Cameco reports first quarter financial results

NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Cameco 
TSX SYMBOL:  CCO
NYSE SYMBOL:  CCJ 
APRIL 29, 2014 
Cameco reports first quarter financial results 
SASKATOON, SASKATCHEWAN--(Marketwired - April 29, 2014) -  
ALL AMOUNTS ARE STATED IN CDN $ (UNLESS NOTED) 
/T/ 
--  strong first quarter sales and average realized price in our uranium 
segment 
--  uranium production and sales outlook reconfirmed 
--  mining activities now underway at Cigar Lake 
--  McClean Lake mill modifications proceeding; mill will not begin 
processing ore in Q2 
--  completed the sale of our interest in Bruce Power Limited Partnership  
/T/ 
Cameco (TSX:CCO) (NYSE:CCJ) today reported its consolidated financial and
operating results for the first quarter ended March 31, 2014 in accordance with
International Financial Reporting Standards (IFRS). 
"We saw strong first quarter results compared to 2013," said
president and CEO, Tim Gitzel, "driven by higher uranium deliveries and
realized prices, and the sale of our interest in Bruce Power Limited
Partnership. Our operations continued to perform well, with the highlight being
the startup of production at the Cigar Lake mine. 
"As an industry, we saw positive signs in Japan, where a new energy policy
confirmed that nuclear power will remain an important source of energy.
However, that news did not change our view of the current market, where excess
supply and discretionary demand for uranium products has resulted in further
downward pressure on the uranium price. While we do not expect improvement in
the near to medium term, the long-term outlook for the industry remains strong,
and we're making efficient use of our resources to be ready for that
future growth." 
/T/ 
THREE MONTHS                 
ENDED MARCH 31                 
------------------------------               
HIGHLIGHTS                                                                  
($ MILLIONS EXCEPT WHERE                                                    
 INDICATED)                              2014           2013        CHANGE  
----------------------------------------------------------------------------
Revenue                                   419            444            (6)%
----------------------------------------------------------------------------
Gross profit                              108             95            14% 
----------------------------------------------------------------------------
Net earnings attributable to                                                
 equity holders                           131              9         1,356% 
----------------------------------------------------------------------------
  $ per common share (diluted)           0.33           0.02         1,550% 
----------------------------------------------------------------------------
Adjusted net earnings (see non-                                             
 IFRS)                                     36             27            33% 
----------------------------------------------------------------------------
  $ per common share (adjusted                                               
and diluted)                          0.09           0.07            29% 
----------------------------------------------------------------------------
Cash provided by continuing                                                 
 operations (after working                                                  
 capital changes)(1)                        7            241           (97)%
----------------------------------------------------------------------------
(1) For comparison purposes, our results have been revised to exclude BPLP.  
The impact of BPLP is shown separately as a discontinued operation.      
/T/ 
FIRST QUARTER 
Net earnings attributable to equity holders (net earnings) this quarter were
$131 million ($0.33 per share diluted) compared to $9 million ($0.02 per share
diluted) in the first quarter of 2013. In addition to the items noted below,
our net earnings were affected by a gain on the sale of our interest in BPLP of
$127 million, offset by mark-to-market losses on foreign exchange derivatives. 
On an adjusted basis, our earnings this quarter were $36 million ($0.09 per
share diluted) compared to $27 million ($0.07 per share diluted) (see non-IFRS
measure) in the first quarter of 2013. The change was mainly due to higher
earnings from our uranium segment based on higher sales volumes and higher
realized prices, partially offset by an early termination fee of $18 million
incurred as a result of the cancellation of our toll conversion agreement with
Springfields Fuels Ltd. (SFL), which was to expire in 2016. 
See Financial results by segment for more detailed discussion. 
Uranium market update 
In the first quarter of 2014, market conditions continued along the same trend
as in 2013. Contracted volumes remained low, putting further downward pressure
on both spot and long-term uranium prices. On the supply side, production
cutbacks and project deferrals have contributed positively to long-term
fundamentals, but for the near term, the market continues to be adequately
supplied. Utilities remain well covered and we expect little improvement over
the near to medium term. 
While there has been no fundamental change to market conditions, there have
been developments that solidify the positive long-term outlook, including the
approval of a new energy policy in Japan that confirms nuclear power will
remain an important electricity source for the country. In addition, the
Nuclear Regulatory Authority continued to clarify the process for utilities to
begin restarting the country's idled nuclear reactors. While the initial
restarts will be a positive development, we expect it will take some time for a
significant number of reactors to resume operations, and for the inventory that
has built up since 2011 to clear. 
Long-term fundamentals remain positive as nuclear growth continues to progress
around the world. Approximately 70 new reactors are under construction, and we
expect a net increase of 93 reactors over the next 10 years, which is expected
to drive an increase in annual uranium consumption from today's 170
million pounds to about 240 million pounds. This demand fundamental combined
with the timing, development and execution of new supply projects and the
continued performance of existing supply will determine the pace of market
recovery. 
Outlook for 2014 
Our strategy is to profitably produce at a pace aligned with market signals,
while maintaining the ability to respond to conditions as they evolve.  
Our outlook for 2014 reflects the expenditures necessary to help us achieve our
strategy. Our outlook for uranium revenue and consolidated revenue, as well as
our production outlook for fuel services has changed, and is explained below.
We do not provide an outlook for the items in the table that are marked with a
dash.  
See 2014 Financial results by segment for details.  
2014 FINANCIAL OUTLOOK 
/T/ 
FUEL              
CONSOLIDATED      URANIUM     SERVICES        NUKEM
----------------------------------------------------------------------------
Production                          - 23.8 to 24.3     12 to 13            - 
million lbs  million kgU             
----------------------------------------------------------------------------
Sales volume                        -     31 to 33     Decrease      9 to 11 
million lbs    5% to 10%  million lbs 
U3O8
----------------------------------------------------------------------------
Revenue compared to 2013     Increase     Increase     Decrease     Increase 
5% to 10%        5% to    5% to 10%     0% to 5% 
10%(1)                          
----------------------------------------------------------------------------
Average unit cost of                -     Increase     Increase     Increase
 sales (including D&A)                 0% to 5%(2)     0% to 5%     0% to 5%
----------------------------------------------------------------------------
Direct administration        Increase            -            -    Increase 
 costs compared to           0% to 5%                               0% to 5%
 2013(3)                                                                    
----------------------------------------------------------------------------
Exploration costs                   -     Decrease            -            -
 compared to 2013                       35% to 40%                          
----------------------------------------------------------------------------
Tax rate                  Recovery of            -            -   Expense of 
30% to 35%                             30% to 35%
----------------------------------------------------------------------------
Capital expenditures     $495 million            -            -            -
----------------------------------------------------------------------------
(1) Based on a uranium spot price of $30.75 (US) per pound (the Ux spot      
price as of April 28, 2014), a long-term price indicator of $45.00 (US)  
per pound (the Ux long-term indicator on April 28, 2014) and an exchange 
rate of $1.00 (US) for $1.08 (Cdn).                                     
(2) This increase is based on the unit cost of sale for produced material    
and committed long-term purchases. If we make discretionary purchases in 
2014, then we expect the overall unit cost of sales to increase further.
(3) Direct administration costs do not include stock-based compensation      
expenses.                                                                
/T/ 
We now expect an increase of 5% to 10% for sales revenue in our uranium segment
(previously an increase of up to 5%) due to the impact of the strengthening US
dollar. The consolidated revenue will increase by 5% to 10% as well (previously
up to 5%) due to the impact of the uranium revenue increase. 
We now expect production in our fuel services segment to be 12 million to 13
million kgU (down from previously reported 13 million to 14 million kgU) due to
the cancellation of our toll conversion contract with SFL, which was included
in the previously reported production amount. 
In our uranium and fuel services segments, our customers choose when in the
year to receive deliveries, so our quarterly delivery patterns, sales volumes
and revenue can vary significantly. We expect our uranium deliveries for the
second quarter will be greater than the first quarter. Uranium sales are
relatively balanced for the remainder of 2014. However, not all delivery
notices have been received to date, which could alter the delivery pattern.
Typically, we receive notices six months in advance of the requested delivery
date. 
SENSITIVITY ANALYSIS 
For the rest of 2014:  
/T/ 
--  a change of $5 (US) per pound in both the Ux spot price ($30.75 (US) per 
pound on April 28, 2014) and the Ux long-term price indicator ($45.00 
(US) per pound on April 28, 2014) would change revenue by $58 million 
and net earnings by $35 million 
--  a one-cent change in the value of the Canadian dollar versus the US 
dollar would effectively change revenue by $7 million and adjusted net 
earnings by $3 million, with a decrease in the value of the Canadian 
dollar versus the US dollar having a positive impact. This sensitivity 
is based on an exchange rate of $1.00 (US) for $1.00 (Cdn).  
/T/ 
PURCHASE COMMITMENTS 
During the first quarter, our purchase commitments increased due to the signing
of new long-term purchase commitments, which we believe will be beneficial for
us as they have been in the past. The increase was partially offset by the
termination of our agreement with SFL.  
As of March 31, 2014, we had commitments of about $1.6 billion (Cdn) for the
following: 
/T/ 
--  approximately 29 million pounds of U3O8 equivalent from 2014 to 2028 
--  approximately 7 million kgU as UF6 in conversion services from 2014 to 
2017, including about 4 million kgU to complete our 2014 obligations to 
SFL under the terminated agreement 
--  over 1.2 million Separative Work Units (SWU) of enrichment services to 
meet existing forward sales commitments under agreements with a non-    Western supplier  
/T/ 
See Purchase commitments in our first quarter MD&A for more information. 
ADJUSTED NET EARNINGS (NON-IFRS MEASURE) 
Adjusted net earnings is a measure that does not have a standardized meaning or
a consistent basis of calculation under IFRS (non-IFRS measure). We use this
measure as a more meaningful way to compare our financial performance from
period to period. We believe that, in addition to conventional measures
prepared in accordance with IFRS, certain investors use this information to
evaluate our performance. Adjusted net earnings is our net earnings
attributable to equity holders, adjusted to better reflect the underlying
financial performance for the reporting period. The adjusted earnings measure
reflects the matching of the net benefits of our hedging program with the
inflows of foreign currencies in the applicable reporting period, and has been
adjusted for pre-tax adjustments on derivatives, income taxes on adjustments,
and the after tax gain on the sale of our interest in BPLP.  
Adjusted net earnings is non-standard supplemental information and should not
be considered in isolation or as a substitute for financial information
prepared according to accounting standards. Other companies may calculate this
measure differently, so you may not be able to make a direct comparison to
similar measures presented by other companies.  
The table below reconciles adjusted net earnings with our net earnings. 
/T/ 
THREE MONTHS  
ENDED MARCH 31  
------------------------------
($ MILLIONS)                                            2014           2013 
----------------------------------------------------------------------------
Net earnings attributable to equity holders              131              9 
----------------------------------------------------------------------------
Adjustments                                                                 
  Adjustments on derivatives(1) (pre-tax)                 44             25 
  Income taxes on adjustments                            (12)            (7)
  Gain on interest in BPLP (after tax)                  (127)             - 
----------------------------------------------------------------------------
Adjusted net earnings                                     36             27 
----------------------------------------------------------------------------
(1) We do not apply hedge accounting for our portfolio of foreign currency   
forward sales contracts. However, we have adjusted our gains or losses   
on derivatives to reflect what our earnings would have been had hedge    
accounting been in place.                                                
/T/ 
DISCONTINUED OPERATION 
On March 27, 2014, we completed the sale of our 31.6% limited partnership
interest in BPLP. The aggregate sale price for our interest in BPLP and certain
related entities was $450 million. The sale has been accounted for effective
January 1, 2014. We realized an after tax gain of $127 million on this
divestiture. See note 4 to our first quarter interim financial statements for
more information. 
CRA DISCLOSURE 
As previously reported, since 2008, the Canada Revenue Agency (CRA) has
disputed the offshore marketing company structure and related transfer pricing
methodology we used for certain intercompany uranium sale and purchase
agreements, and issued notices of reassessment for our 2003 through 2008 tax
returns. We continue to believe the ultimate resolution of this matter will not
be material to our financial position, results of operations and cash flows in
the year(s) of resolution. We are updating our disclosure on the CRA case to
reflect the CRA's intention to accelerate the frequency of reassessments. 
Transfer pricing is a complex area of tax law, and it is difficult to predict
the outcome of a case like ours as there are only a handful of reported court
decisions on transfer pricing in Canada. However, tax authorities generally
test two things:  
/T/ 
--  the governance (structure) 
--  the price  
/T/ 
The majority of our customers are located outside Canada and we established an
offshore marketing subsidiary. This subsidiary entered into intercompany
purchase and sales agreements as well as uranium supply agreements with third
parties. We have arm's-length transfer price arrangements in place, which
expose both parties to the risks and the rewards accruing to them under this
portfolio of purchase and sales contracts.  
With respect to the contract prices, they are generally comparable to those
established in sales contracts between arm's-length buyers and sellers
entered into at that time. We have recorded a cumulative tax provision of $75
million, where an argument could be made that our transfer price may have
fallen outside of an appropriate range of pricing in uranium contracts for the
period from 2003 to March 31, 2014.  
We are confident that we will be successful in our case; however, for the years
2003 through 2008, CRA issued notices of reassessment for approximately $2.0
billion of additional income for Canadian tax purposes, which would result in a
related tax expense of about $590 million. The Canadian Income Tax Act includes
provisions that require larger companies like us to pay 50% of the cash tax
plus related interest and penalties at the time of reassessment. To date, under
these provisions, after applying elective deductions and tax loss carryovers,
we have been required to pay a net amount of $117 million to CRA, which
includes the amounts shown in the table below. 
/T/ 
INTEREST AND     TRANSFER              
INSTALMENT      PRICING             
YEAR ($ MILLIONS)          CASH TAXES    PENALTIES    PENALTIES        TOTAL
----------------------------------------------------------------------------
Prior to 2013                       -           13            -           13
----------------------------------------------------------------------------
2013                                1            9           36           46
----------------------------------------------------------------------------
2014                               28           30            -           58
----------------------------------------------------------------------------
Total                              29           52           36          117
---------------------------------------------------------------------------- 
/T/ 
Using the methodology we believe CRA will continue to apply, and including the
$2.0 billion already reassessed, we expect to receive notices of reassessment
for a total of approximately $5.7 billion of additional income as taxable in
Canada for the years 2003 through 2013, which would result in a related tax
expense of approximately $1.6 billion. As well, CRA may continue to apply
transfer pricing penalties to taxation years subsequent to 2007. As a result,
we estimate that cash taxes and transfer pricing penalties would be between
$1.25 billion and $1.3 billion. In addition, we estimate there would be
interest and instalment penalties applied that would be material to us. We
would be responsible for remitting 50% of the cash taxes and transfer pricing
penalties (between $625 million and $650 million), plus related interest and
instalment penalties assessed, which would be material to us.  
Under the Canadian federal and provincial tax legislation, the amount required
to be remitted each year will depend on the amount of income reassessed in that
year and the availability of elective deductions and tax loss carryovers. CRA
has indicated that they intend to accelerate the frequency of reassessments
related to the transfer pricing adjustments. Their audit of 2009 has been
completed and we have received proposed adjustments to 2009 taxable income
which are calculated in a manner consistent with prior years. We expect the
reassessment for the 2009 taxation year to be issued in the second quarter of
2014, rather than in the fourth quarter as was the case for previous years. In
addition, we believe CRA may complete their audit of 2010 and issue the
resulting reassessment in 2014 as well. The estimated amounts summarized in the
table below reflect this expected accelerated schedule. 
/T/ 
2003 -              2015 -    2017 -          
$ MILLIONS                      2013   2014(2)      2016      2023     TOTAL
----------------------------------------------------------------------------
50% of cash taxes and                                                       
 transfer pricing penalties                                                 
 payable in the period(1)         37 115 - 135 450 - 475    0 - 25 625 - 650
---------------------------------------------------------------------------- 
(1) These amounts do not include interest and instalment penalties, which    
totaled approximately $52 million to March 31, 2014.                    
(2) These amounts include $28 million already paid in 2014.                  
/T/ 
In light of our view of the likely outcome of the case as described above, we
expect to recover the amounts remitted to CRA, including the $117 million
already paid to date. 
The case on the 2003 reassessment is expected to go to trial in 2015. If this
timing is adhered to, we expect to have a Tax Court decision by 2016. 
Caution about forward-looking information relating to our CRA tax dispute 
This discussion of our expectations relating to our tax dispute with CRA and
future tax reassessments by CRA, including the amounts of future additional
taxable income, additional tax expense, cash taxes payable, transfer pricing
penalties, and interest and possible instalment penalties thereon and related
remittances, and timing of a Tax Court decision, is forward-looking information
that is based upon the assumptions and subject to the material risks discussed
under the heading Caution about forward-looking information and also on the
more specific assumptions and risks listed below. Actual outcomes may vary
significantly. 
/T/ 
Assumptions                                                                  
--  CRA will reassess us for the years 2009 through 2013 using a similar 
methodology as for the years 2003 through 2008, and the reassessments 
will be issued on an accelerated basis as described above 
--  we will be able to apply elective deductions and tax loss carryovers to 
the extent anticipated 
--  CRA will seek to impose transfer pricing penalties (10% of the income 
adjustment) in addition to interest charges and instalment penalties 
--  we will be substantially successful in our dispute with CRA and the 
cumulative tax provision of $75 million to date will be adequate to 
satisfy any tax liability resulting from the outcome of the dispute to 
date  
Material risks that could cause actual results to differ materially          
--  CRA reassesses us for years 2009 through 2013 using a different 
methodology than for years 2003 through 2008, or we are unable to 
utilize elective deductions and loss carryovers to the same extent as 
anticipated, resulting in the required cash payments to CRA pending the 
outcome of the dispute being higher than expected 
--  the time lag for the reassessments for each year is different than we 
currently expect 
--  we are unsuccessful and the outcome of our dispute with CRA results in 
significantly higher cash taxes, interest charges and penalties than the 
amount of our cumulative tax provision, which could have a material 
adverse effect on our liquidity, financial position, results of 
operations and cash flows 
--  cash tax payable increases due to unanticipated adjustments by CRA not 
related to transfer pricing  
Financial results by segment                                                 
Uranium                                                                      
THREE MONTHS                 
ENDED MARCH 31                 
------------------------------               
HIGHLIGHTS                               2014           2013        CHANGE  
----------------------------------------------------------------------------
Production volume (million lbs)           5.7            5.9            (3)%
----------------------------------------------------------------------------
Sales volume (million lbs)                6.9            5.1            35% 
----------------------------------------------------------------------------
Average spot price ($US/lb)             34.94          42.71           (18)%
Average long-term price                                                     
 ($US/lb)                               48.67          56.50           (14)%
Average realized price                                                      
  ($US/lb)                              46.60          48.42            (4)%
  ($Cdn/lb)                             50.58          48.25             5% 
----------------------------------------------------------------------------
Average unit cost of sales                                                  
 ($Cdn/lb) (including D&A)              33.30          31.90             4% 
----------------------------------------------------------------------------
Revenue ($ millions)                      348            247            41% 
----------------------------------------------------------------------------
Gross profit ($ millions)                 119             84            42% 
----------------------------------------------------------------------------
Gross profit (%)                           34             34             -  
---------------------------------------------------------------------------- 
/T/ 
FIRST QUARTER 
Production volumes this quarter were 3% lower compared to the first quarter of
2013 due, mainly, to lower production at Rabbit Lake. See Operations updates
for more information. 
Uranium revenues were up 41% due to a 35% increase in sales volumes and a 5%
increase in the Canadian dollar average realized price. Sales in the first
quarter were higher than anticipated at the end of 2013 due to a change in the
timing of deliveries during the quarter, which can vary significantly and are
driven by customer requests. 
Our realized prices this quarter were higher than the first quarter of 2013,
primarily as a result of the weakening of the Canadian dollar. In the first
quarter of 2014, the exchange rate on the average realized price was $1.00 (US)
for $1.09 (Cdn) over the quarter, compared to $1.00 (US) for $1.00 (Cdn) in the
first quarter of 2013. 
Total cost of sales (including D&A) increased by 40% ($229 million compared
to $163 million in 2013). This was mainly the result of a 35% increase in sales
volumes and an increase in non-cash costs. In the first quarter of 2014, total
non-cash costs were $48 million compared to $20 million in the first quarter of
2013 due to the completion of a number of capital projects at our various
production facilities. Upon project completion, we begin to depreciate the
asset, which increases the non-cash portion of our production costs. 
Additionally, in the first quarter, our cost of purchased material was higher
than the average spot price for the quarter and higher than in the first
quarter of 2013. We had back-to-back purchase and sale arrangements that, while
profitable, required we purchase material at a price higher than the current
spot price. 
The net effect was a $35 million increase in gross profit for the quarter. 
The table below shows the costs of produced and purchased uranium incurred in
the reporting periods (which are non-IFRS measures, see the paragraphs below
the table). These costs do not include selling costs such as royalties,
transportation and commissions, nor do they reflect the impact of opening
inventories on our reported cost of sales. 
/T/ 
THREE MONTHS                 
ENDED MARCH 31                 
------------------------------               
($CDN/LB)                                2014           2013        CHANGE  
----------------------------------------------------------------------------
Produced                                                                    
  Cash cost                             20.82          19.12             9% 
  Non-cash cost                         10.55           8.44            25% 
----------------------------------------------------------------------------
  Total production cost                 31.37          27.56            14% 
----------------------------------------------------------------------------
  Quantity produced (million                                                 
lbs)                                   5.7            5.9            (3)%
----------------------------------------------------------------------------
Purchased                                                                   
  Cash cost                             42.18          33.44            26% 
----------------------------------------------------------------------------
  Quantity purchased (million                                                
lbs)                                   1.3            2.3           (43)%
----------------------------------------------------------------------------
Totals                                                                      
  Produced and purchased costs          33.38          29.21            14% 
----------------------------------------------------------------------------
  Quantities produced and                                                    
purchased (million lbs)                7.0            8.2           (15)%
---------------------------------------------------------------------------- 
/T/ 
Cash cost per pound, non-cash cost per pound and total cost per pound for
produced and purchased uranium presented in the above table are non-IFRS
measures. These measures do not have a standardized meaning or a consistent
basis of calculation under IFRS. We use these measures in our assessment of the
performance of our uranium business. We believe that, in addition to
conventional measures prepared in accordance with IFRS, certain investors use
this information to evaluate our performance and ability to generate cash flow. 
These measures are non-standard supplemental information and should not be
considered in isolation or as a substitute for measures of performance prepared
according to accounting standards. These measures are not necessarily
indicative of operating profit or cash flow from operations as determined under
IFRS. Other companies may calculate these measures differently, so you may not
be able to make a direct comparison to similar measures presented by other
companies. 
To facilitate a better understanding of these measures, the following table
presents a reconciliation of these measures to our unit cost of sales for the
first quarters of 2014 and 2013. 
CASH AND TOTAL COST PER POUND RECONCILIATION 
/T/ 
THREE MONTHS                 
ENDED MARCH 31                 
------------------------------               
($ MILLIONS)                             2014           2013        CHANGE  
----------------------------------------------------------------------------
Cost of product sold                    180.9          144.0            26% 
Add / (subtract)                                                            
  Royalties                             (14.2)         (14.4)           (1)%
  Standby charges                        (9.3)          (8.1)           15% 
  Other selling costs                    (2.4)           2.8          (186)%
  Change in inventories                  18.5           65.4           (72)%
----------------------------------------------------------------------------
Cash operating costs (a)                173.5          189.7            (9)%
Add / (subtract)                                                            
  Depreciation and amortization          48.3           19.5           148% 
  Change in inventories                  11.9           30.3           (61)%
----------------------------------------------------------------------------
Total operating costs (b)               233.7          239.5            (2)%
----------------------------------------------------------------------------
  Uranium produced & purchased                                               
(million lbs) (c)                      7.0            8.2           (15)%
----------------------------------------------------------------------------
Cash costs per pound (a / c)            24.79          23.14             7% 
Total costs per pound (b / c)           33.38          29.21            14% 
---------------------------------------------------------------------------- 
Fuel services                                                                
(includes results for UF6, UO2 and fuel fabrication)                         
THREE MONTHS                 
ENDED MARCH 31        CHANGE   
------------------------------               
HIGHLIGHTS                               2014           2013                
----------------------------------------------------------------------------
Production volume (million kgU)           4.0            4.7           (15)%
----------------------------------------------------------------------------
Sales volume (million kgU)                1.8            3.4           (47)%
----------------------------------------------------------------------------
Average realized price                                                      
 ($Cdn/kgU)                             22.41          19.60            14% 
----------------------------------------------------------------------------
Average unit cost of sales                                                  
 ($Cdn/kgU) (including D&A)             21.36          16.27            31% 
----------------------------------------------------------------------------
Revenue ($ millions)                       40             66           (39)%
----------------------------------------------------------------------------
Gross profit ($ millions)                   2             11           (82)%
----------------------------------------------------------------------------
Gross profit (%)                            5             17           (71)%
---------------------------------------------------------------------------- 
/T/ 
FIRST QUARTER 
Total revenue decreased by 39% due to a 47% decrease in sales volumes, offset
by a 14% increase in realized price. 
The total cost of products and services sold (including D&A) decreased by
31% ($38 million compared to $55 million in the first quarter of 2013) due to
the decrease in sales volumes, partially offset by an increase in the average
unit cost of sales. When compared to 2013, the average unit cost of sales was
31% higher due to the mix of fuel services products sold and lower UF6
production. 
The net effect was a $9 million decrease in gross profit. 
NUKEM 
/T/ 
THREE MONTHS                 
ENDED MARCH 31                 
------------------------------               
($ MILLIONS EXCEPT WHERE                                                    
 INDICATED)                              2014           2013        CHANGE  
----------------------------------------------------------------------------
Uranium sales (million lbs)               0.7            2.3           (70)%
----------------------------------------------------------------------------
Revenue                                    32            131           (76)%
----------------------------------------------------------------------------
Cost of product sold (including                                             
 D&A)                                      35            127           (72)%
----------------------------------------------------------------------------
Gross profit (loss)                        (3)             4          (175)%
----------------------------------------------------------------------------
Net loss                                   (7)            (3)         (133)%
----------------------------------------------------------------------------
Adjustments on derivatives(1)               1              2           (50)%
----------------------------------------------------------------------------
Adjusted net loss                          (6)            (1)         (500)%
----------------------------------------------------------------------------
(1) Adjustments relate to unrealized gains and losses on foreign currency    
forward sales contracts (see non-IFRS measure).                          
/T/ 
FIRST QUARTER 
During the first three months of 2014, NUKEM delivered 0.7 million pounds of
uranium, a decline of 1.6 million pounds (70%) due to timing of customer
requirements. NUKEM revenues amounted to $32 million as a result of the decline
in deliveries and a lower realized price.  
Gross loss amounted to $3 million, a decline of $7 million compared to the
first quarter of 2013. Included in the gross loss for the quarter is a $6
million write-down of inventory, as a result of a further decline in the spot
price that caused the carrying values of certain quantities to exceed their
estimated net realizable value.  
While sales were significantly lower in the current year, excluding the effects
of the inventory write-down, they were at higher margins. On a percentage
basis, gross profits were 9% in the first quarter of 2014 compared to 3% in
same period last year.  
Adjusted net loss for the first three months of 2014 was $6 million, compared
to a loss of $1 million in 2013.  
Operations updates 
URANIUM PRODUCTION 
/T/ 
THREE MONTHS ENDED                        
CAMECO'S SHARE                              MARCH 31                        
(MILLION LBS)                         2014      2013   CHANGE      2014 PLAN
----------------------------------------------------------------------------
McArthur River/Key Lake                3.8       3.5        9%          13.1
----------------------------------------------------------------------------
Rabbit Lake                            0.5       1.1      (55)%          4.1
----------------------------------------------------------------------------
Smith Ranch-Highland                   0.5       0.3       67%           2.0
----------------------------------------------------------------------------
Crow Butte                             0.2       0.2        -            0.6
----------------------------------------------------------------------------
Inkai                                  0.7       0.8      (13)%          3.0
----------------------------------------------------------------------------
Cigar Lake                               -         -        -      1.0 - 1.5
----------------------------------------------------------------------------
Total                                  5.7       5.9       (3)%  23.8 - 24.3
---------------------------------------------------------------------------- 
/T/ 
McArthur River/Key Lake 
Production for the quarter was 9% higher compared to the same period last year
due to efficiency and reliability improvements at the Key Lake mill. 
We have begun developing the next freeze wall in zone 4. Freezing of zone 4
north is underway, and production from the area is expected to begin this year. 
At McArthur River, the Canadian Nuclear Safety Commission has approved an
increase of our licence production limit to 21 million pounds (100% basis) per
year from the mine. However, the current annual mill production licence limit
at Key Lake remains at 18.7 million pounds (100% basis). 
As part of our Key Lake extension environmental assessment (EA), we are seeking
approval to increase Key Lake's nominal annual production rate to 25
million pounds and to increase our tailings capacity. A public review and
comment period for the EA concluded in February and a regulatory decision is
expected this year. 
The current collective agreements with unionized employees at McArthur River
and Key Lake expired on December 31, 2013. Bargaining began in November, 2013
and is ongoing. There is risk to production if we are unable to reach an
agreement and a work stoppage occurs. 
Cigar Lake 
In the first quarter, we announced the start of mine production at Cigar Lake.
The jet boring system is performing as expected and six ore cavities have been
mined to date. The ore is routinely transported to the McClean Lake site where
it is being stored for processing. 
AREVA has made good progress on modifications to the McClean Lake mill, and
reports the following: 
/T/ 
--  the ore receiving systems have been commissioned and more than 350 
tonnes of ground ore slurry has been shipped from the Cigar Lake mine 
and loaded into storage tanks at the mill 
--  an expanded ore slurry storage facility has been completed, including 
receipt of regulatory approvals 
--  engineering work related to the mill modifications has been completed, 
all materials have been ordered and key long-lead items have been 
received, and a detailed commissioning plan has been prepared 
--  contractors are on site and the construction is actively progressing  
/T/ 
The necessary time to complete all related construction work (installing pumps,
pipes, electrical and instrumentation), and commissioning of the new components
and the process circuit with water to ensure the systems function as designed,
has led AREVA to advise us that the mill will not begin processing ore by the
end of the second quarter. 
Additionally, AREVA has advised us that work is in progress at McClean Lake to
double the mill's current capacity of 1 million pounds per month in order
to process Cigar Lake's full production, as it is expected to ramp up to
18 million pounds per year by 2018.  
We expect to produce 2 million to 3 million packaged pounds (100% basis) in
2014, depending on the mill startup and rampup, as well as the continued
success of mining operations at Cigar Lake. 
Inkai 
Production was 13% lower compared to the first quarter of 2013. An abnormally
heavy snowfall and rapid spring melt made it difficult to deliver reagents and
access the operating wellfields. 
Heavy spring snow melt in the Sozak region of Kazakhstan has resulted in
flooding and damage to the access roads that are used to deliver reagents and
supplies to several uranium mines. The impact on production at Inkai was
minimal, and based on our plans to construct new wellfields, we remain on track
for annual production of 3.0 million pounds U3O8 (our share). 
FUEL SERVICES  
Fuel services produced 4.0 million kgU in the first quarter, 15% lower than the
same period last year. We decreased our production target in 2014 to between 12
million and 13 million kgU, so quarterly production is anticipated to be lower
than comparable periods in 2013. 
Qualified persons 
The technical and scientific information discussed in this document for our
material properties (McArthur River/Key Lake, Inkai and Cigar Lake) was
approved by the following individuals who are qualified persons for the
purposes of NI 43-101: 
McArthur River/Key Lake 
/T/ 
--  David Bronkhorst, vice-president, mining and technology, Cameco  
/T/ 
Cigar Lake 
/T/ 
--  Scott Bishop, principal mine engineer, technology group, Cameco  
/T/ 
Inkai 
/T/ 
--  Ken Gullen, technical director, international, Cameco  
/T/ 
CAUTION ABOUT FORWARD-LOOKING INFORMATION 
This document includes statements and information about our expectations for
the future. When we discuss our strategy, plans, future financial and operating
performance, or other things that have not yet taken place, we are making
statements considered to be forward-looking information or forward-looking
statements under Canadian and United States securities laws. We refer to them
in this document as forward-looking information. 
Key things to understand about the forward-looking information in this
document: 
/T/ 
--  It typically includes words and phrases about the future, such as: 
anticipate, believe, estimate, expect, plan, will, intend, goal, target, 
forecast, project, strategy and outlook (see examples below). 
--  It represents our current views, and can change significantly. 
--  It is based on a number of material assumptions, including those we have 
listed below, which may prove to be incorrect. 
--  Actual results and events may be significantly different from what we 
currently expect, due to the risks associated with our business. We list 
a number of these material risks below. We recommend you also review our 
annual information form and annual and first quarter MD&A, which include 
a discussion of other material risks that could cause actual results to 
differ significantly from our current expectations. 
--  Forward-looking information is designed to help you understand 
management's current views of our near and longer term prospects, and it 
may not be appropriate for other purposes. We will not necessarily 
update this information unless we are required to by securities laws.  
Examples of forward-looking information in this document                     
--  our expectations about 2014 and future global uranium supply, 
consumption, demand and number of new reactors, including the discussion 
under the heading Uranium market update 
--  our consolidated outlook for the year and the outlook for our operating 
segments for 2014 
--  our expectations for uranium deliveries in the second quarter and 
uranium sales for the balance of 2014 
--  the discussion of our expectations relating to our tax dispute with 
Canada Revenue Agency (CRA), including our estimate of the amount and 
timing of expected cash taxes and transfer pricing penalties payable to 
CRA 
--  our future plans and expectations for each of our uranium operating 
properties and fuel services operating sites 
--  our plan for 2 million to 3 million packaged pounds (100% basis) in 2014 
from milling Cigar Lake ore at AREVA's McClean Lake mill  
/T/ 
/T/ 
Material risks                                                               
--  actual sales volumes or market prices for any of our products or 
services are lower than we expect for any reason, including changes in 
market prices or loss of market share to a competitor 
--  we are adversely affected by changes in foreign currency exchange rates, 
interest rates or tax rates 
--  our production costs are higher than planned, or necessary supplies are 
not available, or not available on commercially reasonable terms 
--  our estimates of production, purchases, costs, decommissioning or 
reclamation expenses, or our tax expense estimates, prove to be 
inaccurate 
--  we are unable to enforce our legal rights under our existing agreements, 
permits or licences 
--  we are subject to litigation or arbitration that has an adverse outcome, 
including lack of success in our dispute with CRA 
--  there are defects in, or challenges to, title to our properties 
--  our mineral reserve and resource estimates are not reliable, or we face 
unexpected or challenging geological, hydrological or mining conditions 
--  we are affected by environmental, safety and regulatory risks, including 
increased regulatory burdens or delays 
--  we cannot obtain or maintain necessary permits or approvals from 
government authorities 
--  we are affected by political risks in a developing country where we 
operate 
--  we are affected by terrorism, sabotage, blockades, civil unrest, social 
or political activism, accident or a deterioration in political support 
for, or demand for, nuclear energy 
--  we are impacted by changes in the regulation or public perception of the 
safety of nuclear power plants, which adversely affect the construction 
of new plants, the relicensing of existing plants and the demand for 
uranium 
--  there are changes to government regulations or policies that adversely 
affect us, including tax and trade laws and policies 
--  our uranium and conversion suppliers fail to fulfil delivery commitments
--  our Cigar Lake mining or production plans are delayed or do not succeed, 
including as a result of any difficulties with the jet boring mining 
method or freezing the deposit to meet production targets, or any 
difficulties with the McClean Lake mill modifications or commissioning 
or milling of Cigar Lake ore, or our inability to acquire any of the 
required jet boring equipment 
--  our McArthur River development, mining or production plans are delayed 
or do not succeed for any reason 
--  we are affected by natural phenomena, including inclement weather, fire, 
flood and earthquakes 
--  our operations are disrupted due to problems with our own or our 
customers' facilities, the unavailability of reagents, equipment, 
operating parts and supplies critical to production, equipment failure, 
lack of tailings capacity, labour shortages, labour relations issues 
(including an inability to renew agreements with unionized employees at 
McArthur River and Key Lake), strikes or lockouts, underground floods, 
cave-ins, ground movements, tailings dam failures, transportation 
disruptions or accidents, or other development and operating risks  
Material assumptions                                                         
--  our expectations regarding sales and purchase volumes and prices for 
uranium and fuel services 
--  our expectations regarding the demand for uranium, the construction of 
new nuclear power plants and the relicensing of existing nuclear power 
plants not being more adversely affected than expected by changes in 
regulation or in the public perception of the safety of nuclear power 
plants 
--  our expected production level and production costs 
--  the assumptions regarding market conditions upon which we have based our 
capital expenditures expectations 
--  our expectations regarding spot prices and realized prices for uranium 
--  our expectations regarding tax rates and payments, foreign currency 
exchange rates and interest rates 
--  our expectations about the outcome of the dispute with CRA 
--  our decommissioning and reclamation expenses 
--  our mineral reserve and resource estimates, and the assumptions upon 
which they are based, are reliable 
--  the geological, hydrological and other conditions at our mines 
--  our Cigar Lake mining and production plans succeed, including the 
additional jet boring equipment is acquired on schedule, the jet boring 
mining method works as anticipated and the deposit freezes as planned 
--  mill modifications and commissioning of the McClean Lake mill are 
completed as planned and the mill is able to process Cigar Lake ore as 
expected, including our expectation of processing 2 million to 3 million 
packaged pounds (100% basis) in 2014 
--  our McArthur River development, mining and production plans succeed 
--  our ability to continue to supply our products and services in the 
expected quantities and at the expected times 
--  our ability to comply with current and future environmental, safety and 
other regulatory requirements, and to obtain and maintain required 
regulatory approvals  
--  our operations are not significantly disrupted as a result of political 
instability, nationalization, terrorism, sabotage, blockades, civil 
unrest, breakdown, natural disasters, governmental or political actions, 
litigation or arbitration proceedings, the unavailability of reagents, 
equipment, operating parts and supplies critical to production, labour 
shortages, labour relations issues (including an inability to renew 
agreements with unionized employees at McArthur River and Key Lake), 
strikes or lockouts, underground floods, cave-ins, ground movements, 
tailings dam failure, lack of tailings capacity, transportation 
disruptions or accidents or other development or operating risks  
/T/ 
Quarterly dividend notice 
We announced today that our board of directors approved a quarterly dividend of
$0.10 per share on the outstanding common shares of the corporation that is
payable on July 15, 2014, to shareholders of record at the close of business on
June 30, 2014. 
Conference call 
We invite you to join our first quarter conference call on Tuesday, April 29th,
2014 at 1:00 p.m. Eastern. 
The call will be open to all investors and the media. To join the call, please
dial (866) 223-7781 (Canada and US) or (416) 340-2216. An operator will put
your call through. A live audio feed of the conference call will be available
from a link at cameco.com. See the link on our home page on the day of the
call.  
A recorded version of the proceedings will be available: 
/T/ 
--  on our website, cameco.com, shortly after the call 
--  on post view until midnight, Eastern, May 30, 2014 by calling (800) 408-    3053 (Canada and US) or (905) 694-9451 (Passcode 9624310#)  
/T/ 
Additional information 
You can find a copy of our first quarter MD&A and interim financial
statements on our website at cameco.com, on SEDAR at sedar.com and on EDGAR at
sec.gov/edgar.shtml. 
Additional information, including our 2013 annual management's discussion
and analysis, annual audited financial statements and annual information form,
is available on SEDAR at sedar.com, on EDGAR at sec.gov/edgar.shtml and on our
website at cameco.com. 
Profile 
We are one of the world's largest uranium producers, a significant
supplier of conversion services and one of two CANDU fuel manufacturers in
Canada. Our competitive position is based on our controlling ownership of the
world's largest high-grade reserves and low-cost operations. Our uranium
products are used to generate clean electricity in nuclear power plants around
the world. We also explore for uranium in the Americas, Australia and Asia. Our
shares trade on the Toronto and New York stock exchanges. Our head office is in
Saskatoon, Saskatchewan. 
As used in this news release, the terms we, us, our, the Company and Cameco
mean Cameco Corporation and its subsidiaries; including NUKEM GmbH, unless
otherwise indicated. 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Cameco
Investor inquiries:
Rachelle Girard
(306) 956-6403
or
Media inquiries:
Gord Struthers
(306) 956-6593 
INDUSTRY:  Manufacturing and Production - Mining and Metals 
SUBJECT:  ERN 
-0-
-0- Apr/29/2014 12:31 GMT
 
 
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