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized in earnings, then the impairment loss is reversed through earnings, otherwise, it is reversed through other
comprehensive income. Impairment losses on available-for-sale equity securities that are recognized in earnings are never reversed through earnings.



|ii. | Non-financial assets
|--- | --------------------

The carrying amounts of Camecos non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated. Goodwill is
tested annually for impairment.

For impairment testing, assets are grouped together into CGUs which are the smallest group of assets that generate cash
inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the
combination.



14



---

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to
sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset or CGU. Fair value is determined as the amount that would be obtained from the sale of the asset or CGU in an arms-length transaction between knowledgeable and willing parties. For
exploration properties, fair value is based on the implied fair value of the resources in place using comparable market transaction metrics.

An
impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses are recognized in earnings. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying
amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

Impairment
losses recognized in prior periods are assessed at each reporting date whenever events or changes in circumstances indicate that the impairment may have reversed. If the impairment has reversed, the carrying amount of the asset is increased to its
recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized. A reversal of an impairment loss is recognized immediately in earnings. An impairment loss in respect of goodwill is not reversed.



|M. | Exploration and evaluation expenditures
|-- | ---------------------------------------

Exploration and evaluation expenditures are those expenditures
incurred by the Company in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. These expenditures include researching
and analyzing existing exploration data, conducting geological studies, exploratory drilling and sampling, and compiling prefeasibility and feasibility studies. Exploration and evaluation expenditures are charged against earnings as incurred, except
when there is a high degree of confidence in the viability of the project and it is probable that these costs will be recovered through future development and exploitation.

The technical feasibility and commercial viability of extracting a resource is considered to be determinable based on several factors, including the existence
of proven and probable reserves and the demonstration that future economic benefits are probable. When an area is determined to be technically feasible and commercially viable, the exploration and evaluation assets attributable to that area are
first tested for impairment and then transferred to property, plant and equipment.

Exploration and evaluation costs that have been acquired in a business
combination or asset acquisition are capitalized under the scope of IFRS 6, Exploration for and Evaluation of Mineral Resources, and are reported as part of property, plant and equipment.



|N. | Provisions
|-- | ----------

A provision is recognized if, as a result of a past event, the Company has a present legal
or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the risk-adjusted expected future cash flows at a pre-tax risk-free rate that reflects current market assessments of the time value of money. The unwinding of the discount is recognized as a finance cost.



15



---

|i. | Environmental restoration
|-- | -------------------------

The mining, extraction and processing activities of the Company normally give
rise to obligations for site closure and environmental restoration. Closure and restoration can include facility decommissioning and dismantling, removal or treatment of waste materials, as well as site and land restoration. The Company provides for
the closure, reclamation and decommissioning of its operating sites in the financial period when the related environmental disturbance occurs, based on the estimated future costs using information available at the reporting date. Costs included in
the provision comprise all closure and restoration activity expected to occur gradually over the life of the operation and at the time of closure. Routine operating costs that may impact the ultimate closure and restoration activities, such as waste
material handling conducted as a normal part of a mining or production process, are not included in the provision.

The timing of the actual closure and
restoration expenditure is dependent upon a number of factors such as the life and nature of the asset, the operating licence conditions and the environment in which the mine operates. Closure and restoration provisions are measured at the expected
value of future cash flows, discounted to their present value using a current pre-tax risk-free rate. Significant judgments and estimates are involved in deriving the expectations of future activities and the
amount and timing of the associated cash flows.

At the time a provision is initially recognized, to the extent that it is probable that future economic
benefits associated with the reclamation, decommissioning and restoration expenditure will flow to the Company, the corresponding cost is capitalized as an asset. The capitalized cost of closure and restoration activities is recognized in property,
plant and equipment and depreciated on a unit-of-production basis. The value of the provision is gradually increased over time as the effect of discounting unwinds. The
unwinding of the discount is an expense recognized in finance costs.

Closure and rehabilitation provisions are also adjusted for changes in estimates.
The provision is reviewed at each reporting date for changes to obligations, legislation or discount rates that effect change in cost estimates or life of operations. The cost of the related asset is adjusted for changes in the provision resulting
from changes in estimated cash flows or discount rates, and the adjusted cost of the asset is depreciated prospectively.



|ii. | Waste disposal
|--- | --------------

The refining, conversion and manufacturing processes generate certain
uranium-contaminated waste. The Company has established strict procedures to ensure this waste is disposed of safely. A provision for waste disposal costs in respect of these materials is recognized when they are generated. Costs associated with the
disposal, the timing of cash flows and discount rates are estimated both at initial recognition and subsequent measurement.



|O. | Employee future benefits
|-- | ------------------------



|i. | Pension obligations
|-- | -------------------

The Company accrues its obligations under employee benefit plans. The Company has
both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further
contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan other than a defined contribution plan. Typically,
defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.



16



---

The liability recognized in the consolidated statements of financial position in respect of defined benefit
pension plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets. The defined benefit obligation is calculated annually, by qualified independent actuaries using the projected unit credit
method prorated on service and managements best estimate of expected plan investment performance, salary escalation, retirement ages of employees and expected health care costs. The present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related
pension liability.

The Company recognizes all actuarial gains and losses arising from defined benefit plans in other comprehensive income, and reports
them in retained earnings. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized immediately in earnings.

For defined contribution plans, the contributions are recognized as employee benefit expense in earnings in the periods during which services are rendered by
employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.



|ii. | Other post-retirement benefit plans
|--- | -----------------------------------

The Company provides certain post-retirement health care benefits
to its retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of
employment using the same accounting methodology as used for defined benefit pension plans. Actuarial gains and losses are recognized in other comprehensive income in the period in which they arise. These obligations are valued annually by
independent qualified actuaries.



|iii. | Short-term employee benefits
|---- | ----------------------------

Short-term employee benefit obligations are measured on an undiscounted
basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus plans if the Company has a present legal or constructive obligation to pay this amount as a result of
past service provided by the employee, and the obligation can be measured reliably.



|iv. | Termination benefits
|--- | --------------------

Termination benefits are payable when employment is terminated by the Company
before the normal retirement date, or whenever an employee accepts an entitys offer of benefits in exchange for termination of employment. Cameco recognizes termination benefits as an expense at the earlier of when the Company can no longer
withdraw the offer of those benefits and when the Company recognizes costs for a restructuring. If benefits are payable more than 12 months after the reporting period, they are discounted to their present value.



|v. | Share-based compensation
|-- | ------------------------

For equity-settled plans, the grant date fair value of share-based
compensation awards granted to employees is recognized as an employee benefit expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized as an expense is
adjusted to reflect the number of awards for which the related service and vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For cash-settled plans, the fair value of the amount payable to
employees is recognized as an expense, with a corresponding increase in liabilities, over the period that the employees unconditionally become entitled to payment. The liability is re-measured at each
reporting date and at settlement date. Any changes in the fair value of the liability are recognized as employee benefit expense in earnings.



17



---

Camecos contributions under the employee share ownership plan are expensed during the year of contribution.
Shares purchased with Company contributions and with dividends paid on such shares become unrestricted on January 1 of the second plan year following the date on which such shares were purchased.



|P. | Revenue recognition
|-- | -------------------

Cameco supplies uranium concentrates and uranium conversion services to utility
customers.

Cameco recognizes revenue on the sale of its nuclear products when the risks and rewards of ownership pass to the customer and collection is
reasonably assured. Camecos sales are pursuant to an enforceable contract that indicates the type of sales arrangement, pricing and delivery terms, as well as details related to the transfer of title.

Cameco has three types of sales arrangements with its customers in its uranium and fuel services businesses. These arrangements include uranium supply, toll
conversion services and conversion supply (converted uranium), which is a combination of uranium supply and toll conversion services.

Uranium supply

In a uranium supply arrangement, Cameco is contractually obligated to provide uranium concentrates to its customers. Cameco-owned uranium is
physically delivered to conversion facilities (Converters) where the Converter will credit Camecos account for the volume of accepted uranium. Based on delivery terms in a sales contract with its customer, Cameco instructs the Converter to
transfer title of a contractually specified quantity of uranium to the customers account at the Converters facility. At this point, the risks and rewards of ownership have been transferred and Cameco invoices the customer and recognizes
revenue for the uranium supply.

Toll conversion services

In a toll conversion arrangement, Cameco is contractually obligated to convert customer-owned uranium to a chemical state suitable for enrichment. Based on
delivery terms in a sales contract with its customer, Cameco either (i) physically delivers converted uranium to enrichment facilities (Enrichers) where it instructs the Enricher to transfer title of a contractually specified quantity of
converted uranium to the customers account at the Enrichers facility, or (ii) transfers title of a contractually specified quantity of converted uranium to either an Enrichers account or the customers account. At this
point, the risks and rewards of ownership have been transferred and Cameco invoices the customer and recognizes revenue for the toll conversion services.

Conversion supply

In a conversion supply arrangement,
Cameco is contractually obligated to provide converted uranium of acceptable origins to its customers. Based on delivery terms in a sales contract with its customer, Cameco either (i) physically delivers converted uranium to the Enricher where
it instructs the Enricher to transfer title of a contractually specified quantity of converted uranium to the customers account at the Enrichers facility, or (ii) transfers title of a contractually specified quantity of converted
uranium to either an Enrichers account or a customers account at Camecos Port Hope conversion facility. At this point, the risks and rewards of ownership have been transferred and Cameco invoices the customer and recognizes revenue
for both the uranium supplied and the conversion service provided.



|Q. | Financial instruments
|-- | ---------------------

A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another.



18



---

|i. | Non-derivative financial assets and financial liabilities
|-- | ---------------------------------------------------------

At
initial recognition, Cameco classifies each of its financial assets and financial liabilities into one of the following categories:

Fair value through
profit or loss

A financial asset or liability is classified as at fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Cameco classifies a financial instrument as
held-for-trading if it was acquired principally for the purpose of selling or repurchasing in the near term, or if it is part of a portfolio with evidence of a recent
pattern of short-term profit taking. Directly attributable transaction costs are recognized in earnings as incurred. These financial assets and financial liabilities are measured at fair value, with any gains or losses on revaluation being
recognized in earnings.

Held-to-maturity

Held-to-maturity investments are financial assets that an entity has the
intention and ability to hold until maturity, provide fixed or determinable payments and contain a fixed maturity date. Assets in this category are initially measured at fair value plus any directly attributable transaction costs and subsequently
measured at amortized cost using the effective interest method.

Loans and receivables

Loans and receivables are financial assets that provide fixed or determinable payments and are not quoted in an active market. Assets in this category are
initially measured at fair value plus any directly attributable transaction costs and subsequently measured at amortized cost using the effective interest method.

Available-for-sale assets

Available-for-sale financial assets are
non-derivative financial assets that are either designated in this category or not classified into any of the other categories. These assets are measured at fair value plus any directly attributable
transaction costs with any gains or losses on re-measurement recognized in other comprehensive income. Accumulated changes in fair value are recorded as a separate component of equity until the asset is
derecognized or impaired, then the cumulative gain or loss in other comprehensive income is transferred to earnings.

Other financial liabilities

This category consists of all non-derivative financial liabilities that do not meet the definition of held-for-trading liabilities, and that have not been designated as liabilities at fair value through profit or loss. These liabilities are initially recognized at fair value
less any directly attributable transaction costs and are subsequently measured at amortized cost using the effective interest method. Transaction costs arising on the issue of equity instruments are recognized directly in equity. Transaction costs
that are directly related to the probable issuance of a security that is classified as a financial liability is deducted from the amount of the financial liability when it is initially recognized, or recognized in earnings when the issuance is no
longer probable.

Cameco derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred.

A financial liability is derecognized when its contractual obligations are discharged or cancelled, or expire.



|ii. | Derivative financial instruments
|--- | --------------------------------

The Company holds derivative financial instruments to reduce exposure
to fluctuations in foreign currency exchange rates and interest rates. Except for those designated as hedging instruments, all derivative financial instruments are recorded at fair value in the consolidated statements of financial position, with any
directly attributable transaction costs recognized in earnings as incurred. Subsequent to initial recognition, changes in fair value are recognized in earnings.

The purpose of hedging transactions is to modify the Companys exposure to one or more risks by creating an offset between changes in the fair value of,
or the cash flows attributable to, the hedged item and the hedging item. When hedge accounting is appropriate, the hedging relationship is designated as a fair value hedge, a cash flow hedge, or a foreign currency risk hedge related to a net
investment in a foreign operation. The Company does not have any instruments that have been designated as hedge transactions at December 31, 2016 and 2015.



19



---

Separable embedded derivatives

Derivatives may be embedded in other financial instruments or executory contracts (the host instrument). Embedded derivatives are treated as
separate derivatives when their economic characteristics and risks are not clearly and closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract
is not designated at fair value. These embedded derivatives are measured at fair value with subsequent changes recognized in earnings through gains or losses on derivatives.



|R. | Income tax
|-- | ----------

Income tax expense is comprised of current and deferred taxes. Current tax and deferred tax
are recognized in earnings except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantially enacted at the
reporting date, and any adjustments to tax payable in respect of previous years. Current tax assets and liabilities are measured at the amount expected to be paid or recovered from the taxation authorities.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will
be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realized.

The Companys exposure to uncertain tax positions is evaluated and a provision is made where it is probable that this exposure
will materialize.



|S. | Share capital
|-- | -------------

Common shares are classified as equity. Incremental costs directly attributable to the
issue of common shares are recognized as a reduction of equity, net of any tax effects.



|T. | Earnings per share
|-- | ------------------

The Company presents basic and diluted earnings per share data for its common
shares. Earnings per share is calculated by dividing the net earnings attributable to equity holders of the Company by the weighted average number of common shares outstanding.

Diluted earnings per share is determined by adjusting the net earnings attributable to equity holders of the Company and the weighted average number of common
shares outstanding, for the effects of all dilutive potential common shares. The calculation of diluted earnings per share assumes that outstanding options which are dilutive to earnings per share are exercised and the proceeds are used to
repurchase shares of the Company at the average market price of the shares for the period. The effect is to increase the number of shares used to calculate diluted earnings per share.



20



---

|U. | Segment reporting
|-- | -----------------

An operating segment is a component of the Company that engages in business
activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Companys other segments. To be classified as a segment, discrete financial information must be available
and operating results must be regularly reviewed by the Companys Chief Executive Officer.

Segment capital expenditure is the total cost incurred
during the period to acquire property, plant and equipment, and intangible assets other than goodwill.



|3. | Accounting standards
|-- | --------------------



|A. | New standards and interpretations not yet adopted
|-- | -------------------------------------------------

A number of new standards and amendments to existing
standards are not yet effective for the year ended December 31, 2016, and have not been applied in preparing these consolidated financial statements. Cameco does not intend to early adopt any of the following standards or amendments to existing
standards, unless otherwise noted.



|i. | Revenue
|-- | -------

In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers(IFRS 15).
IFRS 15 is effective for periods beginning on or after January 1, 2018 and is to be applied retrospectively. IFRS 15 clarifies the principles for recognizing revenue from contracts with customers. Cameco does not expect the standard to have a
material impact on the financial statements.



|ii. | Financial instruments
|--- | ---------------------

In July 2014, the IASB issued IFRS 9, Financial Instruments (IFRS 9). IFRS
9 replaces the existing guidance in IAS 39, Financial Instruments: Recognition and Measurement(IAS 39). IFRS 9 includes revised guidance on the classification and measurement of financial assets, a new expected credit loss model for
calculating impairment on financial assets and new hedge accounting requirements. It also carries forward, from IAS 39, guidance on recognition and derecognition of financial instruments.

IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early adoption of the new standard permitted. Cameco does not intend
to early adopt IFRS 9. The extent of the impact of adoption of IFRS 9 has not yet been determined.



|iii. | Leases
|---- | ------

In January 2016, the IASB issued IFRS 16, Leases(IFRS 16). IFRS 16 is effective for
periods beginning on or after January 1, 2019, with early adoption permitted. IFRS 16 eliminates the current dual model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting. The extent of the impact
of adoption of IFRS 16 has not yet been determined.



|iv. | Disclosure initiative
|--- | ---------------------

In January 2017, the IASB issued Disclosure Initiative(Amendments to IAS
7). The standard applies prospectively and is effective for annual periods beginning on or after January 1, 2017, with earlier application permitted. The amendments require disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including both changes arising from cash flow and non-cash changes. Cameco does not expect the amendments to have a material impact on the financial
statements.



|4. | Determination of fair values
|-- | ----------------------------

A number of the Companys accounting policies and disclosures require
the measurement of fair value, for both financial and non-financial assets and liabilities.



21



---

The fair value of an asset or liability is generally estimated as the amount that would be received on sale of an
asset, or paid to transfer a liability in an orderly transaction between market participants at the reporting date. Fair values of assets and liabilities traded in an active market are determined by reference to last quoted prices, in the principal
market for the asset or liability. In the absence of an active market for an asset or liability, fair values are determined based on market quotes for assets or liabilities with similar characteristics and risk profiles, or through other valuation
techniques. Fair values determined using valuation techniques require the use of inputs, which are obtained from external, readily observable market data when available. In some circumstances, inputs that are not based on observable data must be
used. In these cases, the estimated fair values may be adjusted in order to account for valuation uncertainty, or to reflect the assumptions that market participants would use in pricing the asset or liability.

All fair value measurements are categorized into one of three hierarchy levels, described below, for disclosure purposes. Each level is based on the
transparency of the inputs used to measure the fair values of assets and liabilities:

Level 1  Values based on unadjusted quoted prices in
active markets that are accessible at the reporting date for identical assets or liabilities.

Level 2  Values based on quoted prices in
markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3  Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value
measurement.

When the inputs used to measure fair value fall within more than one level of the hierarchy, the level within which the fair value
measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety.

Transfers between levels
of the fair value hierarchy are recognized at the end of the reporting period during which the transfer occurred. There were no transfers between level 1, level 2, or level 3 during the period. Cameco does not have any recurring fair value
measurements that are categorized as level 3 as of the reporting date.

Further information about the techniques and assumptions used to measure fair
values is included in the following notes:

Note 8 - Property, plant and equipment

Note 9 - Goodwill and intangible assets

Note 23 - Share-based
compensation plans

Note 25 - Financial instruments and risk management



|5. | Use of estimates and judgments
|-- | ------------------------------

The preparation of the consolidated financial statements in conformity
with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future period affected.

Information about critical judgments in applying the accounting policies that have the most
significant effect on the amounts recognized in the consolidated financial statements is discussed below. Further details of the nature of these judgments, estimates and assumptions may be found in the relevant notes to the consolidated financial
statements.



22



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|A. | Recoverability of long-lived and intangible assets
|-- | --------------------------------------------------

Cameco assesses the carrying values of property,
plant and equipment, and intangible assets when there is an indication of possible impairment. Goodwill and intangible assets not yet available for use or with indefinite useful lives are tested for impairment annually. If it is determined that
carrying values of assets or goodwill cannot be recovered, the unrecoverable amounts are charged against current earnings. Recoverability is dependent upon assumptions and judgments regarding market conditions, costs of production, sustaining
capital requirements and mineral reserves. Other assumptions used in the calculation of recoverable amounts are discount rates, future cash flows and profit margins. A material change in assumptions may significantly impact the potential impairment
of these assets.



|B. | Cash generating units
|-- | ---------------------

In performing impairment assessments of long-lived assets, assets that cannot be
assessed individually are grouped together into the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Management is required to exercise judgment in
identifying these CGUs.



|C. | Provisions for decommissioning and reclamation of assets
|-- | --------------------------------------------------------

Significant decommissioning and reclamation
activities are often not undertaken until near the end of the useful lives of the productive assets. Regulatory requirements and alternatives with respect to these activities are subject to change over time. A significant change to either the
estimated costs or mineral reserves may result in a material change in the amount charged to earnings.



|D. | Income taxes
|-- | ------------

Cameco operates in a number of tax jurisdictions and is, therefore, required to estimate
its income taxes in each of these tax jurisdictions in preparing its consolidated financial statements. In calculating income taxes, consideration is given to factors such as tax rates in the different jurisdictions,
non-deductible expenses, changes in tax law and managements expectations of future operating results. Cameco estimates deferred income taxes based on temporary differences between the income and losses
reported in its consolidated financial statements and its taxable income and losses as determined under the applicable tax laws. The tax effect of these temporary differences is recorded as deferred tax assets or liabilities in the consolidated
financial statements. The calculation of income taxes requires the use of judgment and estimates. The determination of the recoverability of deferred tax assets is dependent on assumptions and judgments regarding future market conditions, production
rates and intercompany sales. If these judgments and estimates prove to be inaccurate, future earnings may be materially impacted.



|E. | Commencement of production stage
|-- | --------------------------------

Until a mining property is declared as being in the production stage,
all costs related to its development are capitalized. The determination of the date on which a mine enters the production stage is a matter of judgment that impacts when capitalization of development costs ceases and depreciation of the mining
property commences and is charged to earnings. Refer to note 2 (g)(ii) for further information on the criteria used to make this assessment.



|F. | Mineral reserves
|-- | ----------------

Depreciation on property, plant and equipment is primarily calculated using the unit-of-production method. This method allocates the cost of an asset to each period based on current period production as a portion of total lifetime production or a portion
of estimated mineral reserves. Estimates of life-of-mine and amounts of mineral reserves are updated annually and are subject to judgment and significant change over
time. If actual mineral reserves prove to be significantly different than the estimates, there could be a material impact on the amounts of depreciation charged to earnings.



23



---

|G. | Purchase price allocations
|-- | --------------------------

The purchase price related to a business combination or asset acquisition is
allocated to the underlying acquired assets and liabilities based on their estimated fair values at the time of acquisition. The determination of fair value requires Cameco to make assumptions, estimates and judgments regarding future events. The
allocation process is inherently subjective and impacts the amounts assigned to individually identifiable assets and liabilities. As a result, the purchase price allocation impacts Camecos reported assets and liabilities and future net
earnings due to the impact on future depreciation and amortization expense and impairment tests.



|H. | Determination of joint control
|-- | ------------------------------

Cameco conducts certain operations through joint ownership interests.
Judgment is required in assessing whether Cameco has joint control over the investee, which involves determining the relevant activities of the arrangement and whether decisions around relevant activities require unanimous consent. Judgment is also
required to determine whether a joint arrangement should be classified as a joint venture or joint operation. Classifying the arrangement requires us to assess our rights and obligations arising from the arrangement. Specifically, management
considers the structure of the joint arrangement and whether it is structured through a separate vehicle and when the arrangement is structured through a separate vehicle, we also consider the rights and obligations arising from the legal form of
the separate vehicle, the terms of the contractual arrangements and other facts and circumstances, when relevant. This judgment influences whether we equity account or proportionately consolidate our interest in the arrangement.



|6. | Accounts receivable
|-- | -------------------



|                    |  |      |         |  |      |   |         | 
|------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                    |  | 2016 |         |  | 2015 |  
|                    |  |     
|Trade receivables   |  | $    | 236,373 |  |      | $ | 236,859 | 
|HST/VAT receivables |  |      | 3,968   |  |      |   | 6,239   | 
|Other receivables   |  |      | 2,141   |  |      |   | 3,767   | 
|                    |  |      |         |  |      |   |         | 
|                    |  |     
|Total               |  | $    | 242,482 |  |      | $ | 246,865 | 
|                    |  |      |         |  |      |   |         | 

The Companys exposure to credit and currency risks as well as impairment loss related to trade and other receivables,
excluding harmonized sales tax (HST)/value added tax (VAT) receivables is disclosed in note 25.



|7. | Inventories
|-- | -----------



|              |  |      |           |  |      |   |           | 
|------------- |  | ---- | --------- |  | ---- | - | --------- | 
|              |  | 2016 |           |  | 2015 |  
|              |  |     
|Uranium       |  |      |           |  |      |   |           | 
|Concentrate   |  | $    | 989,202   |  |      | $ | 887,083   | 
|Broken ore    |  |      | 45,581    |  |      |   | 41,722    | 
|              |  |      |           |  |      |   |           | 
|              |  |      | 1,034,783 |  |      |   | 928,805   | 
|              |  |     
|NUKEM         |  |      | 141,040   |  |      |   | 216,361   | 
|              |  |     
|Fuel services |  |      | 112,116   |  |      |   | 140,100   | 
|              |  |      |           |  |      |   |           | 
|              |  |     
|Total         |  | $    | 1,287,939 |  |      | $ | 1,285,266 | 
|              |  |      |           |  |      |   |           | 

In the second quarter of 2015, the production stage was reached at Camecos Cigar Lake operation. Effective May 1,
2015, we commenced charging all production costs, including depreciation, to inventory and subsequently recognizing in cost of sales as the product is sold.

Cameco expensed $1,752,000,000 of inventory as cost of sales during 2016 (2015 - $1,935,000,000). Included in cost of sales is an $18,054,000 net write-down
to reflect net realizable value (2015 - $3,400,000 net recovery).



24



---

NUKEM enters into financing arrangements where future receivables arising from certain sales contracts are sold
to financial institutions in exchange for cash. These arrangements require NUKEM to satisfy its delivery obligations under the sales contracts, which are recognized as deferred sales (note 14). In addition, NUKEM is required to pledge the underlying
inventory as security against these performance obligations. As of December 31, 2016, NUKEM had $4,884,000 ($3,637,000 (US)) of inventory pledged as security under financing arrangements ((2015 - $97,945,000 ($70,770,000 (US)).



|8. | Property, plant and equipment
|-- | -----------------------------

At December 31, 2016



|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |          |   |       |   |           |   |  |   |           |  
|--------------------------------------- |  | ---------------- | --------- | - | ----------------- | - | --------- | -------------------- |  | - | ----------------- | - |  | ------------------------ | -------- | - | ----- | - | --------- | - |  | - | --------- | -
|                                        |  | Landandbuildings |           |   | Plantandequipment |   |           | Furnitureandfixtures |  |   | Underconstruction |   |  | Explorationandevaluation |          |   | Total |  
|                                        |  |                  |           |   |                   |  
|Cost                                    |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |          |   |       |   |           |   |  |   |           |  
|Beginning of year                       |  | $                | 4,862,160 |   |                   | $ | 2,528,488 |                      |  | $ | 121,299           |   |  | $                        | 512,301  |   |       | $ | 1,147,100 |   |  | $ | 9,171,348 |  
|Additions                               |  |                  | 25,821    |   |                   |   | 29,231    |                      |  |   | 9,355             |   |  |                          | 150,343  |   |       |   | 2,158     |   |  |   | 216,908   |  
|Transfers                               |  |                  | 168,784   |   |                   |   | 126,871   |                      |  |   | 3,410             |   |  |                          | (305,944 | ) |       |   | 6,879     |   |  |   |          |  
|Change in reclamation provision         |  |                  | (23,124   | ) |                   |   |          |                      |  |   |                  |   |  |                          |         |   |       |   |          |   |  |   | (23,124   | )
|Disposals                               |  |                  | (27,311   | ) |                   |   | (34,611   | )                    |  |   | (38,233           | ) |  |                          | (15,490  | ) |       |   |          |   |  |   | (115,645  | )
|Effect of movements in exchange rates   |  |                  | (26,841   | ) |                   |   | (9,436    | )                    |  |   | (663              | ) |  |                          | (870     | ) |       |   | (35,496   | ) |  |   | (73,306   | )
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |          |   |       |   |           |   |  |   |           |  
|                                        |  |                  |           |   |                   |  
|End of year                             |  |                  | 4,979,489 |   |                   |   | 2,640,543 |                      |  |   | 95,168            |   |  |                          | 340,340  |   |       |   | 1,120,641 |   |  |   | 9,176,181 |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |          |   |       |   |           |   |  |   |           |  
|                                       
|Accumulated depreciation and impairment | 
|Beginning of year                       |  |                  | 2,226,202 |   |                   |   | 1,353,308 |                      |  |   | 110,444           |   |  |                          | 88,681   |   |       |   | 164,553   |   |  |   | 3,943,188 |  
|Depreciation charge                     |  |                  | 196,564   |   |                   |   | 129,892   |                      |  |   | 6,957             |   |  |                          |         |   |       |   | 198       |   |  |   | 333,611   |  
|Transfers                               |  |                  | 27,101    |   |                   |   | (26,770   | )                    |  |   | (331              | ) |  |                          |         |   |       |   |          |   |  |   |          |  
|Disposals                               |  |                  | (21,736   | ) |                   |   | (19,794   | )                    |  |   | (37,981           | ) |  |                          | (10,603  | ) |       |   |          |   |  |   | (90,114   | )
|Impairment charges(a)(b)                |  |                  | 97,152    |   |                   |   | 28,677    |                      |  |   | 2,011             |   |  |                          | 2,596    |   |       |   | 231,553   |   |  |   | 361,989   |  
|Effect of movements in exchange rates   |  |                  | (17,071   | ) |                   |   | (4,360    | )                    |  |   | (508              | ) |  |                          |         |   |       |   | (6,140    | ) |  |   | (28,079   | )
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |          |   |       |   |           |   |  |   |           |  
|                                        |  |                  |           |   |                   |  
|End of year                             |  |                  | 2,508,212 |   |                   |   | 1,460,953 |                      |  |   | 80,592            |   |  |                          | 80,674   |   |       |   | 390,164   |   |  |   | 4,520,595 |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |          |   |       |   |           |   |  |   |           |  
|                                        |  |                  |           |   |                   |  
|Net book value at December 31, 2016     |  | $                | 2,471,277 |   |                   | $ | 1,179,590 |                      |  | $ | 14,576            |   |  | $                        | 259,666  |   |       | $ | 730,477   |   |  | $ | 4,655,586 |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |          |   |       |   |           |   |  |   |           |  



25



---

At December 31, 2015



|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   |  |   |           |  
|--------------------------------------- |  | ---------------- | --------- | - | ----------------- | - | --------- | -------------------- |  | - | ----------------- | - |  | ------------------------ | ---------- | - | ----- | - | --------- | - |  | - | --------- | -
|                                        |  | Landandbuildings |           |   | Plantandequipment |   |           | Furnitureandfixtures |  |   | Underconstruction |   |  | Explorationandevaluation |            |   | Total |  
|                                        |  |                  |           |   |                   |  
|Cost                                    |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   |  |   |           |  
|Beginning of year                       |  | $                | 3,423,736 |   |                   | $ | 1,984,721 |                      |  | $ | 120,072           |   |  | $                        | 1,962,500  |   |       | $ | 1,084,715 |   |  | $ | 8,575,744 |  
|Additions                               |  |                  | 35,579    |   |                   |   | 23,919    |                      |  |   | 1,329             |   |  |                          | 292,443    |   |       |   | 2,450     |   |  |   | 355,720   |  
|Transfers                               |  |                  | 1,245,941 |   |                   |   | 508,007   |                      |  |   | 5,950             |   |  |                          | (1,747,248 | ) |       |   | (12,650   | ) |  |   |          |  
|Change in reclamation provision         |  |                  | 26,348    |   |                   |   |          |                      |  |   |                  |   |  |                          |           |   |       |   |          |   |  |   | 26,348    |  
|Disposals                               |  |                  | (7,491    | ) |                   |   | (38,077   | )                    |  |   | (9,198            | ) |  |                          | (2,476     | ) |       |   | (229      | ) |  |   | (57,471   | )
|Effect of movements in exchange rates   |  |                  | 138,047   |   |                   |   | 49,918    |                      |  |   | 3,146             |   |  |                          | 7,082      |   |       |   | 72,814    |   |  |   | 271,007   |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   |  |   |           |  
|                                        |  |                  |           |   |                   |  
|End of year                             |  |                  | 4,862,160 |   |                   |   | 2,528,488 |                      |  |   | 121,299           |   |  |                          | 512,301    |   |       |   | 1,147,100 |   |  |   | 9,171,348 |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   |  |   |           |  
|                                        |  |                  |           |   |                  
|Accumulated depreciation and impairment |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   | 
|Beginning of year                       |  |                  | 1,769,526 |   |                   |   | 1,164,969 |                      |  |   | 104,101           |   |  |                          | 91,621     |   |       |   | 154,506   |   |  |   | 3,284,723 |  
|Depreciation charge                     |  |                  | 232,179   |   |                   |   | 133,655   |                      |  |   | 12,925            |   |  |                          |           |   |       |   | 192       |   |  |   | 378,951   |  
|Transfers                               |  |                  | 21,368    |   |                   |   | 94        |                      |  |   |                  |   |  |                          | (21,462    | ) |       |   |          |   |  |   |          |  
|Disposals                               |  |                  | (2,296    | ) |                   |   | (37,530   | )                    |  |   | (9,168            | ) |  |                          |           |   |       |   |          |   |  |   | (48,994   | )
|Impairment charge(c)                    |  |                  | 120,343   |   |                   |   | 70,827    |                      |  |   | 108               |   |  |                          | 18,522     |   |       |   |          |   |  |   | 209,800   |  
|Effect of movements in exchange rates   |  |                  | 85,082    |   |                   |   | 21,293    |                      |  |   | 2,478             |   |  |                          |           |   |       |   | 9,855     |   |  |   | 118,708   |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   |  |   |           |  
|                                        |  |                  |           |   |                   |  
|End of year                             |  |                  | 2,226,202 |   |                   |   | 1,353,308 |                      |  |   | 110,444           |   |  |                          | 88,681     |   |       |   | 164,553   |   |  |   | 3,943,188 |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   |  |   |           |  
|                                        |  |                  |           |   |                   |  
|Net book value at December 31, 2015     |  | $                | 2,635,958 |   |                   | $ | 1,175,180 |                      |  | $ | 10,855            |   |  | $                        | 423,620    |   |       | $ | 982,547   |   |  | $ | 5,228,160 |  
|                                        |  |                  |           |   |                   |   |           |                      |  |   |                   |   |  |                          |            |   |       |   |           |   |  |   |           |  

Cameco has contractual capital commitments of approximately $51,000,000 at December 31, 2016. Certain of the contractual
commitments may contain cancellation clauses, however the Company discloses the commitments based on managements intent to fulfill the contract. The majority of this amount is expected to be incurred in 2017.

(a) In the fourth quarter of 2016, Cameco recognized a $237,621,000 impairment charge relating to Kintyre, its uranium exploration project in Australia. Due
to the weakening of the uranium market and the budget decision not to commit further expenditures to the project, the Company concluded it was appropriate to recognize an impairment charge. The charge was for the full carrying value of the CGU.

(b) In the second quarter of 2016, production was suspended at our Rabbit Lake operation in northern Saskatchewan. In accordance with the provisions of IAS
36, Impairment of Assets, Cameco considered this to be an indicator that the assets of the cash generating unit could potentially be impaired and accordingly, we were required to estimate the recoverable amount of these assets.

An impairment charge of $124,368,000 was recognized as part of the uranium segment. The charge was for the full carrying value of this cash generating unit.
The recoverable amount of the mine and mill was based on a fair value less costs to sell model, which incorporated the future cash flows, including care and maintenance costs, expected to be derived from the operation. It was categorized as a non-recurring level 3 fair value measurement.

The discount rate used in the fair value less costs to sell calculation
was 8% and was determined based on a market participants incremental borrowing cost, adjusted for the marginal return that the participant would expect to use on an investment in the mine and mill. Other key assumptions included uranium price
forecasts and operating and capital cost forecasts. Uranium prices applied in the calculation were based on approved internal price forecasts, which reflect managements expectation of prices that a market participant would use. Operating and
capital cost forecasts were determined based on managements internal cost estimates.



26



---

(c) During 2015, Cameco recognized a $209,800,000 impairment charge relating to its Rabbit Lake mill in northern
Saskatchewan, which is part of its uranium segment. Due to increased uncertainty around future production sources for the Rabbit Lake mill as a result of ongoing economic conditions, the Company concluded it was appropriate to recognize an
impairment charge. The amount of the charge was determined as the excess of the carrying value over the recoverable amount. The recoverable amount of the mill was determined to be $68,971,000 based on a fair value less costs to sell model, which
incorporated the future cash flows expected to be derived from the mill. It is categorized as a non-recurring level 3 fair value measurement.

The discount rate used in the fair value less costs to sell calculation was 8% and was determined based on a market participants incremental borrowing
cost, adjusted for the marginal return that the participant would expect to use on an investment in the mill. The recoverable amount is not sensitive to changes in the discount rate. Other key assumptions include operating and capital cost forecasts
and the margin applied. Operating and capital cost forecasts have been determined based on managements internal cost estimates. A 10% increase in these cost assumptions decreases the recoverable amount by $7,900,000.



|9. | Goodwill and intangible assets
|-- | ------------------------------



|A. | Reconciliation of carrying amount
|-- | ---------------------------------

At December 31, 2016



|                                      |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  
|------------------------------------- |  | -------- | ------- | - | --------- | - | ------- | -------------------- |  | - | ------- |  |  | ----- | ------ | - |  | - | ------- | -
|                                      |  | Goodwill |         |   | Contracts |   |         | Intellectualproperty |  |   | Patents |  |  | Total |       
|                                      |  |          |         |   |          
|Cost                                  |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  
|Beginning of year                     |  | $        | 122,314 |   |           | $ | 121,148 |                      |  | $ | 118,819 |  |  | $     | 12,098 |   |  | $ | 374,379 |  
|Effect of movements in exchange rates |  |          | (3,650  | ) |           |   | (3,615  | )                    |  |   |        |  |  |       | (361   | ) |  |   | (7,626  | )
|                                      |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  
|                                      |  |          |         |   |          
|End of year                           |  |          | 118,664 |   |           |   | 117,533 |                      |  |   | 118,819 |  |  |       | 11,737 |   |  |   | 366,753 |  
|                                      |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  
|                                      |  |          |         |   |          
|Accumulated amortization              |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  
|Beginning of year                     |  |          |        |   |           |   | 108,809 |                      |  |   | 45,430  |  |  |       | 3,010  |   |  |   | 157,249 |  
|Amortization charge                   |  |          |        |   |           |   | 4,613   |                      |  |   | 4,159   |  |  |       | 642    |   |  |   | 9,414   |  
|Effect of movements in exchange rates |  |          |        |   |           |   | (3,138  | )                    |  |   |        |  |  |       | (82    | ) |  |   | (3,220  | )
|                                      |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  
|                                      |  |          |         |   |          
|End of year                           |  |          |        |   |           |   | 110,284 |                      |  |   | 49,589  |  |  |       | 3,570  |   |  |   | 163,443 |  
|                                      |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  
|                                      |  |          |         |   |          
|Net book value at December 31, 2016   |  | $        | 118,664 |   |           | $ | 7,249   |                      |  | $ | 69,230  |  |  | $     | 8,167  |   |  | $ | 203,310 |  
|                                      |  |          |         |   |           |   |         |                      |  |   |         |  |  |       |        |   |  |   |         |  



27



---

At December 31, 2015



|                                      |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 
|------------------------------------- |  | -------- | ------- |  | --------- | - | ------- | -------------------- |  | - | ------- |  |  | ----- | ------ |  |  | - | ------- | 
|                                      |  | Goodwill |         |  | Contracts |   |         | Intellectualproperty |  |   | Patents |  |  | Total |       
|                                      |  |          |         |  |          
|Cost                                  |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 
|Beginning of year                     |  | $        | 102,526 |  |           | $ | 101,549 |                      |  | $ | 118,819 |  |  | $     | 10,141 |  |  | $ | 333,035 | 
|Effect of movements in exchange rates |  |          | 19,788  |  |           |   | 19,599  |                      |  |   |        |  |  |       | 1,957  |  |  |   | 41,344  | 
|                                      |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 
|                                      |  |          |         |  |          
|End of year                           |  |          | 122,314 |  |           |   | 121,148 |                      |  |   | 118,819 |  |  |       | 12,098 |  |  |   | 374,379 | 
|                                      |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 
|                                      |  |          |         |  |          
|Accumulated amortization              |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 
|Beginning of year                     |  |          |        |  |           |   | 88,978  |                      |  |   | 40,992  |  |  |       | 1,963  |  |  |   | 131,933 | 
|Amortization charge                   |  |          |        |  |           |   | 2,458   |                      |  |   | 4,438   |  |  |       | 609    |  |  |   | 7,505   | 
|Effect of movements in exchange rates |  |          |        |  |           |   | 17,373  |                      |  |   |        |  |  |       | 438    |  |  |   | 17,811  | 
|                                      |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 
|                                      |  |          |         |  |          
|End of year                           |  |          |        |  |           |   | 108,809 |                      |  |   | 45,430  |  |  |       | 3,010  |  |  |   | 157,249 | 
|                                      |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 
|                                      |  |          |         |  |          
|Net book value at December 31, 2015   |  | $        | 122,314 |  |           | $ | 12,339  |                      |  | $ | 73,389  |  |  | $     | 9,088  |  |  | $ | 217,130 | 
|                                      |  |          |         |  |           |   |         |                      |  |   |         |  |  |       |        |  |  |   |         | 



|B. | Amortization
|-- | ------------

The intangible asset values relate to intellectual property acquired with Cameco Fuel
Manufacturing Inc. (CFM), patents acquired with UFP Investments LLC (UFP) and purchase and sales contracts acquired with NUKEM. The CFM intellectual property is being amortized on a
unit-of-production basis over its remaining life. Amortization is allocated to the cost of inventory and is recognized in cost of products and services sold as inventory
is sold. The patents acquired with UFP are being amortized to cost of products and services sold on a straight-line basis over their remaining life which expires in July 2029. The NUKEM purchase and sales contracts will be amortized to earnings
over the remaining terms of the underlying contracts, which extend to 2022. Amortization of the purchase contracts is allocated to the cost of inventory and is included in cost of products and services sold as inventory is sold. Sales contracts are
amortized to revenue. Approximately $640,000 of pre-tax earnings (in USD) relating to the amortization of the fair value allocated to the NUKEM contracts will be amortized in 2017 with the remaining balance
being recognized fairly evenly each year through 2022.



|C. | Impairment test
|-- | ---------------

For the purpose of impairment testing, goodwill is attributable to NUKEM, which is
considered to be a CGU.

The recoverable amount of NUKEM was estimated based on a fair value less costs of disposal calculation, which involved
discounting the future cash flows expected to be generated by the CGU. It is categorized as a non-recurring level 3 fair value measurement. The recoverable amount exceeded its carrying value by $34,000,000
(US) and therefore no impairment loss was recognized.



28



---

Five years of cash flows were included in the discounted cash flow model. Any cash flows expected to be generated
beyond the initial five-year period were extrapolated using a terminal value growth rate. The projected cash flows included in the calculation were based upon NUKEMs approved financial forecasts and strategic plan, which incorporate
NUKEMs current contract portfolio as well as sales volumes that a market participant could expect. The key assumptions used in the estimation of the value in use were as follows:



|                           |  |      |      |  
|-------------------------- |  | ---- | ---- | -
|                           |  | 2016 |     
|                           | 
|Discount rate              |  |      | 10.0 | %
|Terminal value growth rate |  |      | 1.6  | %

The discount rate was determined based on a market participants incremental borrowing cost, adjusted for the marginal
return that the participant would expect to earn on an investment in the entity. It represents a nominal, post-tax figure. The terminal value growth rate was determined based on managements expected
average annual long-term growth in the uranium industry.

Other key assumptions include uranium price forecasts and perpetual cash flows. Uranium prices
applied in the calculation were based on approved internal price forecasts, which reflect managements experience and industry expertise. These prices are consistent with expected long-term prices observed in the market. Perpetual cash flows
have been determined based on the future business activity that a market participant could expect.

Cameco has validated the results of the fair value
less costs of disposal calculation by performing sensitivity tests on its key assumptions. Holding all other variables constant, the decreases in recoverable amount created by marginal changes in each of the key assumptions are as follows:



|                           |  |                          |  |                    |        | 
|-------------------------- |  | ------------------------ |  | ------------------ | ------ | 
|                           |  | Change in assumption     |  | Amount of decrease |       
|                           |  |                         
|Discount rate              |  | 1% increase              |  | $                  | 20,364 | 
|Terminal value growth rate |  | 1% decrease              |  |                    | 15,304 | 
|Uranium prices             |  | $1/lb decrease           |  |                    | 3,881  | 
|Perpetual annual cash flow |  | $1 million (US) decrease |  |                    | 7,877  | 

As a result of these tests, the Company believes that any reasonably possible changes in the key assumptions would not result
in NUKEMs carrying amount exceeding its recoverable amount.



|10. | Long-term receivables, investments and other
|--- | --------------------------------------------



|                                                    |  |      |         |   |      |   |         |  
|--------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                    |  | 2016 |         |   | 2015 |  
|                                                    |  |     
|Investments in equity securities [note 25]          |  | $    | 14,807  |   |      | $ | 938     |  
|Derivatives [note 25]                               |  |      | 10,612  |   |      |   | 11,143  |  
|Advances receivable from JV Inkai LLP [note 30]     |  |      | 90,095  |   |      |   | 87,188  |  
|Investment tax credits                              |  |      | 93,920  |   |      |   | 93,972  |  
|Amounts receivable related to tax dispute [note 20] |  |      | 264,042 |   |      |   | 232,614 |  
|Other                                               |  |      | 49,506  |   |      |   | 35,574  |  
|                                                    |  |      |         |   |      |   |         |  
|                                                    |  |     
|                                                    |  |      | 522,982 |   |      |   | 461,429 |  
|Less current portion                                |  |      | (10,498 | ) |      |   | (12,193 | )
|                                                    |  |      |         |   |      |   |         |  
|                                                    |  |     
|Net                                                 |  | $    | 512,484 |   |      | $ | 449,236 |  
|                                                    |  |      |         |   |      |   |         |  



29



---

|11. | Accounts payable and accrued liabilities
|--- | ----------------------------------------



|                                |  |      |         |  |      |   |         | 
|------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                |  | 2016 |         |  | 2015 |  
|                                |  |     
|Trade payables                  |  | $    | 213,481 |  |      | $ | 199,084 | 
|Non-trade payables              |  |      | 85,632  |  |      |   | 107,731 | 
|Payables due to related parties |  |      | 13,787  |  |      |   | 11,041  | 
|                                |  |      |         |  |      |   |         | 
|                                |  |     
|Total                           |  | $    | 312,900 |  |      | $ | 317,856 | 
|                                |  |      |         |  |      |   |         | 

The Companys exposure to currency and liquidity risk related to trade and other payables is disclosed in note 25.



|12. | Short-term debt
|--- | ---------------

Cameco borrows directly in the commercial paper market. At December 31, 2016 and
2015, there was no commercial paper outstanding.

NUKEM has a multicurrency revolving loan facility that is available until October 1, 2020. Total
funds of  75,000,000 are available under the facility, with the option to increase the facility by an additional  25,000,000. Amounts can be drawn in either Euros or US dollars in the form of bank overdrafts, letters of credit,
short-term loans or foreign exchange facilities. Any amounts drawn in Euros bear interest at a rate equal to the comparable EURIBOR on the draw date plus 0.6%, while amounts drawn in US dollars bear interest at a rate equal to the comparable LIBOR
on the draw date plus 0.6%.

At December 31, 2016 and 2015, there were no amounts withdrawn against the facility. As of December 31, 2016, NUKEM
has $107,000 (US) in letters of credit outstanding against the facility (2015 - $406,000 (US)).

The terms of the facility contain a financial covenant
that requires NUKEM to maintain a minimum working capital to debt ratio of 1.35. The facility also stipulates Cameco as a guarantor for NUKEMs withdrawals and requires the Company to maintain a credit rating of at least BBB-. Failure to comply with these covenants could result in cancellation of the facility and accelerated payment of any outstanding amounts. As of December 31, 2016, NUKEM and Cameco were in compliance with
the covenants and the Company does not expect its operating and investing activities in 2017 to be constrained by them.



|13. | Long-term debt
|--- | --------------



|                                                  |  |      |           |  |      |   |           | 
|------------------------------------------------- |  | ---- | --------- |  | ---- | - | --------- | 
|                                                  |  | 2016 |           |  | 2015 |  
|                                                  |  |     
|Unsecured debentures                              |  |      |           |  |      |   |           | 
|Series D - 5.67% debentures due September 2, 2019 |  | $    | 498,472   |  |      | $ | 497,954   | 
|Series E - 3.75% debentures due November 14, 2022 |  |      | 398,346   |  |      |   | 398,097   | 
|Series F - 5.09% debentures due November 14, 2042 |  |      | 99,256    |  |      |   | 99,243    | 
|Series G - 4.19% debentures due June 24, 2024     |  |      | 497,253   |  |      |   | 496,943   | 
|                                                  |  |      |           |  |      |   |           | 
|                                                  |  |     
|Total                                             |  | $    | 1,493,327 |  |      | $ | 1,492,237 | 
|                                                  |  |      |           |  |      |   |           | 

Cameco has a $1,250,000,000 unsecured revolving credit facility that is available until November 1, 2020. Upon mutual
agreement, the facility can be extended for an additional year on the anniversary date. In addition to direct borrowings under the facility, up to $100,000,000 can be used for the issuance of letters of credit and, to the extent necessary, it may be
used to provide liquidity support for the Companys commercial paper program. The agreement also provides the ability to increase the revolving credit facility above $1,250,000,000 by increments no less than $50,000,000, to a total of
$1,750,000,000. The facility ranks equally with all of Camecos other senior debt. As of December 31, 2016 and 2015, there were no amounts outstanding under this facility.

Cameco has $1,658,727,000 (2015 - $1,490,809,000) in letter of credit facilities. Outstanding and committed letters of credit at December 31, 2016
amounted to $1,470,435,000 (2015 - $1,384,061,000), the majority of which relate to future decommissioning and reclamation liabilities (note 15).



30



---

Cameco is bound by a covenant in its revolving credit facility. The covenant requires a funded debt to tangible
net worth ratio equal to or less than 1:1. Non-compliance with this covenant could result in accelerated payment and termination of the revolving credit facility. At December 31, 2016, Cameco was in
compliance with the covenant and does not expect its operating and investing activities in 2017 to be constrained by it.

The table below represents
currently scheduled maturities of long-term debt:



|     |   |  |      |  |   |      |  |  |         |  |  |      |   |  |            |  |   |       |  |  |         |  |  |   |           | 
|---- | - |  | ---- |  | - | ---- |  |  | ------- |  |  | ---- | - |  | ---------- |  | - | ----- |  |  | ------- |  |  | - | --------- | 
|2017 |   |  | 2018 |  |   | 2019 |  |  | 2020    |  |  | 2021 |   |  | Thereafter |  |   | Total | 
|     |   |  |      |  |   |     
|$    |  |  |      |  |  |      |  |  | 498,472 |  |  |      |  |  |            |  |  |       |  |  | 994,855 |  |  | $ | 1,493,327 | 



|14. | Other liabilities
|--- | -----------------



|                                                                |  |      |         |   |      |   |          |  
|--------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | -------- | -
|                                                                |  | 2016 |         |   | 2015 |  
|                                                                |  |     
|Deferred sales                                                  |  | $    | 29,423  |   |      | $ | 132,904  |  
|Derivatives [note 25]                                           |  |      | 58,885  |   |      |   | 168,236  |  
|Accrued pension and post-retirement benefit liability [note 24] |  |      | 69,699  |   |      |   | 64,135   |  
|Other                                                           |  |      | 25,725  |   |      |   | 7,980    |  
|                                                                |  |      |         |   |      |   |          |  
|                                                                |  |     
|                                                                |  |      | 183,732 |   |      |   | 373,255  |  
|Less current portion                                            |  |      | (60,744 | ) |      |   | (241,113 | )
|                                                                |  |      |         |   |      |   |          |  
|                                                                |  |     
|Net                                                             |  | $    | 122,988 |   |      | $ | 132,142  |  
|                                                                |  |      |         |   |      |   |          |  

Deferred sales includes $6,143,000 ($4,575,000 (US)) of performance obligations relating to financing arrangements entered
into by NUKEM (2015 - $110,749,000 ($80,021,000 (US))) (note 7).



|15. | Provisions
|--- | ----------



|                                             |  |             |         |   |                |   |        |       |  |   |         |  
|-------------------------------------------- |  | ----------- | ------- | - | -------------- | - | ------ | ----- |  | - | ------- | -
|                                             |  | Reclamation |         |   | Waste disposal |   |        | Total | 
|                                             |  |             |        
|Beginning of year                            |  | $           | 917,034 |   |                | $ | 17,724 |       |  | $ | 934,758 |  
|Changes in estimates and discount rates      |  |             |         |   |                |   |        |       |  |   |         |  
|Capitalized in property, plant and equipment |  |             | 10,950  |   |                |   |       |       |  |   | 10,950  |  
|Recognized in earnings                       |  |             | (34,075 | ) |                |   | (265   | )     |  |   | (34,340 | )
|Provisions used during the period            |  |             | (11,117 | ) |                |   | (2,391 | )     |  |   | (13,508 | )
|Unwinding of discount [note 18]              |  |             | 20,636  |   |                |   | 97     |       |  |   | 20,733  |  
|Effect of movements in exchange rates        |  |             | (9,811  | ) |                |   |       |       |  |   | (9,811  | )
|                                             |  |             |         |   |                |   |        |       |  |   |         |  
|                                             |  |             |        
|End of period                                |  | $           | 893,617 |   |                | $ | 15,165 |       |  | $ | 908,782 |  
|                                             |  |             |         |   |                |   |        |       |  |   |         |  
|                                             |  |             |        
|Current                                      |  | $           | 18,020  |   |                | $ | 1,599  |       |  | $ | 19,619  |  
|Non-current                                  |  |             | 875,597 |   |                |   | 13,566 |       |  |   | 889,163 |  
|                                             |  |             |         |   |                |   |        |       |  |   |         |  
|                                             |  |             |        
|                                             |  | $           | 893,617 |   |                | $ | 15,165 |       |  | $ | 908,782 |  
|                                             |  |             |         |   |                |   |        |       |  |   |         |  



|A. | Reclamation provision
|-- | ---------------------

Camecos estimates of future decommissioning obligations are based on
reclamation standards that satisfy regulatory requirements. Elements of uncertainty in estimating these amounts include potential changes in regulatory requirements, decommissioning and reclamation alternatives and amounts to be recovered from other
parties.



31



---

Cameco estimates total future decommissioning and reclamation costs for its existing operating assets to be
$1,037,302,000 (2015 - $974,785,000). The expected timing of these outflows is based on life-of-mine plans with the majority of expenditures expected to occur after
2022. These estimates are reviewed by Cameco technical personnel as required by regulatory agencies or more frequently as circumstances warrant. In connection with future decommissioning and reclamation costs, Cameco has provided financial
assurances of $998,207,000 (2015 - $1,010,784,000) in the form of letters of credit to satisfy current regulatory requirements.

The reclamation provision
relates to the following segments:



|              |  |      |         |  |      |   |         | 
|------------- |  | ---- | ------- |  | ---- | - | ------- | 
|              |  | 2016 |         |  | 2015 |  
|              |  |     
|Uranium       |  | $    | 645,219 |  |      | $ | 741,561 | 
|Fuel services |  |      | 248,398 |  |      |   | 175,473 | 
|              |  |      |         |  |      |   |         | 
|              |  |     
|Total         |  | $    | 893,617 |  |      | $ | 917,034 | 
|              |  |      |         |  |      |   |         | 



|B. | Waste disposal
|-- | --------------

The fuel services segment consists of the Blind River refinery, Port Hope conversion
facility and Cameco Fuel Manufacturing Inc.. The refining, conversion and manufacturing processes generate certain uranium contaminated waste. These include contaminated combustible material (paper, rags, gloves, etc.) and contaminated non-combustible material (metal parts, soil from excavations, building and roofing materials, spent uranium concentrate drums, etc.). These materials can in some instances be recycled or reprocessed. A provision for
waste disposal costs in respect of these materials is recognized when they are generated.

Cameco estimates total future costs related to existing waste
disposal to be $14,930,000 (2015 - $17,158,000). The majority of these expenditures are expected to occur within the next three years.



32



---

|16. | Share capital
|--- | -------------

Authorized share capital:



| |  |  | Unlimited number of first preferred shares
| | - |  | ------------------------------------------



| |  |  | Unlimited number of second preferred shares
| | - |  | -------------------------------------------



| |  |  | Unlimited number of voting common shares, no stated par value, and
| | - |  | ------------------------------------------------------------------



| |  |  | One Class B share
| | - |  | -----------------



|A. | Common Shares
|-- | -------------



|                                |  |      |             |  |      |  |             | 
|------------------------------- |  | ---- | ----------- |  | ---- |  | ----------- | 
|Number issued(number of shares) |  | 2016 |             |  | 2015 | 
|                                |  |     
|Beginning of year               |  |      | 395,792,522 |  |      |  | 395,792,522 | 
|                                |  |     
|Issued:                         |  |      |             |  |      |  |             | 
|Stock option plan [note 23]     |  |      |            |  |      |  |            | 
|                                |  |      |             |  |      |  |             | 
|                                |  |     
|Total                           |  |      | 395,792,522 |  |      |  | 395,792,522 | 
|                                |  |      |             |  |      |  |             | 

All issued shares are fully paid.



|B. | Class B share
|-- | -------------

One Class B share issued during 1988 and assigned $1 of share capital entitles
the shareholder to vote separately as a class in respect of any proposal to locate the head office of Cameco to a place not in the province of Saskatchewan.



|C. | Dividends
|-- | ---------

Dividends on Cameco Corporation common shares are declared in Canadian dollars. For the year
ended December 31, 2016, the dividend declared per share was $0.40 (December 31, 2015 - $0.40).



33



---

|17. | Employee benefit expense
|--- | ------------------------

The following employee benefit expenses are included in cost of products and
services sold, administration, exploration, research and development and property, plant and equipment:



|                                                         |  |      |         |   |      |   |         |  
|-------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                         |  | 2016 |         |   | 2015 |  
|                                                         |  |     
|Wages and salaries                                       |  | $    | 379,620 |   |      | $ | 397,730 |  
|Statutory and company benefits                           |  |      | 66,402  |   |      |   | 65,936  |  
|Expenses related to defined benefit plans [note 24]      |  |      | 5,128   |   |      |   | 5,003   |  
|Expenses related to defined contribution plans [note 24] |  |      | 17,716  |   |      |   | 17,961  |  
|Equity-settled share-based compensation [note 23]        |  |      | 19,305  |   |      |   | 22,148  |  
|Cash-settled share-based compensation [note 23]          |  |      | (822    | ) |      |   | (1,011  | )
|                                                         |  |      |         |   |      |   |         |  
|                                                         |  |     
|Total                                                    |  | $    | 487,349 |   |      | $ | 507,767 |  
|                                                         |  |      |         |   |      |   |         |  



|18. | Finance costs
|--- | -------------



|                                         |  |      |         |  |      |   |         | 
|---------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                         |  | 2016 |         |  | 2015 |  
|                                         |  |     
|Interest on long-term debt               |  | $    | 73,434  |  |      | $ | 74,969  | 
|Unwinding of discount on provisions [15] |  |      | 20,733  |  |      |   | 21,428  | 
|Other charges                            |  |      | 16,860  |  |      |   | 7,101   | 
|Interest on short-term debt              |  |      | 879     |  |      |   | 117     | 
|                                         |  |      |         |  |      |   |         | 
|                                         |  |     
|Total                                    |  | $    | 111,906 |  |      | $ | 103,615 | 
|                                         |  |      |         |  |      |   |         | 

No borrowing costs were determined to be eligible for capitalization during the year.



|19. | Other income (expense)
|--- | ----------------------



|                                        |  |      |        |   |      |   |        |  
|--------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                        |  | 2016 |        |   | 2015 |  
|                                        |  |     
|Foreign exchange gains (losses)         |  | $    | (5,935 | ) |      | $ | 59,323 |  
|Contract settlements                    |  |      | 59,027 |   |      |   |       |  
|Gain on change in investment accounting |  |      | 7,032  |   |      |   |       |  
|Other                                   |  |      | 547    |   |      |   | (4,600 | )
|                                        |  |      |        |   |      |   |        |  
|                                        |  |     
|Total                                   |  | $    | 60,671 |   |      | $ | 54,723 |  
|                                        |  |      |        |   |      |   |        |  

During the year, Cameco agreed to terminate two long-term supply contracts with two of its utility customers that were
effective for the years 2016 through 2020 and 2016 through 2021. The resulting gain on contract settlements was $59,027,000.

Also during the year,
Camecos share in one of its associates decreased such that equity accounting was no longer appropriate. As a result, the difference between its carrying value and fair value was recognized in other income. As an
available-for-sale investment, future changes in fair value are being recognized in other comprehensive income.



34



---

|20. | Income taxes
|--- | ------------



|A. | Significant components of deferred tax assets and liabilities
|-- | -------------------------------------------------------------



|                                      |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 
|------------------------------------- |  | ---------------------- | ------- | - | ----------------- | - | -------- | ---- |  | - | ------- |  |  | - | ------- | 
|                                      |  | Recognized in earnings |         |   | As at December 31 |  
|                                      |  | 2016                   |         |   | 2015              |   |          | 2016 |  |   | 2015    | 
|                                      |  |                        |         |  
|Assets                                |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 
|Property, plant and equipment         |  | $                      | 118,853 |   |                   | $ |         |      |  | $ | 118,853 |  |  | $ |        | 
|Provision for reclamation             |  |                        | (11,001 | ) |                   |   | 1,572    |      |  |   | 244,012 |  |  |   | 253,821 | 
|Foreign exploration and development   |  |                        | (43     | ) |                   |   | (782     | )    |  |   | 5,279   |  |  |   | 5,322   | 
|Income tax losses                     |  |                        | (22,093 | ) |                   |   | 88,186   |      |  |   | 402,550 |  |  |   | 424,344 | 
|Defined benefit plan actuarial losses |  |                        |        |   |                   |   |         |      |  |   | 5,691   |  |  |   | 5,184   | 
|Long-term investments and other       |  |                        | (25,589 | ) |                   |   | 15,316   |      |  |   | 56,093  |  |  |   | 82,273  | 
|                                      |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 
|                                      |  |                        |         |  
|Deferred tax assets                   |  |                        | 60,127  |   |                   |   | 104,292  |      |  |   | 832,478 |  |  |   | 770,944 | 
|                                      |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 
|                                      |  |                        |         |  
|Liabilities                           |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 
|Property, plant and equipment         |  |                        | (68,385 | ) |                   |   | (111,080 | )    |  |   |        |  |  |   | 69,875  | 
|Inventories                           |  |                        | (10,144 | ) |                   |   | 1,984    |      |  |   | 12,430  |  |  |   | 22,574  | 
|                                      |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 
|                                      |  |                        |         |  
|Deferred tax liabilities              |  |                        | (78,529 | ) |                   |   | (109,096 | )    |  |   | 12,430  |  |  |   | 92,449  | 
|                                      |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 
|                                      |  |                        |         |  
|Net deferred tax asset                |  | $                      | 138,656 |   |                   | $ | 213,388  |      |  | $ | 820,048 |  |  | $ | 678,495 | 
|                                      |  |                        |         |   |                   |   |          |      |  |   |         |  |  |   |         | 



|                          |  |      |         |   |      |   |         |  
|------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|Deferred tax allocated as |  | 2016 |         |   | 2015 |  
|Deferred tax assets       |  | $    | 835,985 |   |      | $ | 713,674 |  
|Deferred tax liabilities  |  |      | (15,937 | ) |      |   | (35,179 | )
|                          |  |      |         |   |      |   |         |  
|                          |  |     
|Net deferred tax asset    |  | $    | 820,048 |   |      | $ | 678,495 |  
|                          |  |      |         |   |      |   |         |  

Based on projections of future income, realization of these deferred tax assets is probable and consequently a deferred tax
asset has been recorded.



|B. | Movement in net deferred tax assets and liabilities
|-- | ---------------------------------------------------



|                                                              |  |      |         |  |      |   |         |  
|------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | -
|                                                              |  | 2016 |         |  | 2015 |  
|                                                              |  |     
|Net deferred tax asset at beginning of year                   |  | $    | 678,495 |  |      | $ | 462,446 |  
|Recovery for the year in net
earnings(a)                      |  |      | 138,656 |  |      |   | 213,388 |  
|Recovery (expense) for the year in other comprehensive income |  |      | 435     |  |      |   | (669    | )
|Effect of movements in exchange rates                         |  |      | 2,462   |  |      |   | 3,330   |  
|                                                              |  |      |         |  |      |   |         |  
|                                                              |  |     
|End of year                                                   |  | $    | 820,048 |  |      | $ | 678,495 |  
|                                                              |  |      |         |  |      |   |         |  



|(a) | In 2015, we reversed amounts related to our deferred tax asset in the US totalling $72,600,000. We determined that it was no longer probable that there would be sufficient taxable profit in the future against which the
operating losses and other tax deductions could be used.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35



---

|C. | Significant components of unrecognized deferred tax assets
|-- | ----------------------------------------------------------



|                                |  |      |         |  |      |   |         | 
|------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                |  | 2016 |         |  | 2015 |  
|                                |  |     
|Income tax losses               |  | $    | 284,338 |  |      | $ | 194,045 | 
|Property, plant and equipment   |  |      | 3,789   |  |      |   | 1,904   | 
|Provision for reclamation       |  |      | 40,749  |  |      |   | 25,952  | 
|Long-term investments and other |  |      | 107,096 |  |      |   | 107,305 | 
|                                |  |      |         |  |      |   |         | 
|                                |  |     
|Total                           |  | $    | 435,972 |  |      | $ | 329,206 | 
|                                |  |      |         |  |      |   |         | 



|D. | Tax rate reconciliation
|-- | -----------------------

The provision for income taxes differs from the amount computed by applying the
combined expected federal and provincial income tax rate to earnings before income taxes. The reasons for these differences are as follows:



|                                                                                          |  |      |          |   |      |   |          |  
|----------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                                                                          |  | 2016 |          |   | 2015 |  
|                                                                                          |  |     
|Loss before income taxes and non-controlling
interest                                     |  | $    | (154,234 | ) |      | $ | (79,268  | )
|Combined federal and provincial tax rate                                                  |  |      | 26.9     | % |      |   | 26.9     | %
|                                                                                          |  |      |          |   |      |   |          |  
|                                                                                          |  |     
|Computed income tax recovery                                                              |  |      | (41,489  | ) |      |   | (21,323  | )
|Increase (decrease) in taxes resulting from:                                              |  |      |          |   |      |   |          |  
|Difference between Canadian rates and rates applicable to subsidiaries in other countries |  |      | (175,092 | ) |      |   | (197,967 | )
|Change in unrecognized deferred tax assets                                                |  |      | 106,766  |   |      |   | 111,575  |  
|Other taxes                                                                               |  |      | (2,278   | ) |      |   | 2,172    |  
|Share-based compensation plans                                                            |  |      | 1,221    |   |      |   | 1,528    |  
|Change in tax provision related to transfer pricing                                       |  |      | 8,000    |   |      |   | (35,000  | )
|Non-deductible
(non-taxable) capital amounts                                              |  |      |         |   |      |   | (2,362   | )
|Other permanent differences                                                               |  |      | 8,517    |   |      |   | (1,253   | )
|                                                                                          |  |      |          |   |      |   |          |  
|                                                                                          |  |     
|Income tax recovery                                                                       |  | $    | (94,355  | ) |      | $ | (142,630 | )
|                                                                                          |  |      |          |   |      |   |          |  



|E. | Earnings and income taxes by jurisdiction
|-- | -----------------------------------------



|                                    |  |      |          |   |      |   |          |  
|----------------------------------- |  | ---- | -------- | - | ---- | - | -------- | -
|                                    |  | 2016 |          |   | 2015 |  
|                                    |  |     
|Earnings (loss) before income taxes |  |      |          |   |      |   |          |  
|Canada                              |  | $    | (463,946 | ) |      | $ | (959,661 | )
|Foreign                             |  |      | 309,712  |   |      |   | 880,393  |  
|                                    |  |      |          |   |      |   |          |  
|                                    |  |     
|                                    |  | $    | (154,234 | ) |      | $ | (79,268  | )
|                                    |  |      |          |   |      |   |          |  
|                                    |  |     
|Current income taxes                |  |      |          |   |      |   |          |  
|Canada                              |  | $    | 3,454    |   |      | $ | 14,617   |  
|Foreign                             |  |      | 40,847   |   |      |   | 56,141   |  
|                                    |  |      |          |   |      |   |          |  
|                                    |  |     
|                                    |  | $    | 44,301   |   |      | $ | 70,758   |  
|Deferred income taxes (recovery)    |  |      |          |   |      |   |          |  
|Canada                              |  | $    | (120,519 | ) |      | $ | (291,363 | )
|Foreign                             |  |      | (18,137  | ) |      |   | 77,975   |  
|                                    |  |      |          |   |      |   |          |  
|                                    |  |     
|                                    |  | $    | (138,656 | ) |      | $ | (213,388 | )
|                                    |  |      |          |   |      |   |          |  
|                                    |  |     
|Income tax recovery                 |  | $    | (94,355  | ) |      | $ | (142,630 | )
|                                    |  |      |          |   |      |   |          |  



36



---

|F. | Reassessments
|-- | -------------

Canada

In 2008, as part of the ongoing annual audits of Camecos Canadian tax returns, Canada Revenue Agency (CRA) disputed the transfer pricing structure and
methodology used by Cameco and its wholly owned Swiss subsidiary, Cameco Europe Ltd., in respect of sale and purchase agreements for uranium products. From December 2008 to date, CRA issued notices of reassessment for the taxation years 2003 through
2011, which in aggregate have increased Camecos income for Canadian tax purposes by approximately $4,100,000,000. CRA has also issued notices of reassessment for transfer pricing penalties for the years 2007 through 2010 in the amount of
$292,400,000. Cameco believes it is likely that CRA will reassess Camecos tax returns for subsequent years on a similar basis and that these will require Cameco to make future remittances or provide security on receipt of the reassessments.

Using the methodology we believe that CRA will continue to apply and including the $4,100,000,000 already reassessed, we expect to receive notices of
reassessment for a total of approximately $8,100,000,000 for the years 2003 through 2016, which would increase Camecos income for Canadian tax purposes and result in a related tax expense of approximately $2,400,000,000. In addition to
penalties already imposed, CRA may continue to apply penalties to taxation years subsequent to 2010. As a result, we estimate that cash taxes and transfer pricing penalties would be between $1,750,000,000 and $1,950,000,000. In addition, we estimate
there would be interest and instalment penalties applied that would be material to Cameco. While in dispute, we would be responsible for remitting or otherwise securing 50% of the cash taxes and transfer pricing penalties (between $875,000,000 and
$975,000,000), plus related interest and instalment penalties assessed, which would be material to Cameco.

Under Canadian federal and provincial tax
rules, the amount required to be remitted each year will depend on the amount of income reassessed in that year and the availability of elective deductions. Recently, the CRA disallowed the use of any loss carry-backs to be applied to any transfer
pricing adjustment, starting with the 2008 tax year. In light of our view of the likely outcome of the case, we expect to recover the amounts remitted to CRA, including cash taxes, interest and penalties totalling $264,042,000 already paid as at
December 31, 2016 (December 31, 2015 - $232,614,000) (note 10). In addition to the cash remitted, we have provided $420,000,000 in letters of credit to secure 50% of the cash taxes and related interest.

The trial related to the 2003, 2005 and 2006 reassessments commenced in October, 2016. Final arguments are expected in the second half of 2017. If this timing
is adhered to, we expect to have a Tax Court decision within six to 18 months after the trial is complete.

Having regard to advice from its external
advisors, Camecos opinion is that CRAs position is incorrect and Cameco is contesting CRAs position and expects to recover any amounts remitted or secured as a result of the reassessments. However, to reflect the uncertainties of
CRAs appeals process and litigation, Cameco has recorded a cumulative tax provision related to this matter for the years 2003 through the current period in the amount of $58,000,000. While the resolution of this matter may result in
liabilities that are higher or lower than the reserve, management believes that the ultimate resolution will not be material to Camecos financial position, results of operations or liquidity in the year(s) of resolution. Resolution of this
matter as stipulated by CRA would be material to Camecos financial position, results of operations or liquidity in the year(s) of resolution and other unfavourable outcomes for the years 2003 to date could be material to Camecos
financial position, results of operations and cash flows in the year(s) of resolution.

Further to Camecos decision to contest CRAs
reassessments, Cameco is pursuing its appeal rights under Canadian federal and provincial tax rules.

United States

We have received Revenue Agents Reports (RARs) from the Internal Revenue Service (IRS) for the taxation years 2009 to 2012, challenging the transfer
pricing used under certain intercompany transactions. The RARs list the IRS proposed adjustments to taxable income and calculate the tax and penalties owing based on the proposed adjustments.



37



---

The proposed adjustments reflected in the RARs are focused on transfer pricing in respect of certain intercompany
transactions within our corporate structure. The IRS asserts that a portion of the non-US income reported under our corporate structure and taxed outside the US should be recognized and taxed in the US.

The proposed adjustments result in an increase in taxable income in the US of approximately $419,000,000 (US) and a corresponding increased income tax expense
of approximately $122,000,000 (US) for the 2009 through 2012 taxation years, with interest being charged thereon. In addition, the IRS proposed cumulative penalties of approximately $8,000,000 (US) in respect of the adjustment. Having regard to
advice from its external advisors, management believes that the conclusions of the IRS in the RARs are incorrect and is contesting them in an administrative appeal of the proposed adjustments. No cash payments are required while pursuing an
administrative appeal. Management believes that the ultimate resolution of this matter will not be material to our financial position, results of operations or liquidity in the year(s) of resolution.



|G. | Income tax losses
|-- | -----------------

At December 31, 2016, income tax losses carried forward of $2,432,772,000 (2015
- $2,177,332,000) are available to reduce taxable income. These losses expire as follows:



|               |  |        |           |  |    |   |         |       |  |   |         |  |  |   |           | 
|-------------- |  | ------ | --------- |  | -- | - | ------- | ----- |  | - | ------- |  |  | - | --------- | 
|Date of expiry |  | Canada |           |  | US |   |         | Other |  |   | Total   | 
|2020           |  | $      |          |  |    | $ |        |       |  | $ | 1,194   |  |  | $ | 1,194     | 
|2023           |  |        |          |  |    |   |        |       |  |   | 9,236   |  |  |   | 9,236     | 
|2028           |  |        | 95,102    |  |    |   |        |       |  |   |        |  |  |   | 95,102    | 
|2029           |  |        |          |  |    |   | 27,591  |       |  |   |        |  |  |   | 27,591    | 
|2030           |  |        |          |  |    |   | 1,612   |       |  |   |        |  |  |   | 1,612     | 
|2031           |  |        | 101,572   |  |    |   | 23,532  |       |  |   |        |  |  |   | 125,104   | 
|2032           |  |        | 236,107   |  |    |   | 23,224  |       |  |   |        |  |  |   | 259,331   | 
|2033           |  |        | 282,856   |  |    |   | 39,590  |       |  |   |        |  |  |   | 322,446   | 
|2034           |  |        | 300,317   |  |    |   | 21,839  |       |  |   |        |  |  |   | 322,156   | 
|2035           |  |        | 332,826   |  |    |   | 15,196  |       |  |   |        |  |  |   | 348,022   | 
|2036           |  |        | 131,891   |  |    |   | 74,371  |       |  |   |        |  |  |   | 206,262   | 
|No expiry      |  |        |          |  |    |   |        |       |  |   | 714,716 |  |  |   | 714,716   | 
|               |  |        |           |  |    |   |         |       |  |   |         |  |  |   |           | 
|               |  | $      | 1,480,671 |  |    | $ | 226,955 |       |  | $ | 725,146 |  |  | $ | 2,432,772 | 
|               |  |        |           |  |    |   |         |       |  |   |         |  |  |   |           | 

Included in the table above is $912,916,000 (2015 - $615,412,000) of temporary differences related to loss carry forwards
where no future benefit has been recognized.



38



---

|21. | Per share amounts
|--- | -----------------

Per share amounts have been calculated based on the weighted average number of common
shares outstanding during the period. The weighted average number of paid shares outstanding in 2016 was 395,792,522 (2015 - 395,792,522).



|                                                              |  |      |         |   |      |   |         | 
|------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | 
|                                                              |  | 2016 |         |   | 2015 |  
|Basic earnings (loss) per share computation                   |  |      |         |   |      |   |         | 
|Net earnings (loss) attributable to equity holders            |  | $    | (61,611 | ) |      | $ | 65,286  | 
|Weighted average common shares outstanding                    |  |      | 395,793 |   |      |   | 395,793 | 
|                                                              |  |      |         |   |      |   |         | 
|Basic earnings (loss) per common share                        |  | $    | (0.16   | ) |      | $ | 0.16    | 
|                                                              |  |      |         |   |      |   |         | 
|                                                              |  |     
|Diluted earnings (loss) per share computation                 |  |      |         |   |      |   |         | 
|Net earnings (loss) attributable to equity holders            |  | $    | (61,611 | ) |      | $ | 65,286  | 
|Weighted average common shares outstanding                    |  |      | 395,793 |   |      |   | 395,793 | 
|Dilutive effect of stock options                              |  |      |        |   |      |   |        | 
|                                                              |  |      |         |   |      |   |         | 
|Weighted average common shares outstanding, assuming dilution |  |      | 395,793 |   |      |   | 395,793 | 
|                                                              |  |      |         |   |      |   |         | 
|Diluted earnings (loss) per common share                      |  | $    | (0.16   | ) |      | $ | 0.16    | 
|                                                              |  |      |         |   |      |   |         | 



|22. | Statements of cash flows
|--- | ------------------------



|                                          |  |      |         |   |      |   |          |  
|----------------------------------------- |  | ---- | ------- | - | ---- | - | -------- | -
|                                          |  | 2016 |         |   | 2015 |  
|Changes in non-cash working capital:      |  |      |         |   |      |   |          |  
|Accounts receivable                       |  | $    | 1,529   |   |      | $ | 216,266  |  
|Inventories                               |  |      | (73,833 | ) |      |   | (238,549 | )
|Supplies and prepaid expenses             |  |      | 10,867  |   |      |   | (46,620  | )
|Accounts payable and accrued liabilities  |  |      | (17,989 | ) |      |   | (12,225  | )
|Reclamation payments                      |  |      | (13,507 | ) |      |   | (11,807  | )
|Amortization of purchase price allocation |  |      | 27,848  |   |      |   | 16,005   |  
|Other                                     |  |      | (4,049  | ) |      |   | 5,312    |  
|                                          |  |      |         |   |      |   |          |  
|Other operating items                     |  | $    | (69,134 | ) |      | $ | (71,618  | )
|                                          |  |      |         |   |      |   |          |  



|23. | Share-based compensation plans
|--- | ------------------------------

The Company has the following equity-settled plans:



|A. | Stock option plan
|-- | -----------------

The Company has established a stock option plan under which options to purchase
common shares may be granted to employees of Cameco. Options granted under the stock option plan have an exercise price of not less than the closing price quoted on the Toronto Stock Exchange (TSX) for the common shares of Cameco on the trading day
prior to the date on which the option is granted. The options carry vesting periods of one to three years, and expire eight years from the date granted.

The aggregate number of common shares that may be issued pursuant to the Cameco stock option plan shall not exceed 43,017,198 of which 27,870,079 shares have
been issued.



39



---

Stock option transactions for the respective years were as follows:



|                    |  |      |            |   |      |  |           |  
|------------------- |  | ---- | ---------- | - | ---- |  | --------- | -
|(Number of options) |  | 2016 |            |   | 2015 | 
|Beginning of year   |  |      | 8,503,238  |   |      |  | 8,353,006 |  
|Options granted     |  |      | 1,273,340  |   |      |  | 965,823   |  
|Options forfeited   |  |      | (1,156,737 | ) |      |  | (297,461  | )
|Options expired     |  |      | (599,530   | ) |      |  | (518,130  | )
|                    |  |      |            |   |      |  |           |  
|End of year         |  |      | 8,020,311  |   |      |  | 8,503,238 |  
|                    |  |      |            |   |      |  |           |  
|Exercisable         |  |      | 5,929,550  |   |      |  | 6,475,811 |  
|                    |  |      |            |   |      |  |           |  

Weighted average exercise prices were as follows:



|                  |  |      |       |  |      |   |       | 
|----------------- |  | ---- | ----- |  | ---- | - | ----- | 
|                  |  | 2016 |       |  | 2015 |  
|Beginning of year |  | $    | 26.04 |  |      | $ | 28.22 | 
|Options granted   |  |      | 16.38 |  |      |   | 19.30 | 
|Options forfeited |  |      | 25.70 |  |      |   | 29.60 | 
|Options expired   |  |      | 38.81 |  |      |   | 46.48 | 
|                  |  |      |       |  |      |   |       | 
|End of year       |  | $    | 23.61 |  |      | $ | 26.04 | 
|                  |  |      |       |  |      |   |       | 
|Exercisable       |  | $    | 25.46 |  |      | $ | 27.34 | 
|                  |  |      |       |  |      |   |       | 

Total options outstanding and exercisable at December 31, 2016 were as follows:



|                       |  |        |           |  |                              |  |     |                                 |  |   |        |  |  |                                 |           |  |  |   |       | 
|---------------------- |  | ------ | --------- |  | ---------------------------- |  | --- | ------------------------------- |  | - | ------ |  |  | ------------------------------- | --------- |  |  | - | ----- | 
|                       |  |        |           |  | Options outstanding          |  |     | Options exercisable             | 
|Option price per share |  | Number |           |  | Weightedaverageremaininglife |  |     | Weightedaverageexercisableprice |  |   | Number |  |  | Weightedaverageexercisableprice |          
|$16.38 - 21.57         |  |        | 4,216,686 |  |                              |  | 4.7 |                                 |  | $ | 19.11  |  |  |                                 | 2,356,058 |  |  | $ | 20.53 | 
|$21.58 - 54.38         |  |        | 3,803,625 |  |                              |  | 3.2 |                                 |  | $ | 28.59  |  |  |                                 | 3,573,492 |  |  | $ | 28.71 | 
|                       |  |        |           |  |                              |  |     |                                 |  |   |        |  |  |                                 |           |  |  |   |       | 
|                       |  |        | 8,020,311 |  |                              |  |     |                                 |  |   |        |  |  |                                 | 5,929,550 |  |  |   |       | 
|                       |  |        |           |  |                              |  |     |                                 |  |   |        |  |  |                                 |           |  |  |   |       | 

The foregoing options have expiry dates ranging from March 15, 2017 to February 29, 2024.

Non-vested stock option transactions for the respective years were as follows:



|                    |  |      |            |   |      |  |            |  
|------------------- |  | ---- | ---------- | - | ---- |  | ---------- | -
|(Number of options) |  | 2016 |            |   | 2015 | 
|Beginning of year   |  |      | 2,027,427  |   |      |  | 2,533,754  |  
|Options granted     |  |      | 1,273,340  |   |      |  | 965,823    |  
|Options forfeited   |  |      | (143,719   | ) |      |  | (17,320    | )
|Options vested      |  |      | (1,066,287 | ) |      |  | (1,454,830 | )
|                    |  |      |            |   |      |  |            |  
|End of year         |  |      | 2,090,761  |   |      |  | 2,027,427  |  
|                    |  |      |            |   |      |  |            |  



40



---

|B. | Executive performance share unit (PSU)
|-- | --------------------------------------

The Company has established a PSU plan whereby it provides each
plan participant an annual grant of PSUs in an amount determined by the board. Each PSU represents one phantom common share that entitles the participant to a payment of one Cameco common share purchased on the open market, or cash with an
equivalent market value, at the boards discretion, at the end of each three-year period if certain performance and vesting criteria have been met. The final value of the PSUs will be based on the value of Cameco common shares at the end of the
three-year period and the number of PSUs that ultimately vest. Vesting of PSUs at the end of the three-year period will be based on total shareholder return over the three years, Camecos ability to meet its annual operating targets and whether
the participating executive remains employed by Cameco at the end of the three-year vesting period. As of December 31, 2016, the total number of PSUs held by the participants, after adjusting for forfeitures on retirement, was 892,895 (2015 -
791,071).



|C. | Restricted share unit (RSU)
|-- | ---------------------------

The Company has established an RSU plan whereby it provides each plan
participant an annual grant of RSUs in an amount determined by the board. Each RSU represents one phantom common share that entitles the participant to a payment of one Cameco common share purchased on the open market, or cash with an equivalent
market value, at the boards discretion. The RSUs carry vesting periods of one to three years, and the final value of the units will be based on the value of Cameco common shares at the end of the vesting periods. As of December 31, 2016,
the total number of RSUs held by the participants was 557,957 (2015 - 479,320).



|D. | Employee share ownership plan
|-- | -----------------------------

Cameco also has an employee share ownership plan, whereby both employee
and Company contributions are used to purchase shares on the open market for employees. The Companys contributions are expensed during the year of contribution. Under the plan, employees have the opportunity to participate in the program to a
maximum of 6% of eligible earnings each year with Cameco matching the first 3% of employee-paid shares by 50%. Cameco contributes $1,000 of shares annually to each employee that is enrolled in the plan. Shares purchased with Company contributions
and with dividends paid on such shares become unrestricted 12 months from the date on which such shares were purchased. At December 31, 2016, there were 3,356 participants in the plan (2015 - 3,659). The total number of shares purchased in 2016
with Company contributions was 404,550 (2015 - 309,251). In 2016, the Companys contributions totalled $5,204,000 (2015 - $5,295,000).

Cameco
records compensation expense under its equity-settled plans with an offsetting credit to contributed surplus, to reflect the estimated fair value of units granted to employees. During the year, the Company recognized the following expenses under
these plans:



|                              |  |      |        |  |      |   |        | 
|----------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                              |  | 2016 |        |  | 2015 |  
|Stock option plan             |  | $    | 4,588  |  |      | $ | 5,610  | 
|Performance share unit plan   |  |      | 5,572  |  |      |   | 6,574  | 
|Restricted share unit plan    |  |      | 3,941  |  |      |   | 4,669  | 
|Employee share ownership plan |  |      | 5,204  |  |      |   | 5,295  | 
|                              |  |      |        |  |      |   |        | 
|End of year                   |  | $    | 19,305 |  |      | $ | 22,148 | 
|                              |  |      |        |  |      |   |        | 

Fair value measurement of equity-settled plans

The fair value of the units granted through the PSU plan was determined based on Monte Carlo simulation and the fair value of options granted under the stock
option plan was measured based on the Black-Scholes option-pricing model. The fair value of RSUs granted was determined based on their intrinsic value on the date of grant. Expected volatility was estimated by considering historic average share
price volatility.



41



---

The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment
plans were as follows:



|                                        |  |                   |           |   |     |   |         |     |  |   |         |  
|--------------------------------------- |  | ----------------- | --------- | - | --- | - | ------- | --- |  | - | ------- | -
|                                        |  | Stock option plan |           |   | PSU |   |         | RSU | 
|Number of options granted               |  |                   | 1,273,340 |   |     |   | 411,490 |     |  |   | 329,422 |  
|Average strike price                    |  | $                 | 16.38     |   |     |   |        |     |  | $ | 16.46   |  
|Expected dividend                       |  | $                 | 0.40      |   |     |   |        |     |  |   |        |  
|Expected volatility                     |  |                   | 32        | % |     |   | 31      | %   |  |   |        |  
|Risk-free interest rate                 |  |                   | 0.7       | % |     |   | 0.5     | %   |  |   |        |  
|Expected life of option                 |  |                   | 4.7 years |   |     |   | 3 years |     |  |   |        |  
|Expected forfeitures                    |  |                   | 7         | % |     |   | 5       | %   |  |   | 8       | %
|Weighted average grant date fair values |  | $                 | 3.49      |   |     | $ | 16.35   |     |  | $ | 16.46   |  

In addition to these inputs, other features of the PSU grant were incorporated into the measurement of fair value. The market
condition based on total shareholder return was incorporated by utilizing a Monte Carlo simulation. The non-market criteria relating to realized selling prices and operating targets have been incorporated into
the valuation at grant date by reviewing prior history and corporate budgets.

The Company has the following cash-settled plans:



|A. | Deferred share unit (DSU)
|-- | -------------------------

Cameco offers a DSU plan to
non-employee directors. A DSU is a notional unit that reflects the market value of a single common share of Cameco. 60% of each directors annual retainer is paid in DSUs. In addition, on an annual basis,
directors can elect to receive 25%, 50%, 75% or 100% of the remaining 40% of their annual retainer and any additional fees in the form of DSUs. If a director meets their ownership requirements, the director may elect to take 25%, 50%, 75% or 100% of
their annual retainer and any fees in cash, with the balance, if any, to be paid in DSUs. Each DSU fully vests upon award. The DSUs will be redeemed for cash upon a director leaving the board. The redemption amount will be based upon the weighted
average of the closing prices of the common shares of Cameco on the TSX for the last 20 trading days prior to the redemption date multiplied by the number of DSUs held by the director. As of December 31, 2016, the total number of DSUs held by
participating directors was 514,352 (2015 - 623,534).



|B. | Phantom stock option
|-- | --------------------

Cameco makes annual grants of bonuses to eligible
non-North American employees in the form of phantom stock options. Employees receive the equivalent value of shares in cash when exercised. Options granted under the phantom stock option plan have an award
value equal to the closing price quoted on the TSX for the common shares of Cameco on the trading day prior to the date on which the option is granted. The options vest over three years and expire eight years from the date granted. As of
December 31, 2016, the number of options held by participating employees was 347,858 (2015 - 290,833) with exercise prices ranging from $16.38 to $39.53 per share (2015 - $19.30 to $39.53) and a weighted average exercise price of $24.13 (2015 -
$26.05).

Cameco has recognized the following expenses (recoveries) under its cash-settled plans:



|                          |  |      |      |   |      |   |        |  
|------------------------- |  | ---- | ---- | - | ---- | - | ------ | -
|                          |  | 2016 |      |   | 2015 |  
|Deferred share unit plan  |  | $    | (739 | ) |      | $ | (1,088 | )
|Phantom stock option plan |  |      | (83  | ) |      |   | 77     |  
|                          |  |      |      |   |      |   |        |  
|                          |  | $    | (822 | ) |      | $ | (1,011 | )
|                          |  |      |      |   |      |   |        |  

At December 31, 2016, a liability of $7,558,000 (2015 - $11,063,000) was included in the consolidated statements of
financial position to recognize accrued but unpaid expenses for cash-settled plans.



42



---

Fair value measurement of cash-settled plans

The fair value of the phantom stock option plan was measured based on the Black-Scholes option-pricing model. Expected volatility is estimated by considering
historic average share price volatility. The inputs used in the measurement of the fair values of the phantom stock option plan at the grant and reporting dates were as follows:



|                                              |  |               |           |   |                   |   |           |  
|--------------------------------------------- |  | ------------- | --------- | - | ----------------- | - | --------- | -
|                                              |  | Grant date    |           |   | Reporting date    |  
|                                              |  | March 1, 2016 |           |   | December 31, 2016 |  
|Number of units                               |  |               | 93,655    |   |                   |   | 347,858   |  
|Average strike price                          |  | $             | 16.38     |   |                   | $ | 24.13     |  
|Expected dividend                             |  | $             | 0.40      |   |                   | $ | 0.40      |  
|Expected volatility                           |  |               | 32        | % |                   |   | 33        | %
|Risk-free interest rate                       |  |               | 0.6       | % |                   |   | 0.9       | %
|Expected life of option                       |  |               | 4.5 years |   |                   |   | 3.4 years |  
|Expected forfeitures                          |  |               | 7         | % |                   |   | 7         | %
|Weighted average measurement date fair values |  | $             | 3.61      |   |                   | $ | 1.06      |  



|24. | Pension and other post-retirement benefits
|--- | ------------------------------------------

Cameco maintains both defined benefit and defined
contribution plans providing pension benefits to substantially all of its employees. All regular and temporary employees participate in a registered defined contribution plan. This plan is registered under the Pension Benefits Standard Act, 1985. In
addition, all Canadian-based executives participate in a non-registered supplemental executive pension plan which is a defined benefit plan.

Under the supplemental executive pension plan (SEPP), Cameco provides a lump sum benefit equal to the present value of a lifetime pension benefit based on the
executives length of service and final average earnings. The plan provides for unreduced benefits to be paid at the normal retirement age of 65, however unreduced benefits could be paid if the executive was at least 60 years of age and had 20
years of service at retirement. This program provides for a benefit determined by a formula based on earnings and service, reduced by the benefits payable under the registered base plan. Security is provided for the SEPP benefits through a letter of
credit held by the plans trustee. The face amount of the letter of credit is determined each year based on the wind-up liabilities of the supplemental plan, less any plan assets currently held with the
trustee. A valuation is required annually to determine the letter of credit amount. Benefits will continue to be paid from plan assets until the fund is exhausted, at which time Cameco will begin paying benefits from corporate assets.

Cameco also maintains non-pension post-retirement plans (other benefit plans) which are defined benefit
plans that cover such benefits as group life insurance and supplemental health and dental coverage to eligible employees and their dependents. The costs related to these plans are charged to earnings in the period during which the employment
services are rendered. These plans are funded by Cameco as benefit claims are made.

The board of directors of Cameco has final responsibility and
accountability for the Cameco retirement programs. The board is ultimately responsible for managing the programs to comply with applicable legislation, providing oversight over the general functions and setting certain policies.

Cameco expects to pay $1,671,000 in contributions and letter of credit fees to its defined benefit plans in 2017.

The post-retirement plans expose Cameco to actuarial risks, such as longevity risk, market risk, interest rate risk, liquidity risk and foreign currency risk.
The other benefit plans expose Cameco to risks of higher supplemental health and dental utilization than expected. However, the other benefit plans have limits on Camecos annual benefits payable.

The effective date of the most recent valuations for funding purposes on the registered defined benefit pension plans is January 1, 2015. The next
planned effective date for valuations is January 1, 2018.



43



---

Cameco has more than one defined benefit plan and has generally provided aggregated disclosures in respect of
these plans, on the basis that these plans are not exposed to materially different risks. Information relating to Camecos defined benefit plans is shown in the following table:



|                                              |  |                       |         |   |                     |   |         |      |  |   |         |   |  |   |         |  
|--------------------------------------------- |  | --------------------- | ------- | - | ------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                              |  | Pension benefit plans |         |   | Other benefit plans |  
|                                              |  | 2016                  |         |   | 2015                |   |         | 2016 |  |   | 2015    |  
|Fair value of plan assets, beginning of year  |  | $                     | 10,632  |   |                     | $ | 10,877  |      |  | $ |        |   |  | $ |        |  
|Interest income on plan assets                |  |                       | 403     |   |                     |   | 406     |      |  |   |        |   |  |   |        |  
|Return on assets excluding interest income    |  |                       | (127    | ) |                     |   | 1,960   |      |  |   |        |   |  |   |        |  
|Benefits paid                                 |  |                       | (2,254  | ) |                     |   | (2,581  | )    |  |   |        |   |  |   |        |  
|Administrative costs paid                     |  |                       | (2      | ) |                     |   | (30     | )    |  |   |        |   |  |   |        |  
|                                              |  |                       |         |   |                     |   |         |      |  |   |         |   |  |   |         |  
|Fair value of plan assets, end of year        |  | $                     | 8,652   |   |                     | $ | 10,632  |      |  | $ |        |   |  | $ |        |  
|                                              |  |                       |         |   |                     |   |         |      |  |   |         |   |  |   |         |  
|Defined benefit obligation, beginning of year |  | $                     | 52,996  |   |                     | $ | 52,440  |      |  | $ | 21,771  |   |  | $ | 20,107  |  
|Current service cost                          |  |                       | 1,634   |   |                     |   | 1,744   |      |  |   | 1,153   |   |  |   | 1,195   |  
|Interest cost                                 |  |                       | 1,842   |   |                     |   | 1,627   |      |  |   | 900     |   |  |   | 813     |  
|Actuarial loss (gain) arising from:           |  |                       |         |   |                     |   |         |      |  |   |         |   |  |   |         |  
|- demographic assumptions                     |  |                       |        |   |                     |   |        |      |  |   |        |   |  |   | 38      |  
|- financial assumptions                       |  |                       | 677     |   |                     |   | (1,007  | )    |  |   | 373     |   |  |   | (1,228  | )
|- experience adjustment                       |  |                       | 1,605   |   |                     |   | (195    | )    |  |   | 161     |   |  |   | 1,671   |  
|Benefits paid                                 |  |                       | (2,970  | ) |                     |   | (3,175  | )    |  |   | (937    | ) |  |   | (825    | )
|Foreign exchange                              |  |                       | (854    | ) |                     |   | 1,562   |      |  |   |        |   |  |   |        |  
|                                              |  |                       |         |   |                     |   |         |      |  |   |         |   |  |   |         |  
|Defined benefit obligation, end of year       |  | $                     | 54,930  |   |                     | $ | 52,996  |      |  | $ | 23,421  |   |  | $ | 21,771  |  
|                                              |  |                       |         |   |                     |   |         |      |  |   |         |   |  |   |         |  
|Defined benefit liability [note 14]           |  | $                     | (46,278 | ) |                     | $ | (42,364 | )    |  | $ | (23,421 | ) |  | $ | (21,771 | )
|                                              |  |                       |         |   |                     |   |         |      |  |   |         |   |  |   |         |  

The percentages of the total fair value of assets in the pension plans for each asset category at December 31 were as
follows:



|                           |  |                       |     |   |      |  |     |  
|-------------------------- |  | --------------------- | --- | - | ---- |  | --- | -
|                           |  | Pension benefit plans |    
|                           |  | 2016                  |     |   | 2015 | 
|Asset category(a)          |  |                       |     |   |      |  |     |  
|Canadian equity securities |  |                       | 8   | % |      |  | 8   | %
|Global equity securities   |  |                       | 15  | % |      |  | 16  | %
|Canadian fixed income      |  |                       | 26  | % |      |  | 25  | %
|Other(b)                   |  |                       | 51  | % |      |  | 51  | %
|                           |  |                       |     |   |      |  |     |  
|Total                      |  |                       | 100 | % |      |  | 100 | %
|                           |  |                       |     |   |      |  |     |  



|(a) | The defined benefit plan assets contain no material amounts of related party assets at December 31, 2016 and 2015 respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------

|(b) | Relates to the value of the refundable tax account held by the Canada Revenue Agency. The refundable total is approximately equal to half of the sum of the realized investment income plus employer contributions less
half of the benefits paid by the plan.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



44



---

The following represents the components of net pension and other benefit expense included primarily as part of
administration:



|                                               |  |                       |        |  |                     |   |        |      |  |   |       |  |  |   |       | 
|---------------------------------------------- |  | --------------------- | ------ |  | ------------------- | - | ------ | ---- |  | - | ----- |  |  | - | ----- | 
|                                               |  | Pension benefit plans |        |  | Other benefit plans |  
|                                               |  | 2016                  |        |  | 2015                |   |        | 2016 |  |   | 2015  | 
|Current service cost                           |  | $                     | 1,634  |  |                     | $ | 1,744  |      |  | $ | 1,153 |  |  | $ | 1,195 | 
|Net interest cost                              |  |                       | 1,439  |  |                     |   | 1,221  |      |  |   | 900   |  |  |   | 813   | 
|Administration cost                            |  |                       | 2      |  |                     |   | 30     |      |  |   |      |  |  |   |      | 
|                                               |  |                       |        |  |                     |   |        |      |  |   |       |  |  |   |       | 
|Defined benefit expense [note 17]              |  |                       | 3,075  |  |                     |   | 2,995  |      |  |   | 2,053 |  |  |   | 2,008 | 
|Defined contribution pension expense [note 17] |  |                       | 17,716 |  |                     |   | 17,961 |      |  |   |      |  |  |   |      | 
|                                               |  |                       |        |  |                     |   |        |      |  |   |       |  |  |   |       | 
|Net pension and other benefit expense          |  | $                     | 20,791 |  |                     | $ | 20,956 |      |  | $ | 2,053 |  |  | $ | 2,008 | 
|                                               |  |                       |        |  |                     |   |        |      |  |   |       |  |  |   |       | 

The total amount of actuarial losses (gains) recognized in other comprehensive income is:



|                                                |  |                       |       |  |                     |   |        |      |  |   |      |  |  |   |     | 
|----------------------------------------------- |  | --------------------- | ----- |  | ------------------- | - | ------ | ---- |  | - | ---- |  |  | - | --- | 
|                                                |  | Pension benefit plans |       |  | Other benefit plans |  
|                                                |  | 2016                  |       |  | 2015                |   |        | 2016 |  |   | 2015 | 
|Actuarial loss (gain)                           |  | $                     | 2,282 |  |                     | $ | (1,202 | )    |  | $ | 534  |  |  | $ | 481 | 
|Return on plan assets excluding interest income |  |                       | 127   |  |                     |   | (1,960 | )    |  |   |     |  |  |   |    | 
|                                                |  |                       |       |  |                     |   |        |      |  |   |      |  |  |   |     | 
|                                                |  | $                     | 2,409 |  |                     | $ | (3,162 | )    |  | $ | 534  |  |  | $ | 481 | 
|                                                |  |                       |       |  |                     |   |        |      |  |   |      |  |  |   |     | 

The assumptions used to determine the Companys defined benefit obligation and net pension and other benefit expense were
as follows at December 31 (expressed as weighted averages):



|                                      |  |                       |     |   |                     |  |     |      |  |  |      |   |  |  |      |  
|------------------------------------- |  | --------------------- | --- | - | ------------------- |  | --- | ---- |  |  | ---- | - |  |  | ---- | -
|                                      |  | Pension benefit plans |     |   | Other benefit plans | 
|                                      |  | 2016                  |     |   | 2015                |  |     | 2016 |  |  | 2015 |  
|Discount rate - obligation            |  |                       | 3.9 | % |                     |  | 3.9 | %    |  |  | 3.9  | % |  |  | 4.0  | %
|Discount rate - expense               |  |                       | 3.9 | % |                     |  | 3.4 | %    |  |  | 4.0  | % |  |  | 3.9  | %
|Rate of compensation increase         |  |                       | 3.0 | % |                     |  | 3.0 | %    |  |  |     |   |  |  |     |  
|Initial health care cost trend rate   |  |                       |    |   |                     |  |    |      |  |  | 7.0  | % |  |  | 7.0  | %
|Cost trend rate declines to           |  |                       |    |   |                     |  |    |      |  |  | 5.0  | % |  |  | 5.0  | %
|Year the rate reaches its final level |  |                       |    |   |                     |  |    |      |  |  | 2021 |   |  |  | 2021 |  
|Dental care cost trend rate           |  |                       |    |   |                     |  |    |      |  |  | 5.0  | % |  |  | 5.0  | %

At December 31, 2016, the weighted average duration of the defined benefit obligation for the pension plans was 19.6
years (2015 - 19.6 years) and for the other benefit plans was 15.2 years (2015 - 15.0 years).

A 1% change at the reporting date to one of the relevant
actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the following:



|                              |  |                       |        |   |                     |   |        |          |  |   |          |   |  |   |       | 
|----------------------------- |  | --------------------- | ------ | - | ------------------- | - | ------ | -------- |  | - | -------- | - |  | - | ----- | 
|                              |  | Pension benefit plans |        |   | Other benefit plans |  
|                              |  | Increase              |        |   | Decrease            |   |        | Increase |  |   | Decrease |  
|Discount rate                 |  | $                     | (6,748 | ) |                     | $ | 8,782  |          |  | $ | (3,213   | ) |  | $ | 4,080 | 
|Rate of compensation increase |  |                       | 2,624  |   |                     |   | (2,379 | )        |  |   | n/a      |   |  |   | n/a   | 

A 1% change in any of the other assumptions would not have a significant impact on the defined benefit obligation.



45



---

The methods and assumptions used in preparing the sensitivity analyses are the same as the methods and
assumptions used in determining the financial position of Camecos plans as at December 31, 2016. The sensitivity analyses are determined by varying the sensitivity assumption and leaving all other assumptions unchanged. Therefore, the
sensitivity analyses do not recognize any interdependence in the assumptions. The methods and assumptions used in determining the above sensitivity are consistent with the methods and assumptions used in the previous year.

In addition, an increase of one year in the expected lifetime of plan participants in the pension benefit plans would increase the defined benefit obligation
by $1,294,000.

To measure the longevity risk for these plans, the mortality rates were reduced such that the average life expectancy for all members
increased by one year. The reduced mortality rates were subsequently used to re-measure the defined benefit obligation of the entire plan.



|25. | Financial instruments and related risk management
|--- | -------------------------------------------------

Cameco is exposed in varying degrees to a variety of
risks from its use of financial instruments. Management and the board of directors, both separately and together, discuss the principal risks of our businesses. The board sets policies for the implementation of systems to manage, monitor and
mitigate identifiable risks. Camecos risk management objective in relation to these instruments is to protect and minimize volatility in cash flow. The types of risks Cameco is exposed to, the source of risk exposure and how each is managed is
outlined below.

Market risk

Market risk is the risk
that changes in market prices, such as commodity prices, foreign currency exchange rates and interest rates, will affect the Companys earnings or the fair value of its financial instruments. Cameco engages in various business activities which
expose the Company to market risk. As part of its overall risk management strategy, Cameco uses derivatives to manage some of its exposures to market risk that result from these activities.

Derivative instruments may include financial and physical forward contracts. Such contracts may be used to establish a fixed price for a commodity, an
interest-bearing obligation or a cash flow denominated in a foreign currency. Market risks are monitored regularly against defined risk limits and tolerances.

Camecos actual exposure to these market risks is constantly changing as the Companys portfolios of foreign currency, interest rate and commodity
contracts change.

The types of market risk exposure and the way in which such exposure is managed are as follows:



|A. | Commodity price risk
|-- | --------------------

As a significant producer and supplier of uranium and nuclear fuel processing
services, Cameco bears significant exposure to changes in prices for these products. A substantial change in prices will affect the Companys net earnings and operating cash flows. Prices for Camecos products are volatile and are
influenced by numerous factors beyond the Companys control, such as supply and demand fundamentals and geopolitical events.

Camecos sales
contracting strategy focuses on reducing the volatility in future earnings and cash flow, while providing both protection against decreases in market price and retention of exposure to future market price increases. To mitigate the risks associated
with the fluctuations in the market price for uranium products, Cameco seeks to maintain a portfolio of uranium product sales contracts with a variety of delivery dates and pricing mechanisms that provide a degree of protection from pricing
volatility.

Cameco is exposed to commodity price risk through its use of a uranium contract derivative. As of the reporting date, a 30% decrease in the
price of uranium based on the Numerco forward uranium price curve, would result in a loss on this derivative of $9,907,000 ($7,379,000 (US)). A 30% increase would have an equal but opposite impact.



46



---

|B. | Foreign exchange risk
|-- | ---------------------

The relationship between the Canadian and US dollar affects financial results of
the uranium business as well as the fuel services business. Sales of uranium product, conversion and fuel manufacturing services are routinely denominated in US dollars while production costs are largely denominated in Canadian dollars.

Cameco attempts to provide some protection against exchange rate fluctuations by planned hedging activity designed to smooth volatility. To mitigate risks
associated with foreign currency, Cameco enters into forward sales and option contracts to establish a price for future delivery of the foreign currency. These foreign currency contracts are not designated as hedges and are recorded at fair value
with changes in fair value recognized in earnings. Cameco also has a natural hedge against US currency fluctuations because a portion of its annual cash outlays, including purchases of uranium and conversion services, is denominated in US dollars.

Cameco holds a number of financial instruments denominated in foreign currencies that expose the Company to foreign exchange risk. Cameco measures its
exposure to foreign exchange risk on financial instruments as the change in carrying values that would occur as a result of reasonably possible changes in foreign exchange rates, holding all other variables constant. As of the reporting date, the
Company has determined its pre-tax exposure to foreign currency exchange risk on financial instruments to be as follows based on a 5% weakening of the Canadian dollar:



|                                             |  |          |     |  |                |   |          |             |  |   |         |  
|-------------------------------------------- |  | -------- | --- |  | -------------- | - | -------- | ----------- |  | - | ------- | -
|                                             |  |          |     |  | Carrying value |   |          |             | 
|                                             |  | Currency |     |  | (Cdn)          |   |          | Gain (loss) | 
|Cash and cash equivalents                    |  |          | USD |  |                | $ | 41,733   |             |  | $ | 2,087   |  
|Accounts receivable                          |  |          | USD |  |                |   | 222,627  |             |  |   | 11,131  |  
|Long-term receivables, investments and other |  |          | USD |  |                |   | 95,061   |             |  |   | 4,753   |  
|Accounts payable and accrued liabilities     |  |          | USD |  |                |   | (137,324 | )           |  |   | (6,866  | )
|Net foreign currency derivatives             |  |          | USD |  |                |   | (25,166  | )           |  |   | (57,266 | )

A 5% strengthening of the Canadian dollar against the currencies above at December 31, 2016 would have had an equal but
opposite effect on the amounts shown above, assuming all other variables remained constant.



|C. | Interest rate risk
|-- | ------------------

The Company has a strategy of minimizing its exposure to interest rate risk by
maintaining target levels of fixed and variable rate borrowings. The proportions of outstanding debt carrying fixed and variable interest rates are reviewed by senior management to ensure that these levels are within approved policy limits. At
December 31, 2016, the proportion of Camecos outstanding debt that carries fixed interest rates is 80% (2015 - 80%).

Cameco is exposed to
interest rate risk through its interest rate swap contracts whereby fixed rate payments on a notional amount of $300,000,000 of the Series D senior unsecured debentures were swapped for variable rate payments. The swaps terminate on
September 2, 2019. Under the terms of the swaps, Cameco makes interest payments based on the three-month Canada Dealer Offered Rate plus an average margin of 3.7% and receives fixed interest payments of 5.67%. At December 31, 2016, the
fair value of Camecos interest rate swap assets was $6,547,000 (2015 - $10,783,000).

Cameco is also exposed to interest rate risk on its loan
facility with Inkai and on NUKEMs multicurrency revolving loan facility due to the variable nature of the interest rates contained in the terms therein.



47



---

Cameco measures its exposure to interest rate risk as the change in cash flows that would occur as a result of
reasonably possible changes in interest rates, holding all other variables constant. As of the reporting date, the Company has determined the impact on earnings of a 1% increase in interest rate on variable rate financial instruments to be as
follows:



|                               |  |             |        |  
|------------------------------ |  | ----------- | ------ | -
|                               |  | Gain (loss) |       
|Interest rate contracts        |  | $           | (3,021 | )
|Advances receivable from Inkai |  |             | 892    |  

No amounts were drawn against NUKEMs revolving loan facility as of December 31, 2016.

Counterparty credit risk

Counterparty credit risk is
associated with the ability of counterparties to satisfy their contractual obligations to Cameco, including both payment and performance. Camecos sales of uranium product, conversion and fuel manufacturing services expose the Company to the
risk of non-payment.

Cameco manages the risk of non-payment by monitoring
the credit worthiness of its customers and seeking pre-payment or other forms of payment security from customers with an unacceptable level of credit risk. To mitigate risks associated with certain financial
assets, Cameco will hold positions with a variety of large creditworthy institutions.

The maximum exposure to credit risk, as represented by the carrying
amount of the financial assets, at December 31 was:



|                                         |  |      |         |  |      |   |         | 
|---------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                         |  | 2016 |         |  | 2015 |  
|Cash and cash equivalents                |  | $    | 320,278 |  |      | $ | 458,604 | 
|Accounts receivable [note 6]             |  |      | 238,514 |  |      |   | 240,626 | 
|Advances receivable from Inkai [note 30] |  |      | 90,095  |  |      |   | 87,188  | 
|Derivative assets [note 10]              |  |      | 10,612  |  |      |   | 11,143  | 
|Other                                    |  |      | 4,966   |  |      |   | 3,446   | 

At December 31, 2016, there were no significant concentrations of credit risk and no amounts were held as collateral.
Historically, Cameco has experienced minimal customer defaults and, as a result, considers the credit quality of its accounts receivable to be high. All accounts receivable at the reporting date are neither past due nor impaired.

Cameco has established programs for sales without recourse of trade accounts receivable to financial institutions. Through these programs, the Company
surrenders the control, risks and benefits associated with the accounts receivable sold. The amount of receivables sold is recorded as a sale of financial assets and the balances are removed from the consolidated statement of financial position at
the time of sale. The total amount of receivables sold under these programs and derecognized in accordance with IAS 39 during 2016 was $214,428,000 ($159,551,000 (USD)) (2015 - $201,992,000 ($152,410,000 (USD))).

Liquidity risk

Financial liquidity represents
Camecos ability to fund future operating activities and investments. Cameco ensures that there is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Companys
holdings of cash and cash equivalents. The Company believes that these sources will be sufficient to cover the likely short-term and long-term cash requirements.



48



---

The table below outlines the Companys available debt facilities at December 31, 2016:



|                                            |  |              |           |  |                          |   |           |                  |  |   |           | 
|------------------------------------------- |  | ------------ | --------- |  | ------------------------ | - | --------- | ---------------- |  | - | --------- | 
|                                            |  | Total amount |           |  | Outstanding andcommitted |   |           | Amount available | 
|Unsecured revolving credit facility         |  | $            | 1,250,000 |  |                          | $ |          |                  |  | $ | 1,250,000 | 
|Letter of credit facilities                 |  |              | 1,658,727 |  |                          |   | 1,470,435 |                  |  |   | 188,292   | 
|NUKEM multicurrency revolving loan facility |  |              | 106,268   |  |                          |   | 143       |                  |  |   | 106,125   | 

The tables below present a maturity analysis of Camecos financial liabilities, including principal and interest, based
on the expected cash flows from the reporting date to the contractual maturity date:



|                                         |  |                |           |  |                       |   |           |                       |  |   |                 |  |  |                 |         |  |                  |   |   |  |  |   |           | 
|---------------------------------------- |  | -------------- | --------- |  | --------------------- | - | --------- | --------------------- |  | - | --------------- |  |  | --------------- | ------- |  | ---------------- | - | - |  |  | - | --------- | 
|                                         |  | Carryingamount |           |  | Contractualcash flows |   |           | Due inless than1 year |  |   | Due in 1-3years |  |  | Due in 3-5years |         |  | Due after 5years |  
|Accounts payable and accrued liabilities |  | $              | 312,900   |  |                       | $ | 312,900   |                       |  | $ | 312,900         |  |  | $               |        |  |                  | $ |  |  |  | $ |          | 
|Dividends payable                        |  |                | 39,579    |  |                       |   | 39,579    |                       |  |   | 39,579          |  |  |                 |        |  |                  |   |  |  |  |   |          | 
|Long-term debt                           |  |                | 1,493,327 |  |                       |   | 1,500,000 |                       |  |   |                |  |  |                 | 500,000 |  |                  |   |  |  |  |   | 1,000,000 | 
|Foreign currency contracts               |  |                | 29,231    |  |                       |   | 29,231    |                       |  |   | 15,548          |  |  |                 | 13,683  |  |                  |   |  |  |  |   |          | 
|Other derivative liabilities             |  |                | 29,654    |  |                       |   | 29,654    |                       |  |   | 9,418           |  |  |                 | 20,236  |  |                  |   |  |  |  |   |          | 
|                                         |  |                |           |  |                       |   |           |                       |  |   |                 |  |  |                 |         |  |                  |   |   |  |  |   |           | 
|Total contractual repayments             |  | $              | 1,904,691 |  |                       | $ | 1,911,364 |                       |  | $ | 377,445         |  |  | $               | 533,919 |  |                  | $ |  |  |  | $ | 1,000,000 | 
|                                         |  |                |           |  |                       |   |           |                       |  |   |                 |  |  |                 |         |  |                  |   |   |  |  |   |           | 



|                                          |  |       |         |  |                       |   |        |                 |  |   |                 |  |  |                  |        |  |  |   |         | 
|----------------------------------------- |  | ----- | ------- |  | --------------------- | - | ------ | --------------- |  | - | --------------- |  |  | ---------------- | ------ |  |  | - | ------- | 
|                                          |  | Total |         |  | Due inless than1 year |   |        | Due in 1-3years |  |   | Due in 3-5years |  |  | Due after 5years |       
|Total interest payments on long-term debt |  | $     | 474,990 |  |                       | $ | 69,390 |                 |  | $ | 138,780         |  |  | $                | 82,080 |  |  | $ | 184,740 | 
|                                          |  |       |         |  |                       |   |        |                 |  |   |                 |  |  |                  |        |  |  |   |         | 



49



---

Measurement of fair values



|A. | Accounting classifications and fair values
|-- | ------------------------------------------

The following tables summarize the carrying amounts and
accounting classifications of Camecos financial instruments at the reporting date:



|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|-------------------------------------------------- |  | ------------------------------- | -------- | - | -------------------- | - | ------- | ----------------- |  | - | ------------------------- |  |  | ----- | ---------- | - |  | - | ---------- | -
|At December 31, 2016                               | 
|                                                   |  |                                 |          |   |                     
|                                                   |  | Fair valuethroughprofit or loss |          |   | Loans andreceivables |   |         | Available forsale |  |   | Otherfinancialliabilities |  |  | Total |           
|Financial assets                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Cash and cash equivalents                          |  | $                               |         |   |                      | $ | 320,278 |                   |  | $ |                          |  |  | $     |           |   |  | $ | 320,278    |  
|Accounts receivable [note 6]                       |  |                                 |         |   |                      |   | 242,482 |                   |  |   |                          |  |  |       |           |   |  |   | 242,482    |  
|Derivative assets [note 10]                        |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Foreign currency contracts                         |  |                                 | 4,065    |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 4,065      |  
|Interest rate contracts                            |  |                                 | 6,547    |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 6,547      |  
|Investments in equity securities [note 10]         |  |                                 |         |   |                      |   |        |                   |  |   | 14,807                    |  |  |       |           |   |  |   | 14,807     |  
|Advances receivable from Inkai [note 30]           |  |                                 |         |   |                      |   | 90,095  |                   |  |   |                          |  |  |       |           |   |  |   | 90,095     |  
|Other                                              |  |                                 |         |   |                      |   | 4,966   |                   |  |   |                          |  |  |       |           |   |  |   | 4,966      |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|                                                   |  | $                               | 10,612   |   |                      | $ | 657,821 |                   |  | $ | 14,807                    |  |  | $     |           |   |  | $ | 683,240    |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Financial liabilities                              |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Accounts payable and accrued liabilities [note 11] |  | $                               |         |   |                      | $ |        |                   |  | $ |                          |  |  | $     | 312,900    |   |  | $ | 312,900    |  
|Dividends payable                                  |  |                                 |         |   |                      |   |        |                   |  |   |                          |  |  |       | 39,579     |   |  |   | 39,579     |  
|Derivative liabilities [note 14]                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Foreign currency contracts                         |  |                                 | 29,231   |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 29,231     |  
|Uranium contracts                                  |  |                                 | 29,654   |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 29,654     |  
|Long-term debt [note 13]                           |  |                                 |         |   |                      |   |        |                   |  |   |                          |  |  |       | 1,493,327  |   |  |   | 1,493,327  |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|                                                   |  |                                 | 58,885   |   |                      |   |        |                   |  |   |                          |  |  |       | 1,845,806  |   |  |   | 1,904,691  |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Net                                                |  | $                               | (48,273  | ) |                      | $ | 657,821 |                   |  | $ | 14,807                    |  |  | $     | (1,845,806 | ) |  | $ | (1,221,451 | )
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|                                                   |  |                                 |          |   |                     
|At December 31, 2015                               |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|                                                   |  |                                 |          |   |                     
|                                                   |  | Fair valuethroughprofit or loss |          |   | Loans andreceivables |   |         | Available forsale |  |   | Otherfinancialliabilities |  |  | Total |           
|Financial assets                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Cash and cash equivalents                          |  | $                               |         |   |                      | $ | 458,604 |                   |  | $ |                          |  |  | $     |           |   |  | $ | 458,604    |  
|Accounts receivable [note 6]                       |  |                                 |         |   |                      |   | 246,865 |                   |  |   |                          |  |  |       |           |   |  |   | 246,865    |  
|Derivative assets [note 10]                        |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Foreign currency contracts                         |  |                                 | 360      |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 360        |  
|Interest rate contracts                            |  |                                 | 10,783   |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 10,783     |  
|Investments in equity securities [note 10]         |  |                                 |         |   |                      |   |        |                   |  |   | 938                       |  |  |       |           |   |  |   | 938        |  
|Advances receivable from Inkai [note 30]           |  |                                 |         |   |                      |   | 87,188  |                   |  |   |                          |  |  |       |           |   |  |   | 87,188     |  
|Other                                              |  |                                 |         |   |                      |   | 3,446   |                   |  |   |                          |  |  |       |           |   |  |   | 3,446      |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|                                                   |  | $                               | 11,143   |   |                      | $ | 796,103 |                   |  | $ | 938                       |  |  | $     |           |   |  | $ | 808,184    |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Financial liabilities                              |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Accounts payable and accrued liabilities [note 11] |  | $                               |         |   |                      | $ |        |                   |  | $ |                          |  |  | $     | 317,856    |   |  | $ | 317,856    |  
|Dividends payable                                  |  |                                 |         |   |                      |   |        |                   |  |   |                          |  |  |       | 39,579     |   |  |   | 39,579     |  
|Derivative liabilities [note 14]                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Foreign currency contracts                         |  |                                 | 167,420  |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 167,420    |  
|Other                                              |  |                                 | 816      |   |                      |   |        |                   |  |   |                          |  |  |       |           |   |  |   | 816        |  
|Long-term debt [note 13]                           |  |                                 |         |   |                      |   |        |                   |  |   |                          |  |  |       | 1,492,237  |   |  |   | 1,492,237  |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|                                                   |  |                                 | 168,236  |   |                      |   |        |                   |  |   |                          |  |  |       | 1,849,672  |   |  |   | 2,017,908  |  
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  
|Net                                                |  | $                               | (157,093 | ) |                      | $ | 796,103 |                   |  | $ | 938                       |  |  | $     | (1,849,672 | ) |  | $ | (1,209,724 | )
|                                                   |  |                                 |          |   |                      |   |         |                   |  |   |                           |  |  |       |            |   |  |   |            |  



50



---

Cameco does not have any financial instruments classified as held-for-trading, or held-to-maturity as of the reporting date.

The following tables summarize the carrying amounts and fair values of Camecos financial instruments, including their levels in the fair value
hierarchy:

As at December 31, 2016



|                                           |  |                |            |   |            |   |        |         |  |   |            |   |  |   |            |  
|------------------------------------------ |  | -------------- | ---------- | - | ---------- | - | ------ | ------- |  | - | ---------- | - |  | - | ---------- | -
|                                           |  |               
|                                           |  |                |            |   | Fair value |  
|                                           |  | Carrying value |            |   | Level 1    |   |        | Level 2 |  |   | Total      |  
|Derivative assets [note 10]                |  |                |            |   |            |   |        |         |  |   |            |   |  |   |            |  
|Foreign currency contracts                 |  | $              | 4,065      |   |            | $ |       |         |  | $ | 4,065      |   |  | $ | 4,065      |  
|Interest rate contracts                    |  |                | 6,547      |   |            |   |       |         |  |   | 6,547      |   |  |   | 6,547      |  
|Investments in equity securities [note 10] |  |                | 14,807     |   |            |   | 14,807 |         |  |   |           |   |  |   | 14,807     |  
|Derivative liabilities [note 14]           |  |                |            |   |            |   |        |         |  |   |            |   |  |   |            |  
|Foreign currency contracts                 |  |                | (29,231    | ) |            |   |       |         |  |   | (29,231    | ) |  |   | (29,231    | )
|Uranium contracts                          |  |                | (29,654    | ) |            |   |       |         |  |   | (29,654    | ) |  |   | (29,654    | )
|Long-term debt [note 13]                   |  |                | (1,493,327 | ) |            |   |       |         |  |   | (1,721,805 | ) |  |   | (1,721,805 | )
|                                           |  |                |            |   |            |   |        |         |  |   |            |   |  |   |            |  
|Net                                        |  | $              | (1,526,793 | ) |            | $ | 14,807 |         |  | $ | (1,770,078 | ) |  | $ | (1,755,271 | )
|                                           |  |                |            |   |            |   |        |         |  |   |            |   |  |   |            |  

As at December 31, 2015



|                                           |  |                |            |   |            |   |     |         |  |   |            |   |  |   |            |  
|------------------------------------------ |  | -------------- | ---------- | - | ---------- | - | --- | ------- |  | - | ---------- | - |  | - | ---------- | -
|                                           |  |               
|                                           |  |                |            |   | Fair value |  
|                                           |  | Carrying value |            |   | Level 1    |   |     | Level 2 |  |   | Total      |  
|Derivative assets [note 10]                |  |                |            |   |            |   |     |         |  |   |            |   |  |   |            |  
|Foreign currency contracts                 |  | $              | 360        |   |            | $ |    |         |  | $ | 360        |   |  | $ | 360        |  
|Interest rate contracts                    |  |                | 10,783     |   |            |   |    |         |  |   | 10,783     |   |  |   | 10,783     |  
|Investments in equity securities [note 10] |  |                | 938        |   |            |   | 938 |         |  |   |           |   |  |   | 938        |  
|Derivative liabilities [note 14]           |  |                |            |   |            |   |     |         |  |   |            |   |  |   |            |  
|Foreign currency contracts                 |  |                | (167,420   | ) |            |   |    |         |  |   | (167,420   | ) |  |   | (167,420   | )
|Share purchase options                     |  |                | (816       | ) |            |   |    |         |  |   | (816       | ) |  |   | (816       | )
|Long-term debt [note 13]                   |  |                | (1,492,237 | ) |            |   |    |         |  |   | (1,786,567 | ) |  |   | (1,786,567 | )
|                                           |  |                |            |   |            |   |     |         |  |   |            |   |  |   |            |  
|Net                                        |  | $              | (1,648,392 | ) |            | $ | 938 |         |  | $ | (1,943,660 | ) |  | $ | (1,942,722 | )
|                                           |  |                |            |   |            |   |     |         |  |   |            |   |  |   |            |  

The preceding tables exclude fair value information for financial instruments whose carrying amounts are a reasonable
approximation of fair value. The carrying value of Camecos cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximates its fair value as a result of the short-term nature of the instruments.

There were no transfers between level 1 and level 2 during the period. Cameco does not have any financial instruments that are classified as level 3 as of the
reporting date.



|B. | Financial instruments measured at fair value
|-- | --------------------------------------------

Cameco measures its derivative financial instruments,
material investments in equity securities and long-term debt at fair value. Investments in publicly held equity securities are classified as a recurring level 1 fair value measurement while derivative financial instruments and long-term debt are
classified as a recurring level 2 fair value measurement.

The fair value of investments in equity securities is determined using quoted share prices
observed in the principal market for the securities as of the reporting date. The fair value of Camecos long-term debt is determined using quoted market yields as of the reporting date, which ranged from 0.8% to 2.3% (2015 - 0.6% to 2.2%).



51



---

Foreign currency derivatives consist of foreign currency forward contracts, options and swaps. The fair value of
foreign currency options is measured based on the Black Scholes option-pricing model. The fair value of foreign currency forward contracts and swaps is measured using a market approach, based on the difference between contracted foreign exchange
rates and quoted forward exchange rates as of the reporting date.

Interest rate derivatives consist of interest rate swap contracts. The fair value of
interest rate swaps is determined by discounting expected future cash flows from the contracts. The future cash flows are determined by measuring the difference between fixed interest payments to be received and floating interest payments to be made
to the counterparty based on Canada Dealer Offer Rate forward interest rate curves.

Uranium contract derivatives consist of written options and price
swaps. The fair value of uranium options is measured based on the Black Scholes option-pricing model. The fair value of uranium price swaps is determined by discounting expected future cash flows from the contracts. The future cash flows are
determined by measuring the difference between fixed purchases or sales under contracted prices, and floating purchases or sales based on Numerco forward uranium price curves.

Where applicable, the fair value of the derivatives reflects the credit risk of the instrument and includes adjustments to take into account the credit risk
of the Company and counterparty. These adjustments are based on credit ratings and yield curves observed in active markets at the reporting date.

Derivatives

The following table summarizes the fair
value of derivatives and classification on the consolidated statements of financial position:



|                                                                          |  |      |         |   |      |   |          |  
|------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | -------- | -
|                                                                          |  | 2016 |         |   | 2015 |  
|Non-hedge derivatives:                                                    |  |      |         |   |      |   |          |  
|Foreign currency contracts                                                |  | $    | (25,166 | ) |      | $ | (167,060 | )
|Interest rate contracts                                                   |  |      | 6,547   |   |      |   | 10,783   |  
|Contract derivatives                                                      |  |      | (29,654 | ) |      |   | (816     | )
|                                                                          |  |      |         |   |      |   |          |  
|Net                                                                       |  | $    | (48,273 | ) |      | $ | (157,093 | )
|                                                                          |  |      |         |   |      |   |          |  
|Classification:                                                           |  |      |         |   |      |   |          |  
|Current portion of long-term receivables, investments and other [note 10] |  | $    | 4,119   |   |      | $ | 3,823    |  
|Long-term receivables, investments and other [note 10]                    |  |      | 6,493   |   |      |   | 7,320    |  
|Current portion of other liabilities [note 14]                            |  |      | (24,966 | ) |      |   | (168,236 | )
|Other liabilities [note 14]                                               |  |      | (33,919 | ) |      |   |         |  
|                                                                          |  |      |         |   |      |   |          |  
|Net                                                                       |  | $    | (48,273 | ) |      | $ | (157,093 | )
|                                                                          |  |      |         |   |      |   |          |  



52



---

The following table summarizes the different components of the gains (losses) on derivatives included in net
earnings:



|                           |  |      |         |   |      |   |          |  
|-------------------------- |  | ---- | ------- | - | ---- | - | -------- | -
|                           |  | 2016 |         |   | 2015 |  
|Non-hedge derivatives:     |  |      |         |   |      |   |          |  
|Foreign currency contracts |  | $    | 59,398  |   |      | $ | (292,039 | )
|Interest rate contracts    |  |      | (1,016  | ) |      |   | 10,708   |  
|Uranium contracts          |  |      | (23,975 | ) |      |   | 721      |  
|                           |  |      |         |   |      |   |          |  
|Net                        |  | $    | 34,407  |   |      | $ | (280,610 | )
|                           |  |      |         |   |      |   |          |  



|26. | Capital management
|--- | ------------------

Camecos capital structure reflects our vision and the environment in which we
operate. We seek growth through development and expansion of existing assets by acquisition. Our capital resources are managed to support achievement of our goals. The overall objectives for managing capital in 2016 remained unchanged from the prior
comparative period.

Camecos management considers its capital structure to consist of bank overdrafts, long-term debt, short-term debt (net of cash
and cash equivalents and short-term investments), non-controlling interest and shareholders equity.

The
capital structure at December 31 was as follows:



|                          |  |      |           |   |      |   |           |  
|------------------------- |  | ---- | --------- | - | ---- | - | --------- | -
|                          |  | 2016 |           |   | 2015 |  
|Long-term debt [note 13]  |  | $    | 1,493,327 |   |      | $ | 1,492,237 |  
|Cash and cash equivalents |  |      | (320,278  | ) |      |   | (458,604  | )
|                          |  |      |           |   |      |   |           |  
|Net debt                  |  |      | 1,173,049 |   |      |   | 1,033,633 |  
|                          |  |      |           |   |      |   |           |  
|Non-controlling interest  |  |      | 157       |   |      |   | (1,741    | )
|Shareholders equity      |  |      | 5,258,371 |   |      |   | 5,547,020 |  
|                          |  |      |           |   |      |   |           |  
|Total equity              |  |      | 5,258,528 |   |      |   | 5,545,279 |  
|                          |  |      |           |   |      |   |           |  
|Total capital             |  | $    | 6,431,577 |   |      | $ | 6,578,912 |  
|                          |  |      |           |   |      |   |           |  

Cameco is bound by certain covenants in its general credit facilities. These covenants place restrictions on total debt,
including guarantees and set minimum levels for net worth. As of December 31, 2016, Cameco met these requirements.

The terms of NUKEMs
revolving loan facility contain a financial covenant that places restrictions on total debt and working capital balances. The facility also requires Cameco, as guarantor, to maintain a minimum credit rating. As of December 31, 2016 the Company
is in compliance with all requirements under this facility.



|27. | Segmented information
|--- | ---------------------

Cameco has three reportable segments: uranium, fuel services and NUKEM. The
uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate. The fuel services segment involves the refining, conversion and fabrication of uranium concentrate and the purchase and sale of conversion
services. The NUKEM segment acts as a market intermediary between uranium producers and nuclear-electric utilities.

Camecos reportable segments are
strategic business units with different products, processes and marketing strategies.

Accounting policies used in each segment are consistent with the
policies outlined in the summary of significant accounting policies. Segment revenues, expenses and results include transactions between segments incurred in the ordinary course of business. These transactions are priced on an arms length
basis, are eliminated on consolidation and are reflected in the other column.



53



---

|A. | Business segments - 2016
|-- | ------------------------

For the year ended December 31, 2016



|                                    |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|----------------------------------- |  | ------- | --------- | - | ------------ | - | ------- | ----- |  | - | ------- | - |  | ----- | -------- | - |  | - | --------- | -
|                                    |  | Uranium |           |   | Fuelservices |   |         | NUKEM |  |   | Other   |   |  | Total |         
|Revenue                             |  | $       | 1,717,896 |   |              | $ | 321,374 |       |  | $ | 391,402 |   |  | $     | 732      |   |  | $ | 2,431,404 |  
|Expenses                            |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Cost of products and services sold  |  |         | 993,012   |   |              |   | 223,991 |       |  |   | 380,695 |   |  |       | (1,463   | ) |  |   | 1,596,235 |  
|Depreciation and amortization       |  |         | 281,159   |   |              |   | 33,951  |       |  |   | 38,273  |   |  |       | 18,306   |   |  |   | 371,689   |  
|                                    |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Cost of sales                       |  |         | 1,274,171 |   |              |   | 257,942 |       |  |   | 418,968 |   |  |       | 16,843   |   |  |   | 1,967,924 |  
|                                    |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Gross profit (loss)                 |  |         | 443,725   |   |              |   | 63,432  |       |  |   | (27,566 | ) |  |       | (16,111  | ) |  |   | 463,480   |  
|                                    |  |         |           |   |             
|Administration                      |  |         |          |   |              |   |        |       |  |   | 20,088  |   |  |       | 186,564  |   |  |   | 206,652   |  
|Impairment charges                  |  |         | 361,989   |   |              |   |        |       |  |   |        |   |  |       |         |   |  |   | 361,989   |  
|Exploration                         |  |         | 42,579    |   |              |   |        |       |  |   |        |   |  |       |         |   |  |   | 42,579    |  
|Research and development            |  |         |          |   |              |   |        |       |  |   |        |   |  |       | 4,952    |   |  |   | 4,952     |  
|Other operating income              |  |         | (34,075   | ) |              |   |        |       |  |   |        |   |  |       |         |   |  |   | (34,075   | )
|Loss on disposal of assets          |  |         | 22,787    |   |              |   | 221     |       |  |   | 160     |   |  |       |         |   |  |   | 23,168    |  
|Finance costs                       |  |         |          |   |              |   |        |       |  |   | 4,056   |   |  |       | 107,850  |   |  |   | 111,906   |  
|Gain on derivatives                 |  |         |          |   |              |   |        |       |  |   | (6,530  | ) |  |       | (27,877  | ) |  |   | (34,407   | )
|Finance income                      |  |         |          |   |              |   |        |       |  |   | (396    | ) |  |       | (3,983   | ) |  |   | (4,379    | )
|Other expense (income)              |  |         | (56,219   | ) |              |   | (10,372 | )     |  |   | 329     |   |  |       | 5,591    |   |  |   | (60,671   | )
|                                    |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Earnings (loss) before income taxes |  |         | 106,664   |   |              |   | 73,583  |       |  |   | (45,273 | ) |  |       | (289,208 | ) |  |   | (154,234  | )
|Income tax recovery                 |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   | (94,355   | )
|                                    |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Net loss                            |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   | (59,879   | )
|                                    |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Capital expenditures for the year   |  | $       | 201,722   |   |              | $ | 13,983  |       |  | $ | 1,203   |   |  | $     |         |   |  | $ | 216,908   |  
|                                    |  |         |           |   |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  



54



---

For the year ended December 31, 2015



|                                              |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|--------------------------------------------- |  | ------- | --------- |  | ------------ | - | ------- | ----- |  | - | ------- | - |  | ----- | -------- | - |  | - | --------- | -
|                                              |  | Uranium |           |  | Fuelservices |   |         | NUKEM |  |   | Other   |   |  | Total |         
|Revenue                                       |  | $       | 1,866,198 |  |              | $ | 318,999 |       |  | $ | 553,665 |   |  | $     | 15,516   |   |  | $ | 2,754,378 |  
|                                              |  |         |           |  |             
|Expenses                                      |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Cost of products and services sold            |  |         | 989,239   |  |              |   | 226,854 |       |  |   | 516,880 |   |  |       | 11,842   |   |  |   | 1,744,815 |  
|Depreciation and amortization                 |  |         | 269,084   |  |              |   | 30,670  |       |  |   | (5,103  | ) |  |       | 17,867   |   |  |   | 312,518   |  
|                                              |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Cost of sales                                 |  |         | 1,258,323 |  |              |   | 257,524 |       |  |   | 511,777 |   |  |       | 29,709   |   |  |   | 2,057,333 |  
|                                              |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Gross profit (loss)                           |  |         | 607,875   |  |              |   | 61,475  |       |  |   | 41,888  |   |  |       | (14,193  | ) |  |   | 697,045   |  
|                                              |  |         |           |  |             
|Administration                                |  |         |          |  |              |   |        |       |  |   | 18,130  |   |  |       | 168,680  |   |  |   | 186,810   |  
|Impairment charges                            |  |         | 215,488   |  |              |   |        |       |  |   |        |   |  |       |         |   |  |   | 215,488   |  
|Exploration                                   |  |         | 40,259    |  |              |   |        |       |  |   |        |   |  |       |         |   |  |   | 40,259    |  
|Research and development                      |  |         |          |  |              |   |        |       |  |   |        |   |  |       | 6,587    |   |  |   | 6,587     |  
|Loss on disposal of assets                    |  |         | 1,753     |  |              |   | 564     |       |  |   | 9       |   |  |       |         |   |  |   | 2,326     |  
|Finance costs                                 |  |         |          |  |              |   |        |       |  |   | 4,593   |   |  |       | 99,022   |   |  |   | 103,615   |  
|Loss (gain) on derivatives                    |  |         |          |  |              |   |        |       |  |   | (587    | ) |  |       | 281,197  |   |  |   | 280,610   |  
|Finance income                                |  |         |          |  |              |   |        |       |  |   | (3      | ) |  |       | (5,414   | ) |  |   | (5,417    | )
|Share of loss from equity-accounted investees |  |         | 758       |  |              |   |        |       |  |   |        |   |  |       |         |   |  |   | 758       |  
|Other expense (income)                        |  |         | 4,600     |  |              |   |        |       |  |   | 1,899   |   |  |       | (61,222  | ) |  |   | (54,723   | )
|                                              |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Earnings (loss) before income taxes           |  |         | 345,017   |  |              |   | 60,911  |       |  |   | 17,847  |   |  |       | (503,043 | ) |  |   | (79,268   | )
|Income tax recovery                           |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   | (142,630  | )
|                                              |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Net earnings                                  |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   | 63,362    |  
|                                              |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  
|Capital expenditures for the year             |  | $       | 344,610   |  |              | $ | 13,952  |       |  | $ |        |   |  | $     |         |   |  | $ | 358,562   |  
|                                              |  |         |           |  |              |   |         |       |  |   |         |   |  |       |          |   |  |   |           |  



|B. | Geographic segments
|-- | -------------------

Revenue is attributed to the geographic location based on the location of the
entity providing the services. The Companys revenue from external customers is as follows:



|              |  |      |           |  |      |   |           | 
|------------- |  | ---- | --------- |  | ---- | - | --------- | 
|              |  | 2016 |           |  | 2015 |  
|United States |  | $    | 1,902,679 |  |      | $ | 2,135,977 | 
|Canada        |  |      | 347,536   |  |      |   | 341,568   | 
|Germany       |  |      | 181,189   |  |      |   | 276,833   | 
|              |  |      |           |  |      |   |           | 
|              |  | $    | 2,431,404 |  |      | $ | 2,754,378 | 
|              |  |      |           |  |      |   |           | 

The Companys non-current assets, excluding deferred tax assets and financial
instruments, by geographic location are as follows:



|              |  |      |           |  |      |   |           | 
|------------- |  | ---- | --------- |  | ---- | - | --------- | 
|              |  | 2016 |           |  | 2015 |  
|Canada        |  | $    | 3,665,558 |  |      | $ | 3,867,740 | 
|Australia     |  |      | 420,448   |  |      |   | 684,261   | 
|United States |  |      | 327,266   |  |      |   | 429,815   | 
|Kazakhstan    |  |      | 318,006   |  |      |   | 327,847   | 
|Germany       |  |      | 127,618   |  |      |   | 135,627   | 
|              |  |      |           |  |      |   |           | 
|              |  | $    | 4,858,896 |  |      | $ | 5,445,290 | 
|              |  |      |           |  |      |   |           | 



55



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|C. | Major customers
|-- | ---------------

Cameco relies on a small number of customers to purchase a significant portion of its
uranium concentrates and uranium conversion services. During 2016, revenues from one customer of Camecos uranium, fuel services and NUKEM segments represented approximately $223,268,000 (2015 - $320,312,000), approximately 9% (2015 - 12%) of
Camecos total revenues from these segments. As customers are relatively few in number, accounts receivable from any individual customer may periodically exceed 10% of accounts receivable depending on delivery schedule.



|28. | Group entities
|--- | --------------

The following are the principal subsidiaries and associates of the Company:



|                                       |  |                 |  |                    |       |   |      |  |       |  
|-------------------------------------- |  | --------------- |  | ------------------ | ----- | - | ---- |  | ----- | -
|                                       |  | Principal place |  | Ownership interest |      
|                                       |  | of business     |  | 2016               |       |   | 2015 | 
|Subsidiaries:                          |  |                 |  |                    |       |   |      |  |       |  
|Cameco Fuel Manufacturing Inc.         |  | Canada          |  |                    | 100   | % |      |  | 100   | %
|Cameco Inc.                            |  | US              |  |                    | 100   | % |      |  | 100   | %
|Power Resources, Inc.                  |  | US              |  |                    | 100   | % |      |  | 100   | %
|Crow Butte Resources, Inc.             |  | US              |  |                    | 100   | % |      |  | 100   | %
|NUKEM Investments GmbH                 |  | Germany         |  |                    | 100   | % |      |  | 100   | %
|Cameco Australia Pty. Ltd.             |  | Australia       |  |                    | 100   | % |      |  | 100   | %
|Cameco Europe Ltd.                     |  | Switzerland     |  |                    | 100   | % |      |  | 100   | %
|                                       |  |                 | 
|Associate                              |  |                 |  |                    |       |   |      |  |       |  
|GE-Hitachi Global Laser Enrichment LLC |  | US              |  |                    | 24.00 | % |      |  | 24.00 | %



|29. | Joint operations
|--- | ----------------

Cameco conducts a portion of its exploration, development, mining and milling
activities through joint operations located around the world. Operations are governed by agreements that provide for joint control of the strategic operating, investing and financing activities among the partners. These agreements were considered in
the determination of joint control. Camecos significant Canadian uranium joint operation interests are McArthur River, Key Lake and Cigar Lake. The Canadian uranium joint operations allocate uranium production to each joint operation
participant and the joint operation participant derives revenue directly from the sale of such product. The participants in the Inkai joint operation purchase uranium from Inkai and, in turn, derive revenue directly from the sale of such product to
third-party customers. Mining and milling expenses incurred by joint operations are included in the cost of inventory.



56



---

Cameco reflects its proportionate interest in these assets and liabilities as follows:



|                  |  |                            |            |  |           |  |       |      |  |   |           |  |  |   |           | 
|----------------- |  | -------------------------- | ---------- |  | --------- |  | ----- | ---- |  | - | --------- |  |  | - | --------- | 
|                  |  | Principal placeof business |            |  | Ownership |  |       | 2016 |  |   | 2015      | 
|Total assets      |  |                            |            |  |           |  |       |      |  |   |           |  |  |   |           | 
|McArthur River    |  |                            | Canada     |  |           |  | 69.81 | %    |  | $ | 1,093,254 |  |  | $ | 1,107,017 | 
|Key Lake          |  |                            | Canada     |  |           |  | 83.33 | %    |  |   | 571,183   |  |  |   | 629,075   | 
|Cigar Lake        |  |                            | Canada     |  |           |  | 50.03 | %    |  |   | 1,591,489 |  |  |   | 1,674,805 | 
|Inkai             |  |                            | Kazakhstan |  |           |  | 60.00 | %    |  |   | 408,077   |  |  |   | 436,611   | 
|                  |  |                            |            |  |           |  |       |      |  |   |           |  |  |   |           | 
|                  |  |                            |            |  |           |  |       |      |  | $ | 3,664,003 |  |  | $ | 3,847,508 | 
|                  |  |                            |            |  |           |  |       |      |  |   |           |  |  |   |           | 
|                  |  |                            |            | 
|Total liabilities |  |                            |            |  |           |  |       |      |  |   |           |  |  |   |           | 
|McArthur River    |  |                            |            |  |           |  | 69.81 | %    |  | $ | 43,189    |  |  | $ | 49,986    | 
|Key Lake          |  |                            |            |  |           |  | 83.33 | %    |  |   | 150,847   |  |  |   | 174,654   | 
|Cigar Lake        |  |                            |            |  |           |  | 50.03 | %    |  |   | 37,888    |  |  |   | 39,201    | 
|Inkai             |  |                            |            |  |           |  | 60.00 | %    |  |   | 175,725   |  |  |   | 176,163   | 
|                  |  |                            |            |  |           |  |       |      |  |   |           |  |  |   |           | 
|                  |  |                            |            |  |           |  |       |      |  | $ | 407,649   |  |  | $ | 440,004   | 
|                  |  |                            |            |  |           |  |       |      |  |   |           |  |  |   |           | 

Through unsecured shareholder loans, Cameco has agreed to fund the development of the Inkai project. Cameco eliminates the
loan balances recorded by Inkai and records advances receivable (notes 10 and 30) representing its 40% share.



|30. | Related parties
|--- | ---------------

The shares of Cameco are widely held and no shareholder, resident in Canada, is allowed
to own more than 25% of the Companys outstanding common shares, either individually or together with associates. A non-resident of Canada is not allowed to own more than 15%.

Transactions with key management personnel

Key
management personnel are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel of the Company include executive officers,
vice-presidents, other senior managers and members of the board of directors.

In addition to their salaries, Cameco also provides non-cash benefits to executive officers and vice-presidents and contributes to pension plans on their behalf (note 24). Senior management and directors also participate in the Companys share-based compensation
plans (note 23).

Executive officers are subject to terms of notice ranging from three to six months. Upon resignation at the Companys request, they
are entitled to termination benefits of up to the lesser of 18 to 24 months or the period remaining until age 65. The termination benefits include gross salary plus the target short-term incentive bonus for the year in which termination occurs.

Compensation for key management personnel was comprised of:



|                             |  |      |        |  |      |   |        | 
|---------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                             |  | 2016 |        |  | 2015 |  
|Short-term employee benefits |  | $    | 17,673 |  |      | $ | 20,271 | 
|Share-based compensation     |  |      | 10,464 |  |      |   | 12,749 | 
|Post-employment benefits     |  |      | 5,910  |  |      |   | 5,787  | 
|Termination benefits         |  |      | 608    |  |      |   |       | 
|                             |  |      |        |  |      |   |        | 
|                             |  | $    | 34,655 |  |      | $ | 38,807 | 
|                             |  |      |        |  |      |   |        | 



|(a) | Excludes deferred share units held by directors (see note 23).
|--- | --------------------------------------------------------------



57



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Other related party transactions

Through unsecured shareholder loans, Cameco has agreed to fund Inkais project development costs as well as further evaluation on block 3. The limits of
the loan facilities are $175,000,000 (US) and advances under these facilities bear interest at a rate of LIBOR plus 2%. At December 31, 2016, $167,750,000 (US) of principal and interest was outstanding (2015 - $157,492,000 (US)).

Camecos share of outstanding principal and interest was $90,095,000 at December 31, 2016 (2015 - $87,188,000) (note 10). For the year ended
December 31, 2016, Cameco recorded interest income of $2,155,000 relating to this balance (2015 - $2,007,000).



58