Form 6-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UpABIGYNCbsjU6RSFhztEJWgtRFdza1haBhey4s2Gd1YEQs4e1orPP/OaL/v6aOu 3wIok7vClhi6nkXF13DQ1A== 0000950123-09-056201.txt : 20091102 0000950123-09-056201.hdr.sgml : 20091102 20091102152751 ACCESSION NUMBER: 0000950123-09-056201 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20091101 FILED AS OF DATE: 20091102 DATE AS OF CHANGE: 20091102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMECO CORP CENTRAL INDEX KEY: 0001009001 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS METAL ORES [1090] IRS NUMBER: 980113090 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14228 FILM NUMBER: 091150965 BUSINESS ADDRESS: STREET 1: 2121 11TH ST W CITY: SASKATOON STATE: A9 ZIP: S7M 1J3 BUSINESS PHONE: 3069566200 MAIL ADDRESS: STREET 1: 2121 11TH ST W. CITY: SASKATOON STATE: A9 ZIP: S7M 1J3 6-K 1 c91754e6vk.htm FORM 6-K Form 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 Under
the Securities Exchange Act of 1934

For the month of November, 2009

Cameco Corporation

(Commission file No. 1-14228)

2121-11th Street West
Saskatoon, Saskatchewan, Canada S7M 1J3
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F o Form 40-F þ

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

Exhibit Index


Exhibit No.		Description	Page No.

	99.1	Press Release dated November 2, 2009

	99.2	Management’s Discussion & Analysis for the third quarter ending September 30, 2009

	99.3	Interim Unaudited Financial Statements for the third quarter ending September 30, 2009

	99.4	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 2, 2009

	99.5	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated November 2, 2009

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: November 2, 2009	Cameco Corporation
	By:	“Gary M. S. Chad”
		Gary M.S. Chad
		Senior Vice-President, Governance, Law and Corporate Secretary

Page 2

EX-99.1 2 c91754exv99w1.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1



TSX: CCO NYSE: CCJ				website: cameco.com currency: Cdn (unless noted)

2121 — 11^th Street West, Saskatoon, Saskatchewan, S7M 1J3 Canada
Tel: (306) 956-6200 Fax: (306) 956-6201

Cameco Reports Third Quarter Earnings

Saskatoon, Saskatchewan, Canada, November 2, 2009

Cameco Corporation (TSX: CCO; NYSE: CCJ) today reported third quarter 2009 net earnings of $172 million ($0.44 per share diluted), $37 million higher than net earnings of $135 million ($0.39 per share diluted) recorded in the third quarter of 2008. For the nine months ended September 30, 2009, net earnings were $501 million ($1.29 per share diluted), $82 million higher than net earnings of $419 million ($1.21 per share diluted) recorded in the first nine months of 2008.

Third quarter 2009 adjusted net earnings¹ of $104 million ($0.26 per share adjusted and diluted) were 18% lower than in the third quarter of 2008. Adjusted net earnings¹ for the first nine months of 2009 were $334 million ($0.86 per share adjusted and diluted), 19% lower than in 2008 due to lower earnings in the uranium and gold businesses, partially offset by higher results in the fuel services and electricity businesses.

“Cameco remains on target for another strong year in revenue and cash flow,” said Cameco president and CEO Jerry Grandey. “Our focus on performance has given Cameco the capacity to respond to the positive long-term fundamentals we see in our business — supplying uranium fuel to an energy-hungry world where nuclear is increasingly seen as the leading, credible option for clean energy generation.”

In our uranium business, third quarter profits were in line with our quarterly delivery expectations communicated in last quarter’s MD&A. Profits for both the third quarter and the first nine months of 2009 continue to be adversely affected by the higher unit cost of product and services sold. Consistent with prior disclosure, our unit cost of product and services sold is still expected to be 20% to 25% higher when compared to 2008. The expected cost of produced material remains unchanged from the last two quarterly reports. The increase in the unit cost of product and services sold is largely attributable to uranium purchases at prices substantially higher than our costs of production to support our sales activities, including higher trading volumes.

Our gold business was impacted by lower gold production and higher operating costs during the quarter and for the first nine months of the year.


¹		Net earnings for the quarters and nine months ended September 30, 2008 and 2009 have been adjusted to exclude a number of items. Adjusted net earnings is a non-GAAP measure. For a description see “Use of Non-GAAP Financial Measures” on page 9.

In our electricity business, an increase in the realized price led to stronger results in the quarter and for the first nine months of the year. The increase was due largely to revenue recognized by BPLP under its agreement with the Ontario Power Authority (OPA). In addition, an increase in generation contributed to the improved results for the first nine months.

Results in our fuel services business were positively impacted by lower operating costs during the quarter and for the first nine months of the year. In addition, higher revenues in the first nine months of the year as a result of an increase in the average realized price for fuel services products contributed to the stronger yearly results.

Note: All dollar amounts are expressed in Canadian dollars unless otherwise stated. Cameco’s unaudited third quarter financial statements and management’s discussion and analysis are available on our company’s website cameco.com, on SEDAR at sedar.com and on EDGAR at sec.gov/edgar.shtml.


	Three months ended				Nine months ended
	September 30				September 30				Yr/Yr
Financial Highlights	2009		2008		2009		2008		Change %
Revenue ($ millions)		694		729		2,083		1,941		7
Net earnings ($ millions)		172		135		501		419		20
Earnings per share (EPS) — basic ($)		0.44		0.39		1.30		1.22		7
EPS — diluted ($)		0.44		0.39		1.29		1.21		7
Adjusted net earnings ($ millions)¹		104		127		334		414		(19	)
EPS — adjusted and diluted ($)¹		0.26		0.37		0.86		1.19		(28	)
Weighted average common shares outstanding (millions)		393		346		386		345		12
Cash provided by operations² ($ millions)		248		109		565		368		54


¹		Net earnings for the quarters and nine months ended September 30, 2008 and 2009 have been adjusted to exclude a number of items. Adjusted net earnings is a non-GAAP measure. For a description see “Use of Non-GAAP Financial Measures” on page 9.

²		Including changes in working capital. For more information on working capital changes, refer to note 13 of the third quarter unaudited consolidated financial statements.

Cameco’s results come from four business segments:

URANIUM

Highlights

Three months ended

Nine months ended

September 30

2009

2008

2009

2008

Revenue ($ millions)¹

329

396

1,108

1,062

Gross profit ($ millions)

120

356

473

Gross profit %

Average realized price

($US/lb)

34.24

37.88

37.26

42.69

($Cdn/lb)

39.18

39.90

45.80

44.42

Sales volume (million lbs)¹

8.3

9.8

23.9

23.6

Production volume (million lbs)

5.6

2.8

14.1

11.8


¹		Revenue in the amount of $85 million on 2.6 million pounds previously deferred due to a standby product loan was recognized in the first quarter of 2008 as a result of the cancellation of a product loan agreement.

Uranium Results

For the third quarter of 2009, revenue from our uranium business was lower by $67 million at $329 million due to a 15% decrease in reported sales volumes and a 2% decrease in the realized selling price (in Canadian dollars). The decrease in the average realized price was related to lower realized prices under market-related and fixed-price contracts. A more favourable foreign exchange rate partially mitigated the Canadian dollar decline.

The timing of deliveries of uranium products within a calendar year is at the discretion of customers. Therefore, our quarterly delivery patterns can vary significantly.

Our total cost of products and services sold, including depreciation, depletion and reclamation (DD&R), decreased to $260 million in the third quarter of 2009 from $275 million in the third quarter of 2008 due to the 15% decrease in sales volume, partially offset by a 12% increase in the unit cost of product and services sold. The unit cost of product and services sold for the third quarter continued to be negatively impacted by recent purchases at near market prices.

For the first nine months of 2009, revenue from our uranium business increased by $46 million to $1,108 million due to a 3% increase in the realized selling price (in Canadian dollars) and a 1% increase in reported sales volumes.

Our total cost of products and services sold, including DD&R, increased to $752 million in the first nine months of 2009 from $589 million in 2008 due primarily to a 26% increase in the unit cost of product and services sold. The unit cost of product and services sold was negatively impacted by the carryover effect of lower production in 2008, recent purchases at near market prices, higher royalties and increased input costs.

Uranium Production

Three months ended

Nine months ended

Cameco’s share of production

September 30

2009 planned

(million lbs U₃O₈)

2009

2008

2009

2008

production¹

McArthur River/ Key Lake

3.8

2.1

9.3

8.5

13.1

Rabbit Lake

0.9

0.2

2.4

1.7

3.6

Smith Ranch/Highland

0.4

0.3

1.3

1.0

1.8

Crow Butte

0.2

0.1

0.6

0.4

0.8

Inkai

0.3

0.1

0.5

0.2

0.9

Total

5.6

2.8

14.1

11.8

20.2


¹		See the section titled “Uranium Production Outlook (2009 to 2013)” in our third quarter MD&A for more information about the assumptions and risk factors associated with this production forecast.

FUEL SERVICES

Highlights


	Three months ended					Nine months ended
	September 30					September 30
	2009		2008			2009		2008
Revenue ($ millions)		50		69			186		182
Gross profit ($ millions)		4		(3	)		36		(6	)
Gross profit %		7		(5	)		20		(3	)
Sales volume (million kgU)¹		2.8		3.7			8.9		10.2
Production volume (million kgU)²		4.1		1.8			8.4		5.7


¹		Kilograms of uranium (kgU).

²		Production volume includes UF₆, UO₂, fuel fabrication, and UF₆supply from Springfields Fuels Ltd. (SFL).

Fuel Services Results

Total cost of products and services sold, including DD&R, decreased to $46 million in the third quarter from $72 million for the same period in 2008. The cost of products sold in 2008 was impacted by the curtailment of production from the Port Hope UF₆conversion plant. In the third quarter of 2008, the plant was shutdown to allow for the clean up of contaminated soil and all operating costs associated with the UF₆conversion plant were expensed as incurred ($15 million). In 2009, the plant was operational throughout the third quarter and operating costs were allocated to inventory.

In the first nine months of 2009, revenue from our fuel services business was $186 million, an increase of $4 million compared to the same period in 2008 due to an 18% increase in the average realized price for fuel services products, primarily UF₆conversion, partially offset by a 13% decline in sales volumes. The timing of deliveries of fuel services within a calendar year is at the discretion of customers. Therefore, our quarterly delivery patterns can vary significantly.

Total cost of products and services sold, including DD&R, decreased to $149 million in the first nine months of 2009 from $188 million for the same period in 2008. The cost of products sold in both 2009 and 2008 was impacted by the curtailment of production from the Port Hope UF₆conversion plant. In the first half of 2009, the plant was shutdown due to the unavailability of hydrofluoric acid (HF), while in 2008 operations were suspended to allow for the clean up of contaminated soil. All operating costs associated with the UF₆conversion plant were expensed as incurred in the first half of 2009 ($18 million) and the first nine months of 2008 ($43 million).

Our Port Hope conversion services, fuel manufacturing production and SFL supply totalled 4.1 million kgU in the third quarter of 2009 compared to 1.8 million kgU in the third quarter of 2008. Port Hope conversion services, fuel manufacturing production and SFL supply was 8.4 million kgU for the first nine months of 2009 compared to 5.7 million kgU for the same period in 2008.

At our Blind River refinery, we produced 1.9 million kgU in the third quarter of 2009 compared to 1.1 million kgU for the third quarter of 2008. Total UO₃ production for the first nine months of 2009 was 9.0 million kgU compared to 7.2 million kgU in the first nine months of 2008.

NUCLEAR ELECTRICITY GENERATION

Cameco owns 31.6% of the Bruce Power Limited Partnership (BPLP).

During the third quarter, our pre-tax earnings from BPLP amounted to $78 million compared to $61 million for the same period in 2008. This increase in 2009 was due to the increased revenue, partially offset by higher operating costs.

BPLP achieved an adjusted capacity factor of 97% in the third quarter, which includes actual generation and deemed generation of 0.8 TWh. The deemed generation resulted from the B units having their power output reduced in response to dispatch orders from the market operator driven by periods of excess baseload generation in Ontario. Excluding deemed generation, the capacity factor was 86% in the third quarter of 2009 compared to 94% in the same period of 2008. During the third quarter of 2009, BPLP’s units generated 6.2 TWh of electricity compared to 6.8 TWh for the same period in 2008.

The realized price, which reflects spot sales, revenue recognized under BPLP’s agreement with the OPA and financial contract revenue, averaged $66 per MWh in the quarter, 12% higher than the realized price for the third quarter of 2008. The increase is largely the result of recognizing revenue of $205 million (our share, $65 million) under the agreement with the OPA during the quarter. During the quarter, the Ontario electricity spot price averaged $22 per MWh compared to $51 per MWh in the third quarter of 2008. Electricity prices in the Ontario market have been trending lower due primarily to reduced industrial demand, increased generation and low fossil fuel prices.

Our pre-tax earnings from BPLP for the first nine months of 2009 amounted to $162 million compared to $86 million in the same period of 2008. The increase is attributable to higher revenues.

For the first nine months of the year, BPLP’s units achieved an adjusted capacity factor of 90%, which includes actual generation and deemed generation of 0.8 TWh. Excluding deemed generation, the capacity factor was 86% compared with 82% in the same period last year. These units produced 18.2 TWh during the first nine months of 2009, an increase of 0.5 TWh over the same period last year. The increase is due primarily to fewer outage days in 2009 compared to 2008.

The realized price, which reflects spot sales, revenue recognized under BPLP’s agreement with the OPA and financial contract revenue, averaged $64 per MWh for the first nine months of the year, 12% higher than the realized price in the same period last year. The increase is largely the result of recognizing revenue of $377 million under the agreement with the OPA for the first nine months of the year. During the first nine months of 2009, the Ontario electricity spot price averaged $29 per MWh, significantly lower than the average of $49 per MWh from the same period of 2008.

GOLD

Cameco owns approximately 49% of and has voting control over approximately 53% of Centerra’s shares. Centerra owns and operates two gold mines.

Highlights


	Three months ended				Nine months ended
	September 30				September 30
	2009		2008		2009		2008
Revenue ($ millions)		176		143		427		399
Gross profit ($ millions)		40		40		21		116
Gross profit %		23		28		5		29
Realized price ($US/ounce)		959		860		928		884
Sales volume (ounces)		166,000		162,000		390,000		446,000
Gold production (ounces)¹		166,000		186,000		380,000		465,000


¹		Represents 100% of production from the Kumtor and Boroo gold mines.

For the three months ended September 30, 2009, revenue from our gold business increased by $33 million to $176 million compared to the third quarter of 2008 due to a 12% increase in the US dollar selling price and a 3% increase in sales volume.

For the nine months ended September 30, 2009, revenue from our gold business increased by $28 million to $427 million compared to the first nine months of 2008 due to a 5% increase in the US dollar selling price, partially offset by a 13% decline in sales volumes. Revenues were also influenced by an improved Cdn/US exchange rate that averaged $1.17 in the first nine months of 2009 compared to $1.02 in 2008.

Centerra’s cost of product sold increased for the quarter and nine months ended September 30, 2009 compared to 2008 as a result of higher labour costs and an increase in the cost of supplies. In addition, the cost of products and services sold was impacted by recognition of revenue-based taxes in 2009.

OUTLOOK

For the convenience of the reader, we have summarized Cameco’s 2009 consolidated outlook and 2009 outlook for each business segment in a table called “2009 Financial Outlook” provided in our third quarter MD&A.

Below we discuss the material changes made to the 2009 outlook contained in our annual MD&A, as updated by our first and second quarter MD&A. There have been no material changes to our 2009 uranium outlook.

Fuel Services Outlook for 2009

In 2009, fuel services production at Port Hope and SFL is now expected to total between 11 and 13 million kgU compared to our previous estimate of between 8 and 12 million kgU. The increase in our estimate is related to the increased production expected at the Port Hope UF₆ plant as a result of increased confidence in the supply of HF. HF is a primary feed material for the production of UF₆. Productionhad been suspended due to the lack of availability of HF on acceptable terms from December 2008 to mid June 2009. However, we have broadened our sources of supply and are receiving adequate HF.

BPLP’s Outlook for 2009

Electricity revenue in 2009 is expected to increase 15% to 20% over 2008 compared to the 10% to 15% increase previously reported. This change in outlook is largely the result of a continued deterioration in the Ontario electricity market in the third quarter and BPLP recognizing revenue under its agreement with OPA.

In addition, BPLP has in place financial contracts that correspond to about 45% of planned generation over the remainder of the year. Revenue recognized under the agreement with the OPA plus benefits under the financial contracts will contribute to higher realized electricity revenue for 2009.

Gold Outlook for 2009

Centerra expects its 2009 gold production to total between 620,000 and 630,000 ounces compared to its second quarter estimate of 680,000 to 730,000 ounces. The reduction is due to lower than expected production at Kumtor resulting from deferred access to the high grade component of the SB zone in the central pit to the fourth quarter of 2009. Gold production at Kumtor is expected by Centerra to be approximately 500,000 ounces compared to the second quarter estimate of 560,000 to 600,000 ounces.

Uranium Production Outlook (2009 to 2013)

Please see our third quarter MD&A for our updated uranium production outlook table for the period 2009 to 2013.

Uranium Price Sensitivity (2009 to 2013)

Please see our third quarter MD&A for our updated uranium price sensitivity table for the period 2009 to 2013.

COMPANY UPDATES

Cigar Lake

We continue to make progress in remediating the inflow that occurred August 12, 2008 during the dewatering of the underground workings.

On October 23, 2009, we announced that dewatering of the underground development at Cigar Lake had resumed. Dewatering is progressing as planned.

We will provide new estimates of the planned production date and capital cost after the mine has been dewatered, the condition of the underground has been evaluated and the mine plan has been updated to reflect any resulting information.

McArthur River/Key Lake

At McArthur River, the initial raisebore chamber tunnel for zone 2, panel 5 was completed within the protection of freezewalls. This marks the first time development has been accomplished through the unconformity into the Athabasca sandstone. Production from this chamber is expected to start in the fourth quarter. Zone 2, panel 5 is planned to account for approximately two-thirds of McArthur River mine production in 2010. We expect approximately 85 million pounds U₃O₈ to be mined from this area. Portions of the new production raises will intersect the original freezewall developed for mining in zone 2, panels 1, 2 and 3. The original freezewall is redundant now that the freezewall for zone 2, panel 5 is in place. The steel freezepipes contained in the original freezewall pose a mining challenge. We have developed a method to remove the pipes in advance of production and are progressing with this work. Timely removal of the steel freezepipes now represents the largest remaining schedule risk that could impact 2010 production rates in this area. Over the past year, we have successfully addressed the risks associated with freeze drilling, ground freezing and development of the first raisebore chamber for this new production area.

In lower zone 4, freezehole drilling is progressing well and is on track to be completed by year end. Freezing of this new ore source is expected to begin in the first quarter of 2010 with initial production planned in the latter part of 2010.

USE OF NON-GAAP FINANCIAL MEASURES

Adjusted net earnings, a non-GAAP measure, should be considered as supplemental in nature and not a substitute for related financial information prepared in accordance with GAAP. Consolidated net earnings are adjusted in order to provide a more meaningful basis for period-to-period comparisons of the financial results. The following table outlines the adjustments to net earnings.

Adjusted Net Earnings


	Three months ended						Nine months ended
	September 30						September 30
($ millions)	2009			2008			2009			2008
Net earnings (per GAAP)		172			135			501			419
Adjustments (after tax)
Loss (gain) on restructuring of the gold business		33			(2	)		17			(29	)
Stock option expense (recovery)¹		—			(52	)		—			(34	)
Losses (gains) on financial instruments		(101	)		26			(184	)		38
Writedown of investments		—			20			—			20

Adjusted net earnings		104			127			334			414


¹		Late in 2008, we amended our stock option program and began accounting for our options using their fair value at the grant date. Under this method, our stock option expense is highly predictable. For this reason, we will not be adjusting our net earnings for stock option expense in 2009.

QUALIFIED PERSONS

The disclosure of scientific and technical information regarding the following Cameco properties in this news release was prepared by or under the supervision of the following qualified persons for the purpose of National Instrument 43-101:


Qualified Persons		Properties
• David Bronkhorst, general manager, McArthur River operation, Cameco • Les Yesnik, general manager, Key Lake operation, Cameco		McArthur River/KeyLake
• Grant Goddard, general manager, Cigar Lake project, Cameco		Cigar Lake
• Ian Atkinson, vice-president, exploration, Centerra Gold Inc.		Kumtor

CAUTION REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Statements contained in this news release which are not current statements or historical facts are “forward-looking information” (as defined under Canadian securities laws) and “forward-looking statements” (as defined in the U.S. Securities Exchange Act of 1934, as amended) which may be material and that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by them. Sentences and phrases containing words such as “believe”, “estimate”, “anticipate”, “plan”, “outlook”, “predict”, “goals”, “target”, “forecast”, “projects”, “may”, “hope”, “can”, “will”, “shall”, “should”, “expect”, “intend”, “is designed to”, “continues”, “with the intent”, “potential”, “strategy” and the negative of these words, or variations of them, or comparable terminology that does not relate strictly to current or historical facts, are all indicative of forward-looking information and statements. Examples of forward-looking information and statements include, but are not limited to: our expectations regarding future cost of sales for uranium; the statement that Cameco remains on target for strong 2009 revenue and cash flow; our 2009 planned uranium production information; the discussion of our future expectations under the heading “Outlook”; our expectations regarding the expected start date and production levels for the zone 2, panel 5 chamber at McArthur River, and the expected timing for completion of freezehole drilling, and the commencement of freezing and initial production, for lower zone 4 at McArthur River.

The material risk factors that could cause actual results to differ materially from the forward-looking information and statements contained in this news release and the material risk factors or assumptions that were used to develop them include, without limitation: our assumptions regarding production levels, sales volumes, purchases and prices, which are subject to the risk that our assumptions are incorrect; the risk of volatility and sensitivity to market prices for our products and services, which we have assumed will remain relatively constant; our assumptions regarding the state of the Ontario electricity market and that there will be no significant changes in current estimates for costs and prices, and the risk that those assumptions vary adversely; the risk of material adverse changes in foreign currency exchange rates, interest rates and costs, which we have assumed will remain constant or improve in our favour; the risk of material litigation, arbitration or regulatory proceedings and their adverse outcome, which we have assumed will not occur; unexpected or challenging geological, hydrological or mining conditions which deviate significantly from our assumptions regarding those conditions; political risks arising from operating in certain developing countries, which we have assumed will not occur; the risk of adverse changes in government legislation, regulations and policies, which we have assumed will not occur; failure to obtain or maintain necessary permits, licences, and approvals from government authorities, which we have assumed may be obtained and maintained; the risk of natural phenomena such as fire, flooding or earthquakes, which we have assumed will not occur; our assumptions regarding the ability of the company’s and customers’ facilities to operate without disruption, including as a result of strikes, lockouts, equipment failure or other causes, and the risk that such disruptions may occur; assumptions regarding the availability of reagents, equipment, operating parts, and supplies critical to production, and which are subject to the risk that our assumptions are incorrect; the successful transition to new mining areas at McArthur River commencing in 2009, which is subject to various expected and unanticipated risks; the dewatering and depressurization programs at Kumtor continue to produce the expected results and the water management systems work as planned, which is subject to various expected and unanticipated risks; Centerra is successful in mitigating the continued movement of waste and ice into the Kumtor open pit, which is subject to various expected and unanticipated risks; the success and timely completion of planned development and remediation projects, including the remediation of and return to pre-flood construction at Cigar Lake, and the risk of delay or ultimate lack of success; the schedule for the development and rampup of production from Inkai is achieved, which is subject to the risk of delay; the risk of a significant decline in general economic conditions, which we have assumed will not occur; and other development, operating, environmental and safety risks.

The forward-looking information and statements included in this news release represent Cameco’s views as of the date of this news release and should not be relied upon as representing Cameco’s views as of any subsequent date. While Cameco anticipates that subsequent events and developments may cause its views to change, Cameco specifically disclaims any intention or obligation to update forward-looking information and statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws. Forward-looking information and statements contained in this news release about prospective results of operations, financial position or cash flows that are based upon assumptions about future economic conditions and courses of action is presented for the purpose of assisting Cameco’s shareholders in understanding management’s current views regarding those future outcomes, and may not be appropriate for other purposes.

There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. These factors are not intended to represent a complete list of the material risk factors that could affect Cameco. Additional risk factors are noted in Cameco’s current annual information form and current annual MD&A, as well as our 2009 first, second and third quarter MD&A.

CONFERENCE CALL

We invite you to join our third quarter conference call on Monday, November 2, 2009 at 10:00 a.m. Eastern time.

The call will be open to all investors and the media. To join the conference on Monday, November 2, please dial (416) 340-8018 or (866) 223-7781 (Canada and US). A live audio feed of the call will be available on our website at cameco.com. See the link on the home page on the day of the call.

A recorded version of the proceedings will be available:

•		on our website, cameco.com, shortly after the call, and

•		on post view until midnight, Eastern time, Tuesday, December 1, 2009 by calling (416) 695-5800 or (800) 408-3053 (passcode 7078487 #).

ADDITIONAL INFORMATION

A full copy of Cameco’s 2009 third quarter management’s discussion and analysis and financial statements and notes (unaudited) can be obtained on SEDAR at sedar.com, the company’s website at cameco.com and on EDGAR at sec.gov/edgar.shtml.

Additional information on Cameco, including its annual information form, is available on SEDAR at sedar.com, the company’s website at cameco.com and on EDGAR at sec.gov/edgar.shtml.

PROFILE

Cameco, with its head office in Saskatoon, Saskatchewan, is one of the world’s largest uranium producers, a significant supplier of conversion services and one of two Candu fuel manufacturers in Canada. The company’s competitive position is based on its controlling ownership of the world’s largest high-grade reserves and low-cost operations. Cameco’s uranium products are used to generate clean electricity in nuclear power plants around the world, including Ontario where the company is a limited partner in North America’s largest nuclear electricity generating facility. The company also explores for uranium in North America and Australia, and holds a significant interest in a mid-tier gold company. Cameco’s shares trade on the Toronto and New York stock exchanges.

- End -


Investor inquiries:	Bob Lillie	(306) 956-6639

Media inquiries:	Lyle Krahn	(306) 956-6316

EX-99.2 3 c91754exv99w2.htm EXHIBIT 99.2 Exhibit 99.2

Exhibit 99.2

Cameco Corporation
Management’s Discussion and Analysis (MD&A)
For the period ended September 30, 2009

The following discussion of the financial condition and operating results of Cameco Corporation has been prepared as of October 30, 2009 and updates our first quarter, second quarter and annual MD&A, and should be read in conjunction with the unaudited consolidated financial statements and notes for the period ended September 30, 2009, as well as the audited consolidated financial statements for the company for the year ended December 31, 2008 and MD&A of the audited financial statements, both of which are included in the 2008 annual financial review. No update is provided where an item is not material or where there has been no material change from the discussion contained in our first quarter, second quarter and annual MD&A. The financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP). The 2008 annual financial review is available on the company’s website at cameco.com, on sedar.com and on EDGAR at sec.gov/edgar.shtml.

Statements contained in this MD&A, which are not historical facts or a description of present circumstances, are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For more detail on these factors, see the section titled “Caution Regarding Forward-Looking Information” in this MD&A, the section titled “Risks and Risk Management” in the MD&A contained in the company’s 2008 annual financial review, and the section titled “Risk Factors” in the company’s 2008 annual information form.

Note: All dollar amounts are expressed in Canadian dollars unless otherwise stated.


	Three months ended				Nine months ended
	September 30				September 30
Financial Highlights	2009		2008		2009		2008		Change %¹
Revenue ($ millions)		694		729		2,083		1,941		7
Earnings from operations ($ millions)		224		176		585		459		27
Cash provided by operations² ($ millions)		248		109		565		368		54
Net earnings ($ millions)		172		135		501		419		20
Adjusted net earnings ($ millions)³		104		127		334		414		(19	)
Earnings per share (EPS) — basic ($)		0.44		0.39		1.30		1.22		7
EPS — diluted ($)		0.44		0.39		1.29		1.21		7
EPS — adjusted and diluted ($)³		0.26		0.37		0.86		1.19		(28	)
Weighted average common shares outstanding (millions)		393		346		386		345		12
Average uranium (U₃O₈) spot price ($US/lb U₃O₈)		45.29		60.50		46.10		65.11		(29	)
Average realized uranium price
• $US/lb U₃O₈		34.24		37.88		37.26		42.69		(13	)
• $Cdn/lb U₃O₈		39.18		39.90		45.80		44.42		3
Average realized electricity price ($/MWh)		66		59		64		57		18
Average Ontario electricity spot price per megawatt hour ($/MWh)		22		51		29		49		(41	)

FINANCIAL RESULTS

Consolidated Earnings

Third Quarter

For the three months ended September 30, 2009, our net earnings were $172 million ($0.44 per share diluted), $37 million higher than net earnings of $135 million ($0.39 per share diluted) recorded in the third quarter of 2008.

For the three months ended September 30, 2009, our adjusted net earnings³ were $104 million ($0.26 per share adjusted and diluted), $23 million lower than adjusted net earnings of $127 million ($0.37 per share adjusted and diluted) recorded in the third quarter of 2008. The decrease was due to lower earnings in the uranium and gold businesses. Gross profit from our uranium business was impacted primarily by lower sales volumes and a higher unit cost of product and services sold in the quarter. See the section titled “Uranium Results — Third Quarter” in this document for more information. The gold business was impacted by lower gold production and higher operating costs.


¹		Represents the change for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.

²		Including changes in working capital. For more information on working capital changes, refer to note 13 of the third quarter unaudited consolidated financial statements.

³		Net earnings for the quarters and nine months ended September 30, 2008 and 2009 have been adjusted to exclude a number of items. Adjusted net earnings is a non-GAAP measure. For a description see “Use of Non-GAAP Financial Measures” on page 28.

- 2 -

Compared to the third quarter of 2008, exploration expenditures were $4 million lower, at $18 million, with uranium exploration expenditures decreasing by $5 million to $11 million. Gold exploration expenditures at Centerra Gold Inc. (Centerra) were up $1 million at $7 million compared to $6 million in the third quarter of 2008.

In the third quarter of 2009, our income tax expense, based on adjusted net earnings, was a $7 million recovery compared to a $3 million recovery in the same period of 2008. Our effective income tax rate was -6% in the third quarter of 2009 compared to -2% in 2008. During the third quarter of 2009, we obtained reasonable assurance that certain qualifying expenditures under investment tax credit programs would ultimately be realized and accordingly, we began to recognize the expected benefits in our financial results. As a result, we have recorded a net recovery of $9 million in the quarter, consisting of recoveries related to exploration expenditures ($5 million), research and development costs ($4 million) and Cigar Lake remediation ($3 million), partially offset by a $3 million increase in income tax expense.

In the third quarter of 2009, direct administration costs were $40 million, a decrease of $5 million compared to 2008 due mainly to reduced requirements for system technology enhancements and lower recruiting activity.

In the third quarter of 2009, stock-based compensation costs were $2 million compared to a recovery of $77 million in the third quarter of 2008. Late in 2008, we amended our stock option program and began accounting for our options using their fair value at the grant date. Under this method, our stock option expense is highly predictable. For this reason, we will not be adjusting our net earnings for stock option expense in 2009.


	Three months ended
	September 30
Administration ($ millions)	2009		2008
Direct administration		40		45
Stock-based compensation expense (recovery)¹		2		(77	)

Total administration		42		(32	)


¹		Stock-based compensation includes amounts charged to administration under the stock option, deferred share unit, performance share unit and phantom stock option plans.

Nine Months Ended September 30, 2009

For the nine months ended September 30, 2009, our net earnings were $501 million ($1.29 per share diluted), $82 million higher than net earnings of $419 million ($1.21 per share diluted) recorded in the first nine months of 2008.

- 3 -

For the nine months ended September 30, 2009, our adjusted net earnings⁴ were $334 million ($0.86 per share adjusted and diluted), $80 million lower than adjusted net earnings of $414 million ($1.19 per share adjusted and diluted) recorded for the same period in 2008. The decrease was due to lower earnings in the gold and uranium businesses, partially offset by higher results in the fuel services and electricity businesses. Increased costs adversely affected uranium profits. See the section titled “Uranium Results — Nine Months Ended September 30, 2009” in this document for more information. The gold business was impacted by lower gold production and higher operating costs. Gross profit from our electricity business benefited from increased generation and an increase in the realized price, while realized selling prices for fuel services were higher in the first nine months of 2009.

Compared to the first nine months of 2008, exploration expenditures were $1 million lower, at $53 million, with uranium exploration expenditures decreasing by $5 million to $33 million. Gold exploration expenditures at Centerra were $4 million higher at $19 million compared to the first nine months of 2008.

In the first nine months of 2009, our income tax expense, based on adjusted net earnings, was a $1 million recovery compared to $21 million expense in the same period of 2008. Our effective income tax rate was 0% in the first nine months of 2009 compared to 5% in 2008.

In the first nine months of 2009, direct administration costs were $108 million, a decrease of $6 million compared to 2008 due mainly to reduced requirements for system technology enhancements and lower recruiting activity. The rate of growth in the workforce has slowed since the third quarter of 2008.

In the first nine months of 2009, stock-based compensation costs were $12 million compared to a recovery of $53 million in 2008. As noted previously, we will not be adjusting our net earnings for stock option expense in 2009.


	Nine months ended
	September 30
Administration ($ millions)	2009		2008
Direct administration		108		114
Stock-based compensation expense (recovery)¹		12		(53	)

Total administration		120		61


¹		Stock-based compensation includes amounts charged to administration under the stock option, deferred share unit, performance share unit and phantom stock option plans.

⁴		Net earnings for the quarters and nine months ended September 30, 2008 and 2009 have been adjusted to exclude a number of items. Adjusted net earnings is a non-GAAP measure. For a description see “Use of Non-GAAP Financial Measures” on page 28.

- 4 -

Quarterly Financial Results ($ millions except per share amounts)


	2009						2008								2007
Highlights	Q3		Q2		Q1		Q4		Q3		Q2		Q1		Q4
Revenue		694		774		615		918		729		620		593		494
Net earnings		172		247		82		31		135		150		134		61
EPS — basic ($)		0.44		0.63		0.23		0.08		0.39		0.44		0.38		0.18
EPS — diluted ($)		0.44		0.63		0.22		0.08		0.39		0.42		0.37		0.17
Cash from operations¹		248		125		191		340		109		113		146		57


¹		Including changes in working capital. For more information on working capital changes, refer to note 13 of the third quarter unaudited consolidated financial statements.

Revenue of $694 million in the third quarter of 2009 was 10% lower than in the second quarter due to decreased sales volumes and realized selling prices (in Canadian dollars) in the uranium business. Revenues from the fuel services, electricity and gold businesses were comparable to that of the second quarter of 2009.

Net earnings in the third quarter of 2009 were significantly lower than in the second quarter of 2009 due largely to the lower sales volumes and prices in the uranium business. The average realized uranium price in the third quarter was the lowest for the year due to the mix of contract deliveries during the quarter. Profits from the fuel services business were lower due to decreases in realized selling prices (in Canadian dollars).

Our financial results tend to fluctuate largely due to the timing of deliveries and product purchases in the uranium and fuel services businesses.

Cash Flow

In the third quarter of 2009, we generated $248 million in cash from operations compared to $109 million in the same period of 2008. The increase of $139 million was related to lower working capital requirements partially offset by lower sales in the uranium business.

In the first nine months of 2009, we generated $565 million in cash from operations compared to $368 million in the same period of 2008. The increase of $197 million was related to higher sales and a decrease in working capital requirements compared to the prior year. The change in working capital is primarily related to lower accounts receivable in 2009 compared to 2008.

- 5 -

Balance Sheet

At September 30, 2009, our total debt was $1,172 million, representing a decrease of $141 million compared to December 31, 2008. During the quarter, we filed a shelf prospectus in Canada for offerings of up to $1 billion in senior debt. Subsequently, we issued $500 million in unsecured, 10-year debentures at an interest rate of 5.67%. We intend to use the net proceeds of this issue to refinance existing indebtedness (which includes repayment of commercial paper as it matures — $126 million outstanding at September 30, 2009) and for general corporate purposes. Also included in our September 30, 2009 total debt was $173 million, which represents our proportionate share of BPLP’s capital lease obligation. At September 30, 2009, our consolidated net debt to capitalization ratio was 10%, down from 23% at the end of 2008. The decrease was due largely to the issue of equity in the first quarter of 2009 when we issued 26.7 million common shares for net proceeds of approximately $440 million.

Our product inventories increased by $19 million compared to the end of 2008 due to increased inventories of conversion services products and higher average carrying values for uranium.

At September 30, 2009, our consolidated cash balance totalled $670 million, with cash held by Centerra accounting for $175 million of this amount.

Foreign Exchange Update

During the quarter, the Canadian dollar strengthened against the US dollar from $1.00 (US) for $1.16 (Cdn) at June 30, 2009 to $1.00 (US) for $1.07 (Cdn) at September 30, 2009.

At September 30, 2009, we had foreign currency contracts of $1,490 million (US) and EUR 36 million.

The US currency contracts had an average rate of $1.00 (US) for $1.13 (Cdn) at September 30, 2009, which reflects the original foreign exchange spot prices at the time the contracts were entered into and includes net deferred gains.

At September 30, 2009, the net mark-to-market gain on all foreign exchange contracts was $87 million compared to a $2 million gain at June 30, 2009.

Timing differences between the maturity dates and designation dates on previously closed hedge contracts may result in deferred revenue or deferred charges. At September 30, 2009, net deferred gains totalled $46 million. The schedule for net deferred gains to be released to earnings, by year, is as follows:

Deferred Gains (Charges)

2009

2010

2011

$ millions (Cdn)

- 6 -

OUTLOOK

Below is a table summarizing our 2009 consolidated outlook as well as the outlook for each of our business segments. Updates from the outlook contained in the table disclosed in our second quarter MD&A were made to the following items (in bold): fuel services production, nuclear electricity revenue, gold production, and gold capital expenditures.

2009 Financial Outlook¹


				Nuclear
2009 Outlook	Consolidated	Uranium	Fuel Services	Electricity	Gold
Revenue	Increase 5% to 10%²	Increase 5% to 10%³	Increase 5% to 10%	Increase 15% to 20%⁴	—
Administration costs	Decrease 5% to 10%	—	—	—	—
Tax rate	Less than 5%	—	—	—	—
Sales volume	—	34 to 36 million lbs	Decline slightly	—	—
Unit cost of product sold	—	Increase 20% to 25%⁵	—	Decrease slightly	—
Capacity factor	—	—	—	About 90%	—
Production	—	20 million lbs	11 to 13 million kgU⁶	—	620,000 to 630,000 oz⁷
Capital expenditures	$367 million⁸	—	—	$38 million	$88 million (US)⁹


¹		We only provide outlook for the select items shown in the table. For all other items listed in the table, no outlook is provided.

²		This is the revenue outlook for the uranium, fuel services and nuclear electricity businesses and does not include gold.

³		Based on a uranium spot price of $49.50 (US) per pound, reflecting the UxC spot price as of October 26, 2009.

⁴		Outlook contained in the second quarter MD&A table — revenue expected to increase 10% to 15% over 2008.

⁵		The unit cost of product sold, excluding purchases, is expected to rise by 5% to 10%. The remainder of the year-over-year increase is attributable to the cost of purchased material.

⁶		Outlook contained in the second quarter MD&A table — production expected to total between 8 and 12 million kgU in 2009.

⁷		Outlook contained in the second quarter MD&A table — production to be 680,000 to 730,000 ounces.

⁸		Our consolidated outlook for capital expenditures does not include Bruce Power or Centerra capital expenditures.

⁹		Outlook contained in the second quarter MD&A table — capital expenditures to be $107 million (US).

Material changes, from those contained in our annual MD&A, as updated by the information contained in our first and second quarter MD&A, have been made to the 2009 outlook for nuclear electricity revenue, fuel services production and gold production. These changes are discussed below. In addition, we are including our 2009 outlook for uranium unit cost of product and services sold (which is unchanged from the previous quarter), uranium production outlook for 2009 to 2013, updated expected realized uranium price sensitivity table for 2009 to 2013 and an analysis of the sensitivity of our results to changes in the US to Canadian dollar and the spot prices for uranium, electricity and gold.

- 7 -

2009 Outlook for Uranium

We continue to expect our unit cost of product and services sold to rise by 20% to 25% compared to 2008.

The unit cost of product and services sold represents the average cost of inventory, which includes both produced and purchased material. Consistent with prior disclosure, the estimated cost of produced material is expected to contribute a 5% to 10% increase in our unit cost of product and services sold. The remainder of the year-over-year increase is attributable to the cost of purchased material.

We purchase uranium to support our sales activities, including higher trading volumes. The supply interruption provisions in our sales contracts protect us from having to purchase uranium in the event of a shortfall in planned production or deliveries under the highly enriched uranium agreement.

Uranium Production Outlook (2009 to 2013)

We are providing an update for our near-term production outlook in the table below.

Cameco’s Share of Production (million pounds U₃O₈)¹


Current Forecast	2009		2010		2011		2012		2013
McArthur River/Key Lake		13.1		13.1		13.1		13.1		13.1
Rabbit Lake		3.6		3.6		3.6		2.8		1.7
US ISR		2.6		2.5		2.6		3.0		3.4
Inkai²		0.9		2.3		3.1		3.1		3.1

Total*		20.2		21.5		22.4		22.0		21.3


*		While a single estimate has been included for each year of the production outlook, actual production may differ significantly from these estimates as forecasting production is inherently uncertain.

¹		A revised production forecast for Cigar Lake will be provided after the mine has been dewatered, the condition of the underground development has been assessed, and the findings incorporated in the new mine development and production plans.

²		Inkai mineral reserves assume production at an annual rate of 5.2 million pounds of U₃O₈ (our share 60%). Inkai currently has regulatory approval to produce at an annual rate of 2.6 million pounds (100% basis) and an application for regulatory approval to increase annual production to 5.2 million pounds (100% basis) was made in 2005.

The current uranium production forecast noted above for the company is forward-looking information. This forward-looking information is based upon the key assumptions and subject to the material risks that could cause results to differ materially, and which are discussed under the heading “Caution Regarding Forward-Looking Information and Statements”. In particular, we have assumed that the company’s schedule for the development and rampup of production from Inkai is achieved (which requires, among other things, resolution of the issues surrounding acid availability); the successful transition to new mining areas at McArthur River; that the company is able to obtain or maintain the necessary permits and approvals from government authorities to achieve the forecast production; and that there is no disruption in production due to natural phenomena, labour disputes, political risks or other development and operation risks.

Material risks that could cause actual results to differ materially include our inability to achieve forecast production levels for each operation; our development and rampup of production from Inkai does not proceed as anticipated; the transition to new mining areas at McArthur River is not successful; the inability to obtain or maintain necessary permits or government approvals; and a disruption or reduction in production. No assurance can be given that the indicated quantities will be produced. Expected future production estimates are inherently uncertain, particularly in the later years of the forecast, and could materially change over time.

- 8 -

Uranium Price Sensitivity (2009 to 2013)

The prices shown in our expected realized uranium price sensitivity table are intended to provide the reader with a general indication of how our expected realized prices for uranium may vary with changes in market prices over the period 2009 to 2013.

The expected realized prices reported in this table may change from quarter to quarter based on changes in a number of variables, including:

•		new contracts entered into during the quarter,

•		variations in the actual spot price or long-term price during the most recent quarter from the price assumptions in the table published in the previous quarter,

•		changes in inflation assumptions,

•		changes in delivery plans from those assumed in the table published in the previous quarter as a result of requirements contracts or volume flexibility terms contained in some contracts, and

•		changes in the volume of uncommitted material.

Due to the number of variables affecting our realized prices, we have made a simplifying assumption by setting the spot price at the levels noted, and calculating our expected realized prices accordingly. For example, under the $60.00 (US) spot price scenario, the calculation of realized prices assumes the spot price reaches $60.00 (US) at September 30, 2009, and remains at that level through 2013. Each column in the table should be read assuming the column header spot price remains constant for the entire five-year period.

Many of the contracts we are delivering into during the period 2009 to 2013 were finalized in 2003 to 2005 when industry market prices were in the range of about $11 to $31 (US) (see the table below for industry average uranium market prices from 2003 to 2008). To the extent these contracts have pricing fixed at these historic uranium prices or have low ceiling prices, they will yield lower prices than current market prices. As these older contracts expire over the next few years and we begin delivering into more contracts signed since 2006, our average realized price will benefit.

The table below outlines the industry average uranium market prices over the past few years which may help put our average realized prices into perspective.

Industry Average Uranium Market Prices ($US/lb U₃O₈)


	2003		2004		2005		2006		2007		2008
Spot price indicator		11.55		18.60		28.67		49.60		99.29		61.58
Long-term price indicator		12.10		21.00		30.66		49.90		90.83		82.50

- 9 -

The uranium price sensitivity table for the period 2009 to 2013 below has been updated to reflect deliveries made and contracts entered into up to September 30, 2009.

Expected Realized Uranium Price Sensitivity Under Various Spot Price Assumptions
(Rounded to the nearest $1)
Current $US/lb U₃O₈


Spot
Price	$20		$40		$60		$80		$100		$120		$140
2009		37		38		39		40		41		43		44
2010		33		38		47		53		60		68		75
2011		33		38		48		55		63		72		80
2012		37		40		49		58		67		76		85
2013		43		46		56		66		76		87		96

This price table is forward-looking information and is based upon the material assumptions, and subject to the material risks, discussed under the heading “Caution Regarding Forward-Looking Information and Statements”, as well as the following key assumptions and material risks which could cause actual prices to vary:

•		sales volume of approximately 36 million pounds for 2009 (which has been adjusted for the accounting requirements of the product loan agreement) and a sales volume of about 30 million pounds for each year thereafter. Variations in our actual sales volume could lead to materially different results,

•		utilities take the maximum quantities allowed under their contracts, unless a delivery notice stating they will take lower quantities has already been provided, which is subject to the risk that they take lower quantities than expected for a period or defer quantities resulting in materially different realized prices for that period,

•		we defer a portion of deliveries under contract for 2010 and 2011 as a result of exercising our rights under supply interruption/supply reduction provisions,

•		all volumes for which there are no existing sales commitments are assumed to be delivered at the spot price assumed for each scenario, which is subject to the risk that sales are at prices other than spot prices which could result in materially different realized prices,

•		the average long-term price indicator in a given year is assumed to be equal to the average spot price for that entire year. Fluctuations in the spot price or the long-term price during the course of a year could lead to materially different results as our market-related contracts may reference the spot or long-term price indicator at the time of delivery, and

•		an inflation rate of 2.0%, but variations in the inflation rate could have a material impact on actual results.

The assumptions stated above, including our annual sales volumes and the price realized from them, are made solely for the purpose of the foregoing price table and do not necessarily reflect our views of anticipated results.

Fuel Services Outlook for 2009

In 2009, fuel services production at Port Hope and SFL is now expected to total between 11 and 13 million kgU compared to our previous estimate of between 8 and 12 million kgU. The increase in our estimate is related to the increased production expected at the Port Hope UF₆ plant as a result of increased confidence in the supply of hydrofluoric acid (HF). HF is a primary feed material for the production of UF₆. Productionhad been suspended due to the lack of availability of HF on acceptable terms from December 2008 to mid June 2009. However, we have broadened our sources of supply and are receiving adequate HF.

BPLP’s Outlook for 2009

- 10 -

Gold Outlook for 2009

Foreign Exchange Sensitivity

At September 30, 2009, every one-cent increase/decrease in the value of the Canadian dollar versus the US dollar for the remainder of the year would result in a corresponding increase/decrease in net earnings for the balance of the year of about $11 million (Cdn). This sensitivity is based on an expected effective exchange rate of $1.00 (US) being equivalent to about $1.06 (Cdn), which was the rate on October 26, 2009.

Uranium Price Sensitivity (2009)

For the remainder of 2009, a $5.00 (US) per pound change in the uranium spot price from $49.50 (US) per pound (reflecting the UxC spot price at October 26, 2009) would change revenue by $7 million (Cdn) and net earnings by $5 million (Cdn). This sensitivity is based on an expected effective exchange rate of $1.00 (US) being equivalent to about $1.06 (Cdn), which was the rate on October 26, 2009.

Electricity Price Sensitivity Analysis

At September 30, 2009, BPLP had about 3.1 TWh under contract for the balance of 2009, which is equivalent to about 45% of Bruce B generation at its planned capacity factor. Based on the assumption that for the remainder of 2009 the spot price will remain below the floor price provided for under the agreement with the OPA, a $1 change in the electricity spot price from its current level will change our earnings by less than $1 million.

Gold Price Sensitivity Analysis

For the remainder of 2009, a $25.00 (US) per ounce change in the gold spot price would change our net earnings by about $3 million (Cdn). This sensitivity is based on an expected effective exchange rate of $1.00 (US) being equivalent to about $1.06 (Cdn), which was the rate on October 26, 2009.

The foregoing update to the outlook for the year 2009 contained in our annual MD&A for the year ended 2008, as updated by the information contained in our first and second quarter MD&A for 2009, is forward-looking information and, except as stated in the footnotes above, is based upon the same key assumptions and subject to the same material risk factors that could cause results to differ materially which were discussed under the heading “Caution Regarding Forward-looking Information and Statements” in our annual MD&A. These include assumptions regarding production levels, purchases, sales volumes, costs and market prices, and the risk of variations in them; the risk of material adverse changes in foreign currency exchange rates and interest rates, and the assumption that they will remain constant or improve in our favour; the risk of unexpected or challenging geological, hydrological or mining conditions which deviate significantly from our assumptions regarding those conditions; political risks and the risk of adverse changes in government legislation, regulations and policies, which we have assumed will not occur; and the success and timely completion of planned development and remediation projects, and the risks associated with those projects.

- 11 -

BUSINESS SEGMENT RESULTS

Our results come from four business segments:

•		Uranium

•		Fuel services

•		Nuclear electricity generation

•		Gold

URANIUM

Highlights

Three months ended

Nine months ended

September 30

2009

2008

2009

2008

Revenue ($ millions)¹

329

396

1,108

1,062

Gross profit ($ millions)

120

356

473

Gross profit %

Average realized price

($US/lb)

34.24

37.88

37.26

42.69

($Cdn/lb)

39.18

39.90

45.80

44.42

Sales volume (million lbs)¹

8.3

9.8

23.9

23.6

Production volume (million lbs)

5.6

2.8

14.1

11.8


¹		Revenue in the amount of $85 million on 2.6 million pounds previously deferred due to a standby product loan was recognized in the first quarter of 2008 as a result of the cancellation of a product loan agreement.

Uranium Results

Third Quarter

Compared to the third quarter of 2008, revenue from our uranium business was lower by $67 million at $329 million due to a 15% decrease in reported sales volumes and a 2% decrease 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, our quarterly delivery patterns can vary significantly. The decrease in the average realized price was related to lower realized prices under market-related and fixed-price contracts. A more favourable foreign exchange rate partially mitigated the Canadian dollar decline.

Nine Months Ended September 30, 2009

Compared to the first nine months of 2008, revenue from our uranium business increased by $46 million to $1,108 million due to a 3% increase in the realized selling price (in Canadian dollars) and a 1% increase in reported sales volumes. The timing of deliveries of uranium products within a calendar year is at the discretion of customers. Therefore, our 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, partially offset by lower realized prices under market-related contracts.

- 12 -

Uranium Market Update

On July 28, 2009, the US Department of Energy (DOE) announced an expanded and accelerated cleanup effort at its Portsmouth gaseous diffusion plant in Piketon, Ohio. The expanded cleanup will cost between $150 million to $200 million (US) per year over the next four years and is proposed to be funded by providing the cleanup contractor with excess uranium from DOE’s stocks. The quantity of uranium transferred by the DOE to fund the work would be determined using spot market indices at the time of transfer. The proposed use of uranium inventories is in conflict with DOE’s “Excess Uranium Inventory Management Plan” adopted in 2008. The US uranium industry is lobbying DOE and the US government to reconsider its proposal and is considering legal action to protect its interests.

The threat of additional DOE material reaching the market in the near term contributed to the decline of the uranium spot price during the third quarter. The UxC spot price fell from $47.00 (US) per pound at the time of DOE’s announcement to $42.75 (US) per pound at the end of the quarter.

Uranium Spot Market

Outlined below are the industry average spot market prices (TradeTech and UxC) as at the dates specified.


	Sept. 30/09		June 30/09		Sept. 30/08		June 30/08
Average spot market price ($US/lb U₃O₈)	$	42.88	$	51.50	$	52.50	$	59.00

In the spot market, where purchases call for delivery within one year, the volume reported for the third quarter of 2009 was about 10 million pounds U₃O₈. For the nine months of 2009, the volume was about 40 million pounds. This compares to about 14 million pounds in the third quarter of 2008 and about 31 million pounds in the first nine months of 2008.

The UxC spot U₃O₈ price started the third quarter at $52.00 (US) per pound and continued to decline during the quarter, reaching $42.00 (US) per pound on September 21, 2009. The spot price ended the quarter at $42.75 (US) per pound. Since then the UxC spot U₃O₈ price has increased and is currently at $49.50 (US) per pound as at October 26, 2009.

- 13 -

Uranium Long-Term Market

Outlined below are the industry average long-term market price indicators (TradeTech and UxC) as at the dates specified.


	Sept. 30/09		June 30/09		Sept. 30/08		June 30/08
Average long-term market price ($US/lb U₃O₈)	$	64.50	$	65.00	$	75.00	$	82.50

Long-term contracts usually provide for deliveries to begin more than two years after contracts are finalized and use a number of pricing formulas including fixed prices adjusted by inflation indices and market referenced prices (spot and long-term indicators).

Uranium Operations Update

Uranium Production

Three months ended

Nine months ended

Cameco’s share of production

September 30

2009 planned

(million lbs U₃O₈)

2009

2008

2009

2008

production¹

McArthur River/Key Lake

3.8

2.1

9.3

8.5

13.1

Rabbit Lake

0.9

0.2

2.4

1.7

3.6

Smith Ranch/Highland

0.4

0.3

1.3

1.0

1.8

Crow Butte

0.2

0.1

0.6

0.4

0.8

Inkai

0.3

0.1

0.5

0.2

0.9

Total

5.6

2.8

14.1

11.8

20.2


¹		See the section titled “Uranium Production Outlook (2009 to 2013)” in this document for more information about the assumptions and risk factors associated with this production forecast.

McArthur River/Key Lake

Our share of production of U₃O₈ at McArthur River/Key Lake during the third quarter was 3.8 million pounds compared to 2.1 million pounds produced in the same period of 2008. Production varies from quarter to quarter depending on the timing of mill shutdowns. The mill is operating well and no further shutdowns are planned this year. Our share of production at the end of the third quarter of 2009 was 9.3 million pounds U₃O₈ compared to 8.5 million pounds over the same period in 2008. We continue to expect our share of production to be 13.1 million pounds in 2009.

- 14 -

Rabbit Lake

Rabbit Lake produced 0.9 million pounds U₃O₈ in the third quarter of 2009 compared to 0.2 million pounds in the third quarter of 2008. The planned summer shutdown of the mill was carried out over June and July this year, resulting in greater mill operating time in the third quarter of 2009 compared to the third quarter of 2008. For the first nine months of 2009, Rabbit Lake produced 2.4 million pounds U₃O₈, compared to 1.7 million pounds for the nine months ending September 30, 2008.

During the third quarter, commissioning of the circuit to reduce molybdenum and selenium in the mill effluent continued. The circuit is expected to begin operation in the fourth quarter of 2009.

Commissioning of a new tailings pipeline for the expanded Rabbit Lake in-pit tailings management facility was completed and placement of tails commenced during the quarter.

Smith Ranch-Highland and Crow Butte

Smith Ranch-Highland and Crow Butte in situ recovery (ISR) mines, located in Wyoming and Nebraska, produced 0.6 million pounds U₃O₈ in the third quarter 2009, an increase from 0.4 million pounds in the third quarter of 2008. For the first nine months of 2009, these operations produced 1.9 million pounds U₃O₈,an increase from 1.4 million pounds produced during the same period in 2008.

Cigar Lake

We continue to make progress in remediating the inflow that occurred August 12, 2008 during the dewatering of the underground workings.

On October 23, 2009, we announced that dewatering of the underground development at Cigar Lake had resumed. Dewatering is progressing as planned.

- 15 -

Inkai

During the third quarter of 2009, our share of uranium production from blocks 1 and 2 was about 0.3 million pounds U₃O₈. Our share of production for the first three quarters of 2009 was 0.5 million pounds U₃O₈ compared to 0.2 million pounds in the same period in 2008. All of the circuits of the main processing plant have been commissioned and are undergoing optimization.

A new tax code became law on January 1, 2009. Inkai and the Kazakh government have signed an amendment to Inkai’s Resource Use Contract to adopt the new tax code. We do not expect the new tax code will have a material impact on Inkai at this time. However, the elimination of tax stabilization under the new tax code could be material to Inkai in the future.

Uranium Exploration Update

Saskatchewan Exploration

During the third quarter, diamond drilling programs were completed on six projects with more than 14,500 metres completed. Active projects included Cree Extension, Dawn Lake, McArthur River, Moon Lake, Read Lake and Virgin River.

At McArthur River exploration drilling focused on areas southwest and northeast of the mine.

Significant mineralization was encountered on the Moon Lake project in two holes drilled 50 metres apart at depths of 550 metres. This new mineralization is located in basement rock, approximately two kilometres south and on trend with the Millennium deposit. Further drilling on the Centennial deposit, Virgin River project, has added additional mineralized intercepts.

Canadian Exploration

Diamond drilling programs were completed on the Aberdeen and Turqavik projects in Nunavut and on the Otish project in Quebec. Several holes displayed encouraging results and will require follow-up.

Global Exploration

Australia

The initial drill program to confirm the historical resources at Angela was completed in September. Environmental studies are on-going.

Diamond drilling at Kintyre has begun and will continue into 2010 to delineate the Kintyre deposits and facilitate a feasibility study.

Drilling in Arnhem Land on the Wellington Range project during the third quarter encountered significant uranium mineralization in a sandstone column within a fault zone. We will be focusing on this target in future programs.

Kazakhstan

A drilling program is ongoing at Inkai, block 3 to support a commercial discovery application that is expected to be filed before the exploration licence expires in July 2010.

- 16 -

FUEL SERVICES

Highlights


	Three months ended					Nine months ended
	September 30					September 30
	2009		2008			2009		2008
Revenue ($ millions)		50		69			186		182
Gross profit ($ millions)		4		(3	)		36		(6	)
Gross profit %		7		(5	)		20		(3	)
Sales volume (million kgU)¹		2.8		3.7			8.9		10.2
Production volume (million kgU)²		4.1		1.8			8.4		5.7


¹		Kilograms of uranium (kgU).

²		Production volume includes UF₆, UO₂, fuel fabrication, and UF₆supply from Springfields Fuels Ltd. (SFL).

Fuel Services Results

Third Quarter

In the third quarter of 2009, revenue from our fuel services business was $50 million, $19 million lower compared to the same period in 2008 due to a 24% decrease in reported sales volumes and a 3% decline in the average realized price (in Canadian dollars) for fuel services products. The timing of deliveries of fuel services within a calendar year is at the discretion of customers. Therefore, our quarterly delivery patterns can vary significantly.

Total cost of products and services sold, including DD&R, decreased to $46 million in the third quarter from $72 million for the same period in 2008. The cost of products sold in 2008 was impacted by the curtailment of production from the Port Hope UF₆conversion plant. In the third quarter of 2008, the plant was shutdown to allow for the cleanup of contaminated soil and all operating costs associated with the UF₆conversion plant were expensed as incurred ($15 million). In 2009, the plant was operational throughout the third quarter and operating costs were allocated to inventory.

Nine Months Ended September 30, 2009

In the first nine months of 2009, revenue from our fuel services business was $186 million, an increase of $4 million compared to the same period in 2008 due to an 18% increase in the average realized price for fuel services products, primarily UF₆ conversion, partially offset by a 13% decline in sales volumes. The timing of deliveries of fuel services within a calendar year is at the discretion of customers. Therefore, our quarterly delivery patterns can vary significantly.

Total cost of products and services sold, including DD&R, decreased to $149 million in the first nine months of 2009 from $188 million for the same period in 2008. The cost of products sold in both 2009 and 2008 was impacted by the curtailment of production from the Port Hope UF₆conversion plant. In the first half of 2009, the plant was shutdown due to the unavailability of HF, while in 2008 operations were suspended to allow for the cleanup of contaminated soil. All operating costs associated with the UF₆conversion plant were expensed as incurred in the first half of 2009 ($18 million) and the first nine months of 2008 ($43 million).

- 17 -

UF₆ Conversion Market Update

Spot market UF₆ conversion prices declined over the quarter due to the abundance of UF₆supplies on the spot market, as well as the likelihood of US government (DOE) inventory sales (which include conversion). Outlined below are the industry average spot market prices (TradeTech and UxC) for North American and European conversion services as at the dates specified.


	Sept. 30/09		June 30/09		Sept. 30/08		June 30/08
Average spot market price ($US/kgU)
• North America		6.25		7.00		9.50		9.50
• Europe		8.25		8.50		10.75		10.75

Long-term market UF₆ conversion prices declined over the quarter. Outlined below are the industry average long-term prices (TradeTech and UxC) for North American and European conversion services as at the dates specified.


	Sept. 30/09		June 30/09		Sept. 30/08		June 30/08
Average long-term price ($US/kgU)
• North America		11.75		12.25		12.25		12.25
• Europe		13.13		13.38		13.25		13.25

Fuel Services Operations Update

Production

Refining

Conversion Services and Fuel Manufacturing

We expect continued strong performance at the Port Hope conversion facility for the remainder of the year. Deliveries of HF from a second supplier are arriving at the conversion facility.

At Cameco Fuel Manufacturing, the collective agreement with unionized employees expired on June 1, 2009. Negotiations broke down in early September and the union has been on strike since September 5, 2009.

- 18 -

NUCLEAR ELECTRICITY GENERATION

Highlights

Bruce Power Limited Partnership (100% basis)


	Three months ended						Nine months ended
	September 30						September 30
	2009			2008			2009		2008
Output — terawatt hours (TWh)		6.2			6.8			18.2		17.7
Capacity factor (%)¹		86			94			86		82
Realized price ($/MWh)²		66			59			64		57
Average Ontario electricity spot price ($/MWh)		22			51			29		49
($ millions)
Electricity revenue³		458			405			1,218		1,010
Operating costs⁴		210			198			687		693
Cash costs
- operating & maintenance		125			119			432		461
- fuel		22			19			67		55
- supplemental rent⁵		29			29			88		87
Non cash costs (amortization)		34			31			100		90
Income before interest and finance charges		248			207			531		317
Interest and finance charges		(4	)		(8	)		3		30
Earnings before taxes		252			215			528		287
Cash from operations		206			181			525		371
Capital expenditures		34			23			83		66
Operating costs ($/MWh)²		30			29			36		39
Distributions		120			210			390		350


¹		Capacity factor for a given period represents the amount of electricity actually produced for sale as a percentage of the amount of electricity the plants are capable of producing for sale.

²		Per MWh calculations for realized price and operating costs for the third quarter and year to date include actual generation volumes and deemed generation of 0.8 TWh.

³		Electricity revenue for BPLP is comprised of spot sales, revenue recognized under BPLP’s agreement with the OPA, and payments received under BPLP’s financial contracts.

⁴		Net of cost recoveries.

⁵		Supplemental rent is about $28.3 million per operating reactor for 2009.

In the third quarter of 2009, BPLP generated cash from operations of $206 million compared to $181 million in the third quarter of 2008. The increase reflects a higher average realized electricity price, partially offset by higher working capital balances and higher operating costs.

BPLP distributed $120 million to the partners in the third quarter, with our share being $38 million.

- 19 -

Cameco’s Earnings from BPLP


	Three months ended						Nine months ended
	September 30						September 30
($ millions)	2009			2008			2009			2008
BPLP’s earnings before taxes (100%)		252			215			528			287
Cameco’s share of pre-tax earnings before adjustments		80			68			167			91
Proprietary adjustments		(2	)		(7	)		(5	)		(5	)
Pre-tax earnings from BPLP		78			61			162			86

Third Quarter

Earnings Before Taxes

Our pre-tax earnings from BPLP amounted to $78 million during the third quarter compared to $61 million for the same period in 2008. This increase was due to increased revenue, partially offset by higher operating costs.

Output

Revenue and Realized Price

For the third quarter of 2009, BPLP’s electricity revenue increased to $458 million from $405 million over the same period in 2008 due to a higher realized price.

During the third quarter of 2009, about 51% of BPLP output was covered by financial contracts, down from the 67% level during the same period in 2008.

Costs

Operating costs (including amortization) were $210 million in the third quarter of 2009, up 6% compared to the same period of 2008 due to additional maintenance work and increased fuel and amortization costs. About 95% of BPLP’s operating costs are fixed. As such, most of the costs are incurred whether the plant is operating or not. On a per MWh basis, the operating cost in the third quarter of 2009 was $30 compared to $29 in the third quarter of 2008 due to the higher costs and lower generation volume.

- 20 -

Nine Months Ended September 30, 2009

Earnings Before Taxes

Our pre-tax earnings from BPLP for the first nine months of 2009 amounted to $162 million compared to $86 million in the same period of 2008. The increase is attributable to higher revenues.

Output

Revenue and Realized Price

For the first nine months of the year, BPLP’s electricity revenue increased to $1,218 million from $1,010 million over the same period in 2008 as a result of increased generation and higher realized prices.

Costs

For the first nine months of 2009, operating costs were $687 million, compared with $693 million in the same period in 2008. This decrease primarily reflects lower staff costs and fewer forced outages. On a per MWh basis, the operating cost for the first nine months of 2009 was $36 compared to $39 in the same period last year.

- 21 -

GOLD

We own approximately 49% of and have voting control over approximately 53% of Centerra’s shares. Centerra is listed on the Toronto Stock Exchange under the symbol CG. Centerra owns and operates two gold mines: Kumtor, which is located in the Kyrgyz Republic and Boroo located in Mongolia.

Financial Highlights


	Three months ended				Nine months ended
	September 30				September 30
	2009		2008		2009		2008
Revenue ($ millions)		176		143		427		399
Gross profit ($ millions)		40		40		21		116
Gross profit %		23		28		5		29
Realized price ($US/ounce)		959		860		928		884
Sales volume (ounces)		166,000		162,000		390,000		446,000
Gold production (ounces)¹		166,000		186,000		380,000		465,000


¹		Represents 100% of production from the Kumtor and Boroo mines.

Gold Results

Third Quarter

Centerra’s cost of product sold increased for the quarter and nine months ended September 30, 2009 compared to 2008 as a result of higher labour costs and an increase in the cost of supplies. In addition, the cost of product sold was impacted by recognition of revenue-based taxes in 2009.

Centerra produced 166,000 ounces of gold in the third quarter of 2009, which was 20,000 ounces lower than the 186,000 ounces of gold reported in 2008. Production from the Kumtor mine was unchanged at 134,000 ounces as ore grade, 3.5 grams per tonne (g/t), was similar to the third quarter of 2008. Production was lower at the Boroo mine, amounting to 32,000 ounces compared to 52,000 a year earlier, due mainly to the operational shutdown caused by a labour strike at the mine and the subsequent suspension of Boroo’s main operating licences.

The average spot market gold price during the third quarter of 2009 was $960 (US) per ounce, an increase of 10% compared to $872 (US) per ounce in the third quarter of 2008.

Nine Months Ended September 30, 2009

- 22 -

Centerra produced 380,000 ounces of gold in the first nine months of 2009, which was 85,000 ounces less than the 465,000 ounces of gold reported for the same period in 2008. The Kumtor mine saw production decrease to 278,000 ounces from 320,000 ounces in 2008 as the result of a lower ore grade, averaging 2.7 g/t in the first nine months of 2009 compared to the 3.2 g/t milled in 2008. Production was also lower at the Boroo mine, amounting to 102,000 ounces compared to 145,000 a year earlier, due mainly to the operational shutdown caused by a labour strike at the mine and the subsequent suspension of Boroo’s main operating licences.

Kyrgyz Republic

Kumtor Operations Update

During the third quarter of 2009, continued movement of waste and ice from the southeast wall into the Kumtor open pit required the mining of ice and removal of waste which reduced the production of ore and delayed access to the high-grade component of the SB zone. Centerra is working to further stabilize this advanced creep and has expedited a plan to manage accelerated ice and waste movement. While work is planned over the balance of 2009 to sustain the cutback of the ice creep into the pit, there is no guarantee that these efforts will prevent further negative impact on Centerra’s expected results.

Maintenance work to replace the Kumtor ball mill ring gear and changeout of the SAG mill liner has been scheduled for the second quarter of 2010. If in either case, earlier replacement is required, an unplanned shutdown of the mill would be required and would have an adverse impact on Centerra’s production, costs and earnings in 2009.

In the third quarter of 2009, exploration drilling continued in the Kumtor central pit to test the southwest extension of the SB zone within and outside of the current planned open pit. Results of the 2009 drilling in the SB zone area will extend the resource model beyond the current planned pit design. Drilling also focused on confirming the grade and extent of potential high-grade underground mineable mineralization in the Stockwork zone below the current planned open pit.

Mongolia

Boroo Operations Update

On October 23, 2009, Centerra received a claim for compensation from the Mongolian governmental authorities related to certain mineral reserves. Centerra disputes the claim. While Centerra believes that the issues raised by the claim will be resolved through negotiation with the authorities without a material impact on Centerra, there can be no assurances that this will be the case. For further information, refer to note 15 of our third quarter unaudited consolidated financial statements.

- 23 -

LIQUIDITY AND CAPITAL RESOURCES

During the quarter, we issued $500 million of 10-year senior unsecured debentures. The debentures bear interest at 5.67% per annum and mature on September 2, 2019. Net proceeds from the debenture issuance are being used to refinance existing indebtedness and for general corporate purposes. Following the successful debenture offering, we terminated our $500 million, 364-day unsecured revolving credit facility that had a maturity date of June 16, 2010.

Credit Ratings

There has been no change to our credit ratings as discussed in our annual MD&A.

Debt

In addition to cash from operations, debt is used to provide liquidity. We have sufficient borrowing capacity with unsecured lines of credit totalling about $1,200 million, which include the following:

•		A $500 million, unsecured revolving credit facility that matures November 30, 2012. 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 million can be used for the issuance of letters of credit and, to the extent necessary, up to $400 million is kept available to provide liquidity support for our commercial paper program. The facility ranks equally with all of our other senior debt. At September 30, 2009, there was no amount outstanding under this credit facility. However, at September 30, 2009, there was $126 million outstanding under our commercial paper program.

•		A $100 million, unsecured revolving credit facility, maturing February 5, 2010, and extendable for two additional 364-day terms upon mutual agreement with the lender. At September 30, 2009, there was no amount outstanding under this credit facility.

•		Approximately $600 million in short-term borrowing and letters of credit provided by various financial institutions. These facilities are predominantly used to fulfill regulatory requirements to provide financial assurance for future decommissioning and reclamation of our operating sites and as overdraft protection. At September 30, 2009, outstanding letters of credit amounted to $593 million.

We have $800 million outstanding in senior unsecured debentures, which includes:

•		$300 million, bearing interest at a rate of 4.7% per annum and maturing September 16, 2015.

•		$500 million, bearing interest at a rate of 5.67% per annum and maturing September 2, 2019.

We have issued a promissory note payable to GE-Hitachi Global Enrichment, LLC in the amount of $73 million (US) to support future development of its business.

- 24 -

Debt Covenants

We are bound by certain covenants in our general credit facilities. The financially related covenants place restrictions on total debt, including guarantees, and set minimum levels of net worth. As at September 30, 2009, we met these financial covenants and do not expect our operating and investment activities in 2009 to be constrained by them.

Contractual Cash Obligations

There have been no material changes to our contractual cash obligations since December 31, 2008, including payments due for the next five years and thereafter. For further information on these contractual obligations, refer to our annual MD&A.

For further information regarding commitments and contingencies, refer to notes 9, 14 and 15 of our third quarter unaudited consolidated financial statements.

Commercial Commitments

There have been no material changes to our commercial commitments since December 31, 2008. For further information on these commercial commitments, refer to our annual MD&A.

OUTSTANDING SHARE DATA

At September 30, 2009, there were 392,654,873 common shares and one Class B share outstanding. In addition, there were 8,139,992 stock options outstanding with exercise prices ranging from $5.88 to $54.50 per share.

CONTROLS AND PROCEDURES

As of September 30, 2009, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon that evaluation and as of September 30, 2009, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports the company files and submits under applicable securities laws is recorded, processed, summarized and reported as and when required, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting during the quarter ended September 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

- 25 -

CHANGES IN ACCOUNTING POLICY

NEW ACCOUNTING PRONOUNCEMENTS

Goodwill and Intangible Assets

Effective January 1, 2009, we adopted the new Canadian standard, Handbook Section 3064, Goodwill and Intangible Assets, which replaces Handbook Section 3062, Goodwill and Other Intangible Assets and Section 3450, Research and Development Costs. The standard introduces guidance for the recognition, measurement and disclosure of goodwill and intangible assets, including internally generated intangible assets. The standard harmonizes Canadian standards with International Financial Reporting Standards and applies to annual and interim financial statements for fiscal years beginning on or after October 1, 2008. The new standard had no significant impact on our consolidated financial statements.

International Financial Reporting Standards (IFRS)

The Accounting Standards Board has announced that Canadian publicly accountable enterprises will be required to adopt IFRS effective January 1, 2011. Although IFRS employs a conceptual framework that is similar to Canadian GAAP, there are significant differences in recognition, measurement and disclosure. We have undertaken a project to assess the potential impacts of the transition to IFRS and have established a project team led by management to plan for and achieve a smooth transition to IFRS. The team has developed a detailed project plan to ensure compliance with the new standards. Regular progress reports on the status of our IFRS implementation project are provided to senior management and to the audit committee of the board. A major public accounting firm has been engaged to provide technical accounting advice and project management guidance in the conversion to IFRS.

Our implementation project consists of three principal phases:

Phase 1: Preliminary Study and Diagnostic — This phase included performing a high-level impact assessment to identify key areas that may be impacted by the adoption of IFRS. This analysis is complete and resulted in prioritization of areas to be evaluated in the next phase of the project plan. The information obtained from the assessment was also used to develop a detailed plan for convergence and implementation. During phase 1, an analysis was also performed to assess whether information technology systems used to collect and report financial data required modification in order to meet new reporting requirements under IFRS. The necessary systems modifications have been tested and implemented as of June 30, 2009.

Phase 2: Detailed Component Evaluation — In this phase, further evaluation of the financial statement areas impacted by IFRS will be completed. This will involve a more detailed, systematic gap analysis of accounting and disclosure differences between Canadian GAAP and IFRS. This detailed assessment will facilitate final decisions around accounting policies and overall conversion strategy. This phase also involves specification of changes required to existing business processes.

Phase 3: Embedding — This phase includes execution of changes to business processes impacted by our transition to IFRS and formal approval of recommended accounting policy changes. Also included in this phase is the delivery of necessary IFRS training to our audit committee of the board, board of directors and staff. This phase will culminate with the collection of financial information necessary to compile IFRS compliant financial statements and audit committee approval of IFRS financial statements commencing in 2011.

- 26 -

We completed phase 1 in June 2008 and are now in the detailed component evaluation phase, with some work also being performed in the embedding phase. Our analysis of the areas that may be impacted by the adoption of IFRS has identified a number of differences. The training that we have delivered thus far has focused on updating those individuals whose responsibilities are directly impacted by the changes being implemented as a result of the conversion to IFRS. We have held information sessions for both the audit committee of the board and the board of directors on the more significant accounting policy choices and IFRS 1 elections available to us, as well as on IFRS financial statement format and disclosures. We are currently assessing the impact of the adoption of IFRS on our results of operations, financial position and financial statement disclosures. In addition, we continue to assess the impact of the conversion on internal controls over financial reporting and disclosure controls and procedures. We will continue to invest in training and resources throughout the transition period.

Financial Instruments — Disclosures

In June 2009, the CICA issued amendments to Handbook Section 3862, Financial Instruments — Disclosures requiring enhanced disclosures related to liquidity risk and new disclosures on fair value measurement of financial instruments. These requirements harmonize Canadian standards with IFRS and apply to annual financial statements for fiscal years ending after September 30, 2009. We are assessing the impact the new standard on our consolidated financial statements.

- 27 -

USE OF NON-GAAP FINANCIAL MEASURES

Adjusted Net Earnings


	Three months ended						Nine months ended
	September 30						September 30
($ millions)	2009			2008			2009			2008
Net earnings (per GAAP)		172			135			501			419
Adjustments (after tax)
Loss (gain) on restructuring of the gold business		33			(2	)		17			(29	)
Stock option expense (recovery)¹		—			(52	)		—			(34	)
Losses (gains) on financial instruments		(101	)		26			(184	)		38
Writedown of investments		—			20			—			20

Adjusted net earnings		104			127			334			414


¹		Late in 2008, we amended our stock option program and began accounting for our options using their fair value at the grant date. Under this method, our stock option expense is highly predictable. For this reason, we will not be adjusting our net earnings for stock option expense in 2009.

QUALIFIED PERSONS

The disclosure of scientific and technical information regarding the following Cameco properties in this MD&A was prepared by or under the supervision of the following qualified persons for the purpose of National Instrument 43-101:


Qualified Persons		Properties
• David Bronkhorst, general manager, McArthur River operation, Cameco • Les Yesnik, general manager, Key Lake operation, Cameco		McArthur River/Key Lake
• Grant Goddard, general manager, Cigar Lake project, Cameco		Cigar Lake
• Ian Atkinson, vice-president, exploration, Centerra Gold		Kumtor

- 28 -

CAUTION REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Statements contained in this MD&A which are not current statements or historical facts are “forward-looking information” (as defined under Canadian securities laws) and “forward-looking statements” (as defined in the US Securities Exchange Act of 1934, as amended) which may be material and that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by them. Sentences and phrases containing words such as “believe”, “estimate”, “anticipate”, “plan”, “outlook”, “predict”, “goals”, “targets”, “forecast”, “projects”, “may”, “hope”, “can”, “will”, “shall”, “should”, “expect”, “intend”, “is designed to”, “continues”, “with the intent”, “potential”, “strategy” and the negative of these words, or variations of them, or comparable terminology that does not relate strictly to current or historical facts, are all indicative of forward-looking information and statements. Examples of forward-looking information and statements include, but are not limited to: our consolidated outlook for the year 2009 and related discussion; future earnings sensitivity to changes in the exchange rate; price sensitivity analysis for uranium, electricity and gold; the uranium production outlook for 2009 to 2013 and related discussion; our expected uranium production quantities for 2009; the uranium price sensitivity table for 2009 to 2013 and related discussion; our expectations regarding the expected start date and production levels for the zone 2, panel 5 chamber at McArthur River, and the expected timing for completion of freeze hole drilling, and the commencement of freezing and initial production, for lower zone 4 at McArthur River; our expectation that adopting the new tax code will not have a material impact on Inkai; and our expectation that Cameco’s operating and investing activities in 2009 will not be constrained by the financial covenants in our general credit facilities.

The material risk factors that could cause actual results to differ materially from the forward-looking information and statements contained in this MD&A and the material risk factors or assumptions that were used to develop them include, without limitation: our assumptions regarding production levels, sales volumes, purchases and prices, which are subject to the risk that our assumptions are incorrect; the risk of volatility and sensitivity to market prices for our products and services, which we have assumed will remain relatively constant; the assumption regarding the B units of BPLP reaching their targeted capacity factor and that there will be no significant changes in current estimates for costs and prices, and the risk that those assumptions vary adversely; the risk of material adverse changes in foreign currency exchange rates, interest rates and costs, which we have assumed will remain constant or improve in our favour; our assumptions regarding production, cost, remediation, decommissioning, reclamation, mineral reserve and tax estimates, and the risk that our assumptions are incorrect; the risk of material litigation, arbitration or regulatory proceedings and their adverse outcome, which we have assumed will not occur; the risk we may not be able to enforce legal rights which we have assumed to be enforceable; environmental and safety risks, which we have assumed will not adversely affect us; unexpected or challenging geological, hydrological or mining conditions which deviate significantly from our assumptions regarding those conditions; political risks arising from operating in certain developing countries, which we have assumed will not occur; the risk of adverse changes in government legislation, regulations and policies, which we have assumed will not occur; the risk of uranium and conversion service providers’ failure to fulfill delivery commitments, which we have assumed will not occur; failure to obtain or maintain necessary permits, licences, and approvals from government authorities, which we have assumed may be obtained and maintained; the risk of natural phenomena such as fire, flooding or earthquakes, which we have assumed will not occur; our assumptions regarding the ability of the company’s and customers’ facilities to operate without disruption, including as a result of strikes, lockouts, equipment failure or other causes and the risk that such disruptions may occur; assumptions regarding the availability of reagents, equipment, operating parts, and supplies critical to production, which are subject to the risk that our assumptions may be incorrect; assumptions regarding uranium spot prices, gold spot prices, Ontario electrical spot prices and the US/Canadian spot exchange rate, which are subject to the risk of fluctuations that would be materially adverse to us; the assumptions and risk factors regarding uranium price sensitivity set out under the heading “Uranium Price Sensitivity (2009 to 2013)”; the schedule for the development and rampup of production from Inkai is achieved, which is subject to the risk of delay; the successful transition to new mining areas at McArthur River commencing in 2009, which is subject to various expected and unanticipated risks; the dewatering and depressurization programs at Kumtor continue to produce the expected results and the water management systems work as planned, which is subject to various expected and unanticipated risks; Centerra is successful in mitigating the continued movement of waste and ice into the Kumtor open pit, which is subject to various expected and unanticipated risks; the success and timely completion of planned development and remediation projects, including the remediation of and return to pre-flood construction at Cigar Lake, and the risk of delay or ultimate lack of success; the risk of a significant decline in general economic conditions, which we have assumed will not occur; and other development, operating, environmental and safety risks.

- 29 -

The forward-looking information and statements included in this MD&A represent Cameco’s views as of the date of this MD&A and should not be relied upon as representing Cameco’s views as of any subsequent date. While Cameco anticipates that subsequent events and developments may cause its views to change, Cameco specifically disclaims any intention or obligation to update forward-looking information and statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable securities laws. Forward-looking information and statements contained in this MD&A about prospective results of operations, financial position or cash flows that are based upon assumptions about future economic conditions and courses of action is presented for the purpose of assisting Cameco’s shareholders in understanding management’s current views regarding those future outcomes, and may not be appropriate for other purposes.

There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could vary, or differ materially, from those anticipated in them. Further, expected future production estimates are inherently uncertain, particularly in the latter years of the forecast, and could materially change over time. Accordingly, readers of this MD&A should not place undue reliance on forward-looking information and statements. Forward-looking information and statements for time periods subsequent to 2009 involve greater risks and require longer-term assumptions and estimates than those for 2009, and are consequently subject to greater uncertainty. Therefore, the reader is especially cautioned not to place undue reliance on such long-term forward-looking information and statements.

ADDITIONAL INFORMATION

Additional information on Cameco, including its annual information form, is available on SEDAR at sedar.com and the company’s website at cameco.com.

- End -

- 30 -

EX-99.3 4 c91754exv99w3.htm EXHIBIT 99.3 Exhibit 99.3

Exhibit 99.3

Cameco Corporation
Consolidated Financial Statements
September 30, 2009

Cameco Corporation
Highlights
(Unaudited)


	Three Months Ended				Nine Months Ended
	Sept 30/09		Sept 30/08		Sept 30/09			Sept 30/08

Financial (in millions)
Revenue	$	694	$	729	$	2,083		$	1,941
Earnings from operations		224		176		585			459
Net earnings		172		135		501			419
Adjusted net earnings		104		127		334			414
Cash provided by operations		248		109		565			368
Working capital (end of period)						1,267			300
Net debt to capitalization						10	%		25	%

Per common share
Net earnings - - Basic	$	0.44	$	0.39	$	1.30		$	1.22
- Diluted		0.44		0.39		1.29			1.21
- Diluted, adjusted		0.26		0.37		0.86			1.19
Dividend		0.06		0.06		0.18			0.18

Weighted average number of paid common shares outstanding (in thousands)		392,613		345,830		386,355			344,906

Uranium price information
Average uranium spot price for the period (US$/lb)	$	45.29	$	60.50	$	46.10		$	65.11
Average uranium realized price for the period (US$/lb)		34.24		37.88		37.26			42.69
Average uranium realized price for the period (Cdn$/lb)		39.18		39.90		45.80			44.42

Sales volumes
Uranium (in thousands lbs U₃O₈)		8,280		9,846		23,883			23,640
Fuel services (tU)		2,833		3,748		8,853			10,219
Gold (troy ounces)		166,000		162,000		390,000			446,000
Electricity (TWh)		1.9		2.2		5.8			5.6

Note: Currency amounts are expressed in Canadian dollars unless stated otherwise.


	Cameco’s			Three Months Ended				Nine Months Ended
Cameco Production	Share			Sept 30/09		Sept 30/08		Sept 30/09		Sept 30/08

Uranium production (in thousands lbs U₃O₈)
McArthur River		69.8	%		3,758		2,088		9,325		8,471
Rabbit Lake		100.0	%		918		202		2,415		1,715
Crow Butte		100.0	%		198		148		554		435
Smith Ranch Highland		100.0	%		410		278		1,300		954
Inkai		60.0	%		343		64		536		192

Total					5,627		2,780		14,130		11,767


Fuel services (tU) ⁽ⁱ⁾		100.0	%		4,088		1,838		8,449		5,745

Gold (troy ounces)
Kumtor		100.0	%		134,000		134,000		278,000		320,000
Boroo		100.0	%		32,000		52,000		102,000		145,000

Total					166,000		186,000		380,000		465,000


(i)		Includes toll conversion supplied by Springfield Fuels Ltd.

Cameco Corporation
Consolidated Statements of Earnings
(Unaudited)
($Cdn Thousands)


	Three Months Ended						Nine Months Ended
	Sept 30/09			Sept 30/08			Sept 30/09			Sept 30/08

Revenue from
Products and services	$	694,103		$	728,896		$	2,083,080		$	1,941,474


Expenses
Products and services sold ⁽ⁱ⁾		407,733			412,152			1,252,811			1,056,374
Depreciation, depletion and reclamation		97,329			89,196			264,892			203,178
Administration [note 11]		42,347			(32,467	)		120,158			61,251
Exploration [note 9]		18,204			21,892			52,507			53,656
Research and development [note 9]		(2,299	)		1,245			(86	)		4,147
Interest and other [note 8]		(125,816	)		56,944			(212,996	)		89,362
Cigar Lake remediation [note 9]		2,927			2,150			13,119			8,883
Restructuring of gold business [note 14]		26,900			2,200			7,800			8,800
Loss (gain) on sale of assets		2,337			(129	)		183			(3,206	)

		469,662			553,183			1,498,388			1,482,445


Earnings from operations		224,441			175,713			584,692			459,029
Equity in loss of associated companies		(4,686	)		(2,428	)		(24,706	)		(6,232	)
Write-down of investments		—			(23,571	)		—			(23,571	)


Earnings before income taxes and minority interest		219,755			149,714			559,986			429,226
Income tax expense (recovery) [note 9]		37,638			6,021			77,059			(16,677	)
Minority interest		10,002			8,242			(18,035	)		26,724

Net earnings	$	172,115		$	135,451		$	500,962		$	419,179

Basic earnings per common share [note 10]	$	0.44		$	0.39		$	1.30		$	1.22

Diluted earnings per common share [note 10]	$	0.44		$	0.39		$	1.29		$	1.21


(i) Excludes depreciation, depletion and reclamation expenses of:	$	94,753		$	86,963		$	256,939		$	196,543

See accompanying notes to consolidated financial statements

Cameco Corporation
Consolidated Balance Sheets
(Unaudited)
($Cdn Thousands)


	As At
	Sept 30/09		Dec 31/08

Assets
Current assets
Cash and cash equivalents	$	669,732	$	269,176
Accounts receivable		314,099		568,340
Inventories [note 3]		487,412		470,649
Supplies and prepaid expenses		279,118		301,937
Current portion of long-term receivables, investments and other [note 5]		196,010		49,836

		1,946,371		1,659,938

Property, plant and equipment		4,485,288		4,416,293
Intangible assets and goodwill		254,666		283,344
Long-term receivables, investments and other [note 5]		653,031		628,972
Long-term inventories [note 3]		24,505		22,054

		5,417,490		5,350,663


Total assets	$	7,363,861	$	7,010,601


Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	$	454,336	$	580,903
Short-term debt		78,640		89,817
Dividends payable		23,559		21,943
Current portion of long-term debt		11,344		10,175
Current portion of other liabilities		21,077		117,222
Future income taxes		90,666		68,857

		679,622		888,917

Long-term debt [note 6]		1,082,096		1,212,982
Provision for reclamation		341,062		353,344
Other liabilities		177,044		179,880
Future income taxes		94,058		81,352

		2,373,882		2,716,475

Minority interest		697,295		779,203

Shareholders’ equity
Share capital		1,513,733		1,062,714
Contributed surplus		136,369		131,858
Retained earnings		2,583,617		2,153,315
Accumulated other comprehensive income		58,965		167,036

		4,292,684		3,514,923

Total liabilities and shareholders’ equity	$	7,363,861	$	7,010,601


Commitments and contingencies [notes 9,14,15]

See accompanying notes to consolidated financial statements

Cameco Corporation
Consolidated Statements of Shareholders’ Equity
(Unaudited)
($Cdn Thousands)


	Nine Months Ended
	Sept 30/09			Sept 30/08

Share capital
Balance at beginning of period	$	1,062,714		$	819,268
Stock option plan		5,487			735
Conversion of debentures		—			242,352
Equity issuance [note 7]		445,532			—

Balance at end of period	$	1,513,733		$	1,062,355


Contributed surplus
Balance at beginning of period	$	131,858		$	119,531
Stock-based compensation		4,917			16,213
Conversion of debentures		—			(30,431	)
Options exercised		(406	)		—

Balance at end of period	$	136,369		$	105,313


Retained earnings
Balance at beginning of period	$	2,153,315		$	1,788,418
Net earnings		500,962			419,179
Dividends on common shares		(70,660	)		(63,275	)

Balance at end of period	$	2,583,617		$	2,144,322


Accumulated other comprehensive income (loss)
Balance at beginning of period	$	167,036		$	25,433
Other comprehensive income		(108,071	)		21,866

Balance at end of period	$	58,965		$	47,299

Total retained earnings and accumulated other comprehensive income	$	2,642,582		$	2,191,621

Shareholders’ equity at end of period	$	4,292,684		$	3,359,289

See accompanying notes to consolidated financial statements

Cameco Corporation
Consolidated Statements of Comprehensive Income
(Unaudited)
($Cdn Thousands)


	Three Months Ended						Nine Months Ended
	Sept 30/09			Sept 30/08			Sept 30/09			Sept 30/08

Net earnings	$	172,115		$	135,451		$	500,962		$	419,179
Other comprehensive income (loss), net of taxes [note 9]
Unrealized foreign currency translation (losses) gains		(89,436	)		48,060			(137,289	)		70,767
Gains on derivatives designated as cash flow hedges		29,983			67,622			114,385			23,157
Gains on derivatives designated as cash flow hedges transferred to net earnings		(32,481	)		(23,800	)		(87,317	)		(78,440	)
Unrealized gains (losses) on assets available-for-sale		390			(4,592	)		2,150			(12,995	)
Losses on assets available-for-sale transferred to net earnings		—			19,377			—			19,377

Other comprehensive income		(91,544	)		106,667			(108,071	)		21,866

Total comprehensive income	$	80,571		$	242,118		$	392,891		$	441,045

Cameco Corporation
Consolidated Statement of Accumulated Other Comprehensive Income
(Unaudited)
($Cdn Thousands)


	Currency
	Translation			Cash Flow			Available-For-
(net of related income taxes)[note 9]	Adjustment			Hedges			Sale Assets			Total

Balance at December 31, 2008	$	66,642		$	101,654		$	(1,260	)	$	167,036
Change in unrealized foreign currency translation losses		(137,289	)		—			—			(137,289	)
Change in gains on derivatives designated as cash flow hedges		—			114,385			—			114,385
Change in gains on derivatives designated as cash flow hedges transferred to net earnings		—			(87,317	)		—			(87,317	)
Change in unrealized gains on available-for-sale securities		—			—			2,150			2,150

Balance at September 30, 2009	$	(70,647	)	$	128,722		$	890		$	58,965


Balance at December 31, 2007	$	(150,935	)	$	182,734		$	(6,366	)	$	25,433
Change in unrealized foreign currency translation gains		70,767			—			—			70,767
Change in losses on derivatives designated as cash flow hedges		—			23,157			—			23,157
Change in gains on derivatives designated as cash flow hedges transferred to net earnings		—			(78,440	)		—			(78,440	)
Change in unrealized losses on available-for-sale securities		—			—			(12,995	)		(12,995	)
Change in losses on available-for-sale securities transferred to net earnings		—			—			19,377			19,377

Balance at September 30, 2008	$	(80,168	)	$	127,451		$	16		$	47,299

See accompanying notes to consolidated financial statements

Cameco Corporation
Consolidated Statements of Cash Flows
(Unaudited)
($Cdn Thousands)


	Three Months Ended						Nine Months Ended
	Sept 30/09			Sept 30/08			Sept 30/09			Sept 30/08

Operating activities
Net earnings	$	172,115		$	135,451		$	500,962		$	419,179
Items not requiring (providing) cash:
Depreciation, depletion and reclamation		97,329			89,196			264,892			203,178
Provision for future taxes [note 9]		29,449			(28,141	)		19,141			(93,849	)
Deferred gains		(8,790	)		(14,168	)		(33,102	)		(93,515	)
Unrealized (gains) losses on derivatives		(84,296	)		14,026			(197,315	)		32,431
Stock-based compensation [note 11]		774			16,552			4,917			16,213
Loss (gain) on sale of assets		2,337			(129	)		183			(3,206	)
Equity in loss of associated companies		4,686			2,428			24,706			6,232
Write-down of investments		—			23,571			—			23,571
Restructuring of gold business [note 14]		26,900			2,200			7,800			8,800
Minority interest		10,002			8,242			(18,035	)		26,724
Other operating items [note 13]		(2,271	)		(139,872	)		(9,490	)		(177,512	)

Cash provided by operations		248,235			109,356			564,659			368,246


Investing activities
Additions to property, plant and equipment		(128,640	)		(524,318	)		(366,732	)		(764,517	)
Increase in long-term receivables, investments and other		(12,096	)		(33,724	)		(35,832	)		(191,084	)
Proceeds on sale of property, plant and equipment		52			33,029			3,685			36,102

Cash used in investing		(140,684	)		(525,013	)		(398,879	)		(919,499	)


Financing activities
Decrease in debt		(237,713	)		(25,997	)		(607,367	)		(30,326	)
Increase in debt		—			484,346			—			646,543
Issue of debentures, net of issue costs [note 6]		495,818			—			495,818			—
Issue of shares, net of issue costs [note 7]		—			34			440,150			735
Issue of shares, stock option plan		1,023			—			5,081			—
Dividends		(23,553	)		(20,668	)		(69,044	)		(58,554	)

Cash provided by financing		235,575			437,715			264,638			558,398

Increase in cash during the period		343,126			22,058			430,418			7,145
Exchange rate changes on foreign currency cash balances		(22,748	)		6,035			(29,862	)		9,899
Cash and cash equivalents at beginning of period		349,354			120,883			269,176			131,932

Cash and cash equivalents at end of period	$	669,732		$	148,976		$	669,732		$	148,976


Cash and cash equivalents comprised of:
Cash							$	87,995		$	64,878
Cash equivalents								581,737			84,098

							$	669,732		$	148,976


Supplemental cash flow disclosure
Interest paid	$	10,894		$	18,832		$	31,889		$	41,715
Income taxes paid	$	7,190		$	16,766		$	64,498		$	118,026

See accompanying notes to consolidated financial statements

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

Accounting Policies

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) and follow the same accounting principles and methods of application as the most recent annual consolidated financial statements except for the recent accounting standards adopted described below. Since the interim financial statements do not include all disclosures required by GAAP, they should be read in conjunction with Cameco’s annual consolidated financial statements included in the 2008 annual financial review. Certain comparative figures for the prior period have been reclassified to conform to the current period’s presentation.

(a)

Goodwill and Intangible Assets

Effective January 1, 2009, Cameco adopted the new Canadian standard, Handbook Section 3064, Goodwill and Intangible Assets, which replaced Handbook Section 3062, Goodwill and Other Intangible Assets and Section 3450, Research and Development Costs. The standard introduces guidance for the recognition, measurement and disclosure of goodwill and intangible assets, including internally generated intangible assets. The standard also harmonizes Canadian standards with IFRS and applies to annual and interim financial statements for fiscal years beginning on or after October 1, 2008. There was no material impact to previously reported financial statements as a result of the implementation of the new standard.

Future Changes in Accounting Policy

(a)

International Financial Reporting Standards (IFRS)

The Accounting Standards Board (AcSB) has announced that Canadian publicly accountable enterprises will be required to adopt IFRS effective January 1, 2011. Although IFRS employs a conceptual framework that is similar to Canadian GAAP, there are significant differences in recognition, measurement and disclosure. Cameco has undertaken a project to assess the potential impacts of the transition to IFRS and has developed a detailed project plan to ensure compliance with the new standards.

Cameco has completed the initial phase of the implementation project including the detailed diagnostic analysis which included a high-level impact assessment to identify key areas that may be impacted by the adoption of IFRS. This analysis resulted in the prioritization of areas to be evaluated in the next phase of the project plan, component evaluation. This phase, which is currently in progress, includes the analysis of accounting policy alternatives available under IFRS as well as the determination of changes required to existing information systems and business processes. As of June 30, 2009, the systems changes necessary to support the IFRS conversion had been fully tested and implemented. Cameco continues to assess the impact of the conversion on internal controls over financial reporting and disclosure controls and procedures and will continue to invest in training and resources throughout the transition period to facilitate a timely conversion. Cameco is currently assessing the impact of the adoption of IFRS on our results of operations, financial position and financial statement disclosures.

(b)

Financial Instruments — Disclosures

In June 2009, the CICA issued amendments to Handbook Section 3862, Financial Instruments — Disclosures. The amendments provide for enhanced disclosures on liquidity risk and require new disclosures on fair value measurements of financial instruments. These requirements harmonize Canadian standards with IFRS and apply to annual financial statements for fiscal years ending after September 30, 2009. Cameco is assessing the impact the new standard on its consolidated financial statements.

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

Inventories


	As At
(thousands)	Sept 30/09			Dec 31/08

Uranium
Concentrate	$	286,572		$	287,079
Broken ore		22,351			21,396

		308,923			308,475

Fuel Services		132,048			89,635

Gold
Finished		11,166			18,662
Stockpile		59,780			75,931

		70,946			94,593


Total		511,917			492,703
Less: Non-current portion		(24,505	)		(22,054	)

Net	$	487,412		$	470,649

The non-current portion of inventory represents values assigned to low-grade stockpiles of gold ore that are not expected to be processed in the next 12 months.

Derivatives

The following tables summarize the fair value of derivatives and classification on the balance sheet:

As at September 30, 2009


(thousands)	Cameco			BPLP			Total

Non-hedge derivatives:
Embedded derivatives — sales contracts	$	(3,381	)	$	8,259		$	4,878
Foreign currency contracts		87,368			—			87,368
Cash flow hedges:
Energy and sales contracts		—			143,995			143,995

Net	$	83,987		$	152,254		$	236,241

Classification:
Current portion of long-term receivables, investments and other [note 5]	$	99,891		$	95,796		$	195,687
Long-term receivables, investments and other [note 5]		—			57,974			57,974
Current portion of other liabilities		(12,394	)		(1,516	)		(13,910	)
Other liabilities		(3,510	)		—			(3,510	)

Net	$	83,987		$	152,254		$	236,241

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

As at December 31, 2008


(thousands)	Cameco			BPLP			Total

Non-hedge derivatives:
Embedded derivatives — sales contracts	$	(8,951	)	$	4,344		$	(4,607	)
Foreign currency contracts		(105,125	)		—			(105,125	)
Cash flow hedges:
Energy and sales contracts		—			71,116			71,116

Net	$	(114,076	)	$	75,460		$	(38,616	)

Classification:
Current portion of long-term receivables, investments and other [note 5]	$	5,793		$	43,654		$	49,447
Long-term receivables, investments and other [note 5]		—			32,340			32,340
Current portion of other liabilities		(110,918	)		(73	)		(110,991	)
Other liabilities		(8,951	)		(461	)		(9,412	)

Net	$	(114,076	)	$	75,460		$	(38,616	)

The following tables summarize different components of the (gains) and losses on derivatives:

For the three months ended September 30, 2009


(thousands)	Cameco			BPLP			Total

Non-hedge derivatives:
Embedded derivatives — sales contracts	$	1,812		$	(2,224	)	$	(412	)
Foreign currency contracts		(128,854	)		138			(128,716	)
Cash flow hedges:
Energy and sales contracts		—			153			153

Net	$	(127,042	)	$	(1,933	)	$	(128,975	)

For the three months ended September 30, 2008


(thousands)	Cameco			BPLP			Total

Non-hedge derivatives:
Embedded derivatives — sales contracts	$	4,950		$	(4,275	)	$	675
Foreign currency contracts		22,416			—			22,416
Interest rate contracts		906			—			906
Cash flow hedges:
Energy and sales contracts		—			(467	)		(467	)
Ongoing hedge inefficiency		(467	)		—			(467	)

Net	$	27,805		$	(4,742	)	$	23,063

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

For the nine months ended September 30, 2009


(thousands)	Cameco			BPLP			Total

Non-hedge derivatives:
Embedded derivatives — sales contracts	$	(4,307	)	$	(4,292	)	$	(8,599	)
Foreign currency contracts		(193,194	)		378			(192,816	)
Cash flow hedges:
Energy and sales contracts		—			196			196

Net	$	(197,501	)	$	(3,718	)	$	(201,219	)

For the nine months ended September 30, 2008


(thousands)	Cameco		BPLP			Total

Non-hedge derivatives:
Embedded derivatives — sales contracts	$	5,208	$	1,291		$	6,499
Foreign currency contracts		42,869		—			42,869
Interest rate contracts		906		—			906
Cash flow hedges:
Energy and sales contracts		—		(203	)		(203	)
Ongoing hedge inefficiency		2,210		—			2,210

Net	$	51,193	$	1,088		$	52,281

Over the next 12 months, based on current exchange rates, Cameco expects an estimated $31,420,000 of pre-tax gains from the foreign currency cash flow hedges to be reclassified through other comprehensive income to net earnings. The maximum length of time Cameco hedges its exposure to the variability in future cash flows related to foreign currency on anticipated transactions is five years.

Over the next 12 months, based on current prices, Cameco expects an estimated $92,540,000 of pre-tax gains from BPLP’s various energy and sales related cash flow hedges to be reclassified through other comprehensive income to net earnings. The maximum length of time BPLP is hedging its exposure to the variability in future cash flows related to electricity prices on anticipated transactions is five years.

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

Long-Term Receivables, Investments and Other


	As At
(thousands)	Sept 30/09			Dec 31/08

Bruce A L.P. (BPLP)
Capital lease receivable from BPLP ⁽ⁱ⁾	$	95,464		$	97,044
Derivatives [note 4]		153,770			75,994
Accrued pension benefit asset		30,751			6,061
Kumtor Gold Company (KGC)
Reclamation trust fund		7,022			6,219
Equity accounted investments
Global Laser Enrichment LLC (privately held)		193,164			240,018
Govi High Power Exploration Inc. (privately held)		27,225			34,442
UNOR Inc. (market value $1,088)		959			1,088
UEX Corporation (market value $47,690)		5,486			6,714
Huron Wind (privately held)		4,111			4,623
Minergia S.A.C. (privately held)		135			534
Available-for-sale securities
Western Uranium Corporation (market value $4,301)		4,301			3,296
Cue Resources Ltd. (market value $338)		338			422
Derivatives [note 4]		99,891			5,793
Deferred charges
Cost of sales		6,414			6,414
Advances receivable from Inkai JV LLP ⁽ⁱⁱ⁾		142,919			126,130
Accrued pension benefit asset		4,151			4,815
Other		72,940			59,201

		849,041			678,808
Less current portion		(196,010	)		(49,836	)

Net	$	653,031		$	628,972


⁽ⁱ⁾		BPLP leases the Bruce A nuclear generating plants and other property, plant and equipment to Bruce A L.P. under a sublease agreement. Future minimum base rent sublease payments under the capital lease receivable are imputed using a 7.5% discount rate.

⁽ⁱⁱ⁾		Through an unsecured shareholder loan, Cameco has agreed to fund the development of the Inkai project. The limit of the loan facility is $370,000,000 (US) and advances under the facility bear interest at a rate of LIBOR plus 2%. At September 30, 2009, $330,000,000 (US) of principal and interest was outstanding (2008 - $257,000,000 (US)), of which 40% represents the joint venture partner’s share. Of the cash available for distribution each year, 80% is to be used to repay the loan until it is repaid in full.

Long-Term Debt

Cameco has a $500,000,000 unsecured revolving credit facility that is available until November 30, 2012. 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, up to $400,000,000 may be allocated to provide liquidity support for the company’s commercial paper program. The facility ranks equally with all of Cameco’s other senior debt. At September 30, 2009 there was no amount outstanding under this credit facility. Cameco may borrow directly in the commercial paper market. Commercial paper outstanding at September 30, 2009 was $125,900,000. These amounts, when drawn, are classified as long-term debt.

On September 2, 2009, Cameco issued unsecured debentures in the amount of $500,000,000. The debentures bear interest at 5.67% per annum (effective interest rate of 5.78%) and mature on September 2, 2019. The proceeds of the issue after deducting expenses were $495,800,000.

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

Share Capital

(a)

At September 30, 2009, there were 392,654,873 common shares outstanding.

(b)

Options in respect of 8,139,992 shares are outstanding under the stock option plan and are exercisable up to 2018. For the quarter ended September 30, 2009, 89,190 options were exercised resulting in the issuance of shares (2008 — 11,280). For the nine months ended September 30, 2009, 269,550 options were exercised resulting in the issuance of shares (2008 — 79,540).

(c)

On March 5, 2009, Cameco finalized and issued 26,666,400 common shares pursuant to a public offering for a total consideration of $459,995,000. The proceeds of the issue after deducting expenses, net of taxes, were $445,532,000.

Interest and Other


	Three Months Ended						Nine Months Ended
(thousands)	Sept 30/09			Sept 30/08			Sept 30/09			Sept 30/08

Interest on long-term debt	$	6,868		$	14,795		$	24,263		$	36,334
Interest on short-term debt		486			3,587			1,905			3,728
Foreign exchange (gains) losses		1,915			28,663			(18,232	)		31,385
Losses (gains) on derivatives [note 4]		(128,975	)		23,063			(201,219	)		52,281
Other charges		3,338			1,441			10,302			5,102
Interest income		(1,921	)		(2,516	)		(4,788	)		(11,346	)
Capitalized interest		(7,527	)		(12,089	)		(25,227	)		(28,122	)

Net	$	(125,816	)	$	56,944		$	(212,996	)	$	89,362

Income Tax Expense (Recovery)


	Three Months Ended						Nine Months Ended
(thousands)	Sept 30/09			Sept 30/08			Sept 30/09			Sept 30/08

Earnings (loss) before income taxes and minority interest
Canada	$	20,820		$	(88,092	)	$	75,057		$	(205,633	)
Foreign		198,935			237,806			484,929			634,859

	$	219,755		$	149,714		$	559,986		$	429,226


Current income taxes (recovery)
Canada	$	(5,141	)	$	14,984		$	19,158		$	25,659
Foreign		13,331			19,178			38,761			51,513

	$	8,190		$	34,162		$	57,919		$	77,172
Future income taxes (recovery)
Canada	$	35,908		$	(27,545	)	$	20,263		$	(97,743	)
Foreign		(6,460	)		(596	)		(1,123	)		3,894

	$	29,448		$	(28,141	)	$	19,140		$	(93,849	)

Income tax expense (recovery)	$	37,638		$	6,021		$	77,059		$	(16,677	)

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

In 2008, as part of the ongoing annual audits of Cameco’s Canadian tax returns, Canada Revenue Agency (CRA) disputed the transfer pricing methodology used by Cameco and its wholly-owned Swiss subsidiary, Cameco Europe Ltd. (CEL), in respect of sale and purchase agreements for uranium products. In December 2008, CRA issued a notice of reassessment, which increased Cameco’s 2003 Canadian taxable income by approximately $43,000,000 (which does not result in any cash taxes becoming payable for that year). Cameco believes it is likely that CRA will reassess Cameco’s tax returns for the years 2004 through 2008 on a similar basis.

Late in 2008, CRA’s Transfer Pricing Review Committee decided not to impose a penalty for 2003 based on the documentation that had been submitted by Cameco.

Having regard to advice from its external advisors, Cameco’s opinion is that CRA’s position is incorrect, and Cameco intends to contest CRA’s position. However, to reflect the uncertainties of CRA’s appeals process and litigation, Cameco has decided to increase its reserve for uncertain tax positions and recognize an income tax expense of $15,000,000 in 2008 for the years 2003 through 2008. No provisions for penalties or interest have been recorded. We do not expect any cash taxes to be payable due to availability of elective deductions and tax loss carryforwards. 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 over the period. However, an unfavourable outcome for the years 2003 to 2008 could be material to Cameco’s financial position, results of operations or cash flows in the year(s) of resolution.

Further to Cameco’s decision to contest CRA’s 2003 reassessment, a Notice of Appeal was filed with the Tax Court of Canada on July 22, 2009.

During the third quarter of 2009, we obtained reasonable assurance that certain qualifying expenditures under investment tax credit programs would ultimately be realized and as a result, recorded a net recovery of $9,000,000 in expenses. This amount consists of recoveries related to exploration expenditures ($5,000,000), research and development costs ($4,000,000) and Cigar Lake remediation ($3,000,000), partially offset by a $3,000,000 increase in income tax expense.

Other comprehensive income (OCI) included on the consolidated statements of shareholders’ equity and the consolidated statements of comprehensive income are presented net of income taxes. The following income tax amounts are included in each component of other comprehensive income:


	Three Months Ended						Nine Months Ended
(thousands)	Sept 30/09			Sept 30/08			Sept 30/09			Sept 30/08

Gains (losses) on derivatives designated as cash flow hedges	$	12,931		$	23,685		$	52,060		$	(6,716	)
Gains on derivatives designated as cash flow hedges transferred to net earnings		(13,525	)		(6,877	)		(35,797	)		(28,793	)
Unrealized gains (losses) on assets available-for-sale		61			(1,868	)		336			(3,021	)
Losses on assets available-for-sale transferred to net earnings		—			3,024			—			3,024

Total income tax expense (recovery) included in OCI	$	(533	)	$	17,964		$	16,599		$	(35,506	)

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

Accumulated other comprehensive income included on the consolidated statements of shareholders’ equity and the consolidated statement of accumulated other comprehensive income is presented net of income taxes. The following income tax amounts are included in each component of accumulated other comprehensive income:


	As At
(thousands)	Sept 30/09		Sept 30/08

Gains on derivatives designated as cash flow hedges	$	53,003	$	46,419
Unrealized gains (losses) on assets available-for-sale		139		(1,149	)

Total income tax expense included in AOCI	$	53,142	$	45,270

10.

Per Share Amounts


	Three Months Ended				Nine Months Ended
(thousands)	Sept 30/09		Sept 30/08		Sept 30/09		Sept 30/08

Basic earnings per share computation

Net earnings	$	172,115	$	135,451	$	500,962	$	419,179

Weighted average common shares outstanding		392,613		345,830		386,355		344,906

Basic earnings per common share	$	0.44	$	0.39	$	1.30	$	1.22
Diluted earnings per share computation
Net earnings	$	172,115	$	135,451	$	500,962	$	419,179

Weighted average common shares outstanding		392,613		345,830		386,355		344,906
Dilutive effect of stock options		2,120		1,471		1,872		1,945
Weighted average common shares outstanding, assuming dilution		394,733		347,301		388,227		346,851

Diluted earnings per common share	$	0.44	$	0.39	$	1.29	$	1.21

For the quarter ended September 30, 2009, excluded from the calculation were 3,236,411 options as their exercise price was greater than the average closing market price (2008 – 894,675). For the nine months ended September 30, 2009, excluded from the calculation were 4,793,053 options whose exercise price was greater than the average closing market price (2008 – 891,375).

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

11.

Stock Option Plan

Cameco has established a stock option plan under which options to purchase common shares may be granted to officers and other employees of Cameco. The options vest over three years and expire eight years from the date granted. Options granted prior to 1999 expire 10 years from the date of the grant of the option.

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 24,396,269 shares have been issued.

On July 27, 2007, Cameco’s board of directors approved an amendment to the company’s stock option program introducing a cash settlement feature for the exercise of employee stock options. The cash settlement feature allowed option holders to elect to receive an amount in cash equal to the intrinsic value, being the excess market price of the common share over the exercise price of the option, instead of exercising the option and acquiring common shares. All outstanding stock options were subsequently classified as liabilities and carried at their intrinsic value. The intrinsic value of the liability was marked to market each period and amortized to expense over the shorter of the period to eligible retirement or the vesting period. Effective November 10, 2008, the stock option plan was amended to eliminate the alternative to settle in cash. As a result of the amendment all outstanding options are classified as equity and the fair value determined using the Black-Scholes option pricing model.

For the quarter ended September 30, 2009, Cameco has recorded compensation expense of $774,000 with an offsetting credit to contributed surplus to reflect the estimated fair value of stock options granted to employees. For the quarter ended September 30, 2008, a net recovery of $62,233,000 was recorded based on the intrinsic value of stock options granted to employees. For the nine months ended September 30, 2009, Cameco has recorded compensation expense of $4,917,000 with an offsetting credit to contributed surplus to reflect the estimated fair value of stock options granted to employees. For the nine months ended September 30, 2008, a net recovery of $42,118,000 was recorded based on the intrinsic value of stock options granted to employees.

The fair value of the options issued was determined using the Black-Scholes option-pricing model with the following assumptions:


Number of options granted		1,381,039
Average strike price	$	19.41
Expected dividend		1.2	%
Expected volatility		36	%
Risk-free interest rate		1.6	%
Expected life of option	3 - 5 years
Expected forfeitures		15	%
Weighted average grant date fair values	$	5.23

12.

Goodwill

Cameco tests goodwill for possible impairment on an annual basis and at any other time if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. During the third quarter of 2009, Cameco completed the goodwill impairment test for all reporting units. The results of this test have indicated there is no impairment.

13.

Statements of Cash Flows

Other Operating Items


	Three Months Ended						Nine Months Ended
(thousands)	Sept 30/09			Sept 30/08			Sept 30/09			Sept 30/08

Accounts receivable	$	(8,640	)	$	(155,711	)	$	216,639		$	(38,006	)
Inventories		1,244			7,426			(48,244	)		(80,585	)
Accounts payable and accrued liabilities		14,713			(16,306	)		(99,838	)		(93,822	)
Other		(9,588	)		24,719			(78,047	)		34,901

Total	$	(2,271	)	$	(139,872	)	$	(9,490	)	$	(177,512	)

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

14.

Restructuring of the Gold Business

During the first quarter of 2007, the Parliament of the Kyrgyz Republic accepted in the first reading and returned to committee for further deliberation draft legislation that, among other things, challenges the legal validity of Kumtor Gold Company’s (Kumtor) agreements with the Kyrgyz Republic, proposes recovery of additional taxes on amounts relating to past activities, and provides for the transfer of gold deposits (including Kumtor) to a state-owned entity.

On April 24, 2009, Cameco, Centerra, the Kyrgyz Government and other parties signed an agreement to resolve all the issues related to the Kumtor mine. On April 30, 2009, the Kyrgyz parliament ratified the agreement and enacted legislation authorizing implementation of the agreement. On June 11, 2009, closing occurred and Centerra issued 18,232,615 treasury shares to Kyrgyzaltyn JSC and Cameco transferred 25,300,000 shares (the Cameco Contributed Shares) of its 113,918,000 Centerra common shares to a custodian, to be held in escrow, for ultimate release to Kyrgyzaltyn JSC. The timing and number of the Cameco Contributed Shares that will be released to Kyrgyzaltyn JSC will be determined as follows:

(a)

If Cameco reduces its holdings of Centerra common shares to 10.8 million or less, then the Cameco Contributed Shares will be released to Kyrgyzaltyn JSC but the number of Cameco Contributed Shares released will be subject to adjustment depending on the per share sale proceeds received by Cameco. If Cameco receives per share sale proceeds of the agreed minimum threshold or less, then 14,072,623 of the Cameco Contributed Shares will be released to Kyrgyzaltyn JSC. If Cameco receives per share sale proceeds of the agreed maximum threshold or more, then all the Cameco Contributed Shares will be released to Kyrgyzaltyn JSC. If Cameco receives per share sale proceeds between the agreed minimum and maximum thresholds, then the number of the Cameco Contributed Shares to be released to Kyrgyzaltyn JSC will be an interpolated amount.

(b)

If, however, prior to Cameco reducing its holding of Centerra common shares as described above, the weighted average trading price of Centerra’s common shares exceeds the agreed maximum threshold for a period of 20 consecutive trading days, all the Cameco Contributed Shares will be released to Kyrgyzaltyn JSC after the expiration of a further 180 day period.

Cameco retains voting rights over the Cameco Contributed Shares while they are held by the custodian, and the Kyrgyz government will vote 52% of the treasury shares issued on closing as directed by Cameco until all or some of the Cameco Contributed Shares are released as set forth above. Accordingly, Cameco retains voting control over Centerra until all or some of the Cameco Contributed Shares are released.

The estimate of the loss related to this agreement is to be based on Centerra’s share price at the end of each reporting period. At September 30, 2009, the pre-tax loss was estimated to be $138,000,000 and an expense of $7,800,000 was recorded during 2009 to increase the amount provided in prior years.

As the number of the Cameco Contributed Shares ultimately transferred to Kyrgyzaltyn JSC is contingent as described above, the actual loss may be materially different than our current estimate.

15.

Commitments and Contingencies

The following represent the material legal claims against the company and its subsidiaries.

(a)

On February 12, 2004, Cameco, Cameco Bruce Holdings II Inc., BPC Generation Infrastructure Trust and TransCanada Pipelines Limited (collectively, the “Consortium”) sent a notice of claim to British Energy Limited and British Energy International Holdings Limited (collectively, “BE”) requesting, amongst other things, indemnification for breach of a representation and warranty contained in the February 14, 2003, Amended and Restated Master Purchase Agreement (the “MPA”). The alleged breach is that the Unit 8 steam generators were not “in good condition, repair and proper working order, having regard to their use and age.” This defect was discovered during a planned outage conducted just after closing. As a result of this defect, the planned outage had to be significantly extended. The Consortium claimed damages in the amount of $64,558,200 being 79.8% of the $80,900,000 of damages actually incurred, plus an unspecified amount to take into account the reduced operating life of the steam generators. By agreement of the parties, an arbitrator has been appointed to arbitrate the claims and a schedule has been set for the next steps in the proceeding.

The Consortium served its claim on October 21, 2008, and has amended it as required, most recently on August 7, 2009. BE served its answer and counter-statement on December 22, 2008, most recently amended on July 8, 2009, and the Consortium served its reply and answer to counter-statement on January 22, 2009, most recently amended on August 7, 2009.

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

The Unit 8 steam generators require on-going monitoring and maintenance as a result of the defect. In addition to the $64,558,200 in damages sought in the notice of claim, the claim seeks an additional $4,900,000 spent on inspection, monitoring and maintenance of Unit 8, and $31,900,000 in costs for future monitoring and maintenance, as well as repair costs and lost revenue due to anticipated unplanned outages as a consequence of the defect in Unit 8. The initial claim had also sought damages for the early replacement of the Unit 8 steam generators due to the defect shortening their useful operating lives. However, recent inspection data and analysis of the condition of the Unit 8 steam generators now indicates that they will continue to function until the end of the Consortium’s lease of the Bruce Power facility in 2018, as was expected at the time the MPA was entered into. The claim for early replacement was thus abandoned via an amendment to the claim on August 7, 2009. The parties have completed oral discoveries and are currently in the process of completing answers to undertakings given during discoveries. The hearing has been scheduled from November 30, 2009 to December 18, 2009.

In anticipation of this claim, BE issued on February 10, 2006, and then served on Ontario Power Generation Inc. (OPG) and Bruce Power LP a Statement of Claim. This Statement of Claim seeks damages for any amounts that BE is found liable to pay to the Consortium in connection with the Unit 8 steam generator arbitration described above, damages in the amount of $500,000,000, costs and pre and post judgment interest amongst other things. This action is in abeyance pending further developments on the Unit 8 steam generator arbitration.

(b)

Cameco, TransCanada and BPC have assumed the obligations to provide financial guarantees on behalf of BPLP. Cameco has provided the following financial assurances, with varying terms that range from 2004 to 2018:

(i)

Licensing assurances to Canadian Nuclear Safety Commission of up to $133,300,000. At September 30, 2009, Cameco’s actual exposure under these assurances was $23,700,000.

(ii)

Guarantees to customers under power sale agreements of up to $38,300,000. Cameco did not have any actual exposure under these agreements at September 30, 2009.

(iii)

Termination payments to OPG pursuant to the lease agreement of $58,300,000.

The fair value of these guarantees is nominal.

(c)

Under a supply contract with the Ontario Power Authority (OPA), BPLP is entitled to receive payments from the OPA during periods when the market price for electricity in Ontario is lower than the floor price defined under the agreement during a calendar year. On July 6, 2009, BPLP and the OPA amended the supply contract such that beginning in 2009, the annual payments received will not be subject to repayment in future years. Previously, the payments received under the agreement were subject to repayment during the entire term of the contract, dependent on the spot price in future periods. The agreement remains in effect until the earlier of December 31, 2020 or one year after the shutdown of the BPLP units. During 2009, BPLP became entitled to $389,000,000 under this agreement and currently expects to repay $12,000,000. The remaining $377,000,000 was recognized as revenue with Cameco’s share being $119,000,000.

(d)

On October 23, 2009, Centerra received a claim for compensation from the General Department of Specialized Inspection (SSIA) of Mongolia. The concern indicated by the SSIA is the status of certain mineral reserves, including alluvial reserves, covered by the Boroo mine licenses that are recorded in the Mongolian state reserves registry, but for which there are no or incomplete records or reports of mining activity. Centerra believes that it has properly reported all of its mining activities since it began operations in 2004. Centerra is disputing the claim and believes that the issue will be resolved through negotiation with the authorities without a material impact.

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

Segmented Information

For the three months ended September 30, 2009


			Fuel							Inter-
(thousands)	Uranium		Services			Electricity		Gold		Segment			Total
Revenue	$	328,896	$	50,433		$	144,823	$	176,399	$	(6,448	)	$	694,103

Expenses
Products and services sold		212,114		41,251			55,414		105,600		(6,646	)		407,733
Depreciation, depletion and reclamation		47,979		5,473			13,547		30,480		(150	)		97,329
Exploration [note 9]		10,654		—			—		7,550		—			18,204
Other expense		753		3,951			—		—		—			4,704
Cigar Lake remediation [note 9]		2,927		—			—		—		—			2,927
Restructuring costs [note 14]		—		—			—		26,900		—			26,900
Loss on sale of assets		2,337		—			—		—		—			2,337
Non-segmented expenses														(85,786	)

Earnings (loss) before income taxes and minority interest		52,132		(242	)		75,862		5,869		348			219,755
Income tax expense [note 9]														37,638
Minority interest														10,002

Net earnings													$	172,115

For the three months ended September 30, 2008


				Fuel							Inter-
(thousands)	Uranium			Services			Electricity		Gold		Segment			Total
Revenue	$	395,815		$	68,630		$	127,885	$	143,183	$	(6,617	)	$	728,896

Expenses
Products and services sold		223,258			64,815			52,728		84,650		(13,299	)		412,152
Depreciation, depletion and reclamation		52,081			7,058			11,631		18,921		(495	)		89,196
Exploration		16,147			—			—		5,745		—			21,892
Other expense		26,008			—			—		—		—			26,008
Cigar Lake remediation		2,150			—			—		—		—			2,150
Restructuring costs [note 14]		—			—			—		2,200		—			2,200
Gain on sale of assets		(129	)		—			—		—		—			(129	)
Non-segmented expenses															25,713

Earnings (loss) before income taxes and minority interest		76,300			(3,243	)		63,526		31,667		7,177			149,714
Income tax expense [note 9]															6,021
Minority interest															8,242

Net earnings														$	135,451

Cameco Corporation
Notes to Consolidated Financial Statements
(Unaudited)

For the nine months ended September 30, 2009


			Fuel							Inter-
(thousands)	Uranium		Services		Electricity		Gold			Segment			Total
Revenue	$	1,107,909	$	185,619	$	384,825	$	426,801		$	(22,074	)	$	2,083,080

Expenses
Products and services sold		637,169		132,212		184,918		315,327			(16,815	)		1,252,811
Depreciation, depletion and reclamation		114,840		16,973		42,256		90,594			229			264,892
Exploration [note 9]		33,074		—		—		19,433			—			52,507
Other expense		6,508		18,402		—		—			—			24,910
Cigar Lake remediation [note 9]		13,119		—		—		—			—			13,119
Restructuring costs [note 14]		—		—		—		7,800			—			7,800
Loss on sale of assets		183		—		—		—			—			183
Non-segmented expenses														(93,128	)

Earnings (loss) before income taxes and minority interest		303,016		18,032		157,651		(6,353	)		(5,488	)		559,986
Income tax expense [note 9]														77,059
Minority interest														(18,035	)

Net earnings													$	500,962

For the nine months ended September 30, 2008


				Fuel							Inter-
(thousands)	Uranium			Services			Electricity		Gold		Segment			Total
Revenue	$	1,062,315		$	182,206		$	319,255	$	399,352	$	(21,654	)	$	1,941,474

Expenses
Products and services sold		486,972			168,750			190,226		235,090		(24,664	)		1,056,374
Depreciation, depletion and reclamation		102,619			19,421			33,926		47,997		(785	)		203,178
Exploration		37,788			—			—		15,868		—			53,656
Other expense		30,245			—			—		—		—			30,245
Cigar Lake remediation		8,883			—			—		—		—			8,883
Restructuring costs [note 14]		—			—			—		8,800		—			8,800
Gain on sale of assets		(3,206	)		—			—		—		—			(3,206	)
Non-segmented expenses															154,318

Earnings (loss) before income taxes and minority interest		399,014			(5,965	)		95,103		91,597		3,795			429,226
Income tax recovery [note 9]															(16,677	)
Minority interest															26,724

Net earnings														$	419,179

EX-99.4 5 c91754exv99w4.htm EXHIBIT 99.4 Exhibit 99.4

Exhibit 99.4

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Gerald W. Grandey, president and chief executive officer of Cameco Corporation, certify that:

1.		I have reviewed this quarterly report on Form 6-K of Cameco Corporation;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 2, 2009

“Gerald W. Grandey” Gerald W. Grandey
President and Chief Executive Officer

EX-99.5 6 c91754exv99w5.htm EXHIBIT 99.5 Exhibit 99.5

Exhibit 99.5

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, O. Kim Goheen, senior vice-president and chief financial officer, of Cameco Corporation, certify that:

1.		I have reviewed this quarterly report on Form 6-K of Cameco Corporation;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 2, 2009

“O. Kim Goheen” O. Kim Goheen
Senior Vice-President
and Chief Financial Officer

GRAPHIC 7 c91754c9175401.gif GRAPHIC begin 644 c91754c9175401.gif M1TE&.#EAAP!2`.8``*6CH>KIZ(2"@D5#1.[M[+R[NN7DXZFFI=#.S65B89R: MF>/AX0L("4U*2M/1T,O)R)".C7QZ>?E MXST[.FYK:MK9V#4R,G5R<102$M[=W%524KBVM922D:">G=?5U(J(B,/!P28B M(OKZ^H.`?["MK)B6E:RJJ?#O[AT:&MC6U3DV-N#>W=G8UXB%A4]-3//R\:NI MJ$$^/8V*BG!M;//S\L_-S.SKZK>UM$A%17AU=(!]?%A658^,C.GHY_;V]<3# MPN/BX6%>7?'P\**@G_GX^'-P;ZZLK)>4DR@E)(B8J'>#\O#HN1DI.4E9:7DT45?GYU/)B@ MH:*CHQE/G)QI<*2LK:ZD/)NHJ2VOMK>XAA,=L[,O2KG!PJ,/+[VS#&7#R\R2 M%VG'J!9$S=76A'#0T795U][5$Q_15R.("T7?Z:TS,=$5)X9S8!1/'NKWHC_1 M,02%14U19@EQ@Z\@)0_[WA0J<>J8'84&(R*RPN"8!CR%(E2,YH=./XD@!>EI MUZM#"4($D'"&@B=.!;%"Z$'XCIS(A&:E0AM-@95.1:!4(1C``@% M("O;3QI@M4/=("N'D)-C-P:]T5>V[A\W&HJ7I9S\THHZJ+CX[E7GPB`8A5&% M(`1%>R^AW2D!Z"5@:*\*U`3Y.$:#T`;WLS07WR00'&,"(0WT\@,A:AR#!2%; M`>A'?@,J`D2$G)0S2(*S-$"("<<0DH&$LT!1H2)Q7#:+$PCVXN$@(")#"`&@F9:Q"R(RHO$+*%FJB4)@BBLFFPA:J31-#?(`CU$M@@ M4/5R10^%3`!4+Q^00!"ODYPTR%^]X`"HH`U\]-H07%10P0\"^+`HM*"X\"HJ M9PY2X#$#6$'N,#D<8RTA?7+R`CSOYF*`H%J@=%HT/Z2:KRW%;H=->I+100.1 M`[,20&RS(,'P'Q-HR9'_'&;PU+`H(QS#0'V$3+$L4TULS(I:DD5'B!Y"<%3' M*B:3`H*GO8"A"R^SU)%%S*VH(:@?.ABBQQHD/=$-SZR\H0)'0J1;"`8C)(ET M*SN8VLL79TR]C!XUK$2!#%H/T_)*-9@7=BXZ=`;GV;>\L>XQ;`3`=BYN'V.& MMG/C0L)6I.8MS!G06.`W,SY`0"X&0R#Q@[`P2Q2C7\(&*AT8@`@"A:41>R5=`P(ONNTO2("<=**8(%!45'TD/$&KP@0I41`XL*L0"VL"+P!C`=8GZU1_@@#,_,"`!SRI$`)!`JPX0 MZA";B5`%5G`(#(0@0@R@`P(N,859:`@3$MC(&&\'!K@:!@<*T11!%.,UC!G$$V@VB8YTL M!!@V(KTL@.<*,RP$$U!AHDG@*16JO`0&*E([7I)E6(,8`">>-(@ID"6"A*!. MCP1!`S^@``L9B*<\A\B)?H#@%!40V@88\`6>_,EJ$%E#! MTT%,DQ,GC`0,9@%$45"!`FG_&$`+C/#-0MRT$#KU0U-]*H@2<`('5%+$1).J M""MQPG"'4*,?;":)%``%2)BPP0;24```GHC"% M2.!,!9$``RIZEA4RL(H-34 MHA7`HJ@X\06\"8(`*##I'S@)UT(L4HR2<(,/_1`%6QWB`F7X@'FP$"9"B&$C M6)(H_WI-2UP?<70^G/C``;0KAAC((3=A`),?--"%2Z[@"T_@R0RT48$X9/$4 M']BE)0;L!P'8LA`A'@1`[_SP`=C]`8R=HPPY3T`,'HL2`]UK"!0KP*+-4X#3I\-:#.J!&3#AAAQE`@`\1^L"? M`("""-7A"W^00:VYPH=)_:$'08@0"DC04$-P@`);J0,$X#=G""O0`&%U4(&, M7[H&)>2A#PH0@74G\H`+X*T'$LCT,+P`/@GX>DD7,`("@)>(&5P``3>^1"`` "`#L_ ` end -----END PRIVACY-ENHANCED MESSAGE-----