Cameco is proceeding with a phased plan to restore the underground workings at Cigar Lake uranium mine in Canada after a water inflow on October 23, 2006 flooded the project. The first phase of the plan involves drilling holes down to the source of the inflow. Concrete will be pumped through the drill holes and sealed off with grout. Subsequent phases include removing water from underground areas, ground freezing in the area of the inflow, restoring other underground areas and resumption of mine development. Regulatory approval is required for each phase of the remediation plan.

Drill crews completed one hole in the area of the rockfall and nearly completed another hole before leaving for the Christmas break. About 18 holes are now planned including four for mine dewatering. The crews resumed working on December 27, 2006 working around the clock, seven days a week. "Drilling through the Athabasca sandstone has been more challenging than anticipated," said Terry Rogers, Cameco’s Senior Vice-President and COO. "However, the experience we gain in the first few holes is expected to accelerate progress in the future. We will be in a better position to estimate when we expect the first phase to be completed after the first concrete is poured." Cameco had expected to be pouring concrete in December, as part of the first phase, but that is now expected to occur in January.

Cameco will issue another news release in January to update progress and in February 2007 plans to provide preliminary capital cost estimates and timelines for the remediation, as previously indicated. The company continues to work in consultation with international experts to develop a comprehensive remediation plan including contingency options.

Based on current plans, Cameco expects the remediation phases mentioned above will fall within the scope of the original environmental assessment of the Cigar Lake project. Cameco is working closely with the Canadian Nuclear Safety Commission and Saskatchewan regulatory agencies to achieve timely approvals for the various elements of the plan.

The Cigar Lake project is a joint venture owned by Cameco (50%), AREVA Resources Canada (37%), Idemitsu Uranium Exploration Canada (8%) and TEPCO Resources (5%). The project is located in northern Saskatchewan.

Cameco, with its head office in Saskatoon, Saskatchewan, is the world’s largest uranium producer.