The company’s uranium business, higher costs of sales adversely affected uranium profits in the first quarter. However, these costs for 2009, excluding costs for purchased uranium, are still expected to be within prior guidance (increasing by between 5% and 10%). Overall costs of sales are forecast to rise by 15% to 20% as the company expects to purchase additional uranium at prices substantially higher than our costs of production to take advantage of trading opportunities.

The company’s electricity business, higher generation led to stronger results. Cameco’s gold business was impacted by lower production and higher operating costs.

Operationally, we are off to a much better start to the year and have set high expectations for 2009, said Cameco’s president and chief executive officer Jerry Grandey. We are also pleased that we have reached an agreement that provides a secure environment for Centerra’s continued operation and potential growth in Kyrgyzstan while facilitating our eventual divestiture.

Uranium Results

In first quarter of 2009, revenue from Cameco’s uranium business decreased by CAD2 million to CAD336 million compared to the same period in 2008 due to a 4% decrease in reported sales volumes being largely offset by a 5% increase in the realized selling price (in Canadian dollars). The timing of deliveries of uranium products within a calendar year is at the discretion of customers. Therefore, quarterly delivery patterns can vary significantly. The increase in the average realized price (in Canadian dollars) was related to higher prices under fixed-price contracts and a more favourable foreign exchange rate.

Cameco’s total cost of products and services sold, including depreciation, depletion and reclamation (DD&R), increased to CAD220 million in the first quarter of 2009 from CAD169 million in the first quarter of 2008 due to a 38% increase in the unit cost of product and services sold. Average unit cost of sales were negatively impacted by the carryover effect of lower production in 2008, recent purchases at near market prices, higher royalties and increased input costs. Purchases are made to gather market intelligence and where we identify trading opportunities.

Fuel Services Results

In the first quarter of 2009, revenue from Cameco’s fuel services business was CAD54 million, a decrease of CAD5 million compared to the same period in 2008 due to a decrease in reported sales volumes, partially offset by an increase in the average realized price.

The total cost of products and services sold, including DD&R, decreased to CAD47 million from CAD56 million in the same period of 2008. The cost of products sold in both 2009 and 2008 were impacted by the shutdown of the Port Hope UF6 conversion plant. All costs associated with the UF6 conversion plant were expensed as incurred in the first quarter of each year (2009 – CAD11 million; 2008 – CAD14 million).

Cameco’s Port Hope conversion services and fuel manufacturing production and SFL supply totalled 2.1 million kgU in the first quarter of 2009, the same as in the first quarter of 2008. UF6 production in Port Hope was suspended in the first quarter of both 2008 and 2009.

At our Blind River refinery, we produced 3.6 million kgU in the first quarter of 2009 compared to 3.2 million kgU for the first quarter of 2008.

Nuclear Electricity Generation

Highlights

Cameco owns 31.6% of the Bruce Power Limited Partnership (BPLP). During the first quarter, Cameco’s pre-tax earnings from BPLP amounted to CAD44 million compared to CAD6 million in the same period of 2008. This increase in 2009 was due to improved generation and revenue, and lower costs as there were no planned outages during the quarter.

BPLP achieved a capacity factor of 97% in the first quarter of 2009 compared to 72% in the same period of 2008.

Gold

Cameco owns about 53% of Centerra Gold Inc., which owns and operates two gold mines.

Outlook for the year 2009

2009 Outlook for Uranium

In 2009, reported uranium sales volumes are expected to total 32 million to 34 million pounds U3O8 compared to the 31 to 33 million pounds previously reported due to new commitments entered into with deliveries in 2009. As a result, now expect uranium revenue for 2009 to decrease 2% to 5% over 2008, which is less than the previously estimated decrease of 5% to 10%.

The company’s unit cost of product sold, excluding the impact of purchased material, is forecast to rise by 5% to 10% in 2009 compared to 2008. However, the company expects to purchase additional uranium at prices substantially higher than our cost of production in order to take advantage of trading opportunities. Therefore, the overall cost of product sold is now forecast to increase by 15% to 20% over 2008 compared to the previous estimate of 5% to 10%.