October 04, 2005 15:00 ET

Cameco Negotiating to Acquire Canadian Nuclear Fuel Fabricator

SASKATOON, SASKATCHEWAN--(CCNMatthews - Oct. 4, 2005) - Cameco Corporation (TSX:CCO) (NYSE:CCJ) advised today that it is in negotiations to acquire Zircatec Precision Industries, Inc.

Zircatec's primary business is manufacturing nuclear fuel bundles for sale to companies that generate electricity with Candu reactors. Zircatec has one plant in Cobourg, Ontario that produces metal components for fuel bundles and other reactor components. A second plant in Port Hope, Ontario handles nuclear materials and completes the fuel bundle fabrication process.

Cameco's review of Zircatec will determine if it meets the company's investment criteria. Cameco will provide an update on the status of this project once negotiations have proceeded to a point where the company has made an investment decision which is expected by year end.

Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. The company's uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. Cameco's shares trade on the Toronto and New York stock exchanges.

Statements contained in this news release which are not historical facts 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. Factors that could cause such differences, without limiting the generality of the following, include: volatility and sensitivity to market prices for uranium, electricity in Ontario and gold; the impact of the sales volume of uranium, conversion services, electricity generated and gold; competition; the impact of change in foreign currency exchange rates and interest rates; imprecision in reserve estimates; environmental and safety risks including increased regulatory burdens; unexpected geological or hydrological conditions; political risks arising from operating in certain developing countries; a possible deterioration in political support for nuclear energy; changes in government regulations and policies, including trade laws and policies; demand for nuclear power; replacement of production and failure to obtain necessary permits and approvals from government authorities; legislative and regulatory initiatives regarding deregulation, regulation or restructuring of the electric utility industry in Ontario; Ontario electricity rate regulations; weather and other natural phenomena; ability to maintain and further improve positive labour relations; operating performance of the facilities; success of planned development projects; and other development and operating risks.

Although Cameco believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this report. Cameco disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

For additional information on Zircatec, visit their Web site at

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