Cameco embarks on share repurchase

12 September 2007

Canada's uranium mining leader, Cameco, has said it will buy back about C$750 million ($720 million) worth of its own shares over the next year. "The best investment today is repurchasing our own shares," said CEO Jerry Grandey.

Cameco said the purchase program would begin from 11 September 2007 and run until 10 September 2008. During that time common shares
up to a maximum of 5% of the company - 17.7 million shares - would be bought back at market prices. The current price of Cameco stock on the Toronto Stock Exchange puts that investment at about C$750 million ($720 million). Grandey said: "This is an excellent opportunity to increase shareholder value. We intend to acquire the maximum number of shares allowed."

Cameco's stock price has risen and fallen with the spot price of uranium in recent months, peaking at C$59.90 ($57.60) during a period when uranium climbed to $138/lb. Since uranium began to fall in value on the spot market, Cameco stock also declined and is now trading at C$43.25 ($41.60) per share.

Ready funds and income from operations will fund the repurchase. "In the near term, as attractive assets have not been available at reasonable valuations, the best investment today is repurchasing our own shares," said Grandey.

Port Hope

Meanwhile, a statement released alongside the repurchase announcement revealed further details of the temporary shutdown of Cameco's Port Hope conversion facility.

The facility converts uranium concentrate powder (U3O8) into gaseous uranium hexafluoride (UF6) for enrichment. During construction work in July traces of uranium and process chemicals were found in soil beneath the plant. It was quickly found that the chemicals had not traveled beyond the site boundary.

Cameco said at the time that the plant would be closed for a minimum of two months while tests take place. The company has explained that it cannot now say when the plant could reopen, but that it should have enough information to estimate that by early November.

In the meantime, UF6 customers would be supplied from existing inventory, of which there is enough to meet contracts until the end of the first quarter of 2008. Supplies could also be augmented by production from the Springfields plant, owned by Westinghouse in the UK.

Port Hope also converts U308 intouranium dioxide (UO2) powder at natural levels of enrichment for use afuel in Canada's Candu nuclear power reactors. These operations are not affected.

Further information

Cameco

WNN: Cameco surprised by Port Hope chemicals

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