Cameco Corp 6-K, filed Mar 27, 2020

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

Report ofForeign Private Issuer

Pursuant to Rule 13a-16 or15d-16

Under the Securities Exchange Act of 1934

For the month of March, 2020

CamecoCorporation

(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  ☐             Form 40-F  ☒

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  ☐            No  ☒

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

Exhibit Index
Exhibit<br>No.	Description	Page No.
99.1	Notice of 2020 Annual Meeting of Shareholders
99.2	Notice and Access Notification to Shareholders
99.3	Cameco Corporation Management Proxy Circular
99.4	Cameco Corporation Proxy Form
99.5	Cameco Corporation 2020 Annual Report

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: March 27, 2020	Cameco Corporation
	By:	“Sean A. Quinn”
		Sean A. Quinn
		Senior Vice-President, Chief Legal Officer and Corporate Secretary

EX-99.1

Exhibit 99.1

Notice of our 2020 annual meeting of shareholders

You are invited to our 2020 annual meeting:

When

Thursday, April 30, 2020

9:30 a.m. CST

Where

Cameco Corporation

2121 – 11^th^ Street West

Saskatoon, Saskatchewan

We will webcast the meeting on our website at cameco.com.

Your vote is important

If you held Cameco common shares on March 9, 2020, you are entitled to receive notice of and to vote at this meeting.

You can vote in person at the meeting or by proxy.

See pages 5 through 10 of the attached management proxy circular for information about what the meeting will cover, who can vote and how to vote.

By order of the board of directors,

Sean Quinn

Senior Vice-President,

Chief Legal Officer and Corporate Secretary

Saskatoon, Saskatchewan

March 31, 2020

FOR MORE INFORMATION
Read about the business of the meeting<br>beginning on page 5 of the attached management proxy circular.
The deadline for submitting a shareholder<br>proposal for our 2021 annual meeting is January 4, 2021 and we require advance notice for nominating directors.
Access our 2019 annual report and other<br>documents and information online:
·   cameco.com
·   sedar.com (SEDAR)
·   sec.gov/edgar.shtml (EDGAR)
Seepages 37 and 40 for more information.
COMMON SHARES OUTSTANDING
395,797,732	December 31, 2019
395,797,732	March 10, 2020
AST Trust Company (Canada) is our transfer agent and registrar for<br>Canada.<br> <br><br> <br>American Stock Transfer & TrustCompany LLC is our transfer agent and registrar for the US.

EX-99.2

Exhibit 99.2

Notice and Access Notification to Shareholders
Notice of 2020 Annual Meeting of Shareholders and<br><br><br>Notice of Availability of Meeting Materials
Annual Meeting of Shareholders of Cameco Corporation will be held:
---	---	---
When: Thursday, April 30, 2020	Where:	Cameco Corporation
9:30 a.m.<br>local time		2121 – 11^th^Street West
		Saskatoon, Saskatchewan
We will webcast the meetingon our website at cameco.com

Cameco Corporation (the Company) has adopted the notice-and-access method for delivery of its meeting materials to its shareholders. As a registered or non-registered shareholder you are receiving this notification to advise that the meeting materials in connection with the 2020 annual meeting of shareholders are available online. The use of this alternate means of delivery is permitted by Canadian securities regulators and minimizes the use of printed paper materials to reduce printing, paper and mailing costs associated with the annual meeting of shareholders.

The Company has posted online electronic copies of the management proxy circular and the company’s 2019 annual report (which includes its audited consolidated financial statements for the fiscal year ended December 31, 2019 and related management’s discussion and analysis) (collectively, the meeting materials). Shareholders who have not provided standing instructions to receive meeting materials by mail are receiving this notification, along with either a proxy form or voting instruction form, so they may provide their voting instructions.

ACCESSING THE MEETING MATERIALS ONLINE
●   Via the Invest section of our website<br>at<br> <br>cameco.com/invest/2020-annual-meeting	●   The company’s page on SEDAR<br>(sedar.com)
MATTERS TO BE RECEIVED OR VOTED ON AT THE MEETING<br><br><br>(see pages 5 and 6 of management proxy circular)	Page references in<br> <br>managementproxy<br> <br>circular
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●   Elect the directors– election of the directors of Cameco Corporation	page 5 and<br><br><br>pages 11 to 22
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●   Reappoint the auditors– reappoint the independent auditors and authorize the directors to fix their remuneration	page 5
●   Receive the financialstatements – receive the audited consolidated financial statements for the financial year ended December 31, 2019 and the auditor’s report thereon	page 6
●   Advisory vote on executive compensation(“say on pay”) – consider, and if deemed appropriate, adopt a non-binding advisory resolution on the company’s approach to executive compensation	page 6 and<br><br><br>pages 62 to 101

SHAREHOLDERS ARE REMINDED TO REVIEW THE MANAGEMENT PROXY CIRCULAR PRIOR TO VOTING AS IT HAS BEEN PREPARED TO GUIDE YOUR VOTINGDECISIONS.

OBTAINING A PAPER COPY OF THE MEETING MATERIALS

At any time prior to the meeting or for a period of one year from the date the meeting materials are filed on SEDAR, you can request a free paper copy by:

●	Calling<br>1-888-433-6443 (toll free) or 416-682-3801<br>outside Canada and the United States
●	Sending an email to: fulfilment@astfinancial.com
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Requests for paper copies made before the meeting will be sent to you within three business days of receiving your request. To ensure receipt of the paper copy in advance of the voting deadline and meeting date, we estimate that your request must be received no later than 4:00 p.m. (Saskatoon time) on April 16, 2020 (this takes into account the three business day period for processing requests as well as typical mailing times). Please note that if you request a paper copy of the meeting materials, you will not receive a new proxy form or voting instruction form, so please keep the original form sent with this notice in order to vote.

Requests for paper copies made on or after the date of the meeting will be sent to you within 10 days after receiving your request.

VOTING

Please note – You cannot vote by returning this notice. The voting process is different depending on whether you are a registered or non-registered shareholder. You are a registered shareholder if your name appears on your share certificate. You are a non-registered (beneficial) shareholder if your bank, trust company, securities broker, trustee or other financial institution holds your shares (your nominee). This means the shares are registered in your nominee’s name, and you are the beneficial shareholder (see adjacent details). To vote, choose which of the two voting methods set out below applies to you. You will need your control number contained in the accompanying proxy form or voting instruction form in order to vote online.

Registered shareholders - You can vote by completing the proxy form and sending it to AST Trust Company (Canada), Attention: Proxy Department at P.O. Box 721, Agincourt, ON M1S OA1, voting online at www.astvotemyproxy.com or by telephone at 1-888-489-5760.

Non-registered shareholders - You can vote by completing the voting instruction form and sending it to Data Processing Centre, P.O. Box 3700, Stn Industrial Park, Markham, ON L3R 9Z9, voting online at www.proxyvote.com or by telephone at 1-800-474-7493.

Submit your votinginstructions right away to meet the voting deadline. For your proxy voting instructions to be valid, they must be received by AST Trust Company (Canada) before 9:30 a.m. CST on Tuesday, April 28, 2020, or if the meeting is postponed or adjourned, no later than 48 hours (excluding Saturdays, Sundays and statutory holidays) before the meeting is reconvened.

See voting instructions on pages 7 to10 of the management proxy circular for information on how to vote and other important things to know.

QUESTIONS

Shareholders with questions or who wish to obtain further information about notice and access can call AST Trust Company (Canada) toll free at 1-800-387-0825.

EX-99.3

Exhibit 99.3

What’s inside
Message from the Chair of the Board	1
Notice of our 2020 annual meeting	3
Management proxy circular	4
Business of the meeting	5
•   Delivery of meeting materials	7
•   Voting	7
About the nominated directors	11
•   Director profiles	14
•   2019 Meetings and attendance	23
•   Director development	24
•   Board structure and composition	26
•   Skills, attributes and experience	27
•   Diversity	29
Governance at<br>Cameco	30
How the board operates	31
•   Role of the board	31
•   Our expectations of directors	35
•   Board succession	36
Our governance principles	38
•  Shareholder engagement	38
•   Voting results	39
•   Shareholder proposals	40
•   Separate chair and CEO positions	40
•   Accessing our governance and other regulatory disclosure	40
•   Code of conduct and ethics	40
•   Compliance	41
•   Governance guidelines	41
•   Independence	41
Board committees	42
Our approach to ESG matters	48
•   Sustainability	48
•   Workplace diversity and inclusion	49
•   How are we doing	51
•   Governance	51
•   Targets and metrics	52
What’s inside
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Compensation<br>at Cameco	53
Compensation governance	54
•  Compensation risk management	55
•  Independent advice	56
Share ownership guidelines and reporting	57
Director compensation	59
•  Compensation discussion and analysis	59
•  Approach	59
•  Share ownership	59
•  Fees and retainers	59
•  2019 Compensation details	60
Executive compensation	62
•  Message from the Chair of the Human Resources<br><br><br>and Compensation Committee	62
•  Cameco compensation practices	66
•  Compensation overview	67
•  Executive compensation and strategy	67
•  Market context	68
•  Share performance and executive compensation	69
•  CEO compensation summary	70
•  Compensation discussion and analysis	72
**•**Approach	72
**•**Annual decision-making process	74
**•**Measuring performance	75
•  Compensation components	76
•  2019 Performance and compensation	83
•  2020 Compensation decisions	89
•  2019 Compensation details	91
Appendices	102

Message from the Chair of the Board^1^

Dear Fellow Shareholders,

I am pleased to invite you to Cameco’s annual meeting of shareholders at 9:30 a.m. (CST) on April 30, 2020 at Cameco’s offices in Saskatoon, Saskatchewan. The meeting is available to shareholders and other stakeholders by live webcast.

The attached management proxy circular provides information about the business of the meeting, the voting process, this year’s nominated directors, our corporate governance practices, our approach to executive compensation and our 2019 compensation decisions.

The board’s goal is to deliver long-term value to Cameco’s stakeholders. We pay particular attention to strategy and value creation, risk oversight, board governance and management succession – areas we see as fundamental to Cameco’s sustainability and future success.

Strategy

In order to help Cameco achieve its vision to energize a clean-air world, the board is focused on strategy and Cameco’s strategic risks. The board works closely with management on Cameco’s strategic direction and reviewing and discussing strategy is a key component of every regular board meeting.

Management continues to focus on profitably producing uranium at a pace aligned with market signals in order to preserve the value of Cameco’s tier-one assets and increase long-term value in the context of a challenging market environment. In particular, management has prioritized the following strategic actions:

1.	preserving the value of Cameco’s lowest cost assets;
2.	maintaining a strong balance sheet;
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3.	protecting and extending the value of Cameco’s contract portfolio; and
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4.	efficiently managing the company in a low price environment.
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Cameco’s confidence is growing that the uranium market will undergo a transition, similar to what happened in the UF6 conversion market and is benefitting the fuel services segment of Cameco’s business. However, until that transition occurs, these actions are necessary to allow the company to continue to execute on its strategy and to position Cameco to self-manage risk. The board and management are optimistic about the drivers of long-term growth in the nuclear industry and remain committed to taking the steps required to allow the company to successfully navigate the transition.

Increasing populations and growing electricity demand around the world are driving the long-term fundamentals for nuclear. Nuclear energy is a clean energy option that can provide the power needed – reliably, safely and affordably. We believe that it must play a central role as the world shifts to a low-carbon, climate resilient economy.

Initiatives are underway at Cameco to improve efficiency and reduce costs across the organization. Several of them are geared towards innovation and accelerating the adoption of advanced digital and automation technologies. These initiatives will leave us well positioned, when the market turns, to progress toward our vision to energize a clean-air world.

In addition, Cameco is pursuing non-traditional markets for its UO2 and fuel fabrication in its fuel services business and has been actively securing new contracts for reactor components to support refurbishment of Canadian nuclear reactors. Cameco also continues to explore other opportunities within the nuclear fuel cycle. In particular, subject to regulatory and other approvals, it increased its interest, from 24% to 49%, in Global Laser Enrichment, a company testing a third-generation enrichment technology that, if successful, will use lasers to commercially enrich uranium.

^1^ The message from the chair contains forward looking information and is based upon the assumptions and subject to the material risks described at pages 2 and 3 of our 2019 management’s discussion and analysis (MD&A). Actual outcomes for future periods may be significantly different.

2020 MANAGEMENT PROXY CIRCULAR      1

ESG and risk oversight

Cameco’s commitment to environmental, social and governance (ESG) matters is closely monitored by the board and its committees. A safe, healthy and rewarding workplace, a clean environment and supportive communities are measures of success that are integrated into Cameco’s strategic plan and are used to set compensable targets for the management team.

On the supportive communities’ front, we are especially proud of the work Cameco has done to build strong and enduring relationships with Indigenous communities in northern Saskatchewan. We are a leading industrial employer of First Nations and Métis people and have a dedicated team who are focused on workforce development and community engagement in northern Saskatchewan. As well, Donald Deranger, a highly-respected leader, advisor and businessperson in the Saskatchewan Indigenous community, has served on our board since 2009.

In 2019, management established a multi-disciplinary ESG working group to review our approach to ESG matters, including how we report. You can read more about our approach to ESG matters on page 48.

Cameco has a mature enterprise risk management program with processes and controls to ensure we are appropriately managing and mitigating risk. The board oversees Cameco’s strategic risks and oversight of top-tier tactical and functional risks are allocated to specific board committees.

Sound governance

Our strong governance foundation and commitment to good governance principles give us the ability to effectively serve Cameco and its stakeholders. The board reviews Cameco’s governance practices annually and our board and director assessment process is designed to provide insight on how we can continually improve governance at Cameco.

The board is committed to having the right mix of diversity – gender, skills, background, experience and other characteristics – and I am proud of the quality and experience of our directors. We regularly review the board succession plan as well as our competency matrix, core attributes, diversity policy, term limits and retirement policy to make sure the composition of the board is appropriate and continues to meet Cameco’s needs and shareholders’ and other stakeholders’ expectations.

Leadership

We have a skilled and dedicated team at Cameco with significant international experience that is focused on delivering results. The senior leadership team has a wealth of expertise and comprehensive industry knowledge gained from dedicating most of their careers to the nuclear fuel cycle, including the exploration, mining, production and conversion of uranium for clean and reliable nuclear power generation. Most importantly, the team conducts itself with integrity and with an emphasis on safety, people and the environment.

Looking ahead

Cameco is well-positioned to execute on its strategy and to self-manage risk. With the company’s tier-one assets, long-term contract portfolio, employee expertise and strong balance sheet, we are confident in Cameco’s ability to build long-term value and reward shareholders for their continued patience.

Sincerely,

Ian Bruce

Chair of the Board

Cameco Corporation

2     CAMECO CORPORATION

Notice of our 2020 annual meeting of shareholders

You are invited to our 2020 annual meeting:

When

Thursday, April 30, 2020

9:30 a.m. CST

Where

Cameco Corporation

2121 – 11^th^ Street West

Saskatoon, Saskatchewan

We will webcast the meeting on our website at cameco.com.

Your vote is important

If you held Cameco common shares on March 9, 2020, you are entitled to receive notice of and to vote at this meeting.

You can vote in person at the meeting or by proxy.

See pages 5 through 10 of the attached management proxy circular for information about what the meeting will cover, who can vote and how to vote.

By order of the board of directors,

Sean Quinn

Senior Vice-President,

Chief Legal Officer and Corporate Secretary

Saskatoon, Saskatchewan

March 31, 2020

FOR MORE INFORMATION
Read about the business of the meeting<br>beginning on page 5 of the attached management proxy circular.
The deadline for submitting a shareholder<br>proposal for our 2021 annual meeting is January 4, 2021 and we require advance notice for nominating directors.
Access our 2019 annual report and other<br>documents and information online:
·   cameco.com
·   sedar.com (SEDAR)
·   sec.gov/edgar.shtml (EDGAR)
See<br>pages 37 and 40 for more information.
COMMON SHARES OUTSTANDING
395,797,732                         December 31, 2019
395,797,732                         March 10, 2020
AST Trust Company (Canada) is our transfer agent and registrar for<br>Canada.<br> <br><br> <br>American Stock Transfer & TrustCompany LLC is our transfer agent and registrar for the US.
2020 MANAGEMENT PROXY CIRCULAR      3
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Read about the four items of<br>business and how to vote your shares<br> <br><br> <br>pages 5 to10	Management proxy circular<br> <br><br><br><br>You have received this circular because you owned Cameco common shares on March 9, 2020. Management is soliciting your proxy for the 2020annual meeting of shareholders, and we pay all proxy solicitation costs.<br> <br><br> <br>As a shareholder, you have the right to attend the annual meeting of shareholders on April 30, 2020 and to vote your shares in person or by proxy. If you are unable to attend the meeting, you can listen to the webcast on our website<br>(www.cameco.com).<br> <br><br><br><br>The board of directors has approved the contents of this document and has authorized us to distribute it to you. We have also sent a copy to each<br>of our directors and to our auditors.<br> <br><br> <br>The board of directors<br>approved the content of this circular on March 9, 2020. Information is as of that date unless indicated otherwise.
Learn about our governance<br>practices<br>and the board<br> <br><br> <br>pages 30 to 52
Find out what we paid<br>our executive<br>officers<br>and directors in 2019<br>and why<br> <br><br> <br>pages 53 to101
THINGS TO NOTE
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Key terms in this document
•  you and your refer to the shareholder
•  we, us, our, the company and Cameco mean Cameco Corporation
•  shares and Cameco shares mean Cameco’s common shares, unless indicated otherwise
•  all dollar amounts are in Canadian dollars, unless indicated otherwise
•  information is as of March 9, 2020, unless indicated otherwise.
Your vote is important
This circular describes what the meeting will cover and how to vote. Please read it carefully and vote, either by completing the form included with this<br>circular or voting in person at the meeting.
Cameco employees or representatives of Kingsdale Advisors (Kingsdale) may contact you by mail or phone to encourage you to vote. If you<br>have any questions or need more information about voting your shares, call Kingsdale at 1.888.518.1558 (toll-free in North America) or 416.867.2272 (collect calls accepted) outside of North America. Or send an email to<br>contactus@kingsdaleadvisors.com.
We are paying Kingsdale approximately $55,000<br>for their 2020 services.
4     CAMECO CORPORATION
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Business of the meeting
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A quorum is required to hold the meeting and transact business. A quorum is met when the people in attendance hold, or represent by proxy, at least 25% of Cameco’s total issued and outstanding common shares.

We require majority approval on the items of business. Our majority voting policy governs the election of directors (see Majority voting for non-executive directors on page 13).

Elect the directors

The board is recommending you vote for the nominated directors. You can vote for all of the nominated directors, vote for some of them and withhold votes for others, or withhold votes for all of them. Nine director nominees are standing for election to our board to serve for a term of one year. All of the nominated directors currently serve on the board. For information about each nominee, see the director profiles starting on page 14.

Reappoint the auditors

The board, on the recommendation of the audit and finance committee, has proposed that KPMG LLP (KPMG) be reappointed as our auditors until the end of our next annual meeting. KPMG, or its predecessor firms, have been our auditors since Cameco was incorporated in 1988. You can vote for reappointing KPMG, or you can withhold your vote.

Auditors reinforce the importance of a diligent and transparent financial reporting process, and strengthen investor confidence in our financial reporting. KPMG provides us with three types of services:

•	audit services generally relate to the audit and review of annual and interim<br>financial statements and notes, conducting the annual audits of affiliates, auditing our internal controls over financial reporting and providing other services that may be required by regulators. These may include services for registration<br>statements, prospectuses, reports and other documents that are filed with securities regulators, or other documents issued for securities offerings.
•	audit-related services include advising on accounting matters, attest services not<br>directly linked to the financial statements that are required by regulators and conducting audits of employee benefit plans.
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•	tax services relate to tax compliance and tax advice that are beyond the scope of the<br>annual audit. These include reviewing transfer-pricing documentation and correspondence with tax authorities, preparing corporate tax returns, and advice on international tax matters, tax implications of capital market transactions and capital tax.
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The table below shows the fees we paid to KPMG and its affiliates for services in 2018 and 2019. The board has invited a representative of KPMG to attend the meeting.

	2019 ()	% of total fees (%)		2018 ()	% of total fees (%)
Audit fees
Cameco^1^			80.2		68.5
Subsidiaries^2^			9.0		23.9
Total audit fees		****	89.2		92.4
Audit-related fees
Pensions			1.1		0.9
Total audit-related fees		****	1.1		0.9
Tax fees
Compliance			1.5		3.2
Planning and advice^3^			8.2		3.5
Total tax fees		****	9.7		6.7
All other fees
Other<br>non-audit fees			0.0		0.0
Total fees		****	100.0		100.0

All values are in US Dollars.

1.	For the audit of Cameco’s annual consolidated financial statements and the review of interim financial statements.<br>
2.	For the audit of Cameco’s subsidiary financial statements.
---	---
3.	For transfer pricing advisory.
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2020 MANAGEMENT PROXY CIRCULAR      5
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Receive the financial statements

Our consolidated financial statements for the year ended December 31, 2019 will be presented at the meeting.

You can download a copy of our 2019 annual report (which includes our consolidated financial statements for the year ended December 31, 2019, management’s discussion and analysis of these financial statements, and the auditors’ report) on our website (cameco.com/invest/financial-information). Your package includes a paper copy of the annual report only if you requested one.

Advisory vote on executive compensation (“say on pay”)

The board is recommending that you vote in favour of our approach to executive compensation. Please take some time to read about our compensation strategy, our compensation program, how we assess performance and how the board makes decisions. You can find a full discussion about executive compensation at Cameco starting on page 62.

The board believes this non-binding advisory vote gives shareholders a timely and effective way to give input to the board and the human resources and compensation committee on this important matter. You can vote for or against our approach to executive compensation by voting on the following resolution:

Be it resolved that, on an advisory basis and not to diminish the role and responsibilities of the board of directors forexecutive compensation, the shareholders accept the approach to executive compensation disclosed in Cameco’s management proxy circular delivered in advance of the 2020 annual meeting of shareholders.

Other business

We did not receive any shareholder proposals for this meeting, and are not aware of any other items of business to be considered at the meeting. If other items of business are properly brought before the meeting, you (or your proxyholder) can vote as you deem appropriate.

	HOW CAMECO WAS FORMED
Cameco Corporation was formed in 1988 by<br>privatizing two Crown corporations, combining the uranium mining and milling operations of Saskatchewan Mining Development Corporation and the uranium mining, refining and conversion operations of Eldorado Nuclear Limited.
Cameco received these assets in exchange<br>for:
•   assuming substantially all of the current liabilities and certain other liabilities of the two Crown corporations
•   issuing common shares
•   issuing one class B share to the Province of Saskatchewan
•   issuing promissory notes.
Cameco<br>was incorporated under the Canada Business Corporations Act (CBCA).<br> <br><br> <br>You can find more information about our history in our most recent annual information form, which is available on our website (cameco.com/invest).
6     CAMECO CORPORATION
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Delivery of meeting materials

We are using notice and access to deliver the meeting materials to all shareholders. This means that Cameco will post the meeting materials online for shareholders to access electronically. You will receive a package in the mail with a notification explaining how to access and review the meeting materials electronically and how to request a paper copy at no charge. Your package will include a proxy form or a voting instruction form so you can vote your shares.

Notice and access is environmentally friendly and a cost-effective way to distribute our meeting materials because it reduces printing, paper and postage costs.

You can access the meeting materials on our website at cameco.com/invest/2020-annual-meeting and on SEDAR (sedar.com).

How to request a paper copy

Before the meeting

Starting on March 31, 2020, shareholders can request a free paper copy of the meeting materials. To receive the paper copy in advance of the voting deadline and meeting date, we suggest you submit your request by 4:00 p.m. (Saskatoon time) on April 16, 2020.

After the meeting

If you would like to receive a paper copy of the meeting materials for up to one year from the date the meeting materials are filed on SEDAR, please call 1-888-433-6443 (toll free) or 416-682-3801 outside Canada and the United States, or send an email to: fulfilment@astfinancial.com.

If you request a paper copy of the meeting materials, you will not receive a new proxy form or voting instruction form. Please keep the original form sent to you so you can vote your shares.

If you have questions about notice and access, please call our transfer agent, AST Trust Company (Canada), toll free at 1-800-387-0825.

Voting

Who can vote

Cameco has common shares and one class B share, but only holders of our common shares have full voting rights. If you held common shares at the close of business on March 9, 2020 (the record date), you or the person you appoint as your proxyholder can attend the annual meeting and vote your shares.

Each Cameco common share you own represents one vote, except where ownership and voting restrictions apply. As of March 10, 2020, we had 395,792,732 common shares issued and outstanding.

Principal holders of common shares

We have one principal holder of our common shares as of December 31, 2019, as reported in a Schedule 13F filing made with the US Securities Exchange Commission – Beutel, Goodman & Company Ltd. of Toronto, Ontario (including its subsidiaries) held 23,084,705 common shares, or approximately 5.83%, of our total common shares outstanding.

Management is not aware of any other shareholder who holds 5% or more of our common shares.

2020 MANAGEMENT PROXY CIRCULAR      7

Our class B share

The province of Saskatchewan holds our one class B share. This entitles the province to receive notices of and attend all meetings of shareholders, for any class or series. The class B shareholder can only vote at a meeting of class B shareholders, and votes as a separate class if there is a proposal to:

(a)	amend Part 1 of Schedule B of the articles, which states that: Cameco’s registered office and<br>head office operations must be in Saskatchewan, the executive officers and generally all of the senior officers (vice-presidents and above) must live in Saskatchewan, and all annual meetings of shareholders must be held in Saskatchewan,
(b)	amend the articles in a way that would change the rights of class B shareholders, or
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(c)	amalgamate, if the amalgamation would require an amendment to Part 1 of Schedule B of the<br>articles.
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Ownership and voting restrictions

Restrictions on owning, controlling and voting Cameco common shares are set out in the Eldorado Nuclear Limited Reorganization and DivestitureAct (Canada) (ENL Reorganization Act) and our company articles. See Appendix A on page 102 for the definitions in the ENL Reorganization Act, including definitions of resident and non-resident. Ownership restrictions for non-residents were put in place so that Cameco would remain Canadian controlled.

The following is a summary of the limitations listed in our company articles:

Residents – A Canadian resident, either individually or together with associates, cannot hold, beneficially own or control shares or other Cameco securities, directly or indirectly, representing more than 25% of the total votes that can be cast to elect directors.

Non-residents – A non-resident of Canada, either individually or together with associates, cannot hold, beneficially own or control shares or other Cameco securities, directly or indirectly, representing more than 15% of the total votes that can be cast to elect directors.

Voting restrictions – All votes cast at the meeting by non-residents, either beneficially or controlled directly or indirectly, will be counted and pro-rated collectively to limit the proportion of votes cast by non-residents to no more than 25% of the total shareholder votes cast at the meeting.

Residency declarations

Shareholders are required to declare their residency, ownership of Cameco shares, and other things relating to the restrictions, so we can verify compliance with the ownership of and voting restrictions on our shares. Nominees such as banks, trust companies, securities brokers or other financial institutions who hold the shares on behalf of non-registered shareholders need to make the declaration on their behalf.

If you own the shares in your name, you will need to complete the residency declaration on the enclosed proxy form. Copies will be available at the meeting if you are planning to attend the meeting. If we do not receive your residency declaration, we may consider you to be a non-resident of Canada.

The chair of the meeting may ask shareholders and their nominees for additional information to verify compliance with our ownership and voting restrictions. The chair of the meeting will use the declarations and other information to decide whether our ownership restrictions have been complied with.

Enforcement of ownership and voting restrictions

The company articles allow us to enforce the ownership and voting restrictions by suspending voting rights, forfeiting dividends, prohibiting the issue and transfer of Cameco shares, requiring the sale or disposition of Cameco shares, and suspending all other shareholder rights.

8     CAMECO CORPORATION

How to vote

You can vote by proxy, or you can attend the meeting and vote your shares in person. If you are a registered shareholder, we mail the notification directly to you and your package will include a proxy form. We distribute the notification to intermediaries to forward to our non-registered shareholders. For most non-registered shareholders, your package is sent by Broadridge and includes a voting instruction form. We pay the cost of proxy solicitation for all registered and non-registered shareholders.

Submit your voting instructions right away to meet the votingdeadline. Make sure you allow enough time for your instructions to reach our transfer agent if you are sending the completed proxy form or voting instruction form by mail. AST Trust Company (Canada) must receive your voting instructionsbefore 9:30 a.m. CST on Tuesday, April 28, 2020 to be valid. ****

	NON-REGISTERED (BENEFICIAL) SHAREHOLDERS	REGISTERED SHAREHOLDERS
The voting process is different depending on whether you are a<br>registered or non-registered shareholder (see details to the right). ****	You are a non-registered (beneficial)<br>shareholder if your bank, trust company, securities broker, trustee or other financial institution holds your shares (your nominee). This means the shares are registered in your nominee’s name, and you are the beneficial shareholder. Many of<br>our shareholders are non-registered shareholders.	You are a registered shareholder if your name appears on your share certificate.
If you do not plan to come to the meeting, vote your shares byproxy.<br> <br><br> <br>Voting by proxy is the easiest<br>way to vote – it means you are giving someone else the authority to attend the meeting and vote for you.	You can submit your voting instructions online or by fax or mail by following the<br>instructions on your voting instruction form.<br> <br><br> <br>Alternatively, you<br>can appoint a proxyholder to attend the meeting and vote your shares for you by following the instructions on your voting instruction form.<br> <br><br><br><br>If you are appointing someone else to attend the meeting and vote your shares, make sure your appointee knows that he or she must attend the<br>meeting and vote your shares, otherwise your vote will not be counted. Your nominee will likely need to receive instructions from you before 5 p.m. CST on Monday, April 27, 2020.<br><br><br><br> <br>If you appoint someone other than the Cameco proxyholders without<br>specifying how you want your appointee to vote, your appointee will have full discretionary authority to vote as they see fit.	You can vote your shares by proxy. Complete the proxy form and send it to AST Trust<br>Company (Canada) or vote your shares online or by phone or fax by following the instructions on your proxy form.<br> <br><br><br><br>Alternatively, you can appoint a proxyholder to attend the meeting and vote your shares for you by following the instructions on your proxy<br>form.<br> <br><br> <br>Make sure your appointee knows that he or she must attend<br>the meeting and vote your shares, otherwise your vote will not be counted. AST Trust Company (Canada) will likely need to receive voting instructions from you before 5 p.m. CST on Monday, April 27, 2020.<br><br><br><br> <br>If you appoint someone other than the Cameco proxyholders without<br>specifying how you want your appointee to vote, your appointee will have full discretionary authority to vote as they see fit.
If you want to come to the meeting and vote inperson.	Follow the instructions on your voting instruction form to appoint yourself as<br>proxy-holder, and return the voting instruction form as instructed by your intermediary (you may be able to do this online, or by fax or mail).<br> <br><br><br><br>You will need to register with a representative of AST Trust Company (Canada) when you arrive at the meeting.	Do not complete the enclosed proxy form. Your vote will be taken and counted at the<br>meeting. If you vote in person at the meeting, any proxy previously given will be automatically revoked.<br> <br><br><br><br>Be sure to register with a representative of AST Trust Company (Canada) when you arrive at the meeting.
If you change your mind, you can revoke your proxy or votinginstructions.<br> <br><br> <br>Any new instructions will<br>only take effect if they are received by AST Trust Company (Canada) **** before 9:30 a.m. on Tuesday, April **** 28, 2020 or 48 hours before the meeting is reconvened if the meeting is postponed oradjourned.	Contact your nominee if you need help providing new voting instructions, if you want to revoke your voting instructions (without giving new instructions) or if you want<br>to vote in person instead.	You can revoke your proxy without providing new voting instructions by:<br><br><br><br> <br>·  sending a notice in writing to the corporate secretary at Cameco, at 2121 - 11th Street West, Saskatoon, Saskatchewan S7M 1J3, so he receives it by 5 p.m. CST on the last<br>business day before the meeting (Wednesday, April 29, 2020)<br> <br>·  giving a notice in writing to the chair of the meeting before the start of the meeting<br><br><br>·  giving<br>notice in any other manner permitted by law.<br> <br><br> <br>The notice can be<br>from you or your attorney, if he or she<br> <br>has your written authorization. If your shares are owned by a corporation, the written notice<br>must be from its authorized officer or attorney.

Cameco may use the Broadridge QuickVote^TM^ service to assist non-registered shareholders with voting their shares directly over the telephone.

2020 MANAGEMENT PROXY CIRCULAR      9

Voting by proxy

Voting by proxy is the easiest way to vote. It means you are giving someone else the authority to attend the meeting and vote for you (called your proxyholder). All properly executed written proxies and properly completed proxies submitted by telephone or internet, delivered in accordance with this solicitation, will be voted at the meeting consistent with the directions provided in the proxy unless the proxy is revoked prior to completion of voting at the meeting.

If you are a registered shareholder, Tim Gitzel, president and CEO of Cameco, or in his absence Sean Quinn, senior vice-president, chief legal officer and corporate secretary of Cameco (the Cameco proxyholders), have agreed to act as proxyholder to vote your shares for you at the meeting according to your instructions**. You have the right to appoint someone other than the Cameco proxyholders to represent you at the meeting (your appointee does not need to be a shareholder).** If you want to appoint someone else to represent you and vote your shares at the meeting, see the instructions in the table on page 9.

If you appoint the Cameco proxyholders but do not tell them how you want to vote your shares, your shares will be voted:

•	for electing each nominated director
•	for appointing KPMG LLP as auditors
---	---
•	for the advisory vote on our approach to executive compensation.
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Other important things to know

If for any reason a nominated director becomes unable to serve, your proxyholder has the right to vote for another nominated director at his or her discretion, unless you have indicated that you want to withhold your shares from voting on the election of directors.

If there are amendments or other items of business that properly come before the meeting, your proxyholder can vote on each matter as your proxyholder sees fit, as permitted by law, whether or not it is a routine matter, an amendment or contested item of business.

The chair of the meeting has the discretion to accept or reject any late proxies, and can waive or extend the deadline for receiving proxy voting instructions without notice.

If the meeting is postponed or adjourned, the deadline for AST Trust Company (Canada) to receive your voting instructions will be extended to 48 hours (excluding Saturdays, Sundays and statutory holidays) before the meeting is reconvened for your new voting instructions to be valid. See the table on page 9 for further instructions. If you are revoking your proxy without giving new voting instructions, the corporate secretary must receive the notice by 5 p.m. CST on the day before the meeting is reconvened or you must give notice to the chair of the meeting before the start of the reconvened meeting.

Questions

If you have questions about voting, completing the proxy form or residency declaration, or about the meeting in general, please contact Kingsdale, our strategic shareholder services advisor and proxy solicitation agent:

Phone:	1.888.518.1558
	(toll free within North America)
	1.416.867.2272
	(collect from outside North America)
Email:	contactus@kingsdaleadvisors.com
10     CAMECO CORPORATION
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About the nominated directors

Expertise and skills

Diversity
<br><br><br><br><br> <br><br> <br><br><br><br><br>	Commitment<br> <br><br><br><br><br><br><br><br>
2020 MANAGEMENT PROXY CIRCULAR      11
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Our board of directors is responsible for overseeing management and our business affairs. As shareholders, you elect the board to act in the best interests of Cameco. This year the board has nominated nine directors. All nominated directors currently serve on the board and have agreed to stand for re-election. For more on the nomination process, see the Nomination process on page 37.

Board composition and managing conflicts of interest

This year’s nominated directors have been selected based on their knowledge, experience and other attributes, and collective expertise on a broad range of issues the board faces when overseeing our business and affairs. All of our directors are screened annually for conflicts of interest (see page 35).

Independence

Eight of our nine nominated directors (89%) are independent. The only non-independent director is our CEO. All of the nominated directors are Canadian citizens and residents, except for Kate Jackson who is a US citizen and resident. Daniel Camus holds Canadian and French citizenship.

	Status
Name	Independent	Not independent
Ian Bruce	✓
Daniel Camus	✓
Donald Deranger	✓
Catherine Gignac	✓
Tim Gitzel		✓	President and CEO
Jim Gowans	✓
Kate Jackson	✓
Don Kayne	✓
Anne McLellan	✓

Voting results at 2019 annual meeting of shareholders

The voting results of each director who was a nominee at the 2019 annual meeting of shareholders are shown below.

Percentage of votes cast “for” each<br>director (%)	96.9	96.6	99.2	99.7	99.3	99.2	96.7	90.9	94.5
Percentage of votes cast “withheld” (%)	3.1	3.4	0.8	0.3	0.7	0.8	3.3	9.1	5.5
12     CAMECO CORPORATION
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Share ownership and compliance with guidelines

We require each non-executive director to own Cameco shares or deferred share units (DSUs) to align the interests of our directors and shareholders. Non-executive directors have the option to receive all or part of their compensation in DSUs. See page 60 for the portion of the total retainer that each non-executive director received in DSUs in 2019.

We report each director’s holdings of shares and DSUs and their total value, including the Cameco shares they own or exercise control or direction over in the director profile pages that follow, based on the following:

Year end	Closing price of Cameco common shares
December 31, 2018		$15.48
December 31, 2019	****	$11.54

Our share ownership guidelines require that all directors must hold at least three times their annual retainer within five years of joining the board. For assessing compliance, we use our year-end share price on the TSX or the price the shares or units were acquired at, whichever is higher. The table on page 58 provides information about share ownership for each director.

Majority voting for non-executive directors

Under corporate law, a nominated director can be elected with a single vote cast in his or her favour. However, under our majority voting policy to be elected a director must obtain a majority of votes cast in his or her favour. A director who does not receive a majority of votes cast in his or her favour in an uncontested election (where the number of nominated directors equals the number of board positions) must submit his or her resignation to the board.

Within 90 days of the meeting, our nominating, corporate governance and risk committee will review the voting result and recommend to the board whether to accept or reject the resignation. Unless there are exceptional circumstances, the committee and the board will accept the resignation and it will take effect when they reach a decision. The director who submitted a resignation does not participate in any board or committee deliberations on the matter.

The board will publicly announce its decision immediately. If the board rejects the resignation, it will provide a full explanation why. If the board accepts the resignation, it may appoint a new director to fill the vacancy.

Director profiles

The following pages tell you about the nominated directors, including their background, skills, experience, other public company boards they sit on, 2019 meeting attendance, share ownership, and voting results at last year’s annual meeting.

2020 MANAGEMENT PROXY CIRCULAR      13
Ian Bruce,Chair of the Board
---

Age: 66

Calgary, AB

Canadian

Director since: 2012

Independent

Key skills and experience

•	Board / corporate governance
•	Financial acumen
---	---
•	Investor relations
---	---
•	Investments / mergers and acquisitions
---	---
•	Risk oversight
---	---

Ian brings a strong finance andinvestment banking background as well as board, executive, energy sector, and leadership experience to Cameco’s board. He serves as chair of the Cameco board and is a member of each of the five board committees.

Ian Bruce is a corporate director. He is the former president and CEO of Peters & Co. Limited, an independent investment dealer. He has more than 30 years of experience in investment banking with specialization in corporate finance and mergers and acquisitions, predominantly in the oil and gas industry.

Ian is a fellow of the Chartered Professional Accountants of Alberta, a recognized Specialist in Valuation under Canadian CPA rules, and a chartered business valuator. He is a past member of the Expert Panel on Securities Regulation for the Minister of Finance of Canada and is also a past board member and chair of the Investment Industry Association of Canada.

Prior to becoming board chair in May 2018, Ian was chair of the human resources and compensation committee. He has served on Cameco’s audit committee for his entire tenure and has also served on audit committees of other public-company boards. Ian is a director of the private company, TriAxon Oil Corp., and is also a member of its audit and compensation committees.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board chair*		7 of 7		1 of 1	100%

* Ian is a member of all committees and he attended all committee meetings in 2019.

Other public company boards in past five years
MEG Energy Corp. (TSX)	June 2019 to present
Cona Resources Ltd. (TSX)	2014 to 2018
Logan International Inc. (TSX)	2011 to 2016
Securitiesheld
---	---	---	---	---	---	---
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Multiple of 2019annual retainer	Share<br><br><br>ownership<br><br><br>guideline<br> <br>compliant^1^
2019	75,000	65,147	140,147	1,617,296	4.3x	✓ Yes
2018	75,000	50,565	125,565	1,943,746
Change	–	14,582	14,582	(326,450

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Ian’s shares and DSUs<br>held at December 31, 2019 are valued at $2,699,987 and represent 7.2x the board chair retainer of $375,000.
2019 Voting results
---	---	---
	96.9% votes for	3.1% votes withheld

Ian was a director of Laricina Energy Limited (Laricina), a junior oil sands private company, from 2013 to 2017. Laricina was under Companies’ Creditors Arrangement Act (Canada) (CCAA) protection from March 26, 2015 until February 1, 2016, when it exited from CCAA protection. Its restructuring plan was approved by the Alberta Court of Queen’s Bench on July 22, 2015.

14     CAMECO CORPORATION
Daniel Camus
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Age: 67

Westmount, QC

Canadian and French

Director since: 2011

Independent

Key skills and experience

•	Financial acumen
•	International business
---	---
•	Investments / mergers and acquisitions
---	---
•	Risk oversight
---	---
•	Uranium / nuclear
---	---

Daniel brings CFO,international business and energy sector experience, in particular in nuclear, to Cameco’s board and the two committees he sits on, including as chair of the audit and finance committee. He also chairs the compensation committee of one otherpublic company.

Daniel Camus is a corporate director. He is the former group CFO and head of strategy and international activities of Electricité de France SA (EDF). Based in France, EDF is an integrated energy operator active in the generation (including nuclear generation), distribution, transmission, supply and trading of electrical energy with international subsidiaries. He is the former CFO of the humanitarian finance organization, The Global Fund to Fight AIDS, Tuberculosis and Malaria, a position he held from 2012 to 2017.

Daniel holds a PhD in Economics from Sorbonne University, and an MBA in finance and economics from the Institute d’Études Politiques de Paris. Over the past 25 years, he has held various senior roles with the Aventis and Hoechst AG Groups in Germany, the US, Canada, and France. He has been chair of several audit committees and brings experience in human resources and executive compensation through his senior executive roles at international companies where he worked on business integrations in Germany, the US, Canada, and France. He is the audit committee chair and board member of the non-governmental organization, FIND Diagnostics, located in Geneva, Switzerland.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		1 of 1	100%
Audit and finance		5 of 5			100%
Human resources and compensation		4 of 4			100%
Nominating, corporate governance and risk*		3 of 3			100%

* Daniel left the nominating, corporate governance and risk committee in May 2019.

Other public company boards in past five years
ContourGlobal PLC, London (LSE)	2016 to present
SGL Carbon SE, Wiesbaden (Xetra)	2008 to 2018
Valeo SA, Paris (NYX)	2006 to 2018
Vivendi SA, Paris (NYX)	2010 to 2015
Morphosys AG, Munich (TecDAX)	2003 to 2015
Securitiesheld
---	---	---	---	---	---	---
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Multiple of 2019annual retainer	Share<br><br><br>ownership<br><br><br>guideline<br> <br>compliant^1^
2019	–	82,167	82,167	948,207	4.7x	✓ Yes
2018	–	77,254	77,254	1,195,832
Change	–	4,913	4,913	(247,685

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Daniel’s DSUs held at<br>December 31, 2019 are valued at $1,426,687 and represent 7.1x the board member retainer of $200,000.
2019 Voting results
---	---	---
	96.6% votes for	3.4% votes withheld
2020 MANAGEMENT PROXY CIRCULAR      15
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Donald Deranger
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Age: 64

Prince Albert, SK

Canadian

Director since: 2009

Independent

Key skills and experience

•	Board / corporate governance
•	Stakeholder relations / government / public policy
---	---
•	Safety, health and environment / sustainability
---	---
•	Uranium / nuclear
---	---

Donald’sexperience as a contractor in northern Saskatchewan and a leader in the Saskatchewan Indigenous community provides a rich, valuable and unique perspective to Cameco’s board and his work on three of our board committees.

Donald Deranger is an advisor to the Athabasca Basin Development Corporation and non-executive chair of the board of Points Athabasca Contracting Limited Partnership, a northern Saskatchewan Indigenous contractor that does business with Cameco. He is also a governance advisor to the Dené Suliné Nation, which is located in northern regions across western Canada.

Donald is the past president of Learning Together, a non-profit Indigenous organization that works to build relationships with the mining industry, and he continues to assist in an ex-officio capacity. He was the Athabasca vice chief of the Prince Albert Grand Council from 2003 to 2012. Donald has served as a director of the Sylvia Fedorchuk Centre for Nuclear Innovation since 2014. He also served as a director of the Tazi Twe Hydroelectric Project from 2014 to 2016.

An award-winning leader in the Saskatchewan Indigenous community, Donald brings to the board a deep understanding of the culture and peoples of northern Saskatchewan where our richest assets are located.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		1 of 1	100%
Nominating, corporate governance and risk		5 of 5			100%
Reserves oversight		2 of 2		1 of 1	100%
Safety, health and environment		4 of 4		1 of 1	100%
Other public company boards in past five years
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None

Securitiesheld
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Multiple of 2019annual retainer	Share<br><br><br>ownership<br> <br>guideline<br><br><br>compliant^1^
2019	–	67,551	67,551	779,539	3.9x	✓ Yes
2018	–	59,374	59,374	919,110
Change	–	8,177	8,177	(139,571

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Donald’s DSUs held at<br>December 31, 2019 are valued at $1,177,212 and represent 5.9x the board member retainer of $200,000.
2019 Voting results
---	---	---
	99.2% votes for	0.8% votes withheld
16     CAMECO CORPORATION
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Catherine Gignac
---

Age: 58

Mississauga, ON

Canadian

Director since: 2014

Independent

Key skills and experience

•	Mining, exploration and operations
•	Financial acumen
---	---
•	Investments / mergers and acquisitions
---	---
•	Investor relations
---	---
•	Safety, health and environment / sustainability
---	---

Catherine’s extensive career as a mining equity research analyst and geologist, and experience in project value analysisand mergers and acquisitions, expand the range of skills of Cameco’s board. She is chair of our reserves oversight committee and also serves on two other board committees.

Catherine Gignac is a corporate director. She has more than 30 years of experience in capital markets and the mining industry and has held senior positions as a mining equity research analyst with leading global brokerage firms and independent boutiques. She has extensive experience in project value and investment analysis, and spent her early working years as a geologist.

Catherine is a member of the Institute of Corporate Directors, the Canadian Institute of Mining & Metallurgy, and the Prospectors and Developers Association of Canada (PDAC).

Catherine was the principal of Catherine Gignac & Associates from 2011 to 2015. She serves as chair of the board of Women in Mining Canada and as a member of the Canadian Securities Administrators’ mining technical monitoring and advisory committee. She served as chair of the public company, Corvus Gold Inc., from 2014 to 2019 and as a member of its board for six years.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		1 of 1	100%
Audit and finance		4 of 4			100%
Nominating, corporate governance and risk*		2 of 2			100%
Reserves oversight (chair)		2 of 2		1 of 1	100%
Safety, health and environment*		2 of 2		1 of 1	100%

* Catherine joined the nominating, corporate governance and risk committee, and left the safety, health and environment committee, in May 2019.

Other public company boards in past five years
OceanaGold Corporation (TSX)	August 2019 to present
Corvus Gold Inc. (TSX)	2013 to March 2019
Trevali Mining Corporation (TSX)	2012 to 2017
St. Andrew Goldfields Ltd. (TSX)	2011 to 2015
Securitiesheld
---	---	---	---	---	---	---
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Multiple of 2019annual retainer	Share<br><br><br>ownership<br><br><br>guideline<br> <br>compliant^1^
2019	15,000	36,525	51,525	594,59	3.0x	✓ Yes
2018	15,000	36,290	51,290	793,969
Change	–	235	235	(199,371

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Catherine’s shares and<br>DSUs held at December 31, 2019 are valued at $778,790 and represent 3.9x the board member retainer of $200,000.
2019 Voting results
---	---	---
	99.7% votes for	0.3% votes withheld
2020 MANAGEMENT PROXY CIRCULAR      17
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Tim Gitzel
---

Age: 57

Saskatoon, SK

Canadian

Director since: 2011

President and CEO

Not independent

Key skills and experience

•	Uranium / nuclear
•	International business
---	---
•	Mining, exploration and operations
---	---
•	Legal / regulatory
---	---
•	Operational excellence
---	---

As Cameco’spresident and CEO, Tim brings the day-to-day business and operations perspective to the board, and is responsible for executing Cameco’s strategy. Tim has over two decades of industry experience and brings added perspective as a member of theboard of the World Nuclear Association and the Nuclear Energy Institute.

Tim Gitzel is president and CEO of Cameco. He served as president from 2010 to 2011, and prior to that served as senior vice-president and chief operating officer. Tim has more than 20 years of senior management experience in Canadian and international uranium activities. Prior to joining Cameco, he was executive vice-president, mining business unit for Orano (formerly AREVA) in Paris, France, where he was responsible for global uranium, gold, exploration and decommissioning operations in 11 countries.

Tim received his bachelor of arts and law degrees from the University of Saskatchewan. He participated in an executive education programme facilitated by INSEAD in France. He was appointed to the board of the Nuclear Energy Institute in 2012 and to The Mosaic Company board in October 2013. He currently serves as chair of The Mosaic Company’s compensation committee. He served as chair of the World Nuclear Association from 2012 to 2014 and continues to serve as a member of the board. He is also a member of the board of directors of the Business Council of Canada.

Tim is past president of the Saskatchewan Mining Association, and has served on the boards of SaskEnergy Corporation, the Saskatchewan Chamber of Commerce and Junior Achievement of Saskatchewan. He serves our community in numerous capacities, including several current and past leadership positions with charitable and non-profit organizations.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		1 of 1	100%
Other public company boards in past five years
---	---
The Mosaic Company (NYSE)	2013 to present
Securitiesheld
---	---	---	---	---	---	---
Year	Camecoshares	PSUs	*	Total sharesand PSUs	Market value of  shares and PSUs**	Executive share ownership guideline compliant
2019	299,594	344,054		643,648	7,427,698	✓ Yes
2018	256,594	342,311		641,905	9,936,689
Change	–	1,743		1,743	(2,508,991	(for CEO, see page 58)

All values are in US Dollars.

*	Excludes PSUs that vested on December 31, 2019.
**	Value of shares ($3,457,315) and PSUs ($3,970,383) for 2019 are calculated using $11.54 for 2019 and<br>$15.48 for 2018, the year-end closing prices of Cameco shares on the TSX. This is the total value of Tim’s accumulated shares and other equity-based holdings.
---	---

See Incentive plan awards on page 93 for details about his stock options.

2019 Voting results
	99.3% votes for	0.7% votes withheld
18     CAMECO CORPORATION
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Jim Gowans
---

Age: 68

Surrey, BC

Canadian

Director since: 2009

Independent

Key skills and experience

•	Safety, health and environment / sustainability
•	Capital projects
---	---
•	Enterprise leadership
---	---
•	International business
---	---
•	Mining, exploration and operations
---	---
•	Operational excellence
---	---

Jim brings strong experience in the resource sector to Cameco’s board through an extensive career as a senior executivewith several major mining companies and his role as past chair of The Mining Association of Canada. He serves on three of our board committees including as chair of the safety, health and environment committee.

Jim Gowans is a corporate director. He is currently serving as interim president, CEO and a director of Trilogy Metals Inc. This appointment commenced in August 2019 and is expected to end within the next month since a CEO search is in progress. He was president, CEO and a director of Arizona Mining Inc. from January 2016 to August 2018. Prior to that, he was senior advisor to the chair of the board of Barrick Gold Corporation from August to December 2015, and co-president from July 2014 to August 2015. He has over 30 years of experience as a senior executive in the mining industry, including holding executive positions at Debswana Diamond Company in Botswana, DeBeers SA, DeBeers Canada Inc., PT Inco in Indonesia, and Placer Dome Ltd. Jim is the past chair of the Mining Association of Canada.

Jim received a bachelor of applied science degree in mineral engineering from the University of British Columbia and attended the Banff School of Advanced Management. He has extensive mining knowledge and perspective on the importance of sustainability and stakeholder relations. He was a director of the private company, Gedex Technologies Inc. from 2015 to November 2019.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		0 of 1	88%
Audit and finance		5 of 5			100%
Reserves oversight		2 of 2		1 of 1	100%
Safety, health and environment (chair)		4 of 4		1 of 1	100%
Other public company boards in past five years
---	---
Trilogy Metals Inc. (NYSE-MKT)	May 2019 to present
Titan Mining Corporation (TSX)	2018 to present
New Gold Inc. (TSX)	2018 to present
Detour Gold Corporation (TSX)	2018 to March 2019
Arizona Mining Inc. (TSX)	2016 to 2018
Dominion Diamond Corporation (TSX)	2016 to 2017
NewCastle Gold Ltd. (TSX)	2016 to 2017
Securitiesheld
---	---	---	---	---	---	---
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Multiple of 2019annual retainer	Share<br><br><br>ownership<br> <br>guideline<br><br><br>compliant^1^
2019	9,000	73,753	82,753	954,970	4.8x	✓ Yes
2018	9,000	64,676	73,676	1,140,504
Change	–	9,077	9,077	(185,535

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Jim’s shares and DSUs<br>held at December 31, 2019 are valued at $1,564,787 and represent 7.8x the board member retainer of $200,000.
2019 Voting results
---	---	---
	99.2% votes for	0.8% votes withheld

Jim was a director of Gedex Technologies Inc. (Gedex), an Ontario-based developer of airborne geological imaging technology, from 2015 to November 2019. Gedex was under Companies’ Creditors Arrangement Act (Canada) (CCAA) protection from August 12 to December 5, 2019, when it exited from CCAA protection. Its restructuring plan was approved by the Ontario Supreme Court of Justice on December 18, 2019.

2020 MANAGEMENT PROXY CIRCULAR      19
Kathryn (Kate) Jackson
---

Age: 62

Pittsburgh, PA USA

American

Director since: 2017

Independent

Key skills and experience

•	Uranium / nuclear
•	Safety, health and environment / sustainability
---	---
•	Risk oversight
---	---
•	Operational excellence
---	---
•	Human resources and executive compensation
---	---
•	Capital projects
---	---

Kate brings extensive seniormanagement and board experience in highly technical industries, including nuclear power generation, to Cameco’s board and the three committees she sits on. She has worked on both the utility and supplier side of the industry.

Kate Jackson is a corporate director. She is the former senior vice-president and chief technology officer of RTI International Metals Inc. (from 2014 to 2015) and she previously served as senior vice-president and chief technology officer for Westinghouse Electric Company (from 2008 to 2014), which included responsibility for sustainability and environment, health and safety. She has held various senior positions at the Tennessee Valley Authority and Alcoa Corporation.

Kate received a doctorate and a master’s degree in engineering and public policy from Carnegie Mellon University. She also holds a master’s degree in industrial engineering management from the University of Pittsburgh and a bachelor’s degree in physics from Grove City College.

Kate chaired the ISO New England Inc. board from 2008 to 2014. ISO New England Inc. is an independent non-profit regional transmission organization serving a number of Eastern US states. Kate is a member of Carnegie Mellon University School of Engineering Dean’s Advisory Council and the advisory board of the Carnegie Mellon Electricity Industry Centre. She is a member of the University of Pittsburgh Engineering School Board of Visitors. Kate serves as a member of the compensation committees of both Portland General Electric company and EQT Corporation.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		1 of 1	100%
Human resources and compensation		4 of 4			100%
Nominating, corporate governance and risk		5 of 5			100%
Safety, health and environment		4 of 4		1 of 1	100%
Other public company boards in past five years
---	---
EQT Corporation (NYSE)	July 2019 to present
Portland General Electric Company (NYSE)	2014 to present
Hydro One Limited (TSX)	2015 to 2018
Rice Energy, Inc. (NYSE)	Apr. to Nov. 2017
Securitiesheld
---	---	---	---	---	---
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Share<br><br><br>ownership<br><br><br>guideline<br> <br>compliant^1^
2019	–	27,915	27,915	322,139	1.8x
2018	–	18,671	18,671	289,027
Change	–	9,244	9,244	33,112

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Kate’s DSUs held at<br>December 31, 2019 are valued at $365,816, and represent 1.8x the board member retainer of $200,000. Kate has until January 1, 2022 to meet the share ownership guideline target.
2019 Voting results
---	---	---
	96.7% votes for	3.3% votes withheld
20     CAMECO CORPORATION
---
Don Kayne
---

Age: 62

Delta, BC

Canadian

Director since: 2016

Independent

Key skills and experience

•	Enterprise leadership
•	Human resources and executive compensation
---	---
•	International business
---	---
•	Investments / mergers and acquisitions
---	---
•	Safety, health and environment / sustainability
---	---

Don brings many years of experience as a business executive in Canada’s resource industry to Cameco’s board as wellas valuable insights into emerging Asian markets where Cameco does business. He serves on three of our committees, including as chair of the human resources and compensation committee.

Don Kayne is the president and CEO of Canfor Corporation and the CEO of Canfor Pulp Products Incorporated. He serves as a director of both Canfor companies.

Don has extensive experience in international marketing. He has spent his entire career at Canfor, starting out as a regional sales representative in 1979. Prior to being appointed CEO, Don spent 10 years as Canfor’s vice-president of sales and marketing, and is one of the lead architects of the market for British Columbia lumber in China. Don’s work growing markets for Canfor products around the world has provided him with deep connections to markets and customers in every region Canfor serves.

Don is a director of the Bi-National Softwood Lumber Council, Forest Products Association of Canada, Council of Forest Industries, Alberta Forest Products Association and the BC Lumber Trade Council. Don is vice chair of the Bi-National Softwood Lumber Council and serves as chair of its programs committee. He is an audit committee member and the former board chair of the Forest Products Association of Canada. He is also chair of the charitable organization Educating Girls of Rural China Foundation, which works to transform the lives of women and communities in rural areas of western China by providing access to education. Don brings experience in human resources and executive compensation through his senior executive roles at Canfor.

Board and committee membership				2019 Attendance
	Regular			Special		Overall
Board of directors		6 of 7	*		1 of 1	88%
Human resources and compensation (chair)		4 of 4				100%
Reserves oversight		2 of 2			1 of 1	100%
Safety, health and environment		4 of 4			1 of 1	100%

* For the meeting Don was unable to attend, he participated in an intensive briefing and discussion on the content of the meeting with senior management.

Other public company boards in past five years
Canfor Corporation* (TSX)	2017 to present
Canfor Pulp Products Incorporated* (TSX)	2017 to present

* Canfor Corporation holds a controlling interest in Canfor Pulp Products Incorporated. The entities share an executive team and committee assignments, and board meetings are held concurrently.

Securitiesheld
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Share<br><br><br>ownership<br><br><br>guideline<br> <br>compliant^1^
2019	–	68,487	68,487	790,340	✓ Yes
2018	–	50,160	50,160	776,477
Change	–	18,327	18,327	13,863

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Don’s DSUs held at<br>December 31, 2019 are valued at $909,801 and represent 4.5x the board member retainer of $200,000.
2019 Voting results
---	---	---
	90.9% votes for	9.1% votes withheld
2020 MANAGEMENT PROXY CIRCULAR      21
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Anne McLellan
---

Age: 69

Edmonton, AB

Canadian

Director since: 2006

Independent

Key skills and experience

•	Board / corporate governance
•	Stakeholder relations / government / public policy
---	---
•	Legal / regulatory
---	---
•	Human resources and executive compensation
---	---
•	Enterprise leadership
---	---

Anne is a lawyer andcorporate director and brings a rich and broad perspective on business and governance to Cameco’s board through her work experience and distinguished career in public service and higher education in Canada, including as chair of the nominating,corporate governance and risk committee. Anne held a number of ministerial portfolios and also served as former deputy prime minister of Canada.

The Honourable Anne McLellan is a senior advisor at the national law firm Bennett Jones LLP and has served as the Chancellor of Dalhousie University since May 2015. She is a former deputy prime minister of Canada and has held several senior cabinet positions, including federal Minister of Natural Resources, Minister of Health, Minister of Justice and Attorney General of Canada, and federal interlocutor of Métis and non-status Indians. She previously served as a distinguished scholar in residence at the University of Alberta in the Alberta Institute for American Studies.

Anne holds a bachelor of arts degree and a law degree from Dalhousie University, and a master of laws degree from King’s College, University of London. In addition to her extensive experience in federal administration and policy, Anne is the board chair of Pearson College and is also the chair of the board for the Institute for Research and Public Policy, a non-partisan think tank based in Montreal. Anne served on the board of the Edmonton Regional Airport Authority, Canada’s fifth largest airport, from 2008 to 2015 where she served as chair of the governance and compensation committee. Anne served as chair of the environment, health, safety and security committee at Agrium Inc. prior to its merger with Potash Corporation of Saskatchewan Inc.

Board and committee membership			2019 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		1 of 1	100%
Human resources and compensation		3 of 4			75%
Nominating, corporate governance and risk (chair)		5 of 5			100%
Other public company boards in past five years
---	---
Nutrien Ltd.* (TSX)	2018 to 2019
*	Anne was a director of Agrium Inc., a predecessor company to Nutrien Ltd., from 2006 to 2017, and<br>served as a director of the newly-formed company following the merger with PotashCorp. from January 2018 to May 2019.
---	---
Securitiesheld
---	---	---	---	---	---	---
Year	Cameco<br> <br>shares	DSUs	Total sharesand DSUs	Market value of  shares and DSUs	Multiple of 2019annual retainer	Share<br><br><br>ownership<br><br><br>guideline<br> <br>compliant^1^
2019	100	52,722	52,822	609,566	3.0x	✓ Yes
2018	100	48,304	48,404	749,294
Change	–	4,418	4,418	(139,728

All values are in US Dollars.

1	For evaluating compliance with Cameco’s share ownership guidelines, Anne’s shares and DSUs<br>held at December 31, 2019 are valued at $1,115,233 and represent 5.6x the board member retainer of $200,000.
2019 Voting results
---	---	---
	94.5% votes for	5.5% votes withheld
22     CAMECO CORPORATION
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2019 Meetings and attendance

We believe that an active board governs more effectively. Directors are expected to attend 100% of board meetings, all of their committee meetings and the annual meeting of shareholders.

Directors can participate by teleconference if they are unable to attend a meeting in person. The board must have a majority of directors in attendance to hold a meeting and transact business.

The table below is a summary of the 2019 meetings and attendance.

	Number of meetings				Overall meeting
	Regular		Special		attendance
Board		7		1	97%
Audit and finance		5			100%
Human resources and compensation		4			95%
Nominating, corporate governance and risk		5			100%
Reserves oversight		2		1	100%
Safety, health and environment		4		1	100%
Total	****	27	****	3	99%

The table below summarizes the meeting attendance for each director in 2019. The independent directors met incamera at each board and committee meeting.

The board chair is a member of each board committee. Ian Bruce attended all committee meetings throughout the year.

Board committees function independently of management, so Tim Gitzel, our president and CEO, is not a member of any board committee. He is invited to attend all committee meetings.

Name	Board meetings			Committee meetings			Total board and committee  meetings
Ian Bruce		8 of 8	100%		22 of 22	100%		30 of 30	100%
Daniel Camus		8 of 8	100%		12 of 12	100%		20 of 20	100%
John Clappison		5 of 5	100%		6 of 6	100%		11 of 11	100%
Donald Deranger		8 of 8	100%		13 of 13	100%		21 of 21	100%
Catherine Gignac		8 of 8	100%		12 of 12	100%		20 of 20	100%
Tim Gitzel		8 of 8	100%					8 of 8	100%
Jim Gowans		7 of 8	88%		13 of 13	100%		20 of 21	95%
Kate Jackson		8 of 8	100%		14 of 14	100%		22 of 22	100%
Don Kayne		7 of 8	88%		12 of 12	100%		19 of 20	95%
Anne McLellan		8 of 8	100%		8 of 9	89%		16 of 17	94%
2020 MANAGEMENT PROXY CIRCULAR      23
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Director development

Our directors are knowledgeable about issues affecting our business, the nuclear industry, governance, compensation, and related matters. We believe that our education program gives them additional knowledge to help effectively oversee our affairs and stay abreast of important developments and issues within the context of our business.

Orientation

Our onboarding and orientation program familiarizes new directors with Cameco, issues facing the company, our strategy, culture and values, and what we expect of individual directors, the board and committees. All new directors receive orientation so they can be fully engaged and contribute to the board and committees in meaningful ways.

New directors receive orientation that includes:

·	a company and board orientation session on the organization, including Cameco’s history,<br>culture and values, strategy and business, director expectations and corporate governance practices
·	a director manual with information about Cameco and the uranium and nuclear industries,<br>including copies of our recent regulatory filings, financial statements, governance documents and key policies
---	---
·	a two-day nuclear industry seminar presented by<br>management, in years when it is offered
---	---
·	round-table discussions with the committee chairs and appropriate management representatives<br>when the new director joins a committee.
---	---

Under the mentorship aspect of our orientation program, we pair each new director with a longer serving director to supplement his or her orientation sessions with real-time ongoing practical support.

All directors can participate in any part of the orientation program. Existing directors who join new committees also attend round table discussions, if required.

Continuing education

The board recognizes the importance of continuing education for directors. Directors enhance their understanding of our business throughout the year by attending:

·	seminars provided by management that cover issues relating to key business decisions,<br>strategic planning and enterprise risks
·	seminars on topics directors request
---	---
·	Cameco-operated facility or other nuclear facility tours
---	---
·	external conferences and seminars
---	---
·	informal social gatherings with senior management.
---	---

The nominating, corporate governance and risk committee is responsible for the board education program, which includes a budget and approval process. Educational needs are identified through a self-assessment questionnaire, in individual meetings with either the chair of the board or the chair of the nominating, corporate governance and risk committee and in board and committee meetings. The corporate secretary maintains a calendar of educational opportunities for the directors that includes information about relevant conferences, webinars and other events.

Management presentations to the board and committees during the year are aimed at expanding the board’s knowledge of the business, the industry and the key risks and opportunities facing Cameco. Interesting published materials are sent to directors or are included in meeting materials as supplemental reading. Directors also enhance their practical knowledge of Cameco’s operations and the nuclear industry through visits to Cameco-operated facilities or other nuclear facilities. In 2019, our directors toured our operations in Port Hope and Cobourg, Ontario and received operational updates from the management teams.

We pay for director education, including the cost to attend conferences or seminars that the board deems appropriate for directors to keep abreast of developments in the uranium and nuclear industries, corporate governance and the best practices relevant to their roles as Cameco directors and their responsibilities on specific committees. Directors attend sessions offered by the Institute of Corporate Directors (ICD), the National Association of Corporate Directors (NACD) and other education providers to stay current on developments in governance and areas relating to their committee responsibilities.

24     CAMECO CORPORATION

Our directors also attended the following continuing education sessions in 2019:

2019 DIRECTOR DEVELOPMENT	PRESENTED/HOSTED BY	ATTENDED BY
Nuclear industry
World nuclear association annual conference	World nuclear association (WNA)	Ian Bruce<br><br><br>Tim Gitzel
World nuclear fuel cycle conference	Nuclear Energy Institute / WNA	Tim Gitzel
CNSC update	Ms. Rumina Velshi, President and Chief executive Officer of the CNSC	All directors
Atomic energy in India presentation	Dr. Dinesh Srivastava, Chief Executive, Nuclear Fuel Complex, Department of Atomic Energy, Government of India	All directors
The next small thing: small modular reactors	Toronto Region Board of Trade<br> <br>Ontario<br>Power Generation (OPG)	Catherine Gignac
Governance
Annual conference: changing our minds, changing our<br>boardrooms	Institute of Corporate Directors (ICD)	Catherine Gignac
Digital transformation	Carnegie Mellon University	Kate Jackson
Political intelligence for boardrooms	ICD	Anne McLellan
Audit and finance
Mining audit committee roundtable	KPMG	Catherine Gignac
Economic and market
Big data: the Canadian opportunity	Ian MacGregor,<br><br><br>Entrepreneur, Writer, Engineer	All directors
Canada India roundtable	Canada India Business Council (C-IBC)<br><br><br>Government of Saskatchewan<br><br><br>Cameco management	Tim Gitzel
Energy conference	Peters & Co.	Ian Bruce
Environmental humanism	Michael Shellenberger, Founder and President, Environmental Progress	All directors
Global energy transition	Robert J. Johnston, Managing Director, Eurasia Group	All directors
Industrial transformation: digital innovation	Deloitte	Kate Jackson
Saskatchewan political landscape update	The Honourable Scott Moe, Premier of Saskatchewan	All directors
Understanding government relations	Prospectors & Developers Association of Canada (PDAC)	Jim Gowans
Risk
IT, machine learning and artificial intelligence	KPMG	Ian Bruce
Mining and metals: ESG risk management and access to<br>capital	Ernst & Young	Catherine Gignac
The real cybersecurity imperative	Corporate Board Member	Kate Jackson
The evolving cyber threat landscape	Corporate Board Member	Kate Jackson
Energy management, technology and customer<br>preferences	Deloitte	Kate Jackson
Disruptive tech summit	Corporate Executive Board	Kate Jackson
Cyber recovery: surviving a digital extinction-level event	Deloitte	Kate Jackson
Mining and operations
Women: Leaders in mining	McKinsey & Company<br><br><br>Women in Mining Canada	Catherine Gignac
Annual progressive mine forum	The Northern Miner	Catherine Gignac
Evaluating projects	PDAC	Jim Gowans
2020 MANAGEMENT PROXY CIRCULAR      25
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Board structure and composition

The independent chair of the board serves a five-year term and is appointed by the independent board members. The roles of chair and CEO have been separate since 2003. Our CEO has primary responsibility for the operational leadership and strategic direction of Cameco, while our independent chair facilitates the board’s independent oversight of management, promotes communication between management and the board, engages with shareholders, and leads the board’s consideration of key governance matters.

The board believes this leadership structure is appropriate because it effectively allocates authority, responsibility, and oversight between management and the independent members of the board.

INDEPENDENT CHAIR	INDEPENDENTBOARD
Ian Bruce currently<br>serves as independent chair of the board. The chair’s key responsibilities include:<br> <br><br><br><br>•  leading, managing and organizing the board consistent<br>with our approach to governance<br> <br><br> <br>•  encouraging high performance and commitment of all directors<br> <br><br><br><br>•  overseeing the board’s strategic focus to ensure<br>that it represents Cameco’s best interests<br> <br><br><br><br>•  helping to set the tone and culture of Cameco<br><br><br><br><br><br>•  overseeing the board’s procedures so it can carry<br>out its work effectively, efficiently and independently of management<br> <br><br><br><br>•  overseeing all board matters so they are properly<br>addressed and brought to resolution as required<br> <br><br><br><br>•  requiring any matters delegated to the board committees<br>to be properly carried out<br> <br><br> <br>•  acting as the liaison between the board and the CEO and providing advice, counsel and mentorship to the CEO<br> <br><br><br><br>•  meeting with shareholders and other stakeholders in<br>consultation with management<br> <br><br> <br>•  participating in the recruitment and orientation of new directors<br> <br><br><br><br>•  ensuring that Cameco provides timely and relevant<br>information and access to other resources to support the board’s work.	•8 of 9 director nominees are independent – except for our CEO Tim Gitzel, all directors are independent<br> <br><br><br><br>•Board tenure limits – we are committed to<br>board refreshment. To strike a balance between retaining directors with deep knowledge of the company, the industry and the key risks and opportunities facing Cameco, the board has set terms limits and a retirement age. The average tenure of the<br>independent directors as a group is 8.25 years<br> <br><br><br><br>•In camera sessions – at each board and<br>committee meeting, the independent directors meet without management present<br> <br><br><br><br>•Independent compensation consultant – the<br>human resources and compensation committee retains a compensation consultant that is independent of the company, our board and management as required by independence standards set for our compensation consultants<br><br><br><br><br><br>•Independent review of board assessments – an<br>independent third-party undertakes a board effectiveness assessment every five years. This review is in addition to annual board, committee, and director assessments<br> <br><br><br><br>•External advisors – each board committee,<br>with approval of the board chair, and individual directors, may engage external advisors at Cameco’s expense to ensure they have access to independent advice.
26     CAMECO CORPORATION
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Skills, attributes and experience

We believe that a board that has certain core attributes and a broad mix of skills and experience is best equipped to oversee our strategic direction, understand issues that can arise with a company of our size and complexity, and make informed decisions.

Core attributes

All of our directors exhibit the following nine attributes:

BUSINESS JUDGMENT	INTEGRITY AND ACCOUNTABILITY	ENGAGEMENT
Track record of<br>leveraging experience and wisdom in making sound strategic and operational business decisions. Demonstrates business acumen and a mindset for risk oversight.	Demonstrates good character and insists<br>on high ethical standards, recognizes and avoids potential and actual conflicts of interest, maintains strict confidentiality, is accountable for board decisions, acts in Cameco’s best interests and maintains public confidence and goodwill of<br>Cameco’s shareholders and other stakeholders.	Actively participates in meetings and<br>develops a strong understanding of Cameco’s business. Demonstrates an information-seeking orientation and knowledge of current issues and trends respecting public companies. Exhibits familiarity<br><br><br>with international, national and local affairs.
COMMITMENT	TEAMWORK	COMMUNICATION
Availability and<br>willingness to travel, attend and contribute to board and committee functions and take on leadership roles as required.	Demonstrates perception, acuity, tact<br>and rapport to build constructive working relationships and dynamics that engender mutual trust, respect and contribution. Demonstrates an orientation toward resolving differences of opinion, forging consensus, reaching solutions and maintains<br>resiliency and composure under difficult circumstances.	Ability to listen carefully, raise<br>questions constructively and encourage and build upon open discussion of key issues.
INDEPENDENT-MINDEDNESS	FINANCIAL LITERACY	RECORD OF ACHIEVEMENT
Willingness to<br>formulate or maintain one’s own views and to challenge the prevailing opinion.	Ability to read and understand a set of<br>financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by Cameco’s financial statements.<br>Knowledge of IFRS and an understanding of internal controls and procedures for financial reporting.	Has a history and reputation of<br>achievement that demonstrates the ability to perform at the<br> <br>highest level and that reflects high standards for one’s self and for<br>others.

Competency matrix

The board uses a competency matrix to assess composition and ensure it has an appropriate mix of skills and competencies to govern effectively and be a strategic resource for Cameco. The nominating, corporate governance and risk committee reviews director competencies every year to ensure they continue to meet Cameco’s needs.

Each director completes an annual assessment of his or her competencies following detailed guidelines. Directors are expected to assess themselves as having expert knowledge, strong knowledge, or basic knowledge on each competency. The nominating, corporate governance and risk committee chair or the board chair reviews each director’s assessment with him or her and the committee reviews the results for consistency.

2020 MANAGEMENT PROXY CIRCULAR      27

The table below shows the profile of the proposed board, including the categories and descriptions of essential skills and experience and the percentage of nominated directors who have indicated their level of knowledge as expert or strong in each category. Directors’ profiles on pages 14 through 22 set out the key skills and experience that each director brings to the board.

Skills andexperience	Directors with<br> <br>expert or strong<br> <br>knowledge
Board / corporate governance<br><br><br>Prior or current director of a major organization with mature governance practices	9<br><br><br>(100%)
International<br><br><br>Experience with, or strong understanding of, international operations, economics, commodity trading and geopolitics, preferably<br>in countries or regions where we have or are developing operations
Investor relations<br><br><br>Experience with, or strong understanding of, the perspectives of major, long-term and other investors, capital markets, and the<br>investment community, both domestically and internationally, and in shareholder engagement
Risk oversight<br><br><br>Experience in risk governance, including monitoring both strategic and operational / compliance risks
Safety, health and environment / sustainability<br><br><br>Experience in, or strong understanding of, leading safety, health and environmental practices, associated risks and regulatory<br>requirements, and in sound corporate responsibility and sustainable development practices, advocacy and reporting
Capital projects<br> <br>Experience overseeing and evaluating large capital<br>projects and in project management	8
Enterprise leadership<br><br><br>Experience, whether as a prior or current CEO or senior officer or otherwise, of a large public company or major organization<br>with a track record of value creation and successful implementation of strategic direction
Human resources and executive compensation<br><br><br>Thorough understanding of executive compensation, the oversight of succession planning, talent development and retention, and<br>pension programs
Investments / mergers and acquisitions<br><br><br>Experience in the field of investment banking or with mergers and acquisitions, evaluation of investment strategy, and capital<br>allocation, structure and markets
Stakeholder relations / government / public policy<br><br><br>Experience in, or a strong understanding of, the workings of government and public policy both domestically and internationally,<br>and in stakeholder engagement or management
Legal / regulatory<br><br><br>Experience ensuring compliance with laws, regulations and business rules
Uranium / nuclear<br> <br>Strong knowledge of markets, competitors, business issues and imperatives,<br>and the domestic and international regulatory environment
Financial acumen<br> <br>Experience, whether as a professional accountant, CFO or otherwise, in<br>financial accounting and reporting, including internal controls, IFRS, evaluation of financial statements and corporate finance	7
Mining, exploration and operations<br><br><br>Experience with a leading mining or resource company with reserves, technology, exploration and operations expertise	6
Operational excellence<br> <br>Experience in a complex chemical or nuclear operating environment,<br>creating and maintaining a culture focused on safety, the environment and operational excellence
28     CAMECO CORPORATION
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Diversity

A board with a mix of diverse skills, backgrounds, experience, gender and age, that also reflects the evolving demographics and geographic areas where we carry out business, is important for sound decision-making and good governance.

The board has a formal written diversity policy, which was most recently amended in 2018. The amendments included an increase in the target level of female representation from 25% to 30%.

The nominating, corporate governance and risk committee reviews board diversity every year, including the policies and appropriate diversity objectives for Cameco. Currently, our policy sets measurable objectives for female, Indigenous, geographic and age representation. While a diverse board is the goal, and is always part of the consideration for nominating directors, measurable objectives for persons with disabilities and members of visible minorities are not currently included in our policy. The board does not have any directors who have self-identified as persons with disabilities or members of visible minorities.

As required under the diversity policy, the committee reviews our progress in achieving these objectives as part of the annual board and committee evaluations and also refers to the objectives when selecting new director candidates.

Gender

The board believes gender diversity is important, and our diversity policy requires at least 30% of directors to be female. We currently have three female directors, representing 33% of the nominated directors.

Indigenous

The board is committed to building long-lasting and trusting relationships with communities where we operate, and a significant portion of Cameco’s operations are in northern Saskatchewan. Our diversity policy requires at least one director to have an Indigenous background and be from Saskatchewan to bring an understanding of the culture, heritage, values, beliefs and rights of the local Indigenous peoples to the board. We have one Indigenous director.

Geographic

The board also believes it is important to have directors with experience living or working in jurisdictions where<br>we operate or do business. Our diversity policy requires the board to have directors with extensive experience in geographical areas where Cameco has or anticipates having significant business interests. Don Kayne was appointed to the board in<br>January 2016, and brings extensive experience in the emerging Asian markets, including China. Kate Jackson was appointed to the board in January 2017 and brings a deep knowledge of the US nuclear industry.<br><br><br><br> <br>Our board is subject to, and complies with, the terms of the InvestmentCanada Act and the Uranium Non-Resident Ownership Policy, which require at least two-thirds of our directors to be Canadian citizens, and the CBCA, which<br>requires at least half of our directors to be Canadian residents.
Age<br> <br><br><br><br>While the board recognizes the correlation between age and experience, it believes that directors of different ages bring a wider range of<br>viewpoints. Our diversity policy requires the board to represent a range of ages.
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2020 MANAGEMENT PROXY CIRCULAR      29
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Governance at Cameco
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We believe that sound governance is the **** foundation for strong corporate performance. This section tells you about our corporate governance principles and practices. We have also included a section that discusses our approach to ESG matters.

The nominating, corporate governance and risk committee ensures our governance policies and practices are sound and support the board in carrying out its duties. The committee monitors changing regulations and emerging best practices. The committee reviews our corporate governance guidelines annually and the board approves any changes as appropriate.

Where to find it
How the board operates		31
•	Role of the board	31
•	Our expectations of directors	35
•	Board succession	36
Our governance principles		38
Board committees		42
Our approach to ESG matters		48
•	Sustainability	48
•	Workplace diversity and inclusion	49
•	How we are doing	51
•	Governance	51
•	Targets and metrics	52

KEY ELEMENTS OF OURCORPORATE GOVERNANCE

Independent board. Eight of our nine nominated directors (89%) are independent	✓
Non-executive chair leads the board. We maintain separate chair and CEO<br>positions and have had a non-executive, independent chair of the board since 2003	✓****
Share ownership. We require our directors and executives to own shares, or have an equity interest, in Cameco to align their interests with those of our shareholders and share ownership is disclosed	✓
Majority voting for directors. The board adopted a majority voting policy in 2006	✓
Strong risk oversight. The board and committees oversee our risk management program and strategic, financial and operational risks	✓
Formal assessment process. The directors assess the board, committees and individual director performance	✓
Independent third-party review. The director assessment process includes an independent third-party effectiveness assessment every five years	✓
Serving on other boards. We limit the number of other public company boards our directors can serve on, and serve on together	✓
Board refreshment, director recruitment and board succession. We have term limits and a retirement policy for directors and have added two new directors in the past four years	✓
Diverse board. Our board has a diverse mix of skills, background and experience and 33% of this year’s director nominees are female	✓
Independent advice. Board committees have full authority to retain independent advisors to help them carry out their duties and responsibilities	✓
Code of conduct and ethics. Directors, officers and employees must comply with our code of conduct and confirm their compliance every year	✓
Long-standing shareholder engagement. We communicate openly with shareholders and other stakeholders	✓
Say on pay. We have held an advisory vote on our approach to executive compensation every year since 2010	✓
No slate voting. Directors are individually elected	x
No overboarding of directors. No director sits on more than three other public company boards	x
No stock option awards for directors.	x
30     CAMECO CORPORATION
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How the board operates

The board is responsible for overseeing management and our strategy and business affairs. Its goal is to ensure we operate as a successful business, optimizing financial returns while effectively managing risk.

The board encourages open dialogue and works within a climate of respect, trust and candour. The board fulfills its duties by:

•	maintaining a governance framework that establishes broad areas of responsibility and has<br>appropriate checks and balances for effective decision-making and approvals
•	making decisions that set the tone, character and strategic direction for Cameco
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•	approving the vision and value statements and enterprise-level policies developed by<br>management
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•	regularly monitoring management, including its leadership, recommendations, decisions and<br>execution of strategies to ensure that they carry out their responsibilities and deliver value.
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The board carries out its responsibilities directly and through its five standing committees. This provides proper oversight and accountability for specific aspects of governance, risk and Cameco’s business activities and affairs, and frees up the board to focus more on our strategic priorities, broader oversight of enterprise risk and other matters (see Role of the board below and Board committees starting on page 42).

The board and committees meet in camera without management present at all meetings, including those held by teleconference.

Role of the board

The company articles require our board to have between three and 15 directors. The board has decided that nine directors are to be elected at this year’s annual meeting.

Mandate

The board has a formal mandate (see Appendix B) that lists its specific duties and responsibilities including the following:

•	selecting, evaluating and, if necessary, terminating the CEO
•	assessing the integrity of the executive officers and ensuring there is a culture of<br>integrity throughout Cameco
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•	strategic planning and monitoring our performance against the plan
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•	succession planning and monitoring management’s performance and compensation
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•	approving policies and procedures to manage our risks and overseeing management’s<br>efforts to mitigate material risks.
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The board reviews its mandate annually. Each board committee has a mandate that lists the responsibilities and duties of the committee and chair (effectively setting out the committee chairs’ position descriptions) (see Board committees beginning on page 42).

Overseeing the CEO

The CEO is appointed by the board and is responsible for managing Cameco’s affairs. This includes articulating our vision, focusing on creating value, and developing and implementing a strategic plan that will help Cameco achieve its corporate vision.

Our annual objectives become the CEO’s mandate from year to year, and they include specific, quantifiable goals. The CEO’s objectives are reviewed by the human resources and compensation committee and approved by the board. The CEO is accountable to the board and committees, and a review of the CEO’s performance is conducted every year and includes assessment and feedback from all directors. The human resources and compensation committee reviews and discusses the results of the assessment, followed by a discussion with the board. Then the board chair and/or the chair of the human resources and compensation committee meet with the CEO to discuss the results.

2020 MANAGEMENT PROXY CIRCULAR      31

The board has established clear limits of authority for the CEO, and these are described in our delegation of financial authority policy. The board must approve several kinds of decisions, including:

•	operating expenditures that exceed the total operating budget by more than 10%
•	unbudgeted project expenditures over $10 million per transaction, or over<br>$50 million in total per year
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•	cost overruns on budgeted project expenditures that are more than $15 million per<br>transaction, or over $50 million in total per year
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•	any acquisition or disposition of assets over $10 million per transaction, or over<br>$50 million in total per year.
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The CEO position description is available on our website (cameco.com/about/governance/ceos-role).

Strategic planning

Oversight and guidance on Cameco’s strategy is one of the principal roles of the board. Cameco’s board collaborates with management on the planning, progress and fulfillment of our strategic goals and is actively involved in the strategic planning process.

The board sets aside the majority of its time at each meeting to discuss strategic matters with management and monitor progress on the company’s strategic plan. Board members discuss and analyze the main risks facing the business, strategic issues, competitive developments and corporate opportunities. The board also discusses possible adjustments to the strategic plan in light of our progress and the current business environment.

The board measures success and fulfillment of our strategic plan by assessing our performance results against the annual corporate objectives. The board committees are also involved in the strategic planning process.

Our strategic focus is on preserving the value of our lowest cost assets, maintaining a strong balance sheet, protecting and extending the value of our contract portfolio and on efficiently managing the company in a low price environment. In 2019, these strategic actions resulted in generation of $527 million in cash from operations, retirement of one-third, $500 million, of our outstanding debt, and a year-end balance of $1.1 billion in cash on our balance sheet.

Risk

The board is responsible for overseeing risk through the nominating, corporate governance and risk committee, and for overseeing management’s implementation of appropriate risk management processes and controls. Time is dedicated to risk identification, management, and reporting at board and committee meetings. The board has a strategy session at every regular meeting to consider strategic risks, which include risks to the key assumptions of our strategy. Throughout 2019, the board spent a significant amount of time considering geopolitical risk and market risk in light of the uncertainty of global trade matters and the uranium market outlook. The board also spent time discussing ESG and climate risks.

Management consults with the board on enhancing its enterprise risk oversight practices, processes and controls. In 2019, the enterprise risk management (ERM) group continued to focus on enhancing the risk identification, management and reporting processes across the organization. Key performance indicators (KPIs) were established and are tracked to monitor progress against the program objectives. Cross-functional sharing of risk identification and mitigation strategies across the company was undertaken by management’s risk working group who meet regularly throughout the year. Risks identified throughout the organization are assessed and categorized as either functional, tactical or strategic risks.

Functional risks – risks that are considered preventable, and are identifiable and quantifiable, with little to no direct strategic benefit. Board committees are assigned oversight of these risks, and receive updates on the effectiveness of the controls mitigating those risks.

Tactical risks – risks that could threaten Cameco’s medium-term objectives. They may be external and outcomes are identifiable, but uncertainty makes them difficult to assess. These risks are also assigned to the board committees and regular updates are provided, particularly if risks change or emerging issues arise.

Strategic risks – risks that threaten the key assumptions to our strategy. They are almost always external and outcomes can vary and are difficult to quantify. Board oversight and reporting is required for these strategic risks like intolerable uranium price changes and market fundamentals, regulatory impedance, concentration of supply with state-owned enterprises, global geopolitical uncertainty, and loss of stakeholder support for our operations.

32     CAMECO CORPORATION

The table below shows the allocation of tactical and functional risks among the five committees. You can read about the board committees beginning on page 42 and compensation risk on page 55.

Committee risk responsibilities
Audit<br><br><br>and finance	Human resources and compensation	Nominating, corporate governance and risk	Reserves<br> <br>oversight	Safety, health and environment
Oversees financial risks, such as foreign currency, tax, and counterparty and credit<br>exposure<br> <br>risks	Oversees compensation, talent management, succession, and<br><br><br>cyber-security risks	Oversees governance risks	Oversees the estimating of our mineral reserves and risks related to achieving economic value from our assets	Oversees safety, health and environmental risks related to our operations

Our annual information form and annual report include more information about the risks relating to Cameco. The 2019 AIF and the 2019 annual report are available on our website (cameco.com) and on SEDAR (sedar.com).

Risk Management

Our strategic planning and budgeting process includes management’s decisions to accept, mitigate, or transfer identified risks. Employees throughout the company take ownership of the risks specific to their area, and are responsible for developing and implementing the controls to manage and re-assess risk, including ESG risks. Oversight of all risk factors relating to ESG matters is a core function of the board. Our ERM framework captures emerging and evolving risk factors in these areas. For an overview of our approach to ESG matters see page 48.

Our risk policy sets out a broad, systematic approach to identifying, assessing, reporting and managing the significant risks we face in our business and operations. It is reviewed annually to ensure that it continues to meet our needs. Cameco’s ERM program involves all aspects of our business and follows the framework of ISO 31000: Risk Management – Guidelines. We use a common risk matrix throughout the company and consider any risk to be an enterprise risk if it has the potential to significantly affect our ability to achieve our corporate objectives or strategic plan. As part of the annual risk review process, management determines the top risks for monitoring and reporting on over the next year. Management also reviews monthly updates on the company’s progress in managing these top risks.

Internal controls

The board and committees are responsible for monitoring the integrity of our internal controls and management information systems.

The audit and finance committee oversees the internal controls, including controls over accounting and financial reporting systems, and receives regular reports on internal controls from management. This oversight provides reasonable assurance of the reliability of our financial information and the safeguarding of assets.

The internal auditor reports directly to the audit and finance committee chair and updates the committee quarterly, while the CFO makes quarterly presentations on our financial results and forecasts to the audit and finance committee and the board.

Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting to provide reasonable assurance that public reporting of our financial information is reliable and accurate, that our transactions are appropriately accounted for, and that our assets are adequately safeguarded. Management evaluates the effectiveness of our system of internal control over financial reporting.

Succession planning and leadership development

The board oversees succession planning to ensure we have a pool of strong, diverse candidates for senior management positions, and that we nurture talent and attract and retain key people for our long-term success.

Our leadership development focuses on building advanced competencies throughout the organization, identifying high-potential employees and preparing them to take on executive officer roles in the future. The composition of our senior management team is a direct result of this approach.

2020 MANAGEMENT PROXY CIRCULAR      33

The human resources and compensation committee reviews succession planning for senior management and involves the audit and finance committee in reviewing the succession plan for the CFO, controller and senior finance and audit roles.

The board reviews the succession plans and has the opportunity to meet high-potential employees through board presentations and informal social gatherings, such as board events/dinners and site visits.

Board, committee and director assessments

The nominating, corporate governance and risk committee oversees an annual performance and effectiveness assessment of the board, committees, the CEO and individual directors. We use questionnaires for the annual process and an independent third-party assesses the board, committees and directors every five years.

The assessments are administered confidentially and questions are formulated to support open and meaningful feedback on the board’s effectiveness and its proficiency in providing oversight and guidance on Cameco’s affairs. Assessments typically cover the operation of the board, the adequacy of materials provided to directors, board meeting structure, agenda planning, the strategic direction and process, and the board’s overall oversight of the company’s affairs.

The results are used to assess the board, the CEO, the composition of the committees, meeting effectiveness and the assessment framework, identify any gaps in skills and experience to ensure that the board is making the best use of each director’s expertise, and other aspects to enhance board performance. Board assessment results are shared with all board members and committee assessment results are shared with the committee members.

Directors also complete a self-assessment of their skills, performance and relevant experience. One-on-one interviews facilitate a discussion about capacity and commitment to the board and education opportunities. The interviews allow directors to give candid feedback about any issues or concerns relating to their performance, the performance of their peers, or the functioning of the board.

Updates on priorities, action plans and improvement opportunities are identified and discussed at the board and committee levels, and action plans are developed, as required. The effectiveness evaluation is an ongoing, dynamic part of the functioning of the board and its committees.

FEEDBACK	ANALYSIS	OUTCOMES
Feedback is collected through<br>questionnaires and through one-on-one meetings between either the board chair or the chair of the nominating, corporate governance and risk committee and the<br>directors.<br> <br><br> <br>The board is evaluated by all directors.<br><br><br><br> <br>The board chair is evaluated by all directors, including the<br>CEO.<br> <br><br> <br>The committees and committee chairs are evaluated by<br>committee members.<br> <br><br> <br>Each independent director completes a<br>self-assessment.<br> <br><br> <br>The CEO is evaluated by all non-executive directors.	The board and nominating, corporate<br>governance and risk committee review the board report.<br> <br><br> <br>The<br>nominating, corporate governance and risk committee chair reviews the board chair report.<br> <br><br><br><br>The applicable committees review the committee reports.<br> <br><br><br><br>The board chair and the chair of the nominating, corporate governance and risk committee review the committee chair reports and the independent<br>director reports.<br> <br><br> <br>The board chair and the chair of the human<br>resources and compensation committee review the CEO report and meet with the CEO to discuss. The board and the human resources and compensation committee discuss the CEO report.	Priorities and action plans are<br>developed for the board, the board chair, the committees, and the committee chairs, as required.<br> <br><br><br><br>Development opportunities are identified, as required, for each director.
34     CAMECO CORPORATION
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Third-party board effectiveness assessment

An independent third-party board effectiveness assessment was conducted in 2017. It was carried out by Patrick O’Callaghan and included an assessment of the board chair, the board, the committees, and the committee chairs. The consultant’s report findings indicated that Cameco has strong and effective board practices and is structured well to function independently from management. The next third-party board effectiveness assessment is scheduled for 2022.

Our expectations of directors

We expect each member of the board to act honestly and in good faith, and to exercise business judgment that is in Cameco’s best interest. We expect directors to bring their skills, experience and functional expertise to the board and to draw on a variety of resources to support their decision-making, including materials prepared by management, their own research and business experience, independently-prepared media reports on Cameco and the industry, and knowledge gained from serving on other boards.

We also expect each director to:

•	comply with our code of conduct and ethics and governance guidelines
•	promptly report any perceived, potential or actual conflicts of interest
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•	develop an understanding of our strategy, business environment, operations, performance,<br>financial position and the markets we operate in
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•	diligently prepare for each board and committee meeting
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•	attend all board meetings, their committee meetings and the annual meeting of shareholders
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•	actively participate in each meeting, and seek clarification from management and outside<br>advisors to fully understand the issues
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•	participate in our board education program
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•	participate in the board, committee and director assessment process.
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Avoiding conflicts of interest

Directors do their best to avoid situations where their interests might conflict with their duty to act in Cameco’s best interest. Each director must promptly report a potential, perceived or actual conflict of interest to the corporate secretary and not participate in any discussions or decisions about the matter.

The corporate secretary maintains a list of issues and potential conflict situations, and monitors them on an ongoing basis. The corporate secretary helps identify when actions may be desirable and consults with legal counsel if necessary to determine whether a director has a conflict.

Serving on other boards

Our directors do not serve on the boards of competitors and cannot join organizations or groups that may have adverse interests, unless they have the board’s permission. Our governance guidelines state that a director who is an active CEO can serve on a maximum of three public company boards, including their own board and Cameco’s board. Our CEO can only serve on one other board with the consent of the Cameco board. Other directors can serve on a maximum of five public company boards, including Cameco’s board. Members of the audit and finance committee cannot serve on the audit committees of more than two additional public companies without the board’s approval. As of March 10, 2020, Jim Gowans exceeds the limits identified above. He is temporarily serving as interim president, CEO and a director of Trilogy Metals Inc. and the interim president and CEO role is expected to end within a short time frame. For more information about Jim Gowans, please see his director profile on page 19.

The board conducted a detailed review of these limits in 2016 and determined that they continue to be appropriate to avoid overboarding by directors. The chair of the board or the nominating, corporate governance and risk committee discusses board memberships with each director during his or her annual interview, including his or her commitment to the Cameco board and capacity to handle the board and committee workload.

Directors must advise the chair of the board, the chair of the nominating, corporate governance and risk committee, the CEO and the corporate secretary if they are considering a directorship with another public company. A director can temporarily exceed the limit by one directorship if he or she declares an intention to resign from, or not stand for re-election to, at least one other board as of that company’s next annual general meeting.

2020 MANAGEMENT PROXY CIRCULAR      35

Board interlocks

A board interlock is when directors serve together on another board. We do not currently have any board interlocks. We do not allow more than two directors to serve together on another public company board nor do we allow directors to serve together on more than two other public company boards.

Change in position

If a director’s principal occupation or business association changes substantially, the director is required to promptly offer his or her resignation to the board chair, and the board will decide whether or not to accept it.

Board succession

The board recognizes the need to balance the benefit of experience and the need for new perspectives. The nominating, corporate governance and risk committee is responsible for ensuring that the board’s succession planning process and policy on tenure and retirement provide for board refreshment that meets our ongoing needs. The committee is also responsible for the annual review of board composition and the nomination process.

Term limits and retirement

Directors are not nominated for election at an annual meeting after they complete 15 years of continuous service or turn 72, whichever is earlier. In exceptional circumstances, if it is in Cameco’s best interest, the board has the discretion to nominate a director for re-election for an additional one-year term after age 72 or 15 years of service. The CEO typically resigns from the board when he or she retires from Cameco.

Board chair succession

The chair of nominating, corporate governance and risk committee leads the process for selecting the chair of the board. The process is based on an assessment of specific competencies, interviews with individual directors and principles such as fairness and transparency, consensus building, free and unfettered discussion, confidentiality and the importance of the chair/CEO relationship. The term for serving as board chair is five years regardless of the director’s age or years of service.

Director recruitment

The nominating, corporate governance and risk committee is responsible for overseeing board succession. It reviews the director competency and attribute matrix regularly to ensure that the board has the right mix of diversity, skills and experience. It also monitors upcoming director retirements to identify specific skills that may be desirable in new recruits.

The committee is responsible for the recruitment process. It keeps an evergreen list of suitable candidates based on their skills, experience, character, integrity, judgment, record of achievement, diversity and other qualities or qualifications that would enhance overall composition and oversight capabilities of our board, and considers any recommendations made by shareholders.

The committee follows established guidelines and procedures for recruiting and selecting the best candidates. An external search firm is usually retained to cast a wide net to bring forward the best candidates. The committee also generally follows a tiered interview process to determine the most suitable candidates. The committee approves the list of candidates to be interviewed, a selection committee (consisting of the chair of the board, committee chair and the CEO) interviews the candidates, and further interviews are conducted by the nominating, corporate governance and risk committee and other committee chairs if necessary.

In 2019, the committee undertook a diligent recruitment process to identify a female director with strong financial acumen. The board expects to appoint a candidate in 2020 following an orientation program, including serving as a board observer for a period of time prior to appointment.

Two directors have joined the board in the last four years, increasing the board’s diversity and broadening its skills in mergers and acquisitions, marketing and sales, operational excellence, and human resources and executive compensation. The new directors also have senior leadership and CEO experience as well as experience in capital projects, the nuclear industry and international business.

36     CAMECO CORPORATION

Nomination process

The nominating, corporate governance and risk committee is responsible for recommending the candidates for nomination on an annual basis. Part of the committee’s process includes reviewing the list of potential conflict situations, as well as a report on actual and potential conflicts of interest, before recommending the director nominees for election by shareholders.

Shareholders may at any time submit to the board the names of individuals for consideration as directors. The committee will consider any submissions when assessing the diversity, skills and experience required on the board to enhance overall composition and oversight capabilities.

Shareholders who collectively own more than 5% of Cameco’s outstanding shares may nominate individuals to serve as directors and have their nominations included in Cameco’s proxy circular for its annual meeting by submitting a shareholder proposal in compliance with the provisions of the CBCA. We did not receive any shareholder proposals for this year’s meeting. The deadline for shareholder proposals for the 2021 annual meeting of shareholders is January 4, 2021.

Our by-laws require shareholders who wish to nominate directors to give advance notice of the nominations. These requirements are intended to provide a transparent, structured and fair process with a view to providing shareholders an opportunity to submit their proxy voting instructions on an informed basis. In accordance with the by-laws, written notice of the nominations must be provided to Cameco’s corporate secretary no later than 30 days and no more than 65 days prior to the date of the annual meeting and must include the information prescribed in the by-laws. Our by-laws are available on our website (cameco.com/about/governance) and are filed on SEDAR (sedar.com).

2020 MANAGEMENT PROXY CIRCULAR      37

Our governance principles

We believe in transparency, integrity and strong stewardship, and are committed to maintaining a strategic focus that elevates the economic value of our assets and respects environmental and social matters for the benefit of all stakeholders.

Shareholder engagement

We recognize the importance of strong and consistent engagement with shareholders. We communicate openly with shareholders and other key stakeholders. Our goal is to provide shareholders with clear information about our governance and compensation practices, and to continuously improve our practices and our disclosure.

As part of our long-standing objective of open communication, the board invites shareholders and other stakeholders to engage with board representatives by contacting the corporate secretary at corporate_secretary@cameco.com, or by writing to us at our head office address below.

We receive feedback from shareholders through one-on-one or group meetings with the chair of the board and other directors and/or members of management, as needed. We reply promptly to shareholder concerns and take appropriate action. Shareholders, employees and other interested parties can confidentially write to the chair of the board, the committee chairs or the independent directors as a group.

Send your sealed envelope to our corporate office:

Cameco Corporation<br> <br>2121-11th Street West<br> <br>Saskatoon, SK S7M 1J3<br><br><br><br> <br>Private and strictly confidential<br><br><br>Attention – Chair of the board of directors	You can use this address to write to the chair of the audit and finance committee or the human resources and compensation committee – make sure you mark on the envelope to whom you are<br>directing the letter. Envelopes will be delivered unopened to the appropriate party.

Disclosure

We are accountable to our shareholders, employees and the public and we demonstrate our commitment to them through sound governance practices, open and timely public disclosure, and by providing complete, accurate and balanced information in our disclosure documents.

The audit and finance committee is responsible for overseeing our review of our disclosure controls and procedures once a year and recommending any significant changes to the board for approval.

Our disclosure committee includes members of senior management and is responsible for:

•	reviewing all news releases and public filings containing material information prior to their<br>release
•	evaluating the design and effectiveness of our disclosure controls and procedures to make<br>sure they continue to provide reasonable assurance that information is gathered promptly and accurately, so we can develop appropriate public disclosure that complies with legal requirements
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•	providing regular updates on our public disclosure to the audit and finance committee.
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Each board committee reviews the material public disclosure relevant to its mandate before the board considers it for approval:

•	the audit and finance committee reviews the annual and interim financial statements,<br>management’s discussion and analysis (MD&A) and related news releases
•	the safety, health and environment committee reviews the sustainable development report
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•	the reserves oversight committee reviews the reserve and resource estimates and technical<br>reports
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•	the human resources and compensation committee and the nominating, corporate governance and<br>risk committee review this management proxy circular.
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The board also reviews and approves the following publicly-filed documents:

•	prospectuses
•	annual information forms
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•	US Form 40-F filings
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•	other disclosure documents that must be approved by the directors according to securities<br>laws, securities regulations or stock exchange rules.
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38     CAMECO CORPORATION
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The CEO and the CFO meet regularly with investment analysts and institutional investors. Our website (cameco.com) has information for shareholders, investment analysts, media and the public. Our Investor Relations department also provides information to shareholders and responds to general questions or concerns.

You can contact our Investor Relations department by:

Phone:	306.956.6340
Fax:	306.956.6318
Email:	go to the Contact **** section of our website and complete the email form.

Engagement activities

Our engagement activities include the following:

•	senior management holds quarterly conference calls and webcasts with the investor community<br>to review the trends we are seeing in the market and progress on our strategy
•	senior management also holds conference calls and webcasts with the investor community when<br>required to address other material company matters
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•	members of the management team speak at industry and investor conferences about<br>publicly-disclosed information on our business and operations
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•	senior management and our investor relations group engage with investors throughout the year<br>to provide public information on our business
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•	senior management conducted meetings following our 2019 annual meeting with Glass<br>Lewis & Co., LLC and Institutional Shareholder Services (ISS), two proxy advisory firms that provide voting and other governance advice to institutional investors, to maintain a dialogue on governance and compensation matters
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•	senior management engaged with investors regarding questions on ESG-related matters
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•	we have held a ‘say on pay’ advisory vote on our approach to executive compensation<br>every year since 2010, and have consistently received strong approval ratings (over 92% in 2019) (see page 6 for details about this year’s advisory vote).
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Senior management also issues news releases throughout the year to report material information about Cameco, consistent with our commitment to communicating openly and on a timely basis (see page 38 to read more about our disclosure practices).

Say on pay

We have held an advisory vote on ‘say on pay’ every year since we introduced it in 2010 and have received over 90% support in the last two years. We monitor developments in executive compensation and evolving best practices to make sure our programs and decisions are appropriate. We do a risk assessment of our executive compensation program every year and review our compensation programs and governance to reflect changes in the market and best practices and changes in our business strategy.

You can write to the board or committee chair about your views on executive compensation.

Voting results

We promptly disclose the voting results of our shareholder meetings. We will disclose the voting results on the items of business at this year’s meeting in our report on the 2020 annual meeting, which will be released shortly after the meeting. Go to our website (cameco.com/invest/2020-annual-meeting) or on SEDAR (sedar.com) following the meeting to see the voting results.

2020 MANAGEMENT PROXY CIRCULAR      39

Shareholder proposals

Shareholders who meet eligibility requirements under the CBCA can submit a shareholder proposal as an item of business for our annual shareholder meeting in 2021. Proposals must be submitted to our corporate secretary by January 4, 2021 for next year’s annual meeting. Shareholder proposals that comply with the CBCA requirements and are received by that date will be printed in the management proxy circular we send to shareholders next spring along with our responses.

Separate chair and CEO positions

We believe that separating the chair and CEO roles provides stronger leadership, fosters more effective decision-making, avoids conflicts of interest, and allows for more effective oversight and the ability to hold management accountable for the company’s activities (you can read more about the independent chair on page 26). The chair and CEO positions each have a formal position description that describes the terms and responsibilities of the role. These are available on our website (cameco.com/about/governance).

Accessing our governance and other regulatory disclosure

Our key governance documents are available on our website (cameco.com/about/governance):

•	articles and bylaws
•	our governance framework
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•	our governance guidelines
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•	our code of conduct and ethics
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•	the mandates of the board and its committees
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•	definition of independent director and related definitions
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•	board diversity policy
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•	board education program
---	---
•	position descriptions for the board chair and the CEO
---	---
•	director and executive share ownership guidelines
---	---
•	executive incentive compensation recoupment policy.
---	---

Our publicly-filed disclosure documents are also available on our website (cameco.com), and on SEDAR (sedar.com) and EDGAR (sec.gov/edgar.shtml), including:

•	2019 annual report, which includes financial information about us, as provided in the audited<br>financial statements and MD&A for our most recently completed financial year
•	subsequent quarterly reports
---	---
•	our most recent annual information form, particularly the Governance – About theaudit and finance committee section which has additional information about our audit and finance committee, the audit and finance committee mandate in Appendix A, and other information required by Canadian securities regulators
---	---
•	our code of conduct and ethics, articles of incorporation and the bylaws, and the board<br>committee mandates
---	---
•	our voting results following the annual meeting of shareholders.
---	---

Filings with the US Securities and Exchange Commission (SEC) are available under company filings on the SEC website (sec.gov). You can request free printed copies of these documents by writing to the corporate secretary at corporate_secretary@cameco.com, or at Cameco Corporation, 2121-11^th^ Street West, Saskatoon, SK S7M 1J3.

Code of conduct and ethics

Our code of conduct and ethics sets out our principles and guidelines for ethical behaviour under the law, within Cameco, with our shareholders, our communities and the public, and with our customers, partners, contractors, suppliers and competitors.

We review the code every year and promptly communicate any changes. All new employees and board members receive training on the code and are required to certify that they will comply with the code when they join the company or the board. Directors and employees declare any business or personal interests that would create a conflict of interest, and plans are put in place to mitigate any potential conflicts.

40     CAMECO CORPORATION

Directors, officers and employees who have senior management responsibilities or work in supply chain management, internal audit, investor relations, finance/treasury/tax, business technology services, marketing, corporate development, legal, human resources and our executive offices review the code and complete a declaration form every year. The review includes on-line training on key issues such as fraud prevention, privacy matters, acceptable gifts and invitations from vendors, and respectful workplace matters**.**

Employees are encouraged to discuss any concerns or potential violations of the code with their supervisor, manager or human resources representative, or notify the legal or internal audit departments, or any member of the executive. If they are uncomfortable doing so, or if they are not satisfied with the action taken to address their concerns, anyone, at any time, can report a concern or violation of the code confidentially and anonymously online, by phone or by mail through our ethics (whistleblower) hotline.

Our conduct and ethics committee reviews concerns and investigates ethics-related matters under the direction of the audit and finance committee. The audit and finance committee reviews concerns relating to senior management and directors, and reports to the board on Cameco’s compliance with the code.

Compliance

We are a public company and our shares trade on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). We comply with applicable corporate governance guidelines and requirements in Canada and the United States, including:

•	the corporate governance standards that apply to Canadian companies listed on the TSX
•	the requirements of the Sarbanes-Oxley Act of 2002 (SOx)
---	---
•	the NYSE corporate governance standards that apply to foreign private issuers registered with<br>the Securities and Exchange Commission (SEC) in the US.
---	---

We also voluntarily comply with most of the NYSE corporate governance standards that apply to US issuers, with the following exceptions:

•	shareholder approval of equity compensation plans – we comply with the TSX rules,<br>which require shareholders to approve equity compensation plans only if they involve newly issued securities. The NYSE standards require shareholders to approve the plans and any material revisions, whether or not the securities issued under the<br>plans are newly issued or purchased on the open market, subject to a few limited exceptions
•	appointment of auditors – we comply with the CBCA, which requires that the<br>auditors be appointed by the shareholders at the company’s annual meeting. The NYSE standards require the audit committee be directly responsible for the appointment of any registered accounting firm engaged for the purpose of preparing or<br>issuing an audit report or performing other audit, review or attest services. However, there is an exception for foreign private issuers that are required under a home country law to have auditors selected according to home country standards. Our<br>audit and finance committee is responsible for evaluating the auditors and recommending the appointment of the auditors to the board, who recommends the appointment to shareholders.
---	---

Governance guidelines

The board has formal governance guidelines that set out our approach to governance and the board’s governance role and practices. The guidelines ensure we comply with the legal requirements and standards listed above, conduct ourselves in the best interests of Cameco and meet industry best practices. The guidelines are reviewed and updated regularly.

Independence

We believe that a substantial majority of our directors must be independent for the board to be effective and that the audit and finance committee, human resources and compensation committee, and nominating, corporate governance and risk committee must be 100% independent. The majority of our directors are unrelated to Cameco.

A director is independent if he or she does not have a direct or indirect material relationship with us. A relationship is material if it could reasonably interfere with a director’s ability to make independent decisions, regardless of any other association he or she may have. Our independence criteria meet the standards of the Canadian Securities Administrators as set out in Multilateral Instrument 52-110 – Audit Committees, National Policy 58-201 – Corporate Governance Guidelines and the NYSE corporate governance standards, including the NYSE standards on the independence of human resources committee members introduced in 2013.

We review our independence criteria and director status every year, and you can find our complete definition of independence on our website (cameco.com/about/governance/governance-guidelines).

2020 MANAGEMENT PROXY CIRCULAR      41

Board committees

The board carries out its responsibilities directly and through its five standing committees. Committee work fulfills a specific governance role and supports our four measures of success. The committee structure ensures directors can devote the requisite skills, time and attention to specific matters and supports the board in effectively overseeing our business and affairs and providing sound governance generally.

Each committee sets aside time at each meeting to meet in camera, and reports the business of its meetings to the board in a timely manner.

Committee responsibilities

Each board committee was formed based on the need for detailed oversight in key areas. The specific risks assigned to each committee for oversight are addressed in the work plan developed annually that drives its priorities and activities. Each committee:

•	has a mandate outlining the responsibilities and duties of the committee and its chair
•	reviews its mandate annually
---	---
•	reviews its performance against the committee’s mandate.
---	---

Each committee chair is responsible for determining the meeting agenda, how often the committee will meet, the conduct of each meeting, and for chairing their committee meetings, as set out in each committee mandate.

Committee membership

Committee membership is reviewed annually. We strive for periodic rotation of committee members but it is not mandated so that we can benefit from continuity and experience of committee members, as appropriate. Changes are based on the recommendations of the board chair and the chair of the nominating, corporate governance and risk committee.

Committee chair rotation

Our committee chair rotation policy calls for rotating the positions every five years. Changes to the committee chairs and committee memberships are made in a way that balances continuity and the need for fresh perspectives, while recognizing each director’s particular areas of expertise.

Cross-committee attendance

All directors are invited to attend any board committee meeting. Members of the audit and finance committee attend the portion of the human resources and compensation committee meetings on the finance succession plan, which includes the CFO and senior finance personnel.

The chair of the safety, health and environment committee attends the portion of the human resources and compensation committee meeting when it reviews that aspect of our annual corporate performance.

The chair of the reserves oversight committee is a member of the audit and finance committee and reports annually on the company’s annual reserves and resources.

Access to management and outside advisors

The board and committees can invite any member of management, outside advisor or other person to attend their meetings.

Committees can engage outside advisors to assist in carrying out their duties, as authorized by their mandates. Individual directors can also engage outside advisors, as long as they receive approval in advance from the nominating, corporate governance and risk committee. The human resources and compensation committee engaged an independent consultant in 2019.

Committee reports

Committee reports that set out the key responsibilities and 2019 highlights for each committee are set out in the following pages.

42     CAMECO CORPORATION
Audit andfinance committee
---
<br><br><br><br><br> <br><br> <br>Daniel Camus<br><br><br>(chair since May 2019)<br> <br><br><br><br>Ian Bruce<br> <br>CatherineGignac<br> <br>Jim Gowans
---
2019                        <br>                  2019<br><br><br>meetings                       <br> attendance<br> <br><br><br><br>5        100^%^
The committee met separately with the internal auditor and external auditors at every regular<br>meeting.<br> <br><br><br><br>100^%^<br><br><br>Independent and<br> <br>financially<br>literate<br> <br><br> <br>Daniel Camus is the audit and finance committee’s<br>financial expert because he has accounting or related financial expertise and meets the necessary requirements under US securities laws.<br> <br><br><br><br>None of the committee’s members serve on the audit committee of more than two other public companies.
The committee reviewed its mandate and is satisfiedthat it carried out its duties and responsibilities.

Key responsibilities

The audit and finance committee supports the board in fulfilling its oversight responsibilities regarding the integrity of our accounting and financial reporting, the adequacy and effectiveness of our internal controls and disclosure controls, legal, regulatory (excluding safety, health and the environment) and ethical compliance, the independence and performance of our external and internal auditors, oversight of specific risks, and prevention and detection of fraudulent activities and financial oversight.

2019Committee highlights

Financial reporting

•	oversaw the quality and integrity of our accounting and financial reporting processes
•	reviewed and recommended the annual and quarterly financial statements and MD&A and quarterly press releases to the board for approval
---	---

Internal controls

•	reviewed the effectiveness and integrity of our internal control systems and disclosure controls

External audit

•	approved the annual audit plan and the external auditors’ fees, including pre-approval of all services to be provided (see page 5 for details<br>about the external auditor and the fees paid to them in 2019)
•	received regular reports from the external auditors on the audit of our financial statements and the results of their reviews of the unaudited quarterly financial statements
---	---
•	reviewed audit quality indicators
---	---
•	assessed the performance of the external auditors
---	---
•	reviewed the auditor’s qualifications, independence and depth of business and industry knowledge and recommended the appointment of our external auditor for the coming year
---	---
•	regularly met with the external auditor without management present
---	---

Internal audit

•	assessed the internal auditor, reviewed the internal audit mandate, and approved the internal audit plan for the year
•	received regular reports from the internal auditor on the fulfillment of its plan and its recommendations to management
---	---
•	regularly met with the internal auditor without management present
---	---

Compliance

•	reviewed reports about our compliance programs, including the code of conduct and ethics and our global anti-corruption program
•	reviewed related-party transactions
---	---
•	reviewed policies and programs to monitor compliance with legal and regulatory requirements and received and reviewed litigation reports
---	---
•	received briefings and reports on management’s hedging, debt and credit policies and compliance with them
---	---
•	received briefings on significant litigation matters, including the Tokyo Electric Power Company Holdings, Inc. (TEPCO) arbitration
---	---

Risk oversight

•	received reports on enterprise risks that the committee oversees
•	received quarterly updates on the status of mitigation plans pertaining to the risks that the committee oversees (including financial, fraud and other material risks within the<br>committee’s mandate)
---	---
•	monitored the company’s transfer pricing dispute with the CRA, including receipt of regular updates from management
---	---

Financial oversight

•	received and reviewed reports on our insurance program and directors’ and officers’ liability insurance
•	received and reviewed the annual supply chain management report
---	---
•	received and reviewed reports on the company’s funding (including finance and cash flow planning, extending the maturity date of our revolving credit facility and reducing its limit)
---	---
•	received and reviewed reports pertaining to the financial aspects of the company’s operations (including monitoring of care and maintenance spend and retirement of $500 million of<br>our outstanding debt)
---	---
2020<br>MANAGEMENT PROXY CIRCULAR      43
---
Human resources and compensationcommittee
---
<br><br><br><br><br> <br><br> <br>Don Kayne<br><br><br>(chair since May 2018)<br><br><br><br> <br>Ian Bruce<br><br><br>Daniel Camus<br> <br>KateJackson<br> <br>Anne McLellan
---
2019                        <br>                2019<br><br><br>meetings                       <br> attendance<br> <br><br><br><br>4        95^%^
100^%^<br> <br>Independent<br><br><br><br> <br>The committee also has an external consultant who provides independent<br>advice on executive compensation matters. Meridian Compensation Partners (Meridian) has been the committee’s consultant since December 2011, and it has not provided any services to management.
The committee reviewed its mandate and is satisfiedthat it carried out its duties and responsibilities.

Key responsibilities

The human resources and compensation committee supports the board in fulfilling its oversight responsibilities regarding human resource policies, executive compensation, executive succession and development, pension plan governance, and oversight of material risks assigned to the committee.

2019 Committee highlights

A letter from the chair of the human resources and compensation committee begins

on page 62.

Compensation governance

•	monitored compensation trends and emerging issues
•	received and reviewed the annual compensation-related risk report
---	---
•	reviewed ‘say on pay’ results
---	---
•	reviewed, and recommended for approval to the board, changes to features of the long-term incentive plan
---	---
•	selected and managed the committee’s independent compensation consultant, approved its work plan, qualifications and fees, and considered its independence
---	---
•	reviewed the compensation disclosure in this circular
---	---

Executive and director compensation

•	reviewed and recommended to the board approval of executive compensation and incentive plan targets
•	assessed performance against targets
---	---

Succession planning

•	reviewed succession planning with management and oversaw the succession planning process

Risk oversight

•	received reports on enterprise risks that the committee oversees, including a detailed presentation of management’s mitigation of cyber-security risk
•	received quarterly status updates on the mitigation plans pertaining to the risks that the committee oversees (including compensation risk, third-party compensation risk assessments, talent<br>management risk, succession risk, cyber-security risk and other material risks within the committee’s mandate)
---	---
•	reviewed, and recommended to the board for approval, amendments to our people policy
---	---
•	received and reviewed the annual compliance report on labour-related legislation and regulations
---	---
•	considered the risks associated with its compensation programs and concluded that they are not likely to have a material adverse impact on Cameco or its business
---	---

Pension plan governance

•	oversaw pension plan governance and management’s supervision of our pension plan, including updates to our governance documents
44     CAMECO CORPORATION
---
Nominating, corporate governanceand risk committee
---
<br><br><br><br><br> <br><br> <br>Anne McLellan<br><br><br>(chair since May 2016)<br> <br><br><br><br>Ian Bruce<br> <br>DonaldDeranger<br> <br>Catherine Gignac (joined in May 2019)<br><br><br>Kate Jackson
---
2019                        <br>                2019<br><br><br>meetings                       <br> attendance<br> <br><br><br><br>5        100^%^
100%<br><br><br>Independent<br> <br><br><br><br><br> <br>The committee<br><br><br>reviewed its mandate<br> <br>andis satisfied that it<br> <br>carried out its duties<br><br><br>and responsibilities.

Key responsibilities

The nominating, corporate governance and risk committee supports the board in fulfilling its oversight responsibilities by developing and recommending a set of corporate governance principles, identifying and recommending qualified individuals as members of the board and its committees, assessing the effectiveness of the board and committees, and overseeing the risk program.

2019 Committee highlights

Corporate governance

•	oversaw the director selection process
•	monitored governance trends and emerging issues, including the impacts of changes to the CBCA on the board and Cameco
---	---
•	reviewed and recommended to the board approval of revisions to our governance guidelines
---	---
•	reviewed director independence and conflicts of interest
---	---
•	assessed the size, composition, and mandates of the board and board committees, and recommended to the board approval of revisions to mandates
---	---
•	reviewed the competency and attribute matrix
---	---
•	reviewed the board’s diversity policy
---	---
•	oversaw our director education program
---	---
•	reviewed the board budget and recommended its approval to the board
---	---

Risk oversight

•	oversaw our risk program
•	monitored governance-related risks
---	---
•	reviewed, and recommended to the board for approval, amendments to the risk policy
---	---
•	received and reviewed an annual report on security of the board portal
---	---
•	oversaw political donations
---	---

ESG oversight

•	monitored governance trends and emerging issues
•	received updates from the multi-disciplinary working group
---	---
•	received management presentations on discussions with investors on ESG-related matters
---	---

Board and committee assessments

•	oversaw the performance and effectiveness assessment of the board of directors

Governance disclosure

•	reviewed third-party governance ratings
•	reviewed governance disclosure for this management proxy circular
---	---
2020<br>MANAGEMENT PROXY CIRCULAR      45
---
Reservesoversight committee
---
<br><br><br><br><br> <br><br> <br>Catherine Gignac<br><br><br>(chair since May 2015)<br> <br><br><br><br>Ian Bruce<br> <br>DonaldDeranger<br> <br>Jim Gowans<br> <br>Don Kayne
---
2019                        <br>                2019<br><br><br>meetings                       <br> attendance<br> <br><br><br><br>3        100^%^<br><br><br><br> <br>The committee met separately with the leading qualified person at every<br>meeting.
100%<br><br><br>Independent<br> <br><br><br><br><br> <br><br> <br>Thecommittee<br> <br>reviewed its mandate<br> <br>and is satisfied that it<br> <br>carried out its duties<br><br><br>and responsibilities.

Key responsibilities

The reserves oversight committee supports the board in fulfilling its oversight responsibilities regarding estimating and disclosing mineral reserves and resources.

2019 Committee highlights

Estimating mineral reserves and resources

•	confirmed our qualified persons for estimating our mineral reserves and resources
•	performed the due diligence process for the year-end reserves and resources reporting
---	---
•	reviewed management’s annual reserves and resources report and annual reconciliation of reserves to mine production and recommended them to the board for approval
---	---
•	received management reports on internal controls and procedures regarding mineral reserves and resources reporting
---	---

Disclosing mineral reserves and resources

•	monitored industry standards and regulations on estimating and publishing mineral reserves and resources information, and related issues and developments through reports from management
•	received reports from the leading qualified person on the mineral reserves and resources estimates and confirmed that the information has not been restricted or unduly influenced
---	---
•	received confirmation from the leading qualified person and chief operating officer that the information is reliable and that we will publish mineral reserves and resources estimates<br>according to securities laws and regulations that apply to us
---	---
•	received confirmation from the leading qualified person that our disclosure controls for disclosing mineral reserves and resources estimates comply with industry standards
---	---
•	received a presentation on the McArthur River/Key Lake technical report
---	---

Risk oversight

•	received reports on enterprise risks that the committee oversees
•	received status updates on the mitigation plans pertaining to the risks that the committee oversees (including mineral reserves and resources risks and other material risks within the<br>committee’s mandate)
---	---
46     CAMECO CORPORATION
---
Safety, health and environmentcommittee
---
<br><br><br><br><br> <br><br> <br>Jim Gowans<br><br><br>(chair since May 2015)<br><br><br><br> <br>Ian Bruce<br><br><br>Donald Deranger<br> <br>KateJackson<br> <br>Don Kayne
---
2019                        <br>                2019<br><br><br>meetings                       <br> attendance<br> <br><br><br><br>5        100^%^
100%<br><br><br>Independent<br> <br><br><br><br><br> <br><br> <br>Thecommittee<br> <br>reviewed its mandate<br> <br>and is satisfied that it<br> <br>carried out its duties<br><br><br>and responsibilities.

Key responsibilities

The safety, health and environment committee supports the board in fulfilling its oversight responsibilities regarding safety, health and environmental matters.

2019 Committee highlights

Overseeing and assessing policies and management systems

•	oversaw our compliance with all relevant safety, health, environment and quality (SHEQ) legislation and our SHEQ policy and programs
•	received reports on management’s benchmarking of our policies, systems and processes and monitored them against industry best practice
---	---

Monitoring and assessing performance

•	reviewed findings of safety, health and environment (SHE) audits, action plans, and results of investigations into significant events
•	monitored metrics and leading indicators implemented to drive continued improvements to our safety performance
---	---
•	reviewed the annual SHE budget to ensure sufficient funding for compliance
---	---
•	determined the SHEQ objectives and results for executive compensation and related impact
---	---
•	monitored trends, significant events and emerging issues through reports from management
---	---

Risk oversight

•	received reports on enterprise risks that the committee oversees
•	received status updates on the mitigation plans pertaining to the risks that the committee oversees (including safety, health and environment risks and other material risks within the<br>committee’s mandate)
---	---
2020<br>MANAGEMENT PROXY CIRCULAR      47
---

Our approach to ESG matters

Our uranium is used around the world in the generation of safe, carbon-free, affordable, base-load nuclear energy. As we seek to bring the benefits of carbon-free nuclear energy to the world, we will do so in a manner that reflects our values. We are committed to identifying and addressing the environmental, social and governance (ESG) risks and opportunities that we believe may have a significant impact on our ability to add long-term value.

Sustainability: A key part of our strategy, reflecting our values

We view sustainability as an integrated approach to conducting business. We integrate sustainability principles and practices into all stages of our activities, from exploration to decommissioning, including factoring them into our objectives and approach to compensation, our overall corporate strategy, and our day-to-day operations. We adopt established and recognized management system frameworks to guide our integrated approach, which is embedded within ethical business practices and our robust and transparent governance framework. We seek to be transparent with our stakeholders, keeping them updated on the risks and opportunities that we believe may have a significant impact on our ability to add long-term value.

We have a sustainability policy that describes our commitments in this regard. We encourage you to review our sustainability policy at cameco.com/about/governance/policies-programs.

Safety and the environment

We employ an integrated Safety, Health, Environment and Quality (SHEQ) management system that applies to all phases and aspects of our business. The system is governed by one integrated SHEQ policy that recognizes that the safety and health of our workers and the public, protection of the environment, and quality of our processes are the highest priority during all stages of our activities. The policy is supported by multiple corporate SHEQ management programs. We maintain ISO 14001 certification at a corporate level. We encourage you to review our SHEQ policy at cameco.com/about/governance/policies-programs.

Climate change: Nuclear power is part of the solution

There is growing recognition from key global agencies, such as the United Nations Economic Commission for Europe, the United Nations Intergovernmental Panel on Climate Change, and the Union of Concerned Scientists that uranium is the cleanest energy fuel in the world and of the role nuclear power must play in ensuring safe, reliable and affordable carbon-free electricity generation. Indeed, for the first time in nearly two decades, the International Energy Agency released a report on nuclear energy in the hopes of bringing it back into the global energy debate. The report highlighted that a steep decline in nuclear power would threaten energy security and climate change goals and result in four billion tonnes of additional carbon emissions by 2040.

The nuclear industry recognizes the scale and immediacy of the challenge outlined in the Paris Agreement, and the important role that all low-carbon and carbon-free energy sources have to play. Led by the World Nuclear Association, the nuclear industry has a program and vision for the future of electricity supply called “Harmony”. The Harmony program sets a target for nuclear power to provide 25% of electricity by 2050 to help avoid the worst consequences of climate change. As members of the World Nuclear Association, and through participation in other industry organizations, we fully support and are advocates of this initiative.

We believe that the reduction of carbon and greenhouse gas (GHG) emissions is important and necessary in Canada and around the world, and that nuclear power must be a central part of the solution to the world’s shift to a low-carbon, climate resilient economy. As one of the world’s largest producers of the uranium fuel needed to fuel nuclear reactors, we believe there is a significant opportunity for us to be part of the solution to combating climate change and that we are well positioned to deliver significant long-term business value, while actively working to reduce our emission profile.

We are proud that the high-grade uranium ores in Saskatchewan’s Athabasca Basin result in Canadian uranium having among the lowest life cycle greenhouse gas emission intensity internationally, despite the constraints related to our geographic location. In fact, the production of Saskatchewan uranium requires at least one hundred times less greenhouse gas (GHG) emissions than production of the cleanest Canadian natural gas to produce the same amount of electricity, and all of the nuclear power produced is GHG emission free. We have tracked and reported GHG emissions for more than two decades, despite any regulatory requirement to do so. We continue to be focused on improving energy management and the visibility of energy consumption within our organization, with the overall goal of improving the energy intensity of our operations to create business value.

48     CAMECO CORPORATION

Stakeholder relations

Gaining the support of all our stakeholders is necessary to sustain our business.

We have a people policy that describes our commitment to developing and supporting a flexible, skilled, stable and diverse workforce. The policy is supported by multiple corporate human resource programs, standards and practices. We encourage you to review this policy at cameco.com/about/governance/policies-programs.

In addition, we strive to earn the support of the communities in which we operate, which is one of our key measures of success. We identify opportunities and initiatives that support and respect these communities and their cultures.

We recognize the substantial value in developing and maintaining long-term mutually beneficial relationships with Indigenous communities located within or near our operations and other activities.

Through 30 plus years of operation and partnership in northern Saskatchewan, we have developed a comprehensive strategy that applies to all our operations globally, and is aimed at ensuring the support of the communities with whom we work. The global strategy is flexible and is implemented locally to reflect the needs of the communities. The bulk of the strategy has evolved as a result of the commercial benefits we see from ensuring strong support among local communities wherever we operate and focuses on five key areas:

•	workforce development – designed to deliver programming that aims to build<br>educational and skills capacity in local communities
•	business development – designed to promote involvement of locally-owned businesses<br>in contracting opportunities at our operations to provide additional jobs, revenue streams and to build capacity at the local community level
---	---
•	community engagement – designed to ensure that we secure support for our<br>operations from local communities and satisfy the obligations placed on us by regulators and laws
---	---
•	community investment – designed to help local communities with much-needed funding<br>for community programming and infrastructure for initiatives focused on youth, education and literacy, health and wellness, and community development
---	---
•	environmental stewardship – designed to support our overall environmental<br>programming and give communities a voice in both the formal environmental assessment regulatory process, as well as ongoing monitoring activities.
---	---

We set standards for the measures we use to maintain ongoing and meaningful engagement with the communities where we operate.

Workplace diversity and inclusion

Cameco has made a formal commitment to diversity and inclusion that is communicated company-wide through our value statements. We understand the value of a diverse workforce and we embrace, encourage and support workplace diversity and inclusion. Members of a diverse workforce bring new ideas, perspectives, experiences and expertise to the company. Our diversity vision at Cameco is to create a work environment where inclusion is the goal, and a diverse and representative workforce is our measure of success. This allows us to continue to innovate, manage change, and grow as a respected industry leader and employer of choice. Despite ongoing challenges in the uranium market industry, diversity and inclusion played a significant role in our 2019 targets. The specific initiatives outlined on the next page were carried out in 2019 to make progress towards the continued implementation of Cameco’s long-term diversity and inclusion plan.

2020 MANAGEMENT PROXY CIRCULAR      49

Indigenous workforce

Cameco is a large employer of First Nations and Métis people. Indigenous employees make up more than 45% of the workforce at our northern Saskatchewan operations. In order to continue to build and sustain our Indigenous workforce, we offer strong support and development opportunities for our Residents of Saskatchewan’s north (RSN) employees, the majority of whom are Indigenous. This is achieved through our talent acquisition and development practices, collaboration and participation agreements with northern communities and through our community liaisons located in northern Saskatchewan. We also have a dedicated team of employees within our stakeholder and sustainability relations department at head office and our human resources representatives at our four northern Saskatchewan operations and corporate office that focus efforts on supporting our RSN employees.

Women in leadership

Cameco has made commitments to ensure women in leadership is at the forefront of our diversity agenda. In 2019, we undertook the following specific initiatives to increase women in leadership:

•	creation of the gender diversity and inclusion committee focused on gender equity and<br>diversity-related topics
•	participated in the Women in Mining and Women in Nuclear “Mine Your Potential Mentorship<br>Program” which provides select female employees the opportunity to be mentored and/or to mentor other females in the Saskatchewan mining industry
---	---
•	profiled various female employees throughout the organization to bring awareness to their<br>roles and their contributions to the organization
---	---
•	hosted our second annual International Women’s Day celebration where our executive<br>officers presented their support on the importance of gender equity.
---	---

We have one female executive officer, representing 20% of the executive officers, and four female vice-presidents, representing 31% of our senior management team. Cameco currently has about 456 female employees across North America, representing 25% of our workforce.

50     CAMECO CORPORATION

Generally executive officer appointments are a result of our succession planning framework to build advanced competencies throughout the organization and to identify high-potential employees, including female employees, and prepare them to take on executive roles in the future. When appointing executive officers, we strive for a complement of female executive officers that at a minimum reflects the proportion of women in our workforce. We expect that our long-term diversity and inclusion plan will result in more women being identified and prepared for senior level positions at Cameco.

Diversity of senior management

We have a diversity plan with specific objectives each year to improve workplace diversity. We have not set targets for female, Indigenous, persons with disabilities, or members of visible minority representation of executive officers. The diversity of our senior management team is 27.8% female, 5.6% visible minority, and we have no senior management that have self-identified as Indigenous or persons with disabilities.

A diverse senior management team is the goal and part of the consideration when addressing succession. Our current processes are helping us evaluate how to remove barriers to increase participation and representation and, ultimately, increase representation of these four groups. We expect the work we are doing will lead to qualitative and quantitative measures to assess the effectiveness of management’s actions.

How we are doing

We produce a sustainability report for our stakeholders to explain how we are performing against globally-recognized key indicators that measure our environmental, social, governance and financial impacts in the areas that we believe may have a significant impact on our ability to add long-term value for our stakeholders. We use the Global Reporting Initiative’s Sustainability Framework (GRI), in addition to some corporate indicators that are unique to the company to measure and report our performance. This is our report card to our stakeholders. For our most recent performance results, we encourage you to review our sustainability report at cameco.com/about/sustainability.

Given the evolving nature of the ESG landscape, we have established a multi-disciplinary working group to review our current approach in this area, including how we report. The working group is chaired by our Senior Vice-President and Chief Corporate Officer and has been reporting to the nominating, corporate governance and risk committee of the board.

Governance: Sound governance is the foundation for strong ESG performance

We believe that sound governance is the foundation for strong corporate performance. Our board of directors is responsible for overseeing management, and our strategy and business affairs and the integration of ESG principles throughout the company. The board’s goal is to ensure we operate as a successful business, optimizing financial returns while effectively managing risk.

Risk and risk management

We have a mature enterprise risk management (ERM) framework that consists of processes and controls to ensure risks are being appropriately managed and mitigated. For more information on our risk management practices and the board’s oversight of risk see page 32.

See Managing the risks, starting on page 56 of our 2019 MD&A, for a discussion of the risks, including ESG risks, that generally apply to all of our operations and advanced uranium projects, and that could have a material impact on business in the near term. We also recommend you review our most recent annual information form, which includes a discussion of other material risks that could have an impact on our business.

2020 MANAGEMENT PROXY CIRCULAR      51

While the board oversees the company’s strategic risks, including ESG/climate-related risks, it also allocates oversight of other top-tier risks to specific board committees. The following is an overview of the responsibilities allocated to specific board committees.

Audit and finance – supports the board in fulfilling its oversight responsibilities regarding the integrity of our accounting and financial reporting, the adequacy and effectiveness of our internal controls and disclosure controls, legal, regulatory (excluding safety, health and the environment) and ethical compliance, the independence and performance of our external and internal auditors, oversight of specific material risks, and prevention and detection of fraudulent activities and financial oversight.

Human resources and compensation – supports the board in fulfilling its oversight responsibilities regarding human resource policies, employee and labour relations matters, executive compensation, executive succession and development, pension plan governance, and oversight of cyber-security risk.

Nominating, corporate governance and risk – supports the board in fulfilling its oversight responsibilities by developing and recommending a set of corporate governance principles, identifying and recommending qualified individuals as members of the board and its committees, assessing the effectiveness of the board and committees, and overseeing the risk program.

Reserves oversight – supports the board in fulfilling its oversight responsibilities regarding estimating and disclosing mineral reserves and resources.

Safety, healthand environment – supports the board in fulfilling its oversight responsibilities regarding safety, health, environmental and climate-related matters, and supportive communities.

Targets and metrics: The link between ESG factors and executive pay

We recognize the importance of integrating certain ESG factors, such as safety performance, a clean environment and supportive communities, into our executive compensation strategy because success in these areas is critical to Cameco’s long-term success. You can find more information about our compensable targets and our reported performance against those targets in our STI scorecard on pages 83 through 85.

52     CAMECO CORPORATION
Compensation at Cameco
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We compensate our directors and executives in a way that is fair, competitive and based on performance.

This section of the circular is based on the recommendations of the human resources and compensation committee. It has been prepared to provide you with insight into our compensation process and the components of our program.

Our compensationgovernance

We believe in frank and transparent disclosure.

The board oversees our compensation policies and practices and assesses compensation based on balanced short- and long-term performance, relative to pre-determined measures in the areas of financial performance, operational excellence and sustainability. The board can use its discretion to reduce compensation or, subject to certain limits, to adjust compensation upward.

Our culture encourages management to be objective in assessing its own performance and making recommendations to the board to adjust compensation as appropriate.

Management is guided by six compensation principles that were adopted by the board (see page 72), and which guide all executive compensation decisions at Cameco.

Where to find it
Compensation governance	54
•  Compensation<br>risk management	55
•  Independent<br>advice	56
Share ownership guidelines and reporting	57
Directorcompensation	59
•  Compensation discussion and<br>analysis	59
-  Approach	59
-  Share ownership	59
-  Fees and retainers	59
•  2019 Compensation details	60
-  Director compensation table	60
-  Incentive plan awards	61
-  Loans<br>to directors	61
Executivecompensation	62
•  Message from the Chair of the Human<br>Resources and Compensation Committee	62
•  Cameco compensation<br>practices	66
•  Compensation overview	67
•  Executive compensation and<br>strategy	67
•  Market context	68
•  Share performance and executive<br>compensation	69
•  CEO compensation summary	70
•  Compensation discussion and<br>analysis	72
-Approach	72
-Annual decision-making process	74
-Measuring performance	75
-Compensation components	76
-2019 Performance and<br>compensation	83
-2020 Compensation decisions	89
•  2019 Compensation details	91
-Summary compensation table	91
-Incentive plan awards	93
-Equity compensation plan<br>information	95
-Pension benefits	96
-Loans to executives	97
-Termination and change of control benefits	98
2020 MANAGEMENT PROXY CIRCULAR      53
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Compensation governance

The board has ultimate responsibility for compensation at Cameco. The human resources and compensation committee assists the board in overseeing our human resources policies and programs, executive compensation, succession planning, pension plans and director compensation. The committee is qualified, experienced and 100% independent. It has five members of varying tenure.

Don Kayne serves as committee chair and brings strong executive compensation, risk management, governance and CEO experience to the role. Other committee members have strong backgrounds in finance, risk oversight, governance and executive compensation. You can read more about the committee members in their director profiles starting on page 14.

Years on committee
Don Kayne (chair)	3
Daniel Camus^1^	8
Anne McLellan^2^	12
Kate Jackson^2^	2
Ian Bruce^1,2,3^	5
Expertise of committee members
---	---
Business and industry experience	5 of 5
Executive compensation experience (as a<br>senior executive, managing partner or member of the compensation committee of other public companies)	5 of 5
Governance background	5 of 5
Risk oversight experience	5 of 5
Executive leadership	5 of 5
1.	Audit and finance committee members.
---	---
2.	Nominating, corporate governance and risk committee members.
---	---
3.	Ian is a member of all committees. He was chair of the human resources and compensation committee prior to taking on the<br>role of board chair.
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	ABOUT OUR COMPENSATION FRAMEWORK
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•  We use a multi-year strategic plan to balance risk and<br>reward.<br> <br>•  We embed our corporate objectives into<br>how we assess executive performance.<br><br><br>•  Compensation is directly linked to our strategy and<br>performance.<br> <br>•  We use at-risk compensation to motivate executives, with the ultimate value realized depending on performance.<br><br><br>•  We have clawback and anti-hedging policies to mitigate<br>compensation risk.<br> <br><br> <br>Our compensation framework<br>is based on the following:<br> <br><br> <br>Balanceddecision-making<br> <br><br> <br>•  Corporate performance is based on absolute and relative measures.<br> <br>•  We use a balanced scorecard to measure financial, operational, and environmental and social performance relative to our strategic objectives.<br><br><br><br> <br>Threshold performance<br><br><br><br><br><br>•  We must achieve at least a minimum threshold performance<br>to receive incentive award payouts.<br> <br><br> <br>Limitson incentive pay<br> <br><br> <br>•  The STI and PSU plans pay out at a maximum of 200% of target if performance is exceptional. The human resources and compensation committee and board cannot use their discretion to exceed this<br>cap.<br> <br>•  We set threshold, target and maximum<br>performance levels that require significant effort, but not excessive risk taking, to achieve performance.<br> <br>•  Potential payouts under the incentive plans are modest as a percentage of our revenue and income.<br> <br><br><br><br>CCGG pay-for-performance principles<br> <br><br><br><br>•  Our compensation philosophy and practices incorporate the<br>compensation principles recommended by the Canadian Coalition for Good Governance (CCGG) for Canadian companies. We focus on delivering pay for performance and implementing prudent risk management practices that are consistent with CCGG’s<br>principles.
54     CAMECO CORPORATION
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Compensation risk management

Compensation risk is addressed by the human resources and compensation committee each year (see page 44 for the committee’s 2019 highlights).

Our compensation program:

•	is designed to encourage the right management behaviours
•	uses a company-wide balanced scorecard approach to assess performance
---	---
•	motivates appropriate risk-taking
---	---
•	avoids excessive payouts to executives and employees.
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The human resources and compensation committee works with management and the safety, health and environment committee to set corporate objectives for all incentive plans. The committee stress tests different performance scenarios and back tests previous performance and compensation decisions to make sure decisions and outcomes are appropriate.

Meridian Compensation Partners (Meridian), the human resources and compensation committee’s independent consultant, reviews Cameco’s compensation program annually. Meridian has been the committee’s independent consultant since December 2011. The following nine key areas of our compensation programs are reviewed regularly:

•	compensation principles
•	comparator groups
---	---
•	positioning of target compensation
---	---
•	pay mix
---	---
•	incentive plan design
---	---
•	performance measures
---	---
•	share ownership
---	---
•	plan governance and risk mitigation
---	---
•	supplemental executive pension program.
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Based on the risk assessment, the human resources and compensation committee concluded that Cameco’s compensation programs and policies are not likely to have a material adverse effect on Cameco, its business or its value.

Clawback policy

All named executives are subject to a clawback policy that applies to compensation received after January 1, 2013. Our previous policy (in effect since 2003) applies to incentive compensation awarded to the CEO and CFO prior to 2013.

The policy covers incentive compensation, including any annual bonus, performance share units, restricted share units and stock options granted or received. It allows the board and the human resources and compensation committee to decide how to apply the policy and recoup the incentive compensation of the executive at fault if all of the following events occur:

•	we make an accounting restatement if there is a material non-compliance<br>with financial reporting requirements under securities laws
•	an executive engaged in gross negligence, intentional misconduct or fraud which caused or significantly contributed<br>to the restatement
---	---
•	the executive was overcompensated as a result of the restatement.
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Share ownership

Our share ownership guidelines require executives to hold their current shares and to purchase additional shares with their after-tax proceeds from redeeming or exercising equity awards until they have met their target ownership levels (see page 57 for share ownership details).

2020 MANAGEMENT PROXY CIRCULAR      55

Anti-hedging

We prohibit directors, officers and employees from using hedging strategies to offset a decrease in market value of our shares or the market value of equity awards granted as compensation.

Our trading guidelines prohibit:

•	trading while in possession of confidential material information
•	tipping of confidential information to anyone
---	---
•	speculative trading in or hedging of Cameco securities or related financial instruments
---	---
•	holding Cameco securities in margin accounts
---	---
•	fraudulent trading or market manipulation respecting Cameco securities.
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Equity compensation

For 2019, long-term incentive awards were allocated 60% to performance share units (PSUs) and 40% to stock options, and their value is not guaranteed. Performance under the PSU plan is based on a combination of absolute and relative measures over a three-year period. The ultimate value of stock options is determined by our share price at the time of exercise. For 2020, the long-term incentive awards are allocated 60% to PSUs and 40% to restricted share units (RSUs). For more information about this change, see page 89.

Independent advice

The board and board committees retain independent consultants as appropriate to assist them in carrying out their duties and responsibilities. Meridian serves as the human resources and compensation committee’s independent consultant, and Mercer is management’s consultant.

Committee’s consultant

The committee considers the independence of its compensation advisor, and reviews all fees and the terms of consulting services provided by the independent consultant. The committee considers recommendations provided by its compensation consultant and management along with other information, and is ultimately responsible for its own decisions.

The table below shows the fees paid to Meridian in 2018 and 2019. Meridian did not provide any services to management in either year.

	2019		2018
Executive<br>compensation-related fees	$	69,576	$	64,000
All other<br>fees		–		–
Percent of work provided to the committee		100%		100%

Meridian provided a broad range of services in 2019:

•	reviewed the comparator group
•	updated the compensation risk review
---	---
•	provided two education sessions on compensation and governance trends for the committee
---	---
•	reviewed 2019 incentive plan targets and performance against targets
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•	conducted a review of our executive compensation program, performance measures, and STI and PSU plan objectives<br>
---	---
•	completed a CEO realizable<br>pay-for-performance assessment
---	---
•	conducted an in-depth review of the compensation discussion and analysis<br>(CD&A)
---	---
•	consulted on numerous compensation governance matters, including clawbacks, proxy advisor positions, realized and<br>realizable pay disclosure and ISS pay-for-performance modeling.
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The committee reviewed Meridian’s report on independence as contemplated by the NYSE rules and is satisfied with the report. It also confirmed Meridian’s independence.

56     CAMECO CORPORATION

Share ownership guidelines and reporting

Share ownership is an important function of compensation governance. Our guidelines align the interests of our directors and executive officers with those of our shareholders. Ownership includes shares held directly or indirectly, and share equivalents – deferred share units (DSUs) for our directors and PSUs and RSUs for our executives.

The human resources and compensation committee regularly reviews and assesses our guidelines for alignment with market practice. We believe our share ownership guidelines support best practices and align with the market generally, therefore no changes are planned for 2020.

Ownership<br> <br>guidelines<br><br><br>by position	Directors<br> <br><br><br><br>3x annual retainer	CEO<br> <br><br><br><br>4x base salary	Other NEOs<br> <br><br><br><br>2x base salary
Equity<br> <br>used to<br><br><br>meet share<br> <br>ownership<br><br><br>guidelines	Yes	•  Directors and executives – Cameco shares that the person owns or<br>is deemed to own, beneficially, directly or indirectly<br> <br><br><br><br>•  Executives – unvested PSUs (not to exceed the number of shares the<br>person holds) and unvested RSUs<br> <br><br><br><br>•  Directors – DSUs	No	•  Options, whether vested or unvested
---	---	---	---	---

All directors and executive officers are expected to achieve the required levels of ownership within five years of their election or appointment. If they assume a new position with a higher ownership level, they have three additional years to meet the increased level.

If a director has not satisfied the ownership guideline within those first five years or goes below that level after that time period, he or she must receive at least 60% of his or her annual retainer in DSUs until compliance is achieved. If an executive officer has not satisfied the ownership guideline within those first five years or goes below that level after that time period, he or she must use the after-tax proceeds from the payout of his or her PSU and RSU awards and the exercise of stock options to purchase additional shares until compliance is achieved.

We assess compliance annually. For compliance purposes, we assess the share ownership value based on the year-end closing price of Cameco common shares on the TSX, or the price at the time of purchase, whichever is higher.

2020 MANAGEMENT PROXY CIRCULAR      57

The following table shows their holdings for the purposes of our annual compliance assessment as of December 31, 2019.

All of our directors and named executives are in compliance with our share ownership guidelines. Kate Jackson has until January 1, 2022 to meet the 3x retainer level and she is taking 60% of her annual retainer in DSUs to meet that goal. Brian Reilly has until March 2025 to meet the 2x base salary level and he is taking all vested and vesting PSUs as shares to meet that goal.

	Compensationlevel		Camecoshares		Shareequivalents		Value ofholdings (usingshare ownershipguideline value)()	Value<br>ofholdings ()1	Multipleachieved(#)		Compliantwithshareownershipguideline
				Using year-end shareprice
Directors	Annualretainer				DSUs
Ian Bruce		375,000		75,000		65,147				4.3x		Yes
Daniel Camus		200,000		–		82,167				4.7x		Yes
Donald Deranger		200,000		–		67,551				3.9x		Yes
Catherine Gignac		200,000		15,000		36,525				3.0x		Yes
Jim Gowans		200,000		9,000		73,753				4.8x		Yes
Kate Jackson		200,000		–		27,915				1.6x		Yes
Don Kayne		200,000		–		68,487				4.0x		Yes
Anne McLellan		200,000		100		52,722				3.0x		Yes
Named executives	2019 basesalary				PSUs^2^
Tim Gitzel^3^		1,060,900		299,594		137,622				4.8x		Yes
Grant Isaac		569,300		87,185		52,004				2.8x		Yes
Brian Reilly		478,500		5,813		5,813				0.3x		Yes
Alice Wong		460,300		75,485		33,633				2.7x		Yes
Sean Quinn		445,100		43,050		36,489				2.1x		Yes

All values are in US Dollars.

1.	Based on the closing share price of $11.54 on the TSX as of December 31, 2019.
2.	Number of qualifying PSUs for share ownership purposes, which number does not exceed number of Cameco common shares held.<br>
---	---
3.	See Tim Gitzel’s profile on page 18 for the total number and value of the CEO’s shares and all PSUs, not just<br>qualifying PSUs.
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58     CAMECO CORPORATION
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Director compensation

Compensation discussion and analysis

1.     Approach

We have three goals:

•	Recruit and retain qualified individuals to serve as members of our board and contribute to<br>our overall success.
•	Align the interests of our board and shareholders by requiring directors to own shares or<br>share equivalents (by receiving at least 60% of their annual retainer in DSUs until they meet our share ownership guidelines).
---	---
•	Pay competitively by positioning compensation at the median of director compensation paid by<br>companies that are similar to Cameco in nature and scope of operations and comparable in size (see page 73 to read about the comparator group. We use the same comparator group to benchmark executive and director compensation).
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2.     Share ownership

Directors’ can count DSUs to meet the ownership requirements because they are share equivalents. A DSU is a notional share that has the same value as one Cameco common share. DSUs earn additional units as dividend equivalents at the same rate as dividends paid on our common shares. DSUs must be held by each director until after he or she retires from the board.

As of December 31, 2019, directors held $5,473,026 worth of DSUs (representing approximately 474,266 common shares) based on the year-end closing price of Cameco shares on the TSX of $11.54. The board chair has a higher ownership requirement because of the higher retainer for that role.

A director who has met the share ownership guidelines can receive all of the retainer and fees in cash, or a portion in cash and the balance in DSUs in increments of 25%, which is decided before the beginning of each fiscal year. The director compensation table on page 59 shows the percentage of the annual retainer paid in DSUs in 2019 for each director. See page 57 to read more about our guidelines for director share ownership.

3.     Fees and retainers

Our director compensation is structured to align with market practice and to recognize the time commitment, responsibility and attention directors devote to board and committee responsibilities throughout the year.

Director compensation consists of the following:

•	an annual board retainer (higher retainer for the<br>non-executive chair of the board)
•	an annual committee chair retainer (higher retainer for the human resources and compensation<br>and audit and finance committee chairs)
---	---
•	an annual committee retainer for members of the human resources and compensation and audit<br>and finance committees
---	---
•	an additional retainer for members who serve on more than two committees (per committee over<br>two)
---	---
•	a travel fee (per round trip).
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The non-executive chair does not receive any committee-related retainers and directors who are employees of Cameco, such as Tim Gitzel, do not receive director compensation. We reimburse reasonable travel and out-of-pocket expenses relating to directors’ duties.

2020 MANAGEMENT PROXY CIRCULAR      59

The table below shows the current fee schedule. All amounts are paid in Canadian dollars.

ANNUAL RETAINER
Non-executive chair of the board	$375,000
Other<br>non-executive directors	$200,000
COMMITTEE CHAIR RETAINERS
Audit and finance committee	$20,000
Human resources and compensation committee	$20,000
Other committees (nominating, corporate governance and risk, reserves oversight, and	$11,000
safety, health and environment)
COMMITTEE RETAINERS
Audit and finance committee members	$5,000
Human resources and compensation committee members	$5,000
Member of more than two committees (per additional committee)	$5,000
TRAVEL FEES (PER ROUND TRIP)
Over 1,000 km within Canada	$1,700
From the US	$2,100
From outside North America	$3,300

2019 Compensation details

Director compensation table

The table below shows fees earned by each non-executive director in 2019, based on the current fee schedule and their committee memberships.

Tim Gitzel does not receive any director compensation because he is compensated in his role as president and CEO (see Summary compensationtable on page 91). Ian Bruce is our non-executive chair of the board and his board retainer reflects the fees paid to him in this capacity.

	Annual            retainer						% of annual    retainer paidin DSUs
Name	Board
Ian Bruce		375,000	–	–	–	$375,000	50%
Daniel Camus^1^		200,000	11,758	12,967	6,800	$231,525	25%
John<br>Clappison^2^		50,000	1,250	5,000	1,700	$57,950	25%
Donald Deranger		200,000	5,000	–	–	$205,000	50%
Catherine Gignac		200,000	10,000	11,000	6,800	$227,800	–
Jim Gowans		200,000	10,000	11,000	6,800	$227,800	50%
Kate Jackson		200,000	10,000	–	6,300	$216,300	60%
Don Kayne		200,000	10,000	20,000	6,800	$236,800	100%
Anne McLellan		200,000	5,000	11,000	–	$216,000	25%
Total		1,825,000	63,008	70,967	35,200	$1,994,175	–

All values are in US Dollars.

1.	Daniel Camus served on more than two committees until May 2019.
2.	John Clappison retired from the board on May 7, 2019.
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60     CAMECO CORPORATION
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Incentive plan awards – DSUs

The next table shows what each non-executive director earned in DSUs in 2019. We have combined information from two mandatory tables: Incentive plan awards – Value vested or earned during the year and Outstanding share-based and option-based awards into the table below:

•	Share-based awards – Value vested during the year is the amount of DSUs that the<br>directors received in 2019, valued as of the grant dates. It includes all of the DSUs that vested as of the grant date and DSUs granted as dividend equivalents in 2019.
•	Share-based awards – Market or payout value of vested share-based awards not paid outor distributed are all of the directors’ DSUs that have vested. DSUs are not paid out until after the director retires from the board. The DSUs were valued at the year-end closing price of Cameco<br>shares on the TSX of $11.54.
---	---
Name	Share-based awards
---	---	---	---
	Value vested during the year
Ian Bruce		192,368	$751,794
Daniel Camus		64,314	$948,205
John Clappison^1^		14,488	–
Donald Deranger		107,700	$779,534
Catherine Gignac		2,903	$421,495
Jim Gowans		119,574	$851,111
Kate Jackson		122,020	$322,135
Don Kayne		241,852	$790,339
Anne McLellan		58,101	$608,413
Total		923,320	$5,473,026

All values are in US Dollars.

1.	John Clappison retired from the board on May 7, 2019.

See the director profiles starting on page 14 for the number of Cameco shares and DSUs held by each director.

Incentive plan awards – options

We stopped granting options to directors in 2003. None of the directors have any outstanding options.

Loans todirectors

As of March 10, 2020, we and our subsidiaries had no loans outstanding to any current or former directors, except routine indebtedness as defined under Canadian securities laws.

2020 MANAGEMENT PROXY CIRCULAR      61
Executive compensation<br><br><br><br> <br>Cameco is committed to maintaining a transparent<br>executive compensation program.<br> <br><br> <br>The following<br>message by the chair of the human resources and compensation committee highlights key aspects of our executive compensation program. A more detailed discussion follows in the compensation discussion and analysis (CD&A) beginning on page<br>72.
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Message from the Chair of the Human Resources and Compensation Committee^1^

Dear Shareholder,

The human resources and compensation committee oversees all aspects of executive compensation. It assesses Cameco’s strategy and business plan and makes recommendations to the board on performance measures and targets, which reflect Cameco’s four measures of success – outstanding financial performance, a safe, healthy and rewarding workplace, a clean environment and supportive communities. The committee uses these measures and targets to assess Cameco’s corporate and executive performance and compensation program, including payouts of incentive awards to the executive team.

This letter gives you an overview of our approach to executive compensation, the board’s assessment of 2019 performance and our decisions on executive compensation for the year.

A carefully designed compensation program

Cameco is committed to creating long-term value for its stakeholders. We believe that a strong executive team that is equipped to make strategic decisions and implement them effectively, and lead and motivate Cameco’s employees to act in the best interests of stakeholders, is critical to the company’s long-term sustainability.

Cameco’s compensation program is designed to attract, retain and motivate the executive team, pay for performance and drive shareholder value. We link a significant portion of executive pay to the achievement of objectives that drive value for Cameco’s shareholders and believe in the importance of aligning the interests of our executives and shareholders. This is not an easy task with the difficult market conditions that have faced the uranium industry for the last nine years.

The majority of executive pay is variable or at-risk, and linked to the execution of Cameco’s strategy and business plan. At-risk pay is not guaranteed and the value that is ultimately realized is based on Cameco’s performance against key financial and non-financial measures as well as share performance.

Risk is considered throughout the compensation process to ensure incentive awards are appropriate and pay is aligned with performance. The committee’s independent compensation consultant conducts an annual risk assessment to identify any potential risks associated with the compensation program and ensure that we are incenting and rewarding the right behaviours. The 2019 assessment concluded that Cameco’s compensation program and policies drive a balanced approach to short- and long-term risk, and are not likely to have a material adverse effect on Cameco, its business or its value.

Shareholder vote on executive compensation

In keeping with our ongoing commitment to good governance, we held our annual “say on pay” advisory vote at our 2019 annual meeting. Shareholders voted 92.68% in favour of our approach to executive compensation. We are encouraged by the consistently strong support we receive from shareholders and value all feedback on executive compensation and other governance matters.

2019 Compensation decisions and results

Corporate performance is the most significant factor affecting the board’s decisions about executive pay.

^1^	This message from the chair of the human resources and compensation committee contains forward<br>looking information and is based upon the assumptions and subject to the material risks described at pages 2 and 3 of our 2019 MD&A. Actual outcomes for future periods may be significantly different.
62     CAMECO CORPORATION
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Target setting

Our main priorities are ensuring compensation is competitive, fair and supports the achievement of Cameco’s strategy and business plan. Since the Fukushima nuclear incident in March 2011, the average uranium spot price has decreased 64% and the long-term uranium price has decreased 54%. This makes setting performance targets extremely challenging and we do rigorous stretch testing of the targets with the assistance of our compensation consultant.

For 2019, with the continued market uncertainty, the potential outcome of Section 232 of the Trade Expansion Act in the US, the ongoing dispute with the Canada Revenue Agency (CRA), the Tokyo Electric Power Company Holdings, Inc. (TEPCO) arbitration and the $500 million debenture maturing in September 2019, management’s priorities continued to be preserving the value of our low-cost assets, protecting and extending the value of our contract portfolio, building cash on our balance sheet and positioning the company to self-manage risk.

The 2019 short-term incentive plan targets reflected the expenditures necessary to help us achieve that strategy, including removing millions of pounds of uranium production from an oversupplied market by keeping a number of our operations in care and maintenance. This required Cameco to buy significant quantities of uranium product to meet our contracted sales commitments. Annual costs associated with the implementation of the strategy, including expenditures for care and maintenance, product purchases, along with continued low uranium market prices, were expected to put significant downward pressure on our 2019 gross profit margins. As such, estimated 2019 earnings and cash from operations were anticipated to be lower than Cameco’s actual 2018 results, leading to the lower year-over-year financial targets for 2019. However, the implementation of these strategic initiatives is expected to achieve sustainable value over the long term.

The long-term incentive plan, which consists of performance share units (PSUs) and stock options, is also closely aligned with Cameco’s performance objectives. PSUs are linked to absolute and relative performance measures over a three-year period. The 2017 PSU award was tied to performance from January 1, 2017 to December 31, 2019 and paid out based on performance against three measures: the uranium price achieved relative to prices realized by our competitors, achievement of lower all-in sustaining cash costs from Saskatchewan tier-one operations, and relative total shareholder return (TSR). We measure our TSR against the TSX 60. The relative TSR assessment is challenging because there are no publicly-traded uranium companies that are similar in size or scale to Cameco and the TSX 60 group of companies are not affected by the uranium price like Cameco. In 2017, we replaced the production target with the achievement of lower all-in sustaining cash costs from Saskatchewan tier-one operations to align more closely with Cameco‘s strategy of preserving tier-one operations and controlling costs.

The committee carefully reviews the incentive plan measures every year to make sure they continue to support Cameco’s key strategic objectives, and the targets are reviewed and tested each year. Historical performance indicates that challenging short- and long-term targets are set. Cameco has exceeded target corporate performance on the long-term incentive plan only twice in the past eight years and has exceeded target performance on the short-term incentive plan three times in the past eight years. Neither of our short nor long-term plans have ever achieved the maximum payout.

Performance assessment and results

In 2019, Cameco’s resilience was again tested in the face of an unfavourable uranium market. Despite these challenges, Cameco met or exceeded the targets for six of the seven corporate objectives for the year. Cameco continues to execute on all strategic fronts – operational, marketing and financial – and the results are a direct outcome of Cameco’s strong leadership and value-oriented strategy.

The board approved a payout of 130% for the 2019 short-term incentive to recognize Cameco’s strong performance against the four measures of success, despite challenging market conditions:

Financial performance

•	Cameco achieved 2019 adjusted net<br>earnings^2^ of $41 million, exceeding the target
•	Cash from operations, after working capital changes, was $527 million, positively<br>impacted by better than expected results
---	---
•	The executive team continued to manage risk by generating cash from operations. Cash totalled<br>$1.1 billion at the end of 2019
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•	The $500 million debenture that matured in September 2019 was retired as expected
---	---
•	Cameco received a positive ruling in its contract dispute with TEPCO and was awarded<br>$40.3 million (US) in damages
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^2^ Adjusted net earnings is a non-IFRS measure as described in our 2019 MD&A and excludes the impact of various items as detailed in note 1 on page 85.

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Safe, healthy and rewarding workplace

•	Total recordable incident rate (TRIR) improved by 20% compared to 2018 and Cameco recorded<br>the best safety performance in its history for the second consecutive year as it continues to strive for top quartile performance
•	Cameco also met the short-term incentive targets relating to timely completion of corrective<br>actions and job task observations (JTOs)
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Clean environment

•	There were no significant environmental incidents at Cameco’s operations
•	Cameco met its environmental performance targets which focused on mitigating specific risks<br>in each area of its operations
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Supportive communities

•	Cameco’s preferred northern Saskatchewan suppliers continued to face reduced business<br>opportunities as our capital spend is much lower with many sites in care and maintenance. We were successful in assisting a preferred northern Saskatchewan supplier to gain valuable experience on an industrial site different from mining and in the<br>Ontario market. They were willing to expand to Ontario for the Vision in Motion project and were selected for the project. They mobilized their workforce and performed work in Port Hope well and in a safe manner. The project provided significant<br>community support and achieved our broader ESG goals, but the challenges associated with this first-of-a-kind project resulted in<br>the related incentive plan cost target being missed.
•	A preferred northern Saskatchewan supplier and Cameco executed an evergreen contract for haul<br>road maintenance between Key Lake and McArthur River at a cost below Cameco’s internal costs for the same work, benefiting Cameco and supporting our broader ESG goals.
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2019 STI awards

The board reviews the performance and payouts for each performance measure under the short-term incentive plan to determine if there are any extenuating circumstances that should be considered when calculating the corporate performance score. Cameco exceeded the 2019 earnings target and achieved the maximum payout of 200% on this measure, partly due to the $40.3 million (US) award received from the successful conclusion of our arbitration with TEPCO. The arbitrators agreed with Cameco that TEPCO was not entitled to terminate their supply agreement with us, but the damages awarded were lower than our claim. The board has carefully considered the unique facts and circumstances of this case, with input from the human resources and compensation committee, and, together with management, concluded that a maximum score for the earnings target does not properly reflect the disparity between the amount of the award and our claim. The board used its discretion to reduce the earnings payout to 144% to reflect the lower than expected arbitration award. Additional detail about our corporate performance, including our detailed scorecard, starts on page 83.

Payout of 2017 PSU awards

A fundamental component of our compensation philosophy is that a significant portion of executive compensation must be at-risk and linked to the achievement of objectives that drive long-term value. While Cameco delivered strong corporate performance during the 2017 to 2019 period, our TSR relative to the TSX 60 was below threshold. Cameco’s strong operational performance and higher average-realized uranium price relative to competitors partly offset the three-year relative TSR. Ultimately, 55% of the original value of the PSU grant was paid out. This reflects the link between pay and performance and alignment with shareholder interests. You can read more about Share performance and executive compensation on page 69 and CEO realized and realizable pay on page 71.

CEO compensation

The CEO performance assessment undertaken by the committee is robust and incorporates feedback from all board members. The committee makes recommendations to the board on CEO pay. Tim Gitzel’s salary was increased by 3.5% in 2019 to position his pay around the market median. His 2019 short-term incentive award was $1,706,000, due to strong corporate performance and exceptional individual performance in a difficult market. Under Tim’s leadership, Cameco has implemented a plan that has strengthened the balance sheet and positioned the company to achieve its vision of energizing a clean-air world, and support the world’s growing demand for energy.

2020 program changes

The board approved the committee’s recommended changes to the incentive plans in 2020 (outlined below) to support Cameco’s strategy and business plan while recognizing the prolonged challenging market conditions and the importance of efficiently managing Cameco in a low price environment.

64     CAMECO CORPORATION

PSU measures

New PSU grants will be based on two equally weighted performance measures – average realized uranium price relative to industry benchmarks and all-in sustaining cash costs for our Saskatchewan tier-one operations. Both measures are tied closely to our strategy, are stronger indicators of true performance and better support the plan’s objective of closely aligning pay and performance over the long term. Using equally weighted relative and absolute performance measures ensures that management continues to maintain a balanced focus on delivering value over the long term.

We are eliminating the use of TSR as a measure starting in 2020. Relative TSR is most relevant when comparing share performance of companies in a comparable industry or related commodity. There are no publicly-traded uranium companies that are similar in size or scale to Cameco and the TSX 60 group of companies is not affected by the uranium price like Cameco. This makes comparing TSR relative to the TSX 60 a comparison of uranium prices relative to general stock market performance, rather than the intended purpose, which is to assess industry and commodity price out-performance. While we are eliminating relative TSR as a performance measure under the PSU plan, the value of PSU payouts is tied to performance over a three-year period and the price of Cameco shares, aligning with shareholder interests.

Elimination of stock options

Stock options are being replaced by restricted share units (RSUs) in the LTI compensation mix starting in 2020. During 2019, the committee considered the merits of keeping stock options in Cameco’s compensation program and made a decision to replace them with RSUs starting in 2020. RSUs, like stock options, align with share price over a longer-term horizon, are a common form of LTI in our comparator group, and provide retention value. They also reduce the depletion of the option pool – RSUs are non-dilutive to shareholders as shares are purchased on the market when they vest.

Looking ahead

We are expecting another challenging year in 2020 because of continued expenditures required to achieve our strategy while we wait for a market transition. Despite the impact on our expected results, we continue to believe these are the right decisions to sustain the company and ultimately create long-term value.

Cameco’s goal is to remain competitive and to maintain exposure to the rewards that come from having an uncommitted, low-cost uranium supply to deliver in a strengthening market. Our optimism and confidence in a uranium market transition to one where price reflects an economic return on primary production is driven by positive long-term fundamentals.

Targets for the 2020 short-term and long-term incentive awards continue to support Cameco’s strategy and four measures of success. The 2020 targets focus on:

•	achieving financial measures focused on controlling costs and generating cash in a difficult<br>market environment
•	achieving higher prices for uranium sales prices than our competitors
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•	keeping people safe
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•	protecting the environment
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•	maintaining the support of communities near Cameco’s operations.
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The board approved modest salary increases for 2020 for the full executive team, except for the CEO (on his request), to position their base pay around the market median.

The committee continues to oversee succession planning to ensure the effective development of leadership talent and an orderly transition to officer roles as required, including appropriate compensation.

Thank you for your support

We firmly believe in the importance of linking executive pay to the execution of Cameco’s business plan and strategy, aligning the interests of executives and shareholders and building value for shareholders over the long term. We continue to monitor developments in executive compensation and best practices to make sure our compensation program and decisions are appropriate, to adjust our practices as appropriate and to mitigate compensation risk. We encourage you to vote your shares and we welcome any questions and feedback through the corporate secretary’s office.

In closing, I would like to express my confidence in Cameco’s future prospects. I look forward to my continued service as committee chair and working on human resources and compensation matters that are such an important aspect of Cameco’s success.

Sincerely,

Don Kayne

Chair, Human Resources and Compensation Committee

2020 MANAGEMENT PROXY CIRCULAR      65

Cameco compensation practices

The human resources and compensation committee ensures our executive compensation program is competitive, based on sound decision-making, pays for performance, motivates and attracts talent, and focuses on creating long-term value.

WHAT WE DO

Pay for performance. 83% of the compensation for the CEO is at-risk pay – it is<br>variable, contingent on performance and not guaranteed	✓
Share ownership. We require our executives to own equity in Cameco, and to acquire additional shares using the proceeds from redeeming or exercising vested<br>equity awards until they have met their target ownership	✓
Performance based vesting. 60% of the long-term incentive vests at the end of three years based on our absolute performance and relative average realized<br>uranium price	✓
Benchmarking. We benchmark executive compensation against a size and industry appropriate comparator group and target compensation at the median of the<br>group	✓
Caps on incentive payouts. Our STI and PSU plans cap payouts at a maximum of 200%<br><br><br>of target for exceptional performance. The human resources and compensation committee and the board cannot use their discretion to exceed this cap	✓
Stress testing and back testing. We stress test different scenarios to assess appropriateness of pay and<br>avoid excess risk-taking, and the committee considers<br> <br>long-term incentive awards previously granted when granting new awards	✓
Clawbacks. Our clawback policy applies to all executives and all incentive compensation awarded	✓
Independent advice. The committee receives compensation advice from an<br><br><br>independent advisor	✓
Disclosed realized and realizable pay. The value ultimately realized from a long-term incentive award can be significantly different from the grant value.<br>Share price is only one factor that affects the payout value	✓
Modest benefits and perquisites. These are market competitive and represent a small part of total executive compensation	✓
Employment agreements. Employment agreements with the named executives protect specialized knowledge, contacts and connections obtained while at<br>Cameco	✓
Double trigger. The severance provisions in our executive employment agreements and our LTI plans have double triggers in the event of a change of<br>control	✓
WHAT WE DON’T DO
No repricing of stock options.	x
No tax gross-ups.	x
No excessive severance obligations.	x
No bonus amounts or value of equity awards included in pension calculations.	x
No hedging of shares or equity awards.	x

See Compensation governance on page 54 and the CD&A beginning on page 72 for more information.

66     CAMECO CORPORATION

Compensation overview

The chart below shows the different components that make up total direct compensation (TDC) for our executives. Our short-term incentive plan offers executives the potential to earn a cash bonus based on their success in achieving pre-established corporate and individual performance targets for the year.

For 2019, long-term incentives included a PSU plan and stock option plan, which have different terms for vesting and payouts. These incentive plans focus management on the importance of future value and drive corporate performance over the longer term.

Performance-based vesting and share price fluctuation can have a dramatic impact on the realized and realizable value of equity-based compensation. The named executives realized 55% of the grant value of the 2017 PSU awards that vested at the end of 2019 (see pages 86 through 88).

Executive compensation and strategy

Cameco’s strategy is to focus on our tier-one assets, and to profitably produce at a pace aligned with market signals to preserve the value of those assets and increase long-term shareholder value. The strategy is set within the context of a challenging market environment, which we expect to give way to strong long-term fundamentals driven by increasing populations, and the impact of growing electricity demand on the world’s climate. Nuclear energy must be a central part of the solution to the world’s shift to a low-carbon, climate resilient economy. It is an option that can provide the power needed, not only reliably, but also safely and affordably, and in a way that will help avoid some of the worst consequences of climate change. The board plays a key role in our strategy, and works directly with management in developing the strategic plan. Management is responsible for executing the strategy and adapting its actions within the context of an evolving market environment in order to take advantage of the long-term growth we see coming in our industry. The board oversees risk and the execution of the corporate strategy, and challenges management on their progress.

See our most recent MD&A, particularly the Our strategy section for more information about our strategy.

We establish corporate objectives to achieve our strategic plan and our executive compensation program is directly aligned with the strategic plan:

•	measures based on our corporate objectives form the basis of the compensable targets under<br>the short-term incentive plan
•	performance share units (PSUs) measure absolute and relative performance over a three-year<br>period. The actual payout is based on share performance and outcomes against targets based on our long-term strategic goals.
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2020 MANAGEMENT PROXY CIRCULAR      67
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Market context^1^

Like other commodities, the uranium industry is cyclical. History demonstrates that in general, when prices are rising and high, uranium is perceived as scarce, and a lot of contracting activity takes place. The heavy contracting that takes place during price runs drives investment in higher-cost sources of production. Once that production is in the market, it tends to stay in the market longer than is economically rational, creating the perception that uranium is abundant and always will be, and prices decline. When prices are declining and low, like we have seen over the past eight years, there is no perceived urgency to contract, and contracting activity and investment in new supply drops off. After years of low investment in supply, as has been the case since 2011, security of supply tends to overtake price concerns at some point, and utilities re-enter the long-term market to ensure they have the reliable supply of uranium they need to run their reactors.

There have been three significant events that have changed sentiment in the market and impacted uranium prices in the past two decades. The first was a supply event in 2006 when our Cigar Lake mine flooded, putting at risk 18 million pounds of future annual supply. The second event was a demand shock in 2010 as Chinese utilities entered the market in a sizeable way, signing long-term uranium contracts with multiple suppliers to fuel their growing nuclear fleet. The third change in sentiment occurred in March 2011, when the events at the Fukushima nuclear power plants in Japan halted and reversed the upward price trend. Uranium prices fell, as did the share prices of companies involved in uranium exploration, development, and production. As Japan idled its reactor fleet and acceptance of nuclear energy declined in certain countries, the uranium market entered a period of fundamental over-supply.

Market recovery has taken longer than originally anticipated as a result of a slower than expected pace of reactor restarts in Japan, unexpected reactor shutdowns in other regions, and delays in reactor construction programs.

^1^	This discussion of market context contains forward looking information and is based upon the<br>assumptions and subject to the material risks described at pages 2 and 3 of our 2019 MD&A. Actual outcomes for future periods may be significantly different.
68     CAMECO CORPORATION
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Although the demand gap left by forced and premature nuclear reactor shutdowns since 2011 has been filled, market access and trade policy issues were at the top of the list of factors affecting the market in 2019. These issues created uncertainty and consumed a significant amount of time and focus from our customers and contributed to the delay of end-user demand in the spot market. Despite the significant demand created by the reduction in primary supply this year, at least half of the activity in the spot market was churn, the same material changing hands many times. As a result, the average reported uranium spot price was $24.93 (US) per pound at the end of 2019, down $2.82 (US) per pound from the end of 2018. In contrast, interest in long-term contracting increased compared to 2018. While the volume of uranium executed under long-term contracts reached its highest level since 2012, it is still well below annual consumption levels, and the reported long-term price remained flat year-over-year. We believe that underlying the increased interest in long-term contracting is the recognition that the demand cycle is on an upswing while the production cycle has swung down and the market needs to transition to one where price reflects an economic return on primary production. This gives us confidence that the uranium market will undergo the same transition we have seen in the conversion market and that is beginning to occur in the enrichment market.

However, until that transition occurs, we will continue to take the necessary actions to maintain the strength of our balance sheet so we can self-manage risk, including:

•	preserving our tier-one assets
•	continuing to focus on reducing costs and operating efficiently
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•	responsibly managing our production, inventory and purchases
---	---
•	protecting and extending the value of our contract portfolio
---	---
•	maximizing cash flow and navigating by our investment-grade rating
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•	positioning the company to self-manage risk and deliver long-term value.
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At the end of 2019, our share price was down about 26% compared to the end of 2018, reflecting the weaker uranium spot price, and the costs associated with the deliberate actions we have taken to effectively manage the company in a low price environment. In addition, outside factors, including market access and trade policy issues, and global economic uncertainty continue to have a significant impact on the uranium market and in turn our share price. We continue to believe that our share price does not reflect the strength of our core business over the long term. Since 100% of our products go to producing clean, carbon-free electricity, we are confident there is a significant opportunity for us to be a growing part of the solution to the clean-air and climate change crisis the world is currently trying to address.

Share performance and executive compensation

The graph below compares our TSR to the S&P/TSX Composite Total Return Index for the past five years, assuming an initial $100 investment at the end of 2014 and reinvestment of dividends over the period.

The graph also compares our TSR to the named executives’ compensation. The reported compensation reflects the named executives’ compensation from the summary compensation table in our previous management proxy circulars. Where there were changes in named executives, we used the officers in place at the end of the year. For the most part, executive compensation decreases as the TSR decreases and increases as the TSR increases. For further information about how the CEO’s realized and realizable compensation relates to shareholder return, see the lookback table in the CEO compensationsummary that follows.

2020 MANAGEMENT PROXY CIRCULAR      69
CEO compensation summary
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<br><br><br><br><br> <br>Tim Gitzel,<br> <br>President and CEO<br><br><br><br> <br><br> <br><br><br><br><br><br><br><br>	Tim Gitzel is responsible for our overall leadership, vision, and strategic direction. This includes overall responsibility for<br>operating our business while managing risk to create long-term sustainable value for our shareholders.<br> <br><br><br><br><br> <br>2019 Key results<br><br><br>•   Implemented strategic change initiatives to preserve the value of<br>Cameco’s assets and increase long-term shareholder value by continuing the suspension of production at McArthur River and Key Lake, continuing efforts to decrease general and administrative costs, and focusing on improving efficiency across the<br>organization including an initiative to implement digital and automation technologies at McArthur River and Key Lake (taking advantage of the suspension of production to upgrade the technology at these mines).<br><br><br><br> <br>•   Exceeded<br>target adjusted net earnings in a challenging market.<br> <br><br><br><br>•   Achieved an average realized price that is 32% above the average spot price<br>for 2019, outperforming the market.<br> <br><br> <br>•   Achieved a strong balance sheet and retired $500 million in debt.<br> <br><br><br><br>•   Exceeded our sales target by one and a half million pounds.<br><br><br><br> <br>•   Delivered<br>the best safety performance in the history of the company.<br> <br><br><br><br>•   Maintained strong community relationships in northern Saskatchewan by finding<br>new ways to support businesses there and ensuring that Cameco continues to be a leading industrial employer of Indigenous people.<br> <br><br><br><br><br> <br>CEO compensation<br><br><br><br><br><br>•   Tim’s target short-term incentive award for 2019 is 120% of his base<br>salary and is based 80% on corporate performance and 20% on individual performance. Our corporate performance score of 130% of target resulted in a short-term incentive award that amounts to 161% of Tim’s base salary.<br><br><br><br> <br>•   Tim<br>received a long-term incentive award at target (valued at 355% of his 2019 base salary).<br> <br><br><br><br>•   Both incentive awards are at-risk<br>compensation – the long-term incentive award is based on both performance and share price.
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Compensation<br>(as at December31)	Three-yearaverage		2019		2018		2017
---	---	---	---	---	---	---	---	---
Fixed
Base salary	$	1,036,967	$	1,060,900	$	1,025,000	$	1,025,000
At-risk<br><br><br>compensation
Short term incentive	$	1,594,000	$	1,706,000	$	1,784,000	$	1,292,000
Long term incentive
PSUs	$	2,208,657	$	2,259,960	$	2,183,062	$	2,182,950
Options	$	1,472,489	$	1,506,438	$	1,455,454	$	1,455,575
Total directcompensation	$	6,312,113	$	6,533,298	$	6,447,516	$	5,955,525
70     CAMECO CORPORATION
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CEO realized and realizable pay

A significant component of CEO compensation consists of long-term incentives which are designed to focus the CEO on Cameco’s long-term success. These incentives are directly affected by our share price and TSR relative to the TSX index. As president and CEO, Tim receives over 60% of his compensation on a deferred basis as long-term incentives. This is performance and equity-based, at-risk compensation. The next table looks back at total direct CEO compensation during the last five years and compares it to the return on a shareholder’s investment. The analysis is based on the return of a $100 investment by a shareholder at the start of a period, and the reinvestment of dividends over the period, compared to $100 of total direct compensation for the CEO for each year. The chart illustrates Cameco’s strong track record of aligning CEO pay to Cameco’s performance. In each year, the current value of $100 invested by a shareholder is greater than the current value of $100 in compensation awarded to Cameco’s CEO.

	Total directcompensation	Realizedpay^1^	Realizablepay^2^	Current value<br> <br>(realized pay +realizable pay)	Value of 100
					Period	Shareholder
2015	$ 5,368,747	$ 2,872,659	-	$ 2,872,659	12/31/14 to 12/31/19	$    67
2016	$ 5,514,934	$ 3,121,306	-	$ 3,121,306	12/31/15 to 12/31/19	$    73
2017	$ 5,995,525	$ 3,518,774	-	$ 3,518,774	12/31/16 to 12/31/19	$    86
2018	$ 6,447,516	$ 2,809,000	$ 2,340,540	$ 5,149,540	12/31/17 to 12/31/19	$  101
2019	$ 6,533,298	$ 2,766,900	$ 1,719,125	$4,486,025	12/31/18 to 12/31/19	$    75

All values are in US Dollars.

1.	Includes salary, short-term incentive payout, PSU payout, if any, and value realized from exercised<br>stock options, if any.
2.	Includes the market value of PSUs including dividends (assuming PSUs vest at target) and realizable<br>value of stock options that are in-the-money.
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Lookback<br> <br><br><br><br>The chart to the right shows the impact of at-risk pay and the effect that performance and share price<br>have on realized and realizable pay. We show Tim’s five-year average total direct compensation as set out above, compared to his average realized and realizable pay, also as set out in the above table. Realizable pay continues to be at<br>risk.
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Share ownership

Tim exceeds his share ownership requirement. He is required to own 4x his base salary in Cameco shares to align with shareholder interests, and the value of his shares and qualifying PSUs is nearly 4.8x his base salary. The table below shows Tim’s share ownership as of December 31, 2019. The target value of share ownership is calculated by using Tim’s 2019 base salary and the 4x multiple for his position, and is based on the year-end closing price of Cameco common shares on the TSX of $11.54 or the acquisition price of his shares or PSUs, whichever is higher. For additional details about share ownership see Share ownership guidelines and reporting starting on page 57.

Base salary	Multiple	Target value of<br>share ownership ()	Cameco shares		****	Qualifying PSUs		Value of shareownership<br><br><br>(shares and<br> <br>qualifying PSUs)<br> <br>($)
				Value<br>()	Number held<br> <br>(#)		Value<br>()
1,060,900	4 x	4,243,600	299,594			137,622		5,045,473

All values are in US Dollars.

2020 MANAGEMENT PROXY CIRCULAR      71

Executive compensation

Compensation discussion and analysis

1.    Approach

Our executive compensation program is based on strong principles, a disciplined process and thorough research and analysis.

Our program has three goals:

1.	Attract, retain and motivate executives, who are operating in a highly-demanding, complex and<br>competitive global business environment.
2.	Establish a clear link between corporate performance and executive pay.
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3.	Motivate executives to create shareholder value by:
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•	using total shareholder return as a performance measure
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•	rewarding them when they successfully achieve corporate and individual performance objectives over the short and long term
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•	ensuring a significant portion of their total compensation is at risk, reinforcing the importance of strong leadership and their ability to influence business outcomes and financial<br>performance, and is tied to share value to align the interests of executives and shareholders.
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Target compensation

We target base salaries and total compensation at the median of our comparator group with the flexibility to position executive pay within the competitive range of the median for target performance.

The charts below show the 2019 target pay mix for total direct compensation for our named executives, and the amount of at-risk compensation.

We use financial and operational measures to assess performance for short- and long-term incentives.

Six principles drive our policy and program decisions relating to executive compensation:

1	TEAM

Promote executive teamwork by using incentive-based compensation that emphasizes corporate over individual performance.

2	PERFORMANCE

Base compensation decisions on corporate and individual performance, using a combination of financial, non-financial, internal and external measures, and absolute and relative performance, depending on short-term or long-term performance.

3	RETENTION

Focus part of the LTI program (PSUs) on absolute and controllable performance measures to retain skilled executives.

4	SHAREHOLDER ALIGNMENT

Use share ownership requirements and equity-based compensation to align executives with long-term interests of shareholders.

5	COMPARATOR

Benchmark shareholder experience and compensation program against a comparable group of companies.

6	MARKET COMPETITIVENESS

Target executive compensation around the range of the market median, depending on role, experience and performance, to ensure we can attract and retain our executive talent.

72     CAMECO CORPORATION

Research and benchmarking

We use national, provincial and industry compensation forecasts and benchmark our executive compensation against our comparator group for individual compensation components and total compensation by position. Performance, scope of the role, experience and internal equity are also considered.

We engage an independent compensation consultant for advice and analysis to make sure our executive compensation is fair and competitive and that we are balanced in our decision-making.

As a publicly-traded, global nuclear energy company based in Canada, we have no peers that are directly comparable, so the human resources and compensation committee, with the support of its independent consultant, established a comparator group of companies to assess both executive and director compensation.

Benchmarking compensation

Our objective is to have a robust and stable group of companies to benchmark against that are comparable by size and industry. We use a multi-step evaluation process to determine appropriate companies for assessing market levels of compensation. The evaluation process is based on our existing criteria and focuses on companies in the resource industry (mining in particular) that are similar in size and complexity and are a relatively good fit with the overall group.

Comparator group

The 2019 comparator group of 18 companies represents a cross-section of Canadian capital intensive companies from different sectors that are similar by size of assets, revenue, enterprise value, and market capitalization (generally ranging from one-third to three times the size of Cameco). These companies are also in regulated or relevant industries or in complex businesses, have operations in multiple geographic locations and jurisdictions, and have their head office in Canada.

2019 Comparator group
Diversified metals and mining	Energy (oil, gas and<br><br><br>methanol)	Utilities, energy infrastructure<br><br><br>and power producers
Agnico-Eagle Mines Ltd.<br><br><br>Eldorado Gold<br> <br>First Quantum Minerals Ltd.<br><br><br>Goldcorp Inc.<br> <br>Hudbay Minerals Inc.<br><br><br>IAMGold<br> <br>Kinross Gold Corp.<br><br><br>Lundin Mining Corp.<br> <br>New Gold Inc.<br><br><br>Teck Resources<br> <br>Yamana Gold Inc.	ARC Resources<br> <br>Crescent Point<br>Energy<br> <br>EnCana Corp.<br> <br>Enerplus Resources Fund<br><br><br>MEG Energy Corp.<br> <br>Methanex Corp.	TransAlta Corp.
THIS YEAR’S NAMED EXECUTIVES
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We have five named executive officers<br>(named executives) in 2019, including the chief executive officer, chief financial officer, and the next three most highly compensated officers at December 31, 2019.
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•  Tim Gitzel	President and Chief Executive Officer (CEO)
•  Grant Isaac	Senior Vice-President and Chief Financial Officer (CFO)
•  Brian Reilly	Senior Vice-President and Chief Operating Officer (COO)
•  Alice Wong	Senior Vice-President and Chief Corporate Officer (CCO)
•  Sean Quinn	Senior Vice-President, Chief Legal Officer and Corporate Secretary (CLO)
2020 MANAGEMENT PROXY CIRCULAR      73
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2.  Annual decision-making process

The board, the human resources and compensation committee, and management are involved in compensation decision-making. The committee is responsible for making compensation recommendations to the board for its approval.

The illustration below shows our process, the different inputs we use to determine compensation, and the flow of information, recommendations and approval by our board.

Assessing the program

The human resources and compensation committee believes that it is good practice to review our compensation programs every year and continued this practice in 2019.

The committee reviews all policies and programs relating to executive compensation, which involves:

•	establishing the annual corporate objectives to measure performance
•	determining the proposed base salaries, short-term incentive awards, and long-term incentive<br>awards
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•	evaluating performance
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•	reviewing and recommending executive compensation to the board for review and approval.
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The committee retains an external consultant as an independent advisor on compensation matters who is also involved in the compensation review. Management retains a different external consultant as a general resource on human resources and other matters (see Compensation governance starting on page 54 for more information).

74     CAMECO CORPORATION

3.  Measuring performance

Executive compensation decisions are based on corporate and individual performance. Performance objectives are tied to our strategy of focusing on our tier-one assets and profitably producing at a pace aligned with market signals to preserve the value of those assets and increase long-term value with an emphasis on safety, people and the environment.

Corporate performance and measuring success

We assess our corporate performance by how well we achieve both financial and operational goals, and group our corporate objectives into our four measures of success:

•	outstanding financial performance
•	safe, healthy and rewarding workplace
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•	clean environment
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•	supportive communities.
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Our four measures of success allow us to proactively address the financial, social and environmental aspects of our business. We believe that each is integral to our overall success and that together they will ensure our long-term sustainability.

The corporate objectives are designed to support our strategic plan and the board approves them every year. They undergo a rigorous review process – management brings them forward to the human resources and compensation and safety, health and environment committees where they are reviewed to ensure they appropriately support our strategic plan and are achievable with significant management effort. The human resources and compensation committee then recommends the corporate objectives to the board for approval.

Linking pay to performance

The corporate objectives are used as performance measures under our short-term incentive (STI) plan. The STI scorecard on pages 84 and 85 lists our 2019 corporate objectives and weightings, and the threshold, target, maximum, and actual performance against these objectives under the STI plan.

Under our PSU plan, we assess performance over a three-year period based on three objectives. These objectives were recommended by management, reviewed by the human resources and compensation committee, and then recommended to the board for approval. The table on page 80 sets out the measures for PSUs granted in 2019.

PSU awards granted in 2017 were measured against three performance measures. They vested on December 31, 2019 and were paid out early in 2020, based on our performance against those three targets for the three-year performance period (see pages 86 to 88 for the performance assessment and details of the payout).

Performance measures under our STI and PSU plans are linked to our strategic plan to ensure our long-term growth and focus on creating long-term value. The better we perform, the greater the potential to realize a higher payout value.

Individual performance

The board assesses the CEO’s individual performance using the annual corporate objectives and recommendations by the human resources and compensation committee, which are based on:

•	overall corporate performance
•	implementation of the CEO’s strategies to increase long-term value
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•	achievement of the CEO’s individual performance objectives.
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The committee reviews feedback from all directors, reports from management and the CEO’s self-assessment and consults with its compensation consultant before making its recommendation to the board.

Every year the CEO assesses the individual performance of each senior vice-president using the annual corporate objectives as targets, with consideration of the executive’s influence in a given area. The CEO compares actual performance to the targets and evaluates the leadership effectiveness of the executive. The CEO discusses the performance of the executives with the committee and its compensation consultant. The committee then makes its recommendations to the board. The board approves all decisions on executive compensation.

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4.  Compensation components

Five components make up total executive compensation:

•  Base salary
•  Short-term incentive (STI)	}	at-risk compensation
•  Long-term incentive (LTI)
•  Pension
•  Group benefits
FORM	PERFORMANCE<br><br><br>PERIOD	HOW IT IS DETERMINED	RISK MANAGEMENT FEATURES
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BASE SALARY	Provides fixed compensation that is competitive with the market
Cash	One year	Based on current business challenges, experience, scope of the role, market<br>competitiveness among the comparator group, individual performance and<br> <br>internal equity.	Fixed pay, paid throughout the year, provides a certainty at a base level for fulfilling their responsibilities. Represents 17-28%<br>of target direct compensation for the named executives.
VARIABLE<br><br><br>(AT-RISK SHORT TERM)	STI compensation encourages achievement of pre-established corporate and individual performance objectives. Payout is<br>subject to a clawback policy
Cash	One year	Focuses on specific annual objectives.<br><br><br><br> <br>Target award based on market competitiveness among the comparator group and<br>other factors.<br> <br><br> <br>Actual award based on corporate and individual<br>performance.	Provides a balanced focus on short-term performance based on a pre-determined set of performance measures weighted and scored in our scorecard. Actual payout on all measures ranges from 0-200%. Targets and results are approved by the<br>board. Targets are tested to determine the level of stretch.<br> <br><br><br><br>Using a balanced scorecard of different performance measures reduces the risk associated with emphasizing a single (or limited) performance<br>measure.
VARIABLE<br><br><br>(AT-RISK LONG TERM)	LTI compensation is an incentive to achieve longer-term performance and an opportunity to receive equity-based compensation aligned with shareholder<br>interests. Payout is tied to Cameco share performance and is subject to a clawback policy
Performance share<br><br><br>units	Three-year term, with vesting at the end of three years	Focuses on longer-term objectives.<br><br><br><br> <br>Target award based on market competitiveness of the LTI package among the<br>comparator group and other factors.<br> <br><br> <br>Actual payout based on our<br>overall relative and absolute performance targets.<br> <br><br> <br>Payment is<br>made in Cameco shares purchased on the open market, or in cash.	Performance is measured on previously established targets for relative and absolute<br>measures. Three-year vesting period maintains longer term focus for decision-making and management of business. Vesting and payouts are capped. Payout on the relative TSR metric could be 0-200% and 0-150% on each of the other measures.<br> <br><br> <br>Stretch targets are based on achievement that is better than the comparator group and market.
Restricted share units	Three-year term, with vesting at the end of three years	Target award will be based on market competitiveness of the LTI package among the<br>comparator group and other factors.<br> <br><br> <br>The realized value is based<br>on Cameco’s share price.<br> <br><br> <br>Payment is made in Cameco shares<br>purchased on the open market, or in cash.	Provides a balanced incentive to take appropriate risks. Three-year vesting period supports retention, and maintains longer-term focus for decision-making and management<br>of business.
Stock options	Eight-year term, with one-third vesting each of<br>the first three years starting on the first anniversary of<br> <br>the grant date	Target award based on market competitiveness of the LTI package among the comparator<br>group and other factors.<br> <br><br> <br>The final realized value is based on<br>the appreciation of Cameco’s share price.	Provides a balanced incentive to take appropriate risks. Three-year vesting eligibility<br>period and eight-year term maintain longer-term focus for decision-making and management<br> <br>of business.
RETIREMENT BENEFITS
Defined contribution<br><br><br>pension plan and<br><br><br>supplemental executive<br><br><br>pension program<br><br><br>(defined benefit)	Ongoing	Based on market competitiveness and legislative requirements.	Tax efficient way to provide employment benefits. Provides security for employees and their families.
Group insurance,<br><br><br>health and dental,<br><br><br>income protection	Ongoing	Based on market competitiveness.

We also have employment agreements with our named executives (see page 98).

76     CAMECO CORPORATION

Base salary

We generally target base salaries at the median of the comparator group. We review base salaries every year, and compare them to similar positions in the comparator group. Then we review our corporate performance, the individual’s performance, experience and scope of the role as well as internal equity to make sure any increases are fair and balanced. Salary adjustments, if any, for our named executives are normally effective January 1.

Short-term incentive (STI)

The STI plan gives executives the opportunity to earn a cash bonus based on their success in achieving pre-established corporate and individual performance targets for the year.

Cameco has to meet a minimum level of performance (threshold) for each measure before being eligible for a payout of 50% on that measure. Achieving target produces 100% payout on that measure. The maximum payout on any STI target is 200%. There is no payout if performance is below threshold. Individual performance has a maximum payout factor of 150%. The targets are considered challenging or stretch.

The human resources and compensation committee sets the target STI award for each executive based on position, internal equity and market competitiveness. The table below shows the current target levels and weightings used to establish the actual awards. The weighting of corporate and individual performance is the same for all executives, which promotes executive teamwork and closely aligns the interests of executives and shareholders. Actual bonuses are based on performance for the year and paid in the following year after our year-end results are released.

Position	STI target for 2019<br><br><br>(% of base salary)			Corporate performance<br> <br>weighting			Individual performance<br> <br>weighting
CEO		120	%		80	%		20	%
Senior vice-presidents		65-80	%		80	%		20	%

Determining the payout

We use a balanced scorecard to broadly measure corporate performance and give participants a clearer picture of their potential award. The scorecard includes all of the corporate objectives and applies a weighting to each one. Individual performance is also measured.

Measuring corporate performance

The board establishes the measures and weightings every year based on the committee’s recommendation. These objectives represent our four measures of success which highlight the importance we place on our financial and non-financial measures and the social and environmental aspects of our business as a responsible corporation.

As part of the process in determining the STI award, the human resources and compensation committee consults with the safety, health and environment committee on our performance related to safety, health and the environment and related corporate results. The human resources and compensation committee then brings forward a recommendation to the board.

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Measuring individual performance

The committee determines the individual performance measures and weightings for the CEO, while the CEO recommends to the committee the individual performance measures and weightings for the other named executives. Assessment of individual performance is based on the executive’s contribution to corporate performance and individual performance measures. The CEO assesses individual performance for the named executives and presents them to the committee. The committee assesses the CEO’s performance.

Once the individual performance assessment is complete, the assessments are approved by the committee. The corporate performance multiplier and the executive’s assessment results are used to calculate the annual bonus based on the formula below.

Applying discretion

The board can use discretion to increase or decrease the amount of the STI award when there are significant external challenges or opportunities that were not contemplated or reasonably expected when the objectives were set. It cannot exceed the overall maximum payout of 200%. See the HRCC chair’s letter (page 62) for a discussion on how the board used its discretion to decrease the amount of the 2019 STI award.

Long-term incentive (LTI)

LTI provides executives and management employees the opportunity to receive equity-based compensation to drive longer-term performance. Both the committee and the board believe equity-based compensation is important for motivating employees to deliver strong longer-term performance, aligning their interests with those of our shareholders and providing pay that is competitive with the market.

LTI has historically been awarded to executives as PSUs and stock options, with RSUs granted under limited circumstances. This LTI mix allowed us to use different vesting criteria, eligibility and performance measures for at-risk compensation. In 2020, RSUs will replace stock options in the LTI mix. See page 89 for details about this change.

Award	How it’s<br><br><br>used	Business<br><br><br>focus	Who<br><br><br>participates	Vesting	How it’s<br><br><br>settled	Alignment withshareholders
PSUs<br><br><br>(page 79)	60% of target LTI award	Performance vesting criteria<br><br><br><br> <br>Directly linked to long-term, absolute and relative performance and share<br>price<br> <br><br> <br>Reduces the number of option awards, lessening the<br>dilutive impact to shareholders	Vice-presidents and above	Vest after three years based on performance	Cameco shares purchased on the market or cash	Motivates executives to create shareholder value that can be sustained over a longer<br>period on both an absolute and relative basis<br> <br><br> <br>Non-dilutive
Stock options<br><br><br>(page 81)	40% of target LTI award, effective prior to 2020 grants	Ties a portion of future compensation to the long-term performance of our shares	Vice-presidents and above	Vest over three years, expire after eight years	Option to buy Cameco shares issued from treasury at the exercise price	Motivates executives to increase shareholder value
Restricted<br><br><br>share units<br> <br>(page<br>82)	40% of target LTI award, effective with 2020 grants	Ties a portion of future compensation to the longer-term performance of our shares	Vice-presidents and above	Three-year term, with vesting at the end of three years	Cameco shares purchased on the open market, or in cash	Motivates executives to increase shareholder value<br><br><br>Non-dilutive
78     CAMECO CORPORATION
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LTI awards are granted every year on the first business day in March after we publicly disclose our results for the previous fiscal year. If we impose a trading blackout period that includes the first business day in March, we will make the grants on the next trading day after the blackout period has ended.

The board can grant special LTI awards at other times during the year if required for promotions, new hires or to address specific business issues.

Determining the mix

The committee set the 2019 target mix of the long-term incentive awards at 60% PSUs and 40% options, so that all of the LTI is performance based, with options only having a value if our share price increases and PSUs vesting based on performance against a number of factors.

The committee evaluates the mix of options and PSUs every year, and discusses national trends with its compensation consultant, including the relevance of stock options in our industry and the declining emphasis Canadian public companies are placing on stock options and other equity-based awards. The committee takes into account previous awards of PSUs and options when it considers new LTI grants.

During 2019, the committee considered the merits of keeping stock options in our compensation program and made a decision to replace them with RSUs starting in 2020. RSUs, like stock options, align with share price over a longer-term horizon, are a common form of LTI in our comparator group, and provide retention value. They also reduce the depletion of the option pool – RSUs are non-dilutive to shareholders as shares are purchased on the market when they vest.

Performance share unit (PSU) plan

The PSU plan design is described in the table on the previous page, including vesting at the end of a three-year period. The formula below shows how the performance factors determine the final number of PSUs that vest.

The performance multipliers are determined at the time each PSU award is granted.

Each PSU represents an opportunity to receive a Cameco common share purchased on the open market at the end of the three-year performance period (or cash, at the board’s discretion). PSUs granted in 2018 and 2019 earn dividend equivalents in the form of additional PSUs.

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Determining the payout

We use a scorecard to align senior management’s compensation with their ability to improve corporate performance over the three years. The PSUs measure absolute and relative performance so management maintains a balanced, longer-term focus on delivering shareholder value.

For our 2017, 2018 and 2019 awards, performance measures are based on one absolute and two relative measures: all-in sustaining cash cost, relative realized uranium price and relative TSR. As companies in our comparator group are not affected by the uranium price like Cameco, TSR is a challenging performance measure, likely to over compensate in a strong uranium market, and to under compensate in a depressed uranium market rather than rewarding industry outperformance, which is the intention of this measure.

Measuring performance

The human resources and compensation committee reviews the performance measures and targets every year and recommends them to the board for approval. The targets are set on the basis that they are challenging to achieve.

The table below shows the measures and weightings for PSUs awarded in 2019 for 2019 to 2021 performance.

Measure	Weighting	Description	What it measures
Average relative realized<br><br><br>uranium price<br> <br>0 to<br>150%	30%	Achieve an average realized price for uranium sales for a three-year period that exceeds<br>the weighted average price for sales in two independent industry benchmarks for the same period:<br> <br><br><br><br>•   EIA (US energy information administration) price for sales in the<br>US<br> <br><br><br><br>•   ESA (Euratom supply agency) price for sales in Europe.<br><br><br><br> <br>The payout at the end of the three-year period is based on 2018, 2019 and<br>2020 sales due to timing of when pricing information is available.	Measures performance relative to<br><br><br><br> <br>our competitors. Consistently achieving higher prices than our competitors<br>is a stretch target because uranium is a fungible product and we need to distinguish our uranium from our competitors to achieve a premium price.<br> <br><br><br><br>We use these pricing indicators because they are publicly-available measures set by independent third parties.
All-in sustaining cash cost<br><br><br>(AISCC) ^1^<br><br><br>0 to 150%	30%	Achieve three-year cumulative cost reductions while safely achieving steady production<br>at the Saskatchewan tier-one operations in the three-year period from 2019 to 2021.	Measures absolute performance and ties directly to our strategic plan.
Three-year relative total<br><br><br>shareholder return (TSR)<br><br><br>0 to 200%	40%	Achieve three-year average TSR at the median of the three-year average TSR achieved by<br>companies in the TSX 60.<br> <br><br> <br>We define TSR as the change in price of<br>a Cameco common share, including reinvestment of dividends, on the TSX during the three-year period from 2019 to 2021.	Measures performance relative to<br><br><br>the broader index.
PERFORMANCE MULTIPLIER<br><br><br>Maximum of 170%		The overall performance factor is the sum of the three weighted targets<br>above.
INITIAL GRANT OF PSUs		Notional units awarded at the beginning of the three-year performance period.
PSU PAYOUT		Payout amount is the initial number of PSUs granted, plus dividend equivalents,<br>multiplied by the PSU performance multiplier, exchanged for the equivalent number of Cameco common shares, after deducting applicable withholding taxes.
1.	Cash outlay to sustain the operation of the site. It does not include growth capital or royalties. This information is<br>prepared as part of each site’s annual three-year business and budget plan and is incorporated in the monthly financial report for each site.
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80     CAMECO CORPORATION
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PSU performance multiplier

The performance multiplier for each measure depends on our performance against each target. The table below shows how we assessed performance against each measure in the PSU scorecard on page 87 for 2017 to 2019 performance.

Performance<br><br><br>measures<br> <br>(andweighting)	Threshold<br><br><br>performance	If we achieve:	Then the performance multiplier is:
Average realized<br> <br>uranium price<br> <br>(30%)	80% of our target of 100%	Less than 80% of the corresponding target	0%
		80 to 120% of the corresponding target	50 to 150% (in a straight-line interpolation)
		More than 120% of the corresponding target	150%
All-in sustaining<br><br><br>cash cost<br><br><br>(30%)	$900 million over a<br> <br>three-year period<br> <br>(target is $818 million)	More than $900 million	0%
		$736 million to $900 million	50 to 150% (in a straight-line interpolation)
		Less than $736 million	150%
Our three-year<br> <br>average TSR<br> <br>(40%)	25th percentile<br> <br>(target is the 50th percentile)	Below the 25th percentile among our comparator<br><br><br>group	0%
		From the 25th to the<br> <br>50th percentile	50 to 100% (in a straight-line interpolation with 100% at the 50th percentile)
		50th percentile	100%
		50th to 75th percentile	100 to 200% (in a straight-line interpolation)
		Higher than the 75th percentile	200%

Applying discretion

The committee can use discretion to make adjustments so that payouts appropriately reflect performance and discourage excessive risk-taking. We fully disclose any use of discretion, together with the rationale and the particular circumstance. No adjustments were made to the PSU score for 2017 to 2019 performance.

Stock option plan

Prior to 2020, the board granted stock options for executives at the vice-president level and above as part of their LTI compensation mix. The committee takes into account previous equity awards when it considers new grants of options. The board fixes the exercise price of an option at the time of the grant as the TSX closing price of Cameco common shares on the trading day immediately before the date of the grant.

If an option holder leaves the company, any unvested options will vest during a specific period of time depending on the reason for leaving. Vested options can be exercised during the same period. See Termination and change of control benefits starting on page 98 for details.

No more than 10% of our total issued and outstanding shares can be issued to insiders in a year under the stock option plan and any other security-based compensation arrangement. No more than 5% of our total issued and outstanding shares can be issued to any one person. Options cannot be transferred to another person (other than by will or intestate succession).

Making changes – **** The board can change, suspend or terminate the stock option plan, subject to the laws that apply, including but not limited to the rules, regulations and policies of any stock exchange where our shares are listed. Some changes may require approval from shareholders or a governmental or regulatory body.

Neither the board, the human resources and compensation committee nor shareholders can alter or affect the rights of an option holder in a negative way without his or her consent, except as described in the plan. See Appendix C for information about changes to the stock option plan that must be approved by shareholders.

According to the TSX rules for reporting on equity compensation plans, there were no plan changes in 2019.

The Summary compensation table on page 91 gives information about the grant date value of options awarded to the named executives over the past three years. The Incentive plan awards table on page 93 gives information about the 2019 year-end value of the named executives’ unexercised options and PSUs that have not vested.

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Restricted share units

Prior to 2020, the board granted RSUs from time to time to senior management, mainly as a targeted retention tool, on the recommendation of the committee. Each RSU represents one notional common share. These RSUs would typically vest at the end of three years. Management employees below the level of vice-president receive their annual LTI awards as RSUs which vest one-third each year over three years. See 2020 Program changes on page 89 for information about how RSUs will replace stock options in the LTI compensation mix going forward.

Pension

Pensions are an integral part of total compensation and a cost-effective and important benefit for attracting and retaining executives and other employees. Executives participate in a registered base plan and a supplemental program.

Registered base plan – **** We have a registered defined contribution plan for eligible employees. All of the named executives participate in our defined contribution plan. We contribute 13% of the named executive’s pensionable earnings to the defined contribution plan every two weeks up to the annual maximum allowed by the Canada Revenue Agency. The contribution rate changed from 12% to 13% as of April 1, 2019 ($27,230 in 2019).

Supplemental program – **** This non-contributory supplemental defined benefit retirement plan is designed to attract and retain talented executives over the longer term. It provides a retirement income that is commensurate with the executive’s salary and offsets the registered pension plan limits under the Income Tax Act (Canada).

All of our Canadian-based management at the vice-president level and above participate in the supplemental retirement plan (see Pension benefits on page 96 for more information).

Benefits

Groupbenefits – We provide group benefits to all our employees. The named executives participate in an enhanced program and receive coverage similar to those offered by companies in our comparator group. These benefits include life insurance, long-term disability insurance, extended health care, dental care and emergency medical coverage.

Perquisites – **** Our named executives also receive additional benefits as part of their total compensation, similar to those offered by companies in our comparator group. These include a financial and tax planning allowance, a vehicle allowance, an executive medical plan, additional life insurance and salary protection in the event of short-term disability.

82     CAMECO CORPORATION

5.  2019 Performance and compensation

Base salary

The named executives received 3.5% salary increases for 2019 to position their pay around the market median. The chief operating officer received an 8.5% salary increase to position his pay closer to the market median.

Short-term incentive (STI)

The STI award is based on targets set for each named executive as a percentage of base salary and actual corporate and individual performance. Target awards are set at the median of those of our comparator group. The plan design is based 80% on corporate performance and 20% on individual performance for all executives.

Corporate performance was assessed at 130% for 2019, reflecting strong company performance. STI awards are reported in the summary compensation table on page 91. You can find a complete description of the plan design beginning on page 77.

2019 results

Cameco’s performance in 2019 was strong despite a tough market where uranium prices remained low. We delivered solid results in terms of our annual financial performance, safety and clean environment commitments and supportive communities’ commitments. We executed on all strategic fronts – operational, marketing and financial. On the operational front, Cigar Lake and the Fuel Services segment performed very well. With the McArthur River/Key Lake operations still on care and maintenance, production in our uranium segment remained well below our committed sales. As a result, we were actively purchasing material on the spot market. On the financial front, we are well-positioned to execute on our strategy and self-manage risk. Our balance sheet is strong – we started 2020 with $1.1 billion in cash and $1 billion in long-term debt with maturities in 2022, 2024 and 2042. Despite continued challenges in the market and our work internally to improve efficiencies and reduce costs in an organizational structure that has been significantly downsized and consolidated, Cameco was able to meet or exceed six of our seven targets for corporate performance for 2019.

Detailed STI performance results and weightings are reported in the STI scorecard that follows. The human resources and compensation committee and the board review the results and the performance and payouts under each STI measure to determine if there are any exceptions that should be considered in calculating the corporate performance score. The earnings target in 2019 achieved the maximum score, partially due to the $40.3 million (US) cash award from the successful conclusion of our arbitration with TEPCO. The arbitrators agreed with Cameco that TEPCO was not entitled to terminate the supply agreement, but awarded damages lower than our claim. The board carefully considered the unique facts and circumstances of this case with input from the human resources and compensation committee, and, together with management, concluded that a maximum score for the earnings payout does not properly reflect the disparity between the amount of the award and our claim. Accordingly, the board used its discretion to reduce the earnings performance score from 200% to144% to reflect the lower than expected award.

See note 1 to the STI scorecard that follows for additional information about how we determined our adjusted net earnings performance.

About the payout

Threshold performance provides a 50% payout on that measure, while performance at target produces a 100% payout, and maximum performance provides a 200% payout.

There is no payout if performance is below threshold. We have a 200% cap on payouts for performance above the maximum to mitigate excessive risk-taking.

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STI scorecard

2019 STItargets					Payoutpercentage	Performance weighting		Payout
Objective/target	Threshold	Target	Maximum	Actual performance
OUTSTANDING FINANCIAL PERFORMANCE (50% weighting)
Achieve budgeted adjusted net<br>earnings.	($43)	$0	$10	Performance exceeded our target maximum. Adjusted net earnings were $31<br>million^1^ which would have resulted in a 200% payout percentage. The board used its discretion to decrease the payout percentage to 144%.	144.0%	x	25% =
Achieve budgeted cash flow from operations (before working capital changes).<br><br><br><br> <br>($ millions)	$226	$282	$338	Cash flow from operations (before working capital changes)^^was $428<br>million^1^. Performance exceeded our target maximum.	200.0%	x	25% =
SAFE, HEALTHY AND REWARDING WORKPLACE (20% weighting)
If a fatality or permanent disability were to occur, the entire safety performance would default to 0%.
Leading Indicators - strive to complete corrective actions on time and increase the number of JTOs (job task observations) completed.	80.0%	95.0%<br><br><br>or higher	120.0%	In 2019, corrective actions were completed on time 92% of the time and an increased number of job task observations were<br>completed. This slightly exceeded our target.	101.3%	x	10% =
Strive for no injuries at all Cameco-operated sites and maintain a long-term downward trend in combined employee and contractor radiation doses,<br>and injury frequency and severity (measured by TRIR^2^).	2.30	1.5 orlower(1.06 to1.94targetrange)	0.70	TRIR^2^ achieved our 2019 target performance<br>range and performance was 20% stronger year-over-year. There were no significant safety incidents in 2019.	100.0%	x	10% =
SUPPORTIVE COMMUNITIES (15% weighting)
Execute the Vision in Motion project by supporting northern business development opportunities through sourcing services from northern Saskatchewan vendors.	$8.56 and<br>100%<br>complete	$7.78and100%complete	$7.00<br>and<br>100%<br>complete	100% of the project was completed on time, but costs exceeded our target. The threshold was therefore not met for this combined<br>target.	0.0%	x	10% =
Sign contract in support of northern business development opportunities to source services from northern Saskatchewan vendors.	Signed;<br>³10%<br>in-house<br>cost	Signed;matchin-housecost	Signed;<br>£10%<br>in-house<br>cost	In 2019, signed the contract at 7.7% less than in-house costs. This exceeded our<br>target.	177.1%	x	5% =
84     CAMECO CORPORATION
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2019 STI targets				Payoutpercentage	Performance weighting		Payout
---	---	---	---	---	---	---	---
Objective/target	Target	Maximum	Actual performance
CLEAN ENVIRONMENT (15% weighting)
If an incident occurs that results in moderate or significant environmental impacts or current and future<br>remediation costs of greater than or equal to 1 million or which has a reasonable potential to result in significant negative impact on the company’s reputation with our major stakeholders, the payout would default to 0%.
Improve environmental performance in significant environmental aspects by achieving divisional targets.	95%to105%	120%	Environmental performance targets were within the target performance range. There were nosignificant environmental incidents in 2019.	100.0%	x	15% =
OVERALL 2019<br>STI PERFORMANCE		2019 CORPORATE<br><br><br>PERFORMANCE MULTIPLIER				<br><br><br><br>

All values are in US Dollars.

1.	We use adjusted net earnings and cash flow provided by operations (before working capital changes) as a more<br>meaningful way to compare our financial performance from period to period. These measures do not have a standardized meaning or a consistent basis of calculation under IFRS, and they should not be considered in isolation or as a substitute for<br>financial information prepared in accordance with IFRS. Other companies may calculate these measures differently. The adjusted net earnings and cash flow provided by operations amounts in the 2019 compensable targets table are<br>different than what are reported in our 2019 annual management discussion and analysis (2019 MD&A). As reported in further detail on page 63 of this document and page 28 of our 2019 MD&A, adjusted net earnings starts with reported net<br>earnings attributable to equity holders and is then decreased by a net $33 million to exclude the effect of adjustments on derivatives, reclamation provision adjustments, and income tax adjustments. For compensation purposes, adjusted netearnings as reported in our 2019 MD&A is further adjusted for variances in foreign exchange rates as compared to budget. To calculate cash flow from operations (before working capital changes), we start with cash provided by<br>continuing operations as reported on page 63 of this document and page 27 of our 2019 MD&A and deduct the impact of working capital changes of $96 million, then we further adjust for variances in foreign exchange rates as compared to<br>budget.
2.	The total recordable incident rate (TRIR) is an Occupational Safety and Health Administration (OSHA) safety metric that<br>was adopted by the company to continue to drive improvements in safety performance. TRIR is a measure of the rate of “recordable” workplace injuries. Examples of “recordable injuries” are a medical treatment (other than first<br>aid), restricted work, lost-time and other specific injuries such as 10 decibel hearing loss, loss of consciousness and broken bone.
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2020 MANAGEMENT PROXY CIRCULAR      85
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Individual performance

Individual CEO performance was assessed against the following core measures set for 2019, similar to those set in previous years:

Key operating results<br><br><br>Strategic change initiatives<br><br><br>Leadership effectiveness	}	The committee can also add any other performance measures it deems appropriate

In developing its recommendation for the board, the committee assessed overall CEO performance using these measures as well as corporate performance, implementation of our strategy to achieve shareholder value, the recommendations from the compensation consultant, feedback from board members, and the CEO’s own self-assessment.

The board discussed the results of the CEO assessment and considered the committee’s recommendation during an in camera session without management present before approving the CEO’s 2019 STI award. The board’s decision to approve a payout to the CEO on individual performance that was above target was based on Tim’s strong leadership, strategic initiatives and significant performance results made during 2019.

The CEO determines the individual performance measures that will be used for the other executives, sets the weightings for each, and conducts a performance assessment for each senior vice-president. Senior vice-presidents assess the performance of vice-presidents. For each of the senior vice-presidents, the CEO provided a detailed assessment of their performance, particular achievements and leadership. The committee considered these assessments in light of the key operating results for 2019 and approved the CEO’s recommended performance assessments for each of the senior vice-presidents, including the named executives.

Long-term incentive (LTI)

Each LTI award is based on the level of the position, internal equity and overall market competitiveness. The 2019 LTI awards were benchmarked to the median of the comparator group. LTI awards are reported in the Incentive plan awards table on page 93. The table on page 80 explains the targets and weightings for PSUs awarded in 2019.

Position	LTI award<br><br><br>(% of base salary)			Actual % of PSUs and<br><br><br>options granted in 2019<br> <br>(PSUs/options)
President and CEO		355	%		60/40
Senior Vice-President and Chief Financial<br>Officer		250	%		60/40
Senior Vice-President and Chief Operating<br>Officer		225	%		60/40
Senior Vice-President and Chief Corporate<br>Officer		200	%		60/40
Senior Vice-President, Chief Legal Officer and<br>Corporate<br> <br>Secretary		200	%		60/40

Starting with 2018 grants, PSUs earn dividend equivalents in the form of additional PSU. The dividends vest in proportion to the underlying PSUs and are paid out when the award is settled.

About the payout (2017 PSU awards)

Payout formulas have been established for each performance measure, taking into account different levels of threshold performance to determine the performance multiplier, and to cap payouts to eliminate any excessive risk-taking. There is no payout if performance is below threshold. See the table on page 81 for details.

The calculated payout of the 2017 PSU awards for the performance period January 1, 2017 to December 31, 2019 was 71.6% of the number of PSUs granted. The ultimate value of the payout was 55% of the value of the PSUs granted in 2017. The payout was made in March 2020.

86     CAMECO CORPORATION

PSU scorecard

The following table shows the threshold, target and maximum for each objective and our results against the three performance measures under the plan at the end of the performance period.

Three-year results (ending December 31, 2019)					Weighting		Performancemultiplier
Corporate objective/target	Threshold	Target	Maximum	Actual performance
Average realized uranium price<br> <br><br><br><br>0 to 150%<br> <br><br><br><br>Achieve an average realized price for uranium sales for a three-year<br><br><br>period that exceeds the weighted average price for sales in two<br><br><br>industry benchmarks for the same<br><br><br>period – the EIA price for sales<br> <br>in the US and the ESA price<br> <br>for sales in Europe.<br><br><br><br> <br>The 2017 grant is based on 2016,<br><br><br>2017 and 2018 sales due to timing of when pricing information is available.	80%<br> <br>of<br>target	100%<br> <br>of target	At or<br>above<br>120% of<br>target	Achieved an average realized price for uranium sales of 38.16 (US),<br>which is above the weighted average price for sales in two industry benchmarks for the same period.
	$30.23	$37.79	$45.35	101.1%<br>achievement	x	30% =
All-in sustaining cash cost<br><br><br><br> <br>0 to 150%<br><br><br><br> <br>Achieve all-in sustaining cash cost<br>of $818 million in the three-year period 2017 to 2019 from our Saskatchewan tier one operations.<br> <br><br><br><br>($ millions)	$900	$818	$736	Achieved all-in sustaining cash cost of 762.9 million from the identified<br>operations for the three-year period 2017 to 2019.
	$900	$818	$736	107.2%<br>achievement	x	30% =
Our three-year average total shareholder return (TSR)<br><br><br><br> <br>0 to 200%<br><br><br><br> <br>Achieve three-year average TSR that is the median of the three-year average<br>TSR achieved by companies in the comparator group in effect at the time.<br> <br><br> <br>We define TSR as the change in price of a Cameco common share, including reinvestment of dividends, on the TSX for the three-year period 2017 to 2019.	At the 25^th^<br>percentile	At the50^th^percentile	At or<br>above<br> <br>the 75^th^<br>percentile	Three-year average TSR<br>was at the 23rd percentile of our comparator group for the three-year vesting period from<br>2017 to 2019.
	P25	P50	P75	P23<br>achievement	x	40% =
PSU PERFORMANCE MULTIPLIER^1^Sum of the three weighted factors							<br><br><br><br>

All values are in US Dollars.

1.	The multiplier is rounded to one decimal. Actual payouts are calculated using the precise multiplier, which is 71.55%.<br>
2020 MANAGEMENT PROXY CIRCULAR      87
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Relative performance

The 2017 PSU awards vested based on performance conditions that were set at the time of the grant. Our three-year average TSR for 2017 to 2019 was at the 23^rd^ percentile of the TSX 60 group of companies.

Grant value vs. payoutvalue

The grant value of the PSUs in 2017 was based on $14.70, our closing share price on the TSX on the trading day prior to the grant (as disclosed in the summary compensation table of our 2018 proxy circular).

The payout amount is the initial number of PSUs granted, multiplied by the PSU performance multiplier (calculated at a payout of 71.6% of the number of PSUs granted). This results in a payout of 55% of the original grant date value based on our performance and share price.

The table below shows the calculation of the payout on or about March 1, 2020 for each named executive. The value of the payout is based on $11.31, the actual average purchase price of our common shares purchased on the TSX on behalf of the named executives on or about March 2, 2020.

Name		(Multiplier x Weighting)
	2017 PSU award<br><br><br>(# of units )		Average realizeduranium price		All-in sustainingcash cost		Our three-yearaverageTSR		Value of total<br><br><br>2017 PSU<br><br><br>payout ($)
Tim Gitzel	148,500								1,201,774
Grant Isaac	56,100								454,007
Brian Reilly	8,820	x	(102.5% x 30%	+	136.0% x 30%	+	0.0% x 40%)	=	71,393
Alice Wong	36,300								293,782
Sean Quinn	35,100								284,066

The next table shows the vesting history of PSUs awarded to our named executives and paid out over the past three years. Awards vested below target in 2018, 2019 and 2020, highlighting the at-risk nature and link between pay and performance.

PSUs awarded in	Vested as a % of target		Paid out,<br><br><br>after deducting withholding taxes
2017		71.6%		March 2020
2016		61.1%		March 2019
2015		65.6%		March 2018
88     CAMECO CORPORATION
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6.   2020 Compensation decisions

Base salary

Over the last number of years, Cameco has made tough but necessary business decisions to preserve its tier-one assets and to reduce operating and general administrative expenses. As a result, the CEO recommended that the named executives not receive salary increases for 2017 or 2018, except for the chief operating officer who was appointed to the role in July 2017 and received a 5% increase in base salary as of January 1, 2018 to move him closer to the market median for his role. The board approved modest salary increases for the named executives for 2019 to position their pay around the market median. In 2020, the board approved a 5% salary increase for the chief operating officer and 3% salary increases for the other named executives (except the CEO who, on his request, received no salary increase) to position their pay around the market median.

Short-term incentive (STI)

The STI plan will continue to use a balanced scorecard approach that supports Cameco’s four measures of success. The plan emphasizes strong financial performance with 50% of the STI plan based on achievement of financial results.

Long-term incentive (LTI)

2020 LTI awards

LTI awards granted to executives in early 2020 were benchmarked at the median of the comparator group and were based on a percentage of base salary (see page 86 for details about each position).

LTI awards consisting of 60% PSUs and 40% RSUs were granted to the named executives on March 2, 2020 as follows:

•	PSUs vest at the end of a three-year period based on our performance against the following<br>criteria: our average realized uranium price relative to industry benchmarks (50%), and all-in sustaining cash cost (50%) for our Saskatchewan tier-one operations (see<br>page 80 for a description of what this includes)
•	RSUs vest at the end of a three-year period.
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	PSUs					RSUs
---	---	---	---	---	---	---	---	---	---	---
Name	Numbergranted^1^		Value<br>of grant2 ()	Date whenperformanceperiod ends		Numbergranted		Valueof grant2 ()	Vestingdate
Tim Gitzel		194,650			12/31/2022		129,750			03/02/2023
Grant Isaac		75,750			12/31/2022		50,500			03/02/2023
Brian Reilly		58,400			12/31/2022		38,950			03/02/2023
Alice Wong		49,000			12/31/2022		32,650			03/02/2023
Sean Quinn		47,400			12/31/2022		31,600			03/02/2023

All values are in US Dollars.

1.	PSUs granted

The number of PSUs reflects 100% of the original number of PSUs granted and has not been adjusted to reflect performance. PSUs accumulate dividends during the vesting period. The actual number of PSUs earned can vary from 0 to 200% of the original number granted based on corporate performance.

2.	Value of PSUs and RSUs granted

The values represent the number of PSUs and RSUs granted to each named executive, multiplied by $11.61, the closing price of Cameco shares on the TSX on the trading day immediately before the grant.

2020 Program changes

The board approved the committee’s recommended changes to the incentive plans starting in 2020 (outlined below) to support Cameco’s strategy and business plan while recognizing the prolonged challenging market conditions and the importance of efficiently managing Cameco in a low price environment.

PSU measures

2020 PSU awards will be based on two equally weighted performance measures, one relative and one absolute, aligned with best practice. Using equally weighted relative and absolute performance measures ensures that management continues to maintain a balanced focus on delivering shareholder value over the long term. Our relative measure is average realized uranium price relative to industry benchmarks. Our absolute measure is all-in sustaining cash costs for our Saskatchewan tier-one operations. We are eliminating the use of relative TSR for 2020. The measures we have chosen are tied closely to our strategy, are stronger indicators of true performance than relative TSR and better support the plan’s objective of closely aligning pay and performance over the long term.

2020 MANAGEMENT PROXY CIRCULAR      89

While relative TSR is an indicator of performance, it is most relevant when comparing share performance of similar companies in a comparable industry or related commodity. There are no publicly-traded uranium companies that are similar in size or scale to Cameco and the TSX 60 group of companies is not affected by the uranium price like Cameco. This makes comparing TSR relative to the TSX 60 a comparison of uranium prices relative to general stock market performance, rather than the intended purpose, which is to assess industry and commodity price out-performance. While we are eliminating relative TSR as a performance measure under the PSU plan, the value of PSU payouts is tied to performance over a three-year period and the price of Cameco shares, aligning with shareholder interests. TSR is a challenging performance measure, likely to over compensate in a strong uranium market, and to under compensate in a depressed uranium market rather than rewarding industry out-performance, which is the intention of this measure.

Elimination of stock options

Stock options are being replaced by RSUs in the LTI compensation mix starting in 2020. During 2019, the committee considered the merits of keeping stock options in our compensation program and made a decision to replace them with RSUs starting in 2020. RSUs, like stock options, align with share price over a longer-term horizon, are a common form of LTI in our comparator group, and provide retention value. They also reduce the depletion of the option pool – RSUs are non-dilutive to shareholders as shares are purchased on the market when they vest.

90     CAMECO CORPORATION

2019 Compensation details

Summary compensation table

The table below shows the compensation awarded to the named executives in 2019 and the previous two years.

Name and<br><br><br>principal position	Year		Salary^1^		Share-basedawards^2^		Optionbasedawards^3^		Annualincentive      plans^4^		Pensionvalue^5^			All other<br><br><br>compensation^6^		Total<br> <br>compensation
Tim Gitzel<br><br><br>President and Chief Executive Officer		2019<br> <br>2018<br><br><br>2017	$<br> <br>$<br><br><br>$	1,060,900<br> <br>1,025,000<br><br><br>1,025,000	$<br> <br>$<br><br><br>$	2,259,960<br> <br>2,183,062<br><br><br>2,182,950	$<br> <br>$<br><br><br>$	1,506,438<br> <br>1,455,454<br><br><br>1,455,575	$<br> <br>$<br><br><br>$	1,706,000<br> <br>1,784,000<br><br><br>1,292,000	$<br> <br>$<br><br><br>$	491,500<br> <br>318,300<br><br><br>302,900			–<br> <br>–<br><br><br>–	$<br> <br>$<br><br><br>$	7,024,798<br> <br>6,765,816<br><br><br>6,258,425
Grant Isaac	****	2019	$	569,300	$	853,593	$	569,427	$	606,000	$	247,500	****	****	–	$	2,845,820
Senior Vice-President and Chief		2018	$	550,000	$	825,228	$	549,934	$	598,000	$	186,300			–	$	2,709,462
Financial Officer		2017	$	550,000	$	824,670	$	550,070	$	433,000	$	170,400			–	$	2,528,140
Brian Reilly	****	2019	$	478,500	$	645,921	$	430,763	$	476,000	$	311,000	****	****	–	$	2,342,184
Senior Vice-President and Chief		2018	$	441,000	$	595,432	$	396,858	$	448,000	$	509,400			–	$	2,390,690
Operating Officer		2017	$	341,610	$	129,654	$	86,397	$	212,000	$	971,700			–	$	1,741,361
Alice Wong	****	2019	$	460,300	$	552,011	$	368,131	$	398,000	$	218,700	****	****	–	$	1,997,142
Senior Vice-President and Chief		2018	$	444,700	$	533,738	$	355,740	$	387,000	$	(1,200	)		–	$	1,719,978
Corporate Officer		2017	$	444,700	$	533,610	$	355,770	$	277,000	$	5,700			–	$	1,616,780
Sean Quinn	****	2019	$	445,100	$	684,096	$	456,198	$	384,000	$	215,000	****	****	–	$	2,184,394
Senior Vice-President. Chief Legal Officer		2018	$	430,000	$	516,192	$	344,036	$	374,000	$	38,900			–	$	1,703,128
and Corporate Secretary		2017	$	430,000	$	515,970	$	344,045	$	268,000	$	43,100			–	$	1,601,115
1.	Base salary
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Each amount reflects actual pay for the year. There were no salary increases in 2017 or 2018, except for Brian Reilly’s salary changes which reflect a change in role when he was promoted to his current position as of July 1, 2017 and a 2018 salary increase to move him closer to the market median for his role.

2.	Share-based awards

These amounts reflect the grant date value of the number of PSUs awarded, set out in the table below, using the closing price of Cameco shares on the TSX on the day before the grant. The number of PSUs that the named executives will actually earn can vary from 0 to 150% of the original number of PSUs granted, depending on performance (the board can approve up to 200% if performance is exceptional).

Brian Reilly was granted share-based awards in 2017 when he joined our senior management at Canadian headquarters as vice-president, mining, projects and technology. He was formerly managing director for Cameco Australia Pty Ltd, a wholly-owned subsidiary.

The grant date value of Sean Quinn’s PSU award was increased by $150,000 in 2019 to recognize his significant leadership role in Cameco’s legal dispute with the CRA.

	March 1, 2019		March 1, 2018		March 1, 2017
Tim Gitzel		148,000		192,850		148,500
Grant Isaac		55,900		72,900		56,100
Brian Reilly		42,300		52,600		8,820
Alice Wong		36,150		47,150		36,300
Sean Quinn		44,800		45,600		35,100
Grant price	$	15.27	$	11.32	$	14.70

For purposes of financial statement disclosure, the PSUs were valued at $15.33 per unit for 2019, $11.43 per unit for 2018, and $14.72 per unit for 2017 using a Monte Carlo pricing model and the key assumptions set out in the table below. This model is considered the most appropriate way to value a plan with a relative market condition like total shareholder return. The total fair value of the PSUs is amortized into income over their three-year vesting period and the weighted average of the expected retirement dates of the named executives, whichever is lower. The non-market criteria relating to realized selling prices and production targets have been incorporated into the valuation at grant date by reviewing prior history and corporate budgets.

	Expected dividend ()	Expected volatility (%)		Risk-free rate (%)		Expected life (years)		Expected forfeitures (%)
March 2019			37.8		1.8		3.0		12.0
March 2018			37.1		1.9		3.0		8.8
March 2017			36.2		0.9		3.0		8.8

All values are in US Dollars.

The table below shows the difference between the grant date value for compensation purposes and the grant date fair value used for purposes of financial statement disclosure.

Grant date	Grant date value forcompensation purposes ()	Grant date fair value forfinancial statement disclosure ()	Difference per unit ()
March 1, 2019
March 1, 2018
March 1, 2017

All values are in US Dollars.

2020 MANAGEMENT PROXY CIRCULAR      91
3.	Option-based awards
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These amounts reflect the grant date value of the actual number of options originally granted using the Black-Scholes option-pricing model and key assumptions determined by the compensation consultants and listed below.

The table below shows the number of options granted to the named executives over the last three years and the corresponding grant date valuations.

The grant date value of Sean Quinn’s option award was increased by $100,000 in 2019 to recognize his significant leadership role in Cameco’s legal dispute with the CRA.

	March 1, 2019		March 1, 2018		March 1, 2017
Tim Gitzel		275,400		472,550		434,500
Grant Isaac		104,100		178,550		164,200
Brian Reilly		78,750		128,850		25,790
Alice Wong		67,300		115,500		106,200
Sean Quinn		83,400		111,700		102,700
Grant date valuation (per option)	$	5.47	$	3.08	$	3.35

The human resources and compensation committee reviewed estimates of the value of the options on the grant dates that were prepared by Mercer (March 2019, March 2018, and March 2017). It then recommended to the board the number of options to grant, which the board approved.

The compensation consultants used the Black-Scholes option-pricing model and the following key assumptions:

	Dividend yield (%)		Volatility (%)		Risk-free rate (%)		Expected life (years)		Exercise price ()
March 2019		0.60		38.3		1.9		5.5
March 2018		2.90		37.2		1.9		5.5
March 2017		2.90		33.0		1.1		5.5

All values are in US Dollars.

As this approach may not be identical to that used by other companies and is sensitive to the assumptions used, the figures may not be directly comparable across companies, however a consistent approach has been used for compensation valuation purposes. The expected life assumption is based on Mercer’s calculation of the expected life of Cameco options and options issued by companies in the comparator group in effect at the time. They calculate the expected life by adding the actual term (eight years) to the vesting period (three years), and dividing in half.

For purposes of financial statement disclosure, options were valued at $4.92 (awarded in March 2019), $3.48 (awarded in March 2018), and $3.34 (awarded in March 2017) each on the date of the grant. For purposes of financial statement disclosure, the options were amortized over their three-year vesting period or the weighted average of the years to expected retirement of the named executives, whichever was lower. We used the Black-Scholes option-pricing model all three years and the following key assumptions:

	Dividend yield (%)		Volatility (%)		Risk-free rate (%)		Expected life (years)		Exercise price ()
March 2019		0.52		35.9		1.8		4.9
March 2018		0.71		34.8		2.0		4.8
March 2017		2.72		33.7		1.1		4.7

All values are in US Dollars.

These accounting value assumptions are different from the compensation value assumptions in the calculations above. The human resources and compensation committee uses the compensation valuation method and assumptions used in valuing compensation of companies in the comparator group to allow for a better comparison with market comparators.

The accounting value assumptions are based on our own internal research and past experience of how employees exercise their options. The table below shows the difference between the grant date value for compensation purposes and the accounting value assumptions used for purposes of financial statement disclosure.

Grant date	Grant date value forcompensation purposes ()	Grant date fair value forfinancial statement disclosure ()	Difference per unit ()
March 1, 2019
March 1, 2018
March 1, 2017

All values are in US Dollars.

4.	Annual incentive plans

These amounts were earned in the fiscal year shown and were paid in the following fiscal year.

5.	Pension value

The amounts for the named executives include company contributions under the registered defined contribution pension plan as applicable, plus the present value of the projected pension earned in each year for service credited under the supplemental executive pension program. The amount for each named executive is the Compensatory change reported in the table for Executive pension value disclosure on page 97.

6.	All other compensation

This amount does not include perquisites and other personal benefits because they total less than $50,000 and less than 10% of the annual salary for each of the named executives. Perquisites and benefits are valued at the cost to Cameco and include commissions to buy shares with PSU payouts, premiums on incremental life insurance and long-term disability, a financial and tax planning allowance, an executive medical plan and a vehicle allowance.

Value of options exercised (supplemental information)

None of the named executives have exercised options in the last three years. Except those granted in 2018, all options awarded to the executives since 2012 have an exercise price greater than the current price of Cameco shares on the TSX and therefore are currently out-of-the-money.

92     CAMECO CORPORATION

Incentive plan awards

The table below shows the total unexercised option and share awards granted to the named executives as of December 31, 2019.

Name	Grant date		Number ofsecuritiesunderlyingunexercisedoptions		Optionexerciseprice			Valueofunexercisedin-the-<br><br><br>moneyoptions			Market or<br> <br>payout value of<br> <br>share-basedawards thathave notvested^1^
Tim Gitzel		05/15/2012		268,600		21.14	05/14/2020		–
		03/01/2013		187,500		22.00	02/28/2021		–
		03/03/2014		155,200		26.81	03/02/2022		–
		03/02/2015		284,500		19.30	03/01/2023		–
		03/01/2016		404,300		16.38	02/29/2024		–
		03/01/2017		434,500		14.70	02/28/2025		–			–	$1,201,774
		03/01/2018		472,550		11.32	02/28/2026		103,961	195,083		–
		03/01/2019		275,400		15.27	02/28/2027		–	148,971		–
Total			****	2,482,550				****	103,961	344,054	****	0	$1,201,774
Grant Isaac		05/15/2012		89,500		21.14	05/14/2020
		03/01/2013		62,500		22.00	02/28/2021		–
		03/03/2014		51,700		26.81	03/02/2022		–
		03/02/2015		85,200		19.30	03/01/2023		–
		03/01/2016		152,800		16.38	02/29/2024		–
		03/01/2017		164,200		14.70	02/28/2025		–			–	$454,007
		03/01/2018		178,550		11.32	02/28/2026		39,281	73,744		–
		03/01/2019		104,100		15.27	02/28/2027		–	56,267		–
Total			****	888,550				****	39,281	130,011	****	0	$454,007
Brian Reilly		05/15/2012		8,875		21.14	05/14/2020		–
		03/01/2013		13,410		22.00	02/28/2021		–
		03/03/2014		11,095		26.81	03/02/2022		–
		03/02/2015		18,192		19.30	03/01/2023		–
		03/01/2016		25,310		16.38	02/29/2024		–
		03/01/2017		25,790		14.70	02/28/2025		–			–	$71,393
		03/01/2018		128,850		11.32	02/28/2026		28,347	53,209		–
		03/01/2019		78,750		15.27	02/28/2027		–	42,578		–
Total			****	310,272				****	28,347	95,787	****	0	$71,393
Alice Wong		05/15/2012		59,700		21.14	05/14/2020		–
		03/01/2013		41,700		22.00	02/28/2021		–
		03/03/2014		34,500		26.81	03/02/2022		–
		03/02/2015		56,800		19.30	03/01/2023		–
		03/01/2016		98,800		16.38	02/29/2024		–
		03/01/2017		106,200		14.70	02/28/2025		–			–	$293,782
		03/01/2018		115,500		11.32	02/28/2026		25,410	47,696		–
		03/01/2019		67,300		15.27	02/28/2027		–	36,387		–
Total			****	580,500				****	25,410	84,083	****	0	$293,782
Sean Quinn		05/15/2012		12,500		21.14	05/14/2020		–
		03/01/2013		16,040		22.00	02/28/2021		–
		03/03/2014		13,017		26.81	03/02/2022		–
		03/02/2015		54,600		19.30	03/01/2023		–
		03/01/2016		95,550		16.38	02/29/2024		–
		03/01/2017		102,700		14.70	02/28/2025		–			–	$284,066
		03/01/2018		111,700		11.32	02/28/2026		24,574	46,128		–
		03/01/2019		83,400		15.27	02/28/2027		–	45,094		–
Total			****	489,507				****	24,574	91,222	****	0	$284,066

All values are in US Dollars.

1.	The PSU awards are subject to performance conditions and valued at the minimum possible payout of zero.<br>
2020 MANAGEMENT PROXY CIRCULAR      93
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The next table shows:

•	Option-based awards – value vested during the year is the total value of the<br>named executive’s options when they vested during 2019.
•	Share-based awards – value vested during the year are share-based awards that<br>vested at the end of 2019 and were paid out in 2020.
---	---
•	Non-equity incentive plan compensation –value earned during the year is the short-term incentive award earned in 2019 and paid in 2020.
---	---
Name	Option-based awards –<br><br><br>value vested<br> <br>during the year^1^
---	---	---	---	---
Tim Gitzel		722,884	1,201,774	$1,706,000
Grant Isaac		273,141	454,007	$606,000
Brian Reilly		177,646	71,393	$476,000
Alice Wong		176,687	293,782	$398,000
Sean Quinn		170,871	284,066	$384,000

All values are in US Dollars.

1.	Option-based awards

The amounts reflect the pre-tax value that the executives would have realized if they had exercised their options that vested in 2019, on the date they vested. Options that had a positive value at the time of vesting are included in the calculation of these figures.

2.	Share-based awards

The amounts are the values of the PSUs that were granted in 2017, vested at December 31, 2019 and paid out to the named executives on or about March 2, 2020 at $11.31 (the actual average purchase price of our common shares purchased on the TSX on behalf of the named executives on that date). The compensation value we previously disclosed for these PSUs was based on the target number of PSUs multiplied by the share value on grant date. The named executives realized 55% of the grant date value of the PSUs that were granted as part of their total compensation for 2017.

3.	Non-equity incentive plan compensation

The amounts are the STI payments for 2019 that were paid in 2020.

94     CAMECO CORPORATION

Equity compensation plan information

Securities authorized for issue under equity compensation plans

(authorized for issue from treasury under our compensation plans at the end of 2019)

Plan category	Number of securities to<br> <br>be issued upon exercise<br><br><br>of outstanding options,<br><br><br>warrants and rights<br><br><br>(a)		Weighted-average<br><br><br>exercise price ofoutstanding options,warrants and rights<br><br><br>(b)		Number of securities remaining<br><br><br>available for future issue under equity<br><br><br>compensation plans (excluding securities<br><br><br>reflected in column a)<br> <br>(c)
Equity compensation plans approved<br>  by security holders		8,617,097	$	17.44		6,524,812
Equity compensation plans not<br>  approved by security holders		–		–		–
Total		8,617,097	$	17.44		6,524,812

Of the 8,617,097 options outstanding at December 31, 2019, 6,290,380 were exercisable and 2,326,717 were not. The total number of Cameco shares that can be issued under the option plan and other compensation arrangements must be less than 43,017,198 (10.9% of our total and outstanding common shares as of March 10, 2020).

Burn rate

The table below shows the burn rate for the last three years calculated in accordance with TSX listing rules based on the weighted-average number of shares outstanding in each year.

As of December 31	2019		2018		2017
Number of options issued		886,740		1,473,430		1,373,040
Weighted average number of shares<br>outstanding		395,797,732		395,792,686		395,792,686
Burn rate		0.22%		0.37%		0.35%

Additional plan details

The next two tables provide additional details about the stock option plan at the end of 2019 and as of March 10, 2020.

	As of December 31, 2019
Number of options available for issue under the option<br>plan and other compensation arrangements		6,524,812
Number of options issued in 2019 under the option plan<br>and other compensation arrangements		886,740
	As of December 31, 2019	As of March 10, 2020
---	---	---	---
Number (%) of our shares issued and outstanding to be issued when<br>outstanding<br> <br>options under the option plan are exercised	8,617,097 (2.18%)		8,583,277 (2.17%)
Number (%) of our issued and outstanding shares still available for issue<br>under the<br> <br>option plan	6,524,812 (1.65%)		6,558,632 (1.66%)
Total dilution rate	3.83%		3.83%

The table below shows other activity in the option plan since it was introduced in 1992:

Maximum initial share reserve (August 15, 1995)	31,460,418
Increase in the reserve (June 12, 2006)	11,556,780
Total shares issued under the plan (as at business open<br>on March 10, 2020)	27,870,289
Total shares issued under the plan / total shares issued<br>and outstanding^^(as at business open on March 10, 2020)	7.0%
Total shares issued and outstanding (as at the openingof business on March 10, 2020)	395,792,732
2020 MANAGEMENT PROXY CIRCULAR      95
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Pension benefits

Defined contribution plan

All regular, full-time and part-time employees (including all of the named executives) participate in our registered defined contribution plan as of December 31, 2019.

Under the Income Tax Act (Canada), the plan had a contribution limit of $27,230 in 2019. This works out to a threshold salary of approximately $213,825, based on the change in the contribution rate from 12% to 13% as of April 1, 2019.

Supplemental executive pension program

The supplemental executive pension program is aimed at attracting and retaining talented executives. It provides a lump sum retirement benefit that is consistent with the executive’s salary and offsets the limits of registered pension plans under the Income Tax Act (Canada).

All Canadian-based management at the vice-president level and above participate in the program. It had 18 active members as at December 31, 2019, with one inactive member, 18 retirees and spouses of deceased retirees who were receiving a pension and one former member with a deferred entitlement. This includes certain officers of wholly-owned subsidiaries who were previously eligible to participate in the program.

The supplemental benefit is calculated as follows:

The supplemental benefit is based on actual years of service from the participant’s date of hire up to the date of termination, or until the end of the notice period for termination without cause. It is calculated on base salary, and unlike other companies, does not include bonuses as part of the pensionable earnings. The supplemental program does not allow past service credits or any kind of accelerated service. Full benefits are paid at the normal retirement age of 65, but are also payable starting at 60 years of age if the person has 20 years of service.

Except for benefits for participants who are US taxpayers, the program is funded in part by trust assets and the remainder by a letter of credit held by the program’s trustees. The liability is approximately $43,524,000 ($20,424,000 for the named executives) as of December 31, 2019. The face amount of the letter of credit will be determined each year based on the wind-up liabilities of the supplemental program (excluding benefits for US taxpayers), less any trust assets. The face amount of the letter of credit for 2019 was $38,300,000. The trustee would be able to draw on the letter of credit to pay benefits to members following specified trigger events. Benefits will continue to be paid from the trust assets until the fund is exhausted, at which time Cameco will begin paying benefits from corporate assets.

Early retirement

Under our registered defined contribution plan, members can transfer their account balance or begin receiving a benefit any time after termination of employment, so early retirement does not apply. All named executives are members of this plan.

Under our supplemental program, the named executives can take early retirement starting at age 55, however, the benefit formula will be reduced by 0.25% for each month before the defined age (age 60 with at least 20 years of continuous employment or age 65, whichever is earlier).

96     CAMECO CORPORATION

Executive pension value disclosure

The table below shows the estimated pension service costs for the supplemental program and Cameco’s contribution to the defined contribution plan as the compensatory change. It also shows the accrued pension obligations payable under our pension plans for each named executive.

Name	Number ofyears ofcreditedservice (#)		Annual benefits<br><br><br>payable^1^				Pension<br>obligation at start of year2,3 ()	Compensatorychange3 ()	Non-compensatorychange4 ()	Pension  obligation at  <br>year end5 ()
			At year<br><br><br>end	**** <br> <br>****	At age<br><br><br>65	**** <br> <br>****
Tim Gitzel		12.98		403,700		630,800
Grant Isaac		10.47		174,700		458,500
Brian Reilly		9.00		113,900		201,300
Alice Wong		32.92		385,400		455,600
Sean Quinn		26.25		320,400		389,600

All values are in US Dollars.

1.	Annual benefits payable

The value of the annual benefits accrued for all named executives include benefits under the registered defined contribution pension plan and the supplemental executive pension program. The defined contribution costs are also included in the service cost as described under Compensatory change. The annual benefits accrued do not take into account any early retirement reductions or vesting requirements.

The amounts under at age 65 are based on current compensation levels and assume accrued years of service to age 65 for each of the named executives. Under our supplemental executive pension program, the named executives are eligible to retire at age 55, which would reduce the pension benefits they are entitled to receive.

Annual benefits payable at year end and at age 65 are based on final average earnings as at December 31, 2019.

2.	Pension obligation at start of year is based on December 31, 2018 accounting<br>assumptions.
3.	Pension obligation at start of year and the compensatory change are estimated totals<br>that include our registered defined contribution pension plan and supplemental executive pension program. They are based on assumptions representing entitlements in employment agreements that may change over time. The methods we used to determine<br>these estimates may not be exactly the same as methods other companies use, so the figures may not be directly comparable.
---	---

We used the following key assumptions to estimate these benefit obligations:

•	100% vesting
•	a retirement age of 63 or one year after the valuation date if 63 years of age or older. The assumed<br>retirement age of 63 is management’s best estimate for determining the accrued benefit obligation as at December 31, 2018, as reported in our financial statements
---	---
•	salary increases of 3.0% each year
---	---
•	a discount rate of 3.9% each year to determine the benefit obligation
---	---
•	a long-term rate of return on defined contribution plan assets of 6.0%
---	---
•	benefits are pre-tax.
---	---

See note 25 to our audited 2019 financial statements (in our 2019 annual report and also on our website) for more information about our pension plans.

Compensatory change is the value of the projected pension earned from January 1, 2019 to December 31, 2019 for our registered defined contribution pension plan and supplemental executive pension program.

4.	Non-compensatory change includes changes such as<br>changes in assumptions (other than those used to estimate the compensatory change), employee contributions and interest on the accrued obligation at the start of the year.
5.	Pension obligation at year end is the value of the named executive’s projected pension<br>earned for service up to December 31, 2019 under our registered defined contribution pension plan and supplemental executive pension program. It is based on December 31, 2019 accounting assumptions and includes RRSP balances included in<br>the base plan, if any.
---	---

We used the following key assumptions to estimate these benefit obligations:

•	100% vesting
•	a retirement age of 63 or one year after the valuation date if 63 years of age or older. The assumed<br>retirement age of 63 is management’s best estimate for determining the accrued benefit obligation as at December 31, 2019, as reported in our financial statements
---	---
•	salary increases of 3.0% each year
---	---
•	a discount rate of 3.1% each year to determine the benefit obligation
---	---
•	a long-term rate of return on defined contribution plan assets of 6.0%
---	---
•	benefits are pre-tax.
---	---

The pension amounts for all of the named executives equal the value of their accumulated contributions under the registered defined contribution pension plan, supplemented by amounts based on final average earnings and service under the supplemental executive pension program (a defined benefit plan).

Loans to executives

As of March 10, 2020, we and our subsidiaries had no loans outstanding to our current or former named executives, except routine indebtedness as defined under Canadian securities laws.

2020 MANAGEMENT PROXY CIRCULAR      97

Termination and change of control benefits

We have employment agreements with the named executives. They are for an indefinite period and provide for:

•	a base salary
•	participation in the short-term incentive plan
---	---
•	participation in the long-term incentive plans
---	---
•	participation in the employee defined contribution pension plan and the supplemental<br>executive pension program.
---	---

The agreements also include post-termination obligations requiring that the named executives do not:

•	use or disclose specialized knowledge, contracts and connections obtained while at Cameco
•	compete against us in any way for 12 months after leaving the organization
---	---
•	solicit any of our customers, suppliers or employees or harm our relationships with any of<br>them for 12 months (18 months for the CEO) after leaving the organization.
---	---

The summary on page 100 shows the incremental compensation that would be paid to the named executives if their employment had been terminated without cause on December 31, 2019, including following a change of control. If Tim Gitzel, Brian Reilly, Alice Wong or Sean Quinn had resigned, it would have been treated as retirement because they are eligible to retire. None of the named executives receive any incremental benefits if there is a change of control but no termination of employment.

CEO

Tim Gitzel’s employment agreement provides for:

•	a requirement to hold four times his base salary in Cameco shares, RSUs and qualifying PSUs
•	a severance period of two years if he is terminated without cause
---	---
•	a $7,000 annual allowance for tax advice ($14,000 in his retirement year)
---	---
•	a requirement to give a minimum notice of six months for resignation or retirement
---	---
•	accelerated vesting of certain equity awards if the CEO’s employment is terminated<br>within 24 months following a change of control (see the summary below for details on compensation upon termination).
---	---

Other named executives

The employment agreements for the other named executives provide for:

•	a requirement to hold two times their base salary in Cameco shares, RSUs and qualifying PSUs<br>by December 31 of the fifth year in their current positions
•	a notice period of 18 months if they are terminated without cause
---	---
•	a $5,000 annual allowance for tax advice ($10,000 in their retirement year)
---	---
•	a requirement to give a minimum notice of three months for resignation or retirement
---	---
•	accelerated vesting of certain equity awards if employment is terminated within 24 months<br>following a change of control (see the summary below for details on compensation upon termination).
---	---

The table below is a summary of the compensation that would be paid to the named executives if their employment is terminated. We believe the following terms are fair, competitive with the market and based on industry practice.

Type of<br><br><br>termination	Severance	STI bonus	Options	PSUs	RSUs	Benefits	Pension
Retirement^1^	•  none	•  none, unless the executive retires on or near the last day of the year	•  three years to<br>vest<br> <br><br><br><br>•  must be exercised within three years or the original term, whichever is<br>earlier	•  performance is measured to the end of the year of retirement<br> <br><br><br><br>•  awards are pro-rated to completed months<br>of service	•  awards are pro-rated to completed months of service	•  post-retirement benefits continue until age 65<br> <br><br><br><br>•  once the executive turns 65, life insurance, health and dental benefits are<br>reduced and are provided until death	•  credited service no longer earned
98     CAMECO CORPORATION
---
Type of<br><br><br>termination	Severance	STI bonus	Options	PSUs	RSUs	Benefits	Pension
---	---	---	---	---	---	---	---
Resignation^2^	•  executive must give<br>three months’ notice, except for CEO who must give six months’ notice<br> <br><br><br><br>•  if we waive the notice, we must pay his or her base salary for the three or six<br>month notice period	•  none	•  vesting continues for<br>90 days<br> <br><br><br><br>•  must be exercised within 90 days or the original term, whichever is<br>earlier	•  all outstanding PSUs<br>are cancelled	•  all outstanding RSUs<br>are cancelled	•  none	•  credited service no<br>longer earned
Termination without cause^3^	•  lump sum equal to base salary and target bonus for the<br>notice period	•  none, unless<br>committee exercises discretion, usually when executive has worked most of the year	•  options continue to vest for the notice period<br><br><br><br> <br>•  must be<br>exercised within the notice period or by the original expiry date, whichever is earlier	•  performance is measured to the end of the year of<br>termination<br> <br><br><br><br>•  awards are<br>pro-rated to completed months of service	•  awards are<br>pro-rated to completed months of service	•  employer contributions for health, dental and life<br>insurance benefits continue for the notice period or until executive obtains other employment, whichever is earlier	•  coverage continues and credited service continues to be<br>earned for the notice period
Termination without cause or for good reason within 24 months of a change of control^4^	•  same as for termination without cause	•  same as for<br>termination without cause	•  all options vest immediately and may be exercised until<br>the original term or within 24 months, whichever is earlier	•  all PSUs vest and are paid at target within 30<br>days	•  all RSUs vest immediately and are payable in cash within<br>30 days	•  same as for termination without cause	•  same as for termination without cause
Termination with cause	•  none	•  all entitlement to<br>the bonus is lost	•  vesting continues for 30 days or the original term,<br>whichever is earlier<br> <br><br><br><br>•  must be exercised within 30 days	•  all outstanding PSUs are cancelled	•  all outstanding RSUs are cancelled	•  none	•  credited service no longer earned
Death	•  none	•  target bonus pro-rated to date of death	•  three years to vest<br><br><br><br> <br>•  must be<br>exercised within three years or original term, whichever is earlier	•  performance is measured to end of year of death<br><br><br><br><br><br>•  awards are<br>pro-rated to the completed months of service as of date of death	•  awards are<br>pro-rated to the completed months of service as of date of death	•  life insurance is paid on death	•  credited service no longer earned<br><br><br><br><br><br>•  value of vested pension benefit is paid to the<br>beneficiary
1.	Retirement
---	---

At the discretion of the CEO and provided that the executive is at least 57 years old with at least 10 years of service when he or she retires, the executive may be eligible for post-retirement benefits including health, dental, accidental death and dismemberment, and life insurance. Also at the discretion of the CEO and provided the executive retires and is at least 57 years old with 10 years of service, a supplemental amount of $1,000 per month is paid until age 65.

2.	Resignation

Tim Gitzel, Brian Reilly, Alice Wong and Sean Quinn are eligible for retirement and therefore the compensation that is paid if a senior executive resigns does not apply. Retirement provisions will continue to apply, as set out in note 3.

3.	Termination without cause

The notice period for Tim Gitzel is two years or the period remaining until age 65, whichever is earlier. The notice period for the other named executives is 18 months or the period remaining until age 65, whichever is earlier.

4.	Termination without cause or good reason within 24 months of a change of control

According to the ENL Reorganization Act, no person, alone or together with associates may hold, beneficially own or control, directly or indirectly, more than 25% of Cameco’s voting shares that can be cast to elect the directors. Because of the legislated restrictions on share ownership, there would have to be an act of federal parliament for anyone to hold more than 25% of our voting shares. For Tim Gitzel, change of control is defined as a transaction resulting in any person, corporation or entity holding 35% or more of our voting shares, transfer or lease of substantially all of the company’s assets, dissolution or liquidation of the company, or the board deciding that a change of control has occurred. For the other named executives, change of control is the same except that an entity must hold 50% or more of our voting shares.

2020 MANAGEMENT PROXY CIRCULAR      99

The table below shows the incremental values that would be paid to the named executives if any of them had been terminated without cause on December 31, 2019, including following a change of control. No incremental amounts are payable if a named executive retires, resigns, dies or is terminated with cause.

Cameco has legislated ownership restrictions under the ENL Reorganization Act. While a change of control is possible, it would require an act of parliament or one of the activities discussed in note 4 on page 99.

		Estimated incremental payment at December 31, <br>20191
Name	Compensation element	Termination<br>without cause2 <br>()	Termination without causewith a change of<br><br><br>control^3^<br><br><br>($)
Tim Gitzel	Cash		4,667,960
	Deferred compensation vesting		4,039,690
	Benefits		34,200
	Total incremental amount		8,741,850
	Annual pension increment		1,080,300
Grant Isaac	Cash		1,537,110
	Deferred compensation vesting		1,526,514
	Benefits		24,600
	Total incremental amount		3,088,224
	Annual pension increment		440,500
Brian Reilly	Cash		1,256,063
	Deferred compensation vesting		1,124,280
	Benefits		22,000
	Total incremental amount		2,402,343
	Annual pension increment		387,500
Alice Wong	Cash		1,139,243
	Deferred compensation vesting		987,258
	Benefits		23,400
	Total incremental amount		2,149,901
	Annual pension increment		321,100
Sean Quinn	Cash		1,101,623
	Deferred compensation vesting		1,069,085
	Benefits		23,200
	Total incremental amount		2,193,908
	Annual pension increment		322,900

All values are in US Dollars.

1.	The table below shows the commuted values for resignation (retirement in the case of Tim Gitzel,<br>Brian Reilly, Alice Wong and Sean Quinn). We estimated these values using the Canadian Institute of Actuaries’ Standard Practice for Determining Pension Commuted Values, and assumed:
•	100% vesting
---	---
•	pension commencement at the executive’s age or age 55, whichever is later
---	---
•	no salary increase after December 31, 2019
---	---
•	a discount rate of 2.4% each of the next 10 years and 2.5% each year thereafter for Canadian and US<br>liabilities
---	---
•	benefits are pre-tax.
---	---
Commuted value	For retirement		On December 31, 2019
---	---	---	---	---
The commuted values are based on assumptions representing entitlements in the employment agreements, and these may change over time. These commuted values may be higher or lower than the present<br>value of the benefit obligation and include entitlements from the defined contribution retirement program and the supplemental executive pension program. The methods we use may not be exactly the same as those used by other companies, so you may not<br>be able to compare our figures directly with those of other companies.		Tim Gitzel<br>Brian Reilly<br>Alice Wong<br>Sean Quinn		$7,344,200<br>$2,047,400<br>$8,392,000<br>$7,000,800
	****	For resignation
		Grant Isaac		$2,582,400
2.	Termination without cause
---	---

Amounts shown as Cash represent entitlements to cash payments in lieu of notice. The cash payment for the CEO, Tim Gitzel, is equal to two times the sum of his annual salary and target annual cash bonus. The cash payment for the other named executives is equal to one and one-half times the sum of their annual salary and target annual cash bonus.

There is no Deferred compensation vesting. For all named executives, unvested PSU awards are prorated to completed months of service in the performance period and pay out over the normal schedule so there is no incremental benefit. Options would continue to be eligible to meet time-based vesting conditions over the severance period and expire at the end of the severance period.

Amounts shown as Benefits are the present value of the continuing benefits for the notice period, based on historical costs and trends and calculated using a discount rate of 3.1% at December 31, 2019. Additionally, at the discretion of the CEO, Alice Wong and Sean Quinn may be eligible for post-retirement benefits, including health, dental, accidental death and dismemberment, and life insurance as they are at least 57 years of age and have more than 10 years of service, which incremental values would be up to $140,700 and $164,800, respectively.

100     CAMECO CORPORATION

Amounts shown as Annual pension increment are equal to the value of benefits to be credited according to the notice period for each named executive and calculated using the December 31, 2019 accounting assumptions (same as the key assumptions set out in note 3 on page 97).

3.	Termination without cause with a change of control

Amounts shown as Cash represent entitlement to cash payments in lieu of notice as indicated in note 2 above.

Amounts shown as Deferred compensation vesting include an amount for unvested PSUs and options. The incremental benefit for PSUs represent all outstanding PSUs that would vest immediately at target and be paid out in the first quarter of 2020. The incremental benefit for options represent unvested in-the-money options that would vest immediately. The calculation of the PSUs and options in this situation is based on a share price of $11.54, the year-end closing price of a Cameco common share on the TSX.

Amounts shown as Benefits are the present value of the continuing benefits for the notice period as indicated in note 2 above.

Amounts shown as Annual pension increment is equal to the value of benefits to be credited according to the notice period as indicated in note 2 above.

2020 MANAGEMENT PROXY CIRCULAR      101

Appendix A

Interpretation

The following definitions are summaries only and are defined in their entirety in the Eldorado Nuclear Limited Reorganization and Divestiture Act (Canada) and Cameco’s articles.

For the purposes of this circular:

a person is an “associate” of another person if:

i.	one is a corporation of which the other is an officer or director;
ii.	one is a corporation that is controlled by the other or by a group of persons of which the other is a member;<br>
---	---
iii.	one is a partnership of which the other is a partner;
---	---
iv.	one is a trust of which the other is a trustee;
---	---
v.	both are corporations controlled by the same person;
---	---
vi.	both are members of a voting trust or parties to an arrangement that relates to voting securities of the Corporation; or<br>
---	---
vii.	both are at the same time associates, within the meaning of any of (i) to (vi) above, of the same person;<br>
---	---

provided that:

viii.	if a resident associated with a non-resident submits to the board of directors<br>of the corporation a statutory declaration stating that no voting shares of the corporation are held, directly or indirectly, for a non-resident, that resident and<br>non-resident are not associates of each other, provided the statutory declaration is not false;
ix.	two corporations are not associates pursuant to (vii) above by reason only that each is an associate of the same<br>person pursuant to (i) above;
---	---
x.	if any person appears to the board to hold voting shares to which are attached not more than the lesser of four one-hundredths of 1% of the votes that may be cast to elect directors of the corporation and 10,000 such votes, that person is not an associate of any other person and no other person is an associate of that person<br>in relation to those voting shares.
---	---

“ beneficial ownership ” includes ownership through a trustee, legal representative, agent or other intermediary.

“ control ” means control in any manner that results in control in fact, whether directly through ownership of securities or indirectly through a trust, an agreement, the ownership of any body corporate or otherwise.

“non-resident” means:

i.	an individual, other than a Canadian citizen, who is not ordinarily resident in Canada;
ii.	a corporation incorporated, formed or otherwise organized outside Canada;
---	---
iii.	a foreign government or agency thereof;
---	---
iv.	a corporation that is controlled by non-residents, directly or indirectly, as<br>defined in any of (i) to (iii) above;
---	---
v.	a trust:
---	---
a.	established by a non-resident as defined in any of (ii) to (iv) above,<br>other than a trust for the administration of a pension fund for the benefit of individuals, a majority of whom are residents; or
---	---
b.	in which non-residents as defined in any of (i) to (iv) above have more<br>than 50% of the beneficial interest; or
---	---
vi.	a corporation that is controlled by a trust described in (v) above.
---	---

“ person ” includes an individual, corporation, government or agency thereof, trustee, executor, administrator, or other legal representative.

“ resident ” means an individual, corporation, government or agency thereof or trust that is not a non-resident.

102     CAMECO CORPORATION

Appendix B

Board mandate

PURPOSE

The purpose of the board of directors (board) is to supervise the management of the business and affairs of the corporation. The board of directors will discharge this responsibility by developing and determining policy by which the business and affairs of the corporation are to be managed and by overseeing the management of the corporation.

COMPOSITION

The board is elected by the shareholders at the annual meeting of the shareholders of the corporation. The board shall appoint the chair annually from among its non-executive independent members. As fixed by the articles of the corporation, the board shall consist of at least three and not more than fifteen members.

A majority of the directors shall be resident Canadians. A majority of the directors shall be independent pursuant to standards for independence adopted by the board. The standards for independence are available on our website.

MEETINGS

The board will schedule as many meetings as necessary to carry out its duties effectively. A two year rolling schedule of regular board and committee meetings will be provided to directors. Confirmation of the date, time and place of regular meetings will be sent to directors approximately three weeks in advance of regularly scheduled meetings.

A meeting of the board may be called by the chair, the chief executive officer or any two directors. The corporate secretary shall, upon the direction of any of the foregoing, arrange a meeting of the board. Special meetings may be called by providing 48 hours notice. Board meetings may be held at any time without notice if all of the directors have waived or are deemed to have waived notice of the meeting.

A majority of the members of the board shall constitute a quorum. No business may be transacted by the board except at a meeting of its members at which a quorum of the board is present. Each director is expected to attend all meetings of the board. A director who is unable to attend a board meeting in person may participate by telephone or teleconference.

At board meetings, each director is entitled to one vote and questions are decided by a majority of votes of the directors present. In case of an equality of votes, the chair of the meeting does not have a second or casting vote.

The corporate secretary acts as secretary to the board. In the absence of the corporate secretary, the board may appoint any other person to act as secretary.

The board may invite such officers and employees of the corporation as it may see fit from time to time to attend at meetings of the board and assist thereat in the discussion and consideration of any matter.

DUTIES AND RESPONSIBILITIES

1.	The board of directors has specific responsibilities for the following, which do not, in any way, limit or<br>comprehensively define its overall responsibility for the stewardship of the corporation:
a.	selection, appointment, evaluation and if necessary the termination of the chief executive officer;<br>
---	---
b.	satisfying itself as to the integrity of the senior executives of the corporation and as to the culture of integrity<br>throughout the corporation;
---	---
c.	succession planning, including appointing, counselling and monitoring the performance of executive officers;<br>
---	---
d.	oversight of the human resources policies of the corporation and while taking into account the views and recommendations<br>of the human resources and compensation committee, approval of the compensation of the chief executive officer and the other executive officers;
---	---
e.	strategic planning, approval of business plans and monitoring corporate performance against those plans;<br>
---	---
f.	approval of periodic capital and operating plans and monitoring corporate performance against those plans;<br>
---	---
2020 MANAGEMENT PROXY CIRCULAR      103
---
g.	oversight of the policies and processes to manage risks of the corporation, and oversight of management’s<br>mitigation of the material risks;
---	---
h.	policies to require ethical behaviour of the corporation and its directors and employees, and compliance with laws and<br>regulations;
---	---
i.	oversight of the policies and processes for the implementation and integrity of the corporation’s internal control<br>and management information systems and its financial reporting;
---	---
j.	approval of directors for appointment, nomination and election (as applicable), oversight of any potential conflicts of<br>interest, and director independence determination;
---	---
k.	assessment of the effectiveness of the board and its committees;
---	---
l.	oversight of the program for orientation and education of new directors and ongoing education for all directors;<br>
---	---
m.	definition of the duties and the limits of authority of senior management, including approving a position statement for<br>the chief executive officer;
---	---
n.	policies for disclosure of corporate information to facilitate effective communications with shareholders, other<br>stakeholders and the public;
---	---
o.	health and safety and environmental policies and oversight of systems to enable compliance with these policies and all<br>relevant laws and regulations;
---	---
p.	oversight of the policies and processes for estimating and disclosing the corporation’s mineral reserves;<br>
---	---
q.	corporate governance including the relationship of the board of directors to management and shareholders, oversight of<br>the corporate governance principles applicable to the corporation, and taking reasonable steps to ensure the corporation has appropriate structures and procedures in place to permit the board of directors to effectively discharge its duties and<br>responsibilities;
---	---
r.	calling meetings of shareholders and submission to the shareholders of any question or matter requiring approval of the<br>shareholders;
---	---
s.	recommendation of the auditors to be appointed at shareholders’ meetings, and filling a vacancy in the office of<br>the auditor;
---	---
t.	issuance of securities of the corporation;
---	---
u.	declaration of dividends and establishment of the dividend policy for the corporation;
---	---
v.	approval of the annual audited financial statements and related management discussion and analysis, and the interim<br>unaudited financial statements and related interim management discussion and analysis, management proxy circulars, takeover bid circulars, directors’ circulars, prospectuses, annual information forms and other disclosure documents required to<br>be approved by the directors of a corporation under securities laws, regulations or rules of any applicable stock exchange;
---	---
w.	adoption, amendment or repeal of bylaws of the corporation;
---	---
x.	review and approval of material transactions not in the ordinary course of business; and
---	---
y.	other corporate decisions required to be made by the board of directors, or as may be reserved by the board of<br>directors, to be made by itself, from time to time and not otherwise delegated to a committee of the board of directors or to the management of the corporation.
---	---
2.	Subject to the provisions of applicable law and the bylaws of the corporation, the responsibilities of the board of<br>directors may be delegated, from time to time, to committees of the board of directors on such terms as the board of directors may consider appropriate.
---	---

ORGANIZATIONAL MATTERS

3.	The procedures governing the board shall be those in Parts 6 and 7 of the General Bylaws of the corporation.<br>
4.	The board shall annually review and assess the adequacy of its mandate.
---	---
5.	The board shall participate in an annual performance evaluation.
---	---
6.	The board shall perform any other activities consistent with this mandate, the corporation’s governing laws, and<br>regulations of stock exchanges, as the board deems necessary or appropriate.
---	---
104     CAMECO CORPORATION
---

Appendix C

Stock option plan

The following kinds of changes must be approved by shareholders according to the terms of our stock option plan:

General

•	any change to the number of common shares that can be issued under the plan, including<br>increasing the fixed maximum number of common shares, or changing from a fixed maximum number to a fixed maximum percentage of common shares
•	any change to extend the period after a trading blackout when options can be exercised
---	---
•	any change to extend the expiry date of an option unless it would otherwise expire during a<br>trading blackout period
---	---
•	any change that requires shareholder approval under applicable law such as those described in<br>the rules, regulations and policies of any stock exchange that we are listed on.
---	---

Exercise price

•	any change that would cause the exercise price of an option to be lower than the fair market<br>value of the common shares at the time the option is granted. This does not include standard adjustment provisions relating to dividends or stock splits, recapitalizations, consolidations or other fundamental corporate changes, or provisions for the<br>treatment of options if there is a change of control or other similar transaction that affects the powers of the board to make certain changes to the stock option plan
•	any other change that would cause the exercise or purchase price of an option to be lower<br>(other than the standard adjustment provisions or if there is a change of control or other similar transaction as described in the item above). Cancelling an option and reissuing it at a lower price is considered a reduction in the exercise price.
---	---

Eligibility

•	any change that increases the number of categories of people who are eligible to receive<br>options, if it could increase the participation of insiders
•	any change allowing options to be transferred other than by will or intestate succession.
---	---

Securities

•	adding deferred or restricted share units or other share awards that would not involve an<br>actual cash payment
•	any change that allows adding a cashless exercise feature, unless it reduces the number of<br>underlying shares in the stock option plan reserve.
---	---
2020 MANAGEMENT PROXY CIRCULAR      105
---

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Cameco Corporation

2121-11th Street West

Saskatoon, Saskatchewan

S7M 1J3

cameco.com

TSX – CCO; NYSE - CCJ

EX-99.4

Exhibit 99.4

Submit your proxy form — We must receive your completed form before 9:30 a.m. CST on Tuesday, April 28,2020.<br> <br><br> <br>If the meeting is postponed or adjourned, we must receive the form at least 48<br>hours (excluding Saturdays, Sundays and holidays) before the meeting is reconvened. The chair of the meeting has the discretion to accept or reject any late proxies and can waive or extend the deadline for receiving proxy voting instructions without<br>notice.
Internet	Mobile device	Telephone	Mail	Fax
www.astvotemyproxy.com	Scan this QR code	1.888.489.5760	Use the envelope provided	Toll free inside    Outside
		(English only)	or mail to:	North America:    North America:
Follow the instructions on screen. You will need your control number referenced below.			AST TRUST COMPANY (CANADA)<br> <br>ATTN: PROXY<br>DEPARTMENT<br> <br>P.O. BOX 721<br> <br>AGINCOURT, ON M1S 0A1	1.866.781.3111   1.416.368.2502<br> <br><br><br><br>Remember to fax both<br> <br>pages of this form.
Cameco Corporation<br><br><br>Use this proxy form to vote by proxy at our<br><br><br>2020 annual meeting of shareholders
---
When: ****  Thursday April 30,<br>2020    9:30 a.m. CST
Where: Cameco Corporation, 2121 - 11th St. W, Saskatoon, Saskatchewan

This proxy is solicited by management. Throughout this document, we, us, our and Cameco mean Cameco Corporation and you and your mean the person completing this form.

Two ways to vote:   In person or by proxy

Our annual meeting gives you the opportunity to vote on several items of Cameco business. Your vote is important, regardless of the number of shares you hold.

Vote in person

Come to our annual meeting and vote your shares in person. Do not complete this form.

Vote by proxy

This is the easiest way to vote. It means you give someone else — called your proxyholder — the authority to attend the meeting and vote for you.

You can vote by proxy in four ways:

On the internet — Go to www.astvotemyproxy.com and follow the instructions on screen. You will need your control number, which appears below your name and address on this form.

By fax — Complete, date and sign this form and fax it to our transfer agent, AST Trust Company (Canada).

By mail — Complete, date and sign this form and mail it to AST Trust Company (Canada).

By telephone — Call 1.888.489.5760 and follow the prompts. You will need your control number which appears adjacent to your name and address on this form.

By appointing someone else to attend the meeting for you — This person does not need to be a shareholder (see section 1). Make sure your appointee is aware of the meeting and attends it for you. Your proxyholder will need to see a representative of AST Trust Company (Canada) when they arrive at the meeting.

If you are voting by proxy, please complete all five sections of this form, date and sign it and return it right away.

Appoint a proxyholder — **You can appoint Tim Gitzel or Sean Quinn to be your proxyholder, or choose someone else to represent you and vote your shares at the meeting.**This person does not have to be a shareholder.
	You appoint Tim Gitzel, or in his absence, Sean Quinn.				You appoint the following person to attend the meeting
If you do not check one of the boxes, we will assume you have<br>appointed Tim Gitzel, or in his absence, Sean Quinn, as your proxyholder.					and vote on your behalf:
Tell us your votinginstructions — When you complete this section, you are directing your proxyholder to follow these instructions when voting. Our board of directors and management recommend that shareholders vote FORthese items.
If you do not specify how you want to vote your shares:
●   the Cameco officer<br>you appointed as your proxyholder in section 1 will vote FOR each of the items below.					●   the other<br>proxyholder you appointed in section 1 can vote as s/he sees fit
If there are amendments or other items of business that properly come before the meeting, your proxyholder can vote on each matter as s/he sees fit, as permitted by law, whether or not it is a routine matter, an<br>amendment or contested item of business.
	Elect the directors (see page 5 of the management proxy circular)
		FOR	WITHHOLD				FOR	WITHHOLD
	1.     Ian Bruce					6.     Jim Gowans
	2.    Daniel Camus					7.     Kathryn Jackson
	3.    Donald Deranger					8.     Don Kayne
	4.     Catherine Gignac					9.     Anne McLellan
	5.     Tim Gitzel
	Appoint the auditors (see page 5 of the management proxy circular)						FOR	WITHHOLD
	Appoint KPMG LLP as auditors
	Have a say on our approach to executive compensation (see page 6 of the management proxy<br>circular)
	As this is an advisory vote, the results will not be binding on the board.
	Be it resolved that, on an advisory basis and not to diminish the role and responsibilities of the<br>board of directors for executive compensation, the shareholders accept the approach to executive compensation disclosed in Cameco’s management proxy circular delivered in advance of the 2020 annual meeting of shareholders.						FOR<br><br><br><br><br><br><br>	AGAINST<br><br><br><br><br><br><br>
Declare your residency— If you do not provide this information, we will consider the shares represented by this proxy to be owned and controlled by a non-resident, which means the vote<br>may have less impact.
You declare that the shares represented by this proxy are held, benefically owned or controlled, either directly or indirectly, by a resident of Canada as defined below. If the shares are held in the names of two or<br>more people, you declare that all of these people are residents of Canada.							YES<br> <br><br><br><br><br>	NO<br> <br><br><br><br><br>
When you sign this form, you are certifying that you have done whatever is reasonably possible to confirm residential status.
What do we mean by residency?<br><br><br><br> <br>Cameco shares have restrictions on ownership and voting for residents and non-residents of Canada. You can read about residency and voting starting on page 8 of the accompanying management proxy circular.<br> <br><br><br><br>The definitions here are summaries only. The complete definitions are in the Eldorado Nuclear Limited Reorganization and Divestiture Act(Canada) and our articles.<br> <br><br> <br>A non-residentis:
●   an individual, other<br>than a Canadian citizen, who is not ordinarily<br>resident in Canada<br> <br>●   a corporation<br> <br>●   that was incorporated, formed or otherwise organized outside of<br>Canada, or<br><br><br>●   that is controlled by non-residents, either directly or indirectly				●   a trust<br><br><br>●   that was established<br>by a non-resident, other than a trust for the administration of a pension fund for individuals where the majority of the individuals are residents, or<br><br><br>●   where non-residents have more than 50% of the beneficial interest<br> <br>●   a foreign government or foreign government agency
Anyone not included in the above description of non-resident is<br>considered a resident. Residents can be individuals, corporations, trusts and governments or government agencies.
Sign and date — When you sign here, you are:<br> <br><br><br><br>●   authorizing your proxyholder to vote according to<br>your voting instructions at Cameco’s 2020 annual meeting of shareholders, or any meeting that is reconvened if it was postponed or adjourned<br> <br><br><br><br>●   revoking any proxy that you previously gave for this<br>meeting.<br> <br><br> <br>For shares registered in the name of a corporation, estate, trust or minor, an<br>authorized officer or attorney must sign this form and state his or her position. This person may also have to provide proof that s/he is authorized to sign.
Signature<br> <br>(if<br>your shares are held in more than one name, either person can complete and sign this form)			Date<br> <br>(if you<br>leave this blank, we will consider the date to be the day this form was received by or on behalf of us)			Position<br><br><br>(complete this if you are a guardian, or signing by power of attorney on behalf of a corporation, estate or trust)

EX-99.5

Exhibit 99.5

2019 Annual Report

➊Mining

Once an orebody is discovered and defined by exploration, there are three common ways to mine uranium, depending on the depth of the orebody and the deposit’s geological characteristics:

•	Open pit mining is used if the ore is near the surface. The ore is usually mined using drilling and blasting.
•	Underground mining is used if the ore is too deep to make open pit mining economical. Tunnels and shafts provide access to the ore.
---	---
•	In situ recovery (ISR) does not require large scale excavation. Instead, holes are drilled into the ore and a solution is used to dissolve the uranium. The solution is pumped to the surface<br>where the uranium is recovered.
---	---

➊Milling

Ore from open pit and underground mines is processed to extract the uranium and package it as a powder typically referred to as uranium concentrates (U3O8) or yellowcake. The leftover processed rock and other solid waste (tailings) is placed in an engineered tailings facility.

➋Refining

Refining removes the impurities from the uranium concentrate and changes its chemical form to uraniumtrioxide (UO3).

➌Conversion

For light water reactors, the UO3 is converted to uraniumhexafluoride (UF6) gas to prepare it for enrichment. For heavy water reactors like the Candu reactor, the UO3 is converted into powdered uranium dioxide (UO2).

➍Enrichment

Uranium is made up of two main isotopes: U-238 and U-235. Only U-235 atoms, which make up 0.7% of natural uranium, are involved in the nuclear reaction (fission). Most of the world’s commercial nuclear reactors require uranium that has an enriched level of U-235 atoms.

The enrichment process increases the concentration of U-235 to between 3% and 5% by separating U-235 atoms from the U-238. Enriched UF6 gas is then converted to powdered UO2.

➎Fuel manufacturing

Natural or enriched UO2 is pressed into pellets, which are baked at a high temperature. These are packed into zircaloy or stainless steel tubes, sealed and then assembled into fuel bundles.

➏Generation

Nuclear reactors are used to generate electricity. U-235 atoms in the reactor fuel fission, creating heat that generates steam to drive turbines. The fuel bundles in the reactor need to be replaced as the U-235 atoms are depleted, typically after one or two years depending upon the reactor type. The used – or spent – fuel is stored or reprocessed.

Spent fuel management

The majority of spent fuel is safely stored at the reactor site. A small amount of spent fuel is reprocessed. The reprocessed fuel is used in some European and Japanese reactors.

Management’s discussion and analysis

February 7, 2020

6	2019 PERFORMANCE HIGHLIGHTS
10	MARKET OVERVIEW AND DEVELOPMENTS
15	OUR STRATEGY
25	MEASURING OUR RESULTS
26	FINANCIAL RESULTS
55	OPERATIONS AND PROJECTS
78	MINERAL RESERVES AND RESOURCES
83	ADDITIONAL INFORMATION
85	2019 CONSOLIDATED FINANCIAL STATEMENTS

This management’s discussion and analysis (MD&A) includes information that will help you understand management’s perspective of our audited consolidated financial statements (financial statements) and notes for the year ended December 31, 2019. The information is based on what we knew as of February 6, 2020.

We encourage you to read our audited consolidated financial statements and notes as you review this MD&A. You can find more information about Cameco, including our financial statements and our most recent annual information form, on our website at cameco.com, on SEDAR at sedar.com or on EDGAR at sec.gov. You should also read our annual information form before making an investment decision about our securities.

The financial information in this MD&A and in our financial statements and notes are prepared according to International Financial Reporting Standards (IFRS), unless otherwise indicated.

Unless we have specified otherwise, all dollar amounts are in Canadian dollars.

Throughout this document, the terms we, us, our, the Company and Cameco mean Cameco Corporation and its subsidiaries, unless otherwise indicated.

Caution about forward-looking information

Our MD&A 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 (US) securities laws. We refer to them in this MD&A as forward-looking information.

Key things to understand about the forward-looking information in this MD&A:

•	It typically includes words and phrases about the future, such as: anticipate, believe, estimate, expect, plan,<br>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 on page 3, which may prove<br>to be incorrect.
---	---
•	Actual results and events may be significantly different from what we currently expect, due to the risks<br>associated with our business. We list a number of these material risks on pages 2 and 3. We recommend you also review our most recent annual information form, which includes a discussion of other material risks that could cause actual<br>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<br>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 MD&A

•	on the financial front, we are well-positioned to execute on our strategy and self-manage risk
•	we will continue to take the necessary actions to maintain the strength of our balance sheet so we can self-manage risk, and that we expect will reward shareholders for their continued patience and support of our<br>strategy to build long-term value
---	---
•	our expectations about 2020 and future global uranium supply, consumption, contracting volumes and demand, including the discussion under the heading Market overview and developments
---	---
•	the discussion under the heading Our strategy
---	---
•	our expectations for uranium purchases
---	---
•	our expectations for uranium sales and deliveries
---	---
•	the discussion of our expectations relating to our Canada Revenue Agency (CRA) transfer pricing dispute, including that the Tax Court of Canada’s (Tax Court) ruling will be upheld on appeal, the timing of an appeal<br>decision, the Tax Court ruling diminishes our tax risk relating to our CRA dispute, and our estimate of the amount and timing of expected cash taxes and transfer pricing penalties and the amount of the disbursements award
---	---
•	the discussion under the heading Outlook for 2020, including our 2020 financial outlook, expectations for 2020 gross profit and cash balances, and our price sensitivity analysis for our uranium segment
---	---
•	the outlook for our uranium and fuel services segments for 2020
---	---
•	our expectations for future tax payments and rates, including effective tax rates
---	---
•	our expectation that our cash balances and operating cash flows will meet our anticipated 2020 capital requirements
---	---
•	our expectations for 2020, 2021 and 2022 capital expenditures
---	---
•	our expectation that in 2020 we will be able to comply with all the covenants in our unsecured revolving credit facility
---	---
•	production and life of mine operating cost estimates for the Cigar Lake and Inkai operations
---	---
•	future plans and expectations for uranium properties, advanced uranium projects, and fuel services operating sites
---	---
•	our expectations related to care and maintenance costs, including incurring between $150 million and $170 million in 2020
---	---
•	our mineral reserve and resource estimates
---	---
•	our decommissioning estimates
---	---

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, loss of market share to a competitor or trade restrictions
•	we are adversely affected by changes in currency exchange rates, interest rates, royalty rates, or tax rates
---	---
•	our production costs are higher than planned, or our cost reduction strategies are unsuccessful, or necessary supplies are not available, or not available on commercially reasonable terms
---	---
•	our strategies may change, be unsuccessful or have unanticipated consequences
---	---
•	our estimates and forecasts prove to be inaccurate, including production, purchases, deliveries, cash flow, revenue, costs, decommissioning, reclamation expenses, our tax expense, or receipt of future dividends from JV<br>Inkai
---	---
•	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
---	---
•	we are unsuccessful in our dispute with CRA and this results in significantly higher cash taxes, interest charges and penalties that could have a material adverse effect on us
---	---
•	we are unable to utilize letters of credit to the extent anticipated in our dispute with CRA
---	---
•	there are defects in, or challenges to, title to our properties
---	---
2	CAMECO CORPORATION
---	---
•	our mineral reserve and resource estimates are not reliable, or there are unexpected or challenging geological, hydrological or mining conditions
---	---
•	we are affected by environmental, safety and regulatory risks, including increased regulatory burdens or delays
---	---
•	necessary permits or approvals from government authorities cannot be obtained or maintained
---	---
•	we are affected by political risks
---	---
•	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
---	---
•	a major accident at a nuclear power plant
---	---
•	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<br>uranium
---	---
•	government laws, regulations, policies or decisions that adversely affect us, including tax and trade laws
---	---
•	our uranium suppliers fail to fulfil delivery commitments or our uranium purchasers fail to fulfil purchase commitments
---	---
•	our Cigar Lake development, mining or production plans are delayed or do not succeed for any reason
---	---
•	any difficulties in milling of Cigar Lake ore at the McClean Lake mill
---	---
•	water quality and environmental concerns could result in a potential deferral of production and additional capital and operating expenses for the Cigar Lake operation
---	---
•	JV Inkai’s development, mining or production plans are delayed or do not succeed for any reason
---	---
•	our expectations relating to care and maintenance costs prove to be inaccurate
---	---
•	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 suppliers’ or customers’ facilities, the unavailability of reagents, equipment, operating parts and supplies critical to production, equipment<br>failure, lack of tailings capacity, labour shortages, labour relations issues, strikes or lockouts, underground floods, cave-ins, ground movements, tailings dam failures, transportation disruptions or<br>accidents, unanticipated consequences of our cost reduction strategies, or other development and operating risks
---	---

Material assumptions

•	our expectations regarding sales and purchase volumes and prices for uranium and fuel services, trade restrictions, and that counterparties to our sales and purchase agreements will honour their commitments
•	our expectations regarding the demand for and supply of uranium
---	---
•	our expectations regarding spot prices and realized prices for uranium, and other factors discussed under the heading Price sensitivity analysis: uranium segment
---	---
•	that 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<br>of nuclear power plants
---	---
•	our ability to continue to supply our products and services in the expected quantities and at the expected times
---	---
•	our expected production levels for uranium and conversion services
---	---
•	our cost expectations, including production costs, purchase costs, operating costs, capital costs, and the success of our cost reduction strategies
---	---
•	our expectations regarding tax rates and payments, royalty rates, currency exchange rates and interest rates
---	---
•	our expectations about the outcome of our dispute with CRA, including that the Tax Court ruling will be upheld on appeal
---	---
•	we are able to utilize letters of credit to the extent anticipated in our dispute with CRA
---	---
•	our decommissioning and reclamation estimates, including the assumptions upon which they are based, are reliable
---	---
•	our mineral reserve and resource estimates, and the assumptions upon which they are based, are reliable
---	---
•	our understanding of the geological, hydrological and other conditions at our uranium properties
---	---
•	our Cigar Lake development, mining and production plans succeed
---	---
•	the McClean Lake mill is able to process Cigar Lake ore as expected
---	---
•	JV Inkai’s development, mining and production plans succeed
---	---
•	the ability of JV Inkai to pay dividends
---	---
•	that care and maintenance costs will be as expected
---	---
•	our and our contractors’ 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,<br>litigation or arbitration proceedings, the unavailability of reagents, equipment, operating parts and supplies critical to production, labour shortages, labour relations issues, strikes or lockouts, underground floods,<br>cave-ins, ground movements, tailings dam failure, lack of tailings capacity, transportation disruptions or accidents, unanticipated consequences of our cost reduction strategies, or other development or<br>operating risks
---	---
MANAGEMENT’S DISCUSSION AND ANALYSIS	3
---	---

4	CAMECO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS	5

2019 performance highlights

Throughout 2019 we continued to do what we said we would do, executing on all strategic fronts; operational, marketing and financial. On the operational front, Cigar Lake and our Fuel Services segment are performing very well. With the McArthur River/Key Lake operation still on care and maintenance, production in our uranium segment remained well below our committed sales. As a result, we were actively purchasing material on the spot market. On the financial front, we are well-positioned to execute on our strategy and self-manage risk. Our balance sheet is strong, we are starting 2020 with $1.1 billion in cash and $1 billion in long-term debt with maturities in 2022, 2024 and 2042. In addition, the Federal Court of Appeal hearing of our September 2018 unequivocal Tax Court of Canada (Tax Court) win has been scheduled to be held on March 4, 2020 and we anticipate we could receive a decision in 2020. We believe the Tax Court ruling diminishes the risk related to our tax case with Canada Revenue Agency (CRA) and believe the decision of the Tax Court will be upheld on appeal.

In 2019, the spot market underperformed our expectations, due to the delay of end-user demand caused by uncertainty largely related to market acess and trade policy issues. However, we were pleased by our performance in the term market. The interest in long-term contracting and our off-market conversations with some of our best and largest customers continues. We have not seen the current level of prospective business in our pipeline since before 2011. Since the beginning of 2019, we added just over 36 million pounds of deliveries to our contract portfolio, more than replacing the volumes delivered in 2019, while maintaining leverage to higher future uranium prices. Our customers recognize that, from a security of supply perspective, diversification is important, and in some cases their risk management departments require it. They want access to long-lived, tier-one productive capacity from commercial suppliers who have a proven operating track record. Increasingly, many customers are also required to ensure their suppliers adhere to more stringent environmental, social, and governance performance standards. In addition, in light of the market access and trade policy issues affecting our market, they recognize the potential for trade policy distortions to regionalize supply, and ultimately, along with low prices, make the availability of future supply less certain and less predictable.

In September, the World Nuclear Association released its nuclear fuel report, which highlighted the fact that the demand cycle is on an upswing while the production cycle has swung down. The report outlined three scenarios for uranium demand and supply for the years 2019 through 2040. Demand was up in all three scenarios considered: the low case, the base case, and the high case. Under all three scenarios the report shows that the industry needs to at least double projected primary uranium production by 2040 to satisfy forecasted demand. To achieve this, the WNA report recognized that the market will require the appropriate signals to ensure current levels of production continue, the return of idled capacity, the completion of projects under development, the pursuit of brownfield expansion projects, and the development of currently planned and prospective greenfield projects. Finally, the report recognized that even when inventories are high, mobility can be low. For us, the report reinforced our belief that the uranium market needs to transition, similar to what has happened in the conversion market and is beginning to occur in the enrichment market.

However, until we see that transition occur, we will continue to take the necessary actions to maintain the strength of our balance sheet so we can self-manage risk, and that we expect will reward shareholders for their continued patience and support of our strategy to build long-term value.

6	CAMECO CORPORATION

Financial performance

HIGHLIGHTS
DECEMBER 31 ( MILLIONS EXCEPT WHERE INDICATED)		2018		CHANGE
Revenue	1,863		2,092		(11	)%
Gross profit	242		296		(18	)%
Net earnings attributable to equity holders	74		166		(55	)%
per common share (diluted)	0.19		0.42		(56	)%
Adjusted net earnings (non-IFRS, see page 28)	41		211		(81	)%
per common share (adjusted and diluted)	0.10		0.53		(81	)%
Cash provided by operations (after working capital changes)	527		668		(21	)%

All values are in US Dollars.

Net earnings attributable to equity holders (net earnings) and adjusted net earnings were lower in 2019 compared to 2018, in-line with the outlook we provided. See 2019 consolidated financial results beginning on page 27 for more information. Key highlights:

•	generated $527 million in cash from operations
•	retired one-third, $500 million, of our outstanding debt<br>
---	---
•	extended the maturity date of our revolving credit facility to November 2023, and reduced it by $250 million<br>to $1 billion
---	---
•	Tax Court awarded $10.25 million in legal fees incurred, plus an amount for disbursements of up to<br>$17.9 million in our dispute with CRA. Timing of any payments under the cost award is uncertain.
---	---
•	tribunal of international arbitrators ruled in favour of Cameco Inc. in its dispute with Tokyo Electric Power<br>Company Holdings, Inc. (TEPCO), awarding damages of $40.3 million (US), which we received in the third quarter
---	---
•	received $92.6 million (US) from JV Inkai, representing repayment, in full, of its outstanding loan. In<br>addition, received dividends of $10.6 million (US) in December 2019.
---	---

Our segment updates

In our uranium segment, annual production was in-line with expectations. Key highlights:

•	continued the production suspension at McArthur River/Key Lake, removing 18 million pounds per year (100%<br>basis) from the market
•	annual production of 9.0 million pounds—in-line with the 2019<br>outlook provided
---	---
•	purchased 19.0 million pounds of uranium, including our spot purchases, committed purchase volumes, JV Inkai<br>purchases and the purchase of NUKEM’s excess inventory
---	---
•	reached a new collective agreement with unionized employees at our McArthur River/Key Lake operation, which<br>expires December 31, 2022
---	---

Production in 2019 from our fuel services segment was 27% higher than in 2018, as a result of an increase in UF6 production given the increase in demand in the market. We reached a new collective agreement with unionized employees at our Port Hope conversion facility, which expires July 1, 2022.

See Our operations and projects beginning on page 55 for more information.

MANAGEMENT’S DISCUSSION AND ANALYSIS	7
HIGHLIGHTS			2018		CHANGE
---	---	---	---	---	---	---	---
Uranium	Production volume (million lbs)	9.0	****	9.2		(2	)%
	Sales volume (million lbs)	31.5	****	35.1		(10	)%
	Average realized price	33.77	****	37.01		(9	)%
		44.85	****	47.96		(6	)%
	Revenue ( millions)	1,414	****	1,684		(16	)%
	Gross profit ( millions)	153	****	268		(43	)%
Fuel services	Production volume (million kgU)	13.3	****	10.5		27	%
	Sales volume (million kgU)	14.1	****	11.6		22	%
	Average realized price	26.21	****	26.78		(2	)%
	Revenue ( millions)	370	****	313		18	%
	Gross profit ( millions)	90	****	59		53	%

All values are in US Dollars.

Industry prices

		2018		CHANGE
Uranium (US/lb U3O8)1
Average annual spot market price	25.64		24.59		4	%
Average annual long-term price	31.75		30.38		5	%
Fuel services (US/kgU as UF6)1
Average annual spot market price
North America	18.27		9.98		83	%
Europe	18.12		10.32		76	%
Average annual long-term price
North America	16.73		14.33		17	%
Europe	16.63		14.44		15	%

All values are in US Dollars.

Note: the industry does not publish UO2 prices. ^^

^1^	Average of prices reported by TradeTech and UxC, LLC (UxC)

On the spot market, where purchases call for delivery within one year, the volume reported by UxC for 2019 was approximately 63.3 million pounds, compared to 88.7 million pounds in 2018. The majority of the activity in the spot market has been churn, the same material changing hands many times. There has been a lack of end-user demand primarily caused by the delay of purchasing decisions. Uncertainty due to changing market dynamics, including ongoing market access and trade policy issues continued to keep some utilities on the sidelines. At the end of 2019, the average reported spot price was $24.93 (US) per pound, down $2.82 (US) per pound from the end of 2018. During the year, the uranium spot price ranged from a high of $28.90 (US) per pound to a low of $24.05 (US) per pound, averaging $25.64 (US) for the year.

Long-term contracts usually call for deliveries to begin more than two years after the contract is finalized, and use a number of pricing formulas, including fixed prices escalated over the term of the contract, and market referenced prices (spot and long-term indicators) quoted near the time of delivery. The volume of long-term contracting reported by UxC for 2019 was about 95.8 million pounds compared to about 91.5 million pounds in 2018. While higher than the same period last year, newly contracted volumes continued to be less than the quantities consumed. Uncertainty regarding the future of some reactor fleets and complacency due to low uranium prices continued to impact contracting volumes. The average reported long-term price at the end of the year was $32.50 (US) per pound, up $0.50 (US) from 2018.

With the uncertainty created by market access and trade policy issues facing the nuclear industry, we expect contracting in 2020 could remain largely discretionary.

Spot UF6 conversion prices increased to record levels in both the North American and European markets. For North American delivery, the average reported spot price at the end of 2019 was $22.13 (US) per kilogram uranium as UF6 (US/kgU as UF6), up $8.63 (US) from the end of 2018. Long-term UF6 conversion prices finished 2019 at $18.13 (US/kgU as UF6), up $2.13 (US) from the end of 2018.

8	CAMECO CORPORATION

SHARES AND STOCK OPTIONS OUTSTANDING

At February 5, 2020, we had:

•	395,797,732 common shares and one Class B share outstanding
•	8,594,527 stock options outstanding, with exercise prices ranging from $11.32 to $26.81
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DIVIDEND

In 2019, our board of directors declared a dividend of $0.08 per common share, which was paid December 13, 2019. The decision to declare an annual dividend by our board will be based on our cash flow, financial position, strategy and other relevant factors including appropriate alignment with the cyclical nature of our earnings.

MANAGEMENT’S DISCUSSION AND ANALYSIS	9

Market overview and developments

Growing confidence

Market access and trade policy issues were at the top of the list of factors affecting the market in 2019. These issues created uncertainty and consumed a significant amount of time and focus from our customers and contributed to the delay of end-user demand in the spot market. Despite the significant demand created by the reduction in primary supply this year, at least half of the activity in the spot market has been churn, the same material changing hands many times. In contrast, interest in long-term contracting increased compared to 2018. While the volume of uranium executed under long-term contracts is still below annual consumption levels, it reached its highest level since 2012 and there continues to be significant interest. We believe that underlying this interest is the recognition that the demand cycle is on an upswing while the production cycle has swung down and the market needs to transition to one where price reflects an economic return on primary production. This gives us confidence that the uranium market will undergo the same transition we have seen in the conversion market and that is beginning to occur in the enrichment market.

Supply is not guaranteed

Economic realities and government-driven trade policies continue to have an impact on the security of supply in our industry. Not only does it not make sense to invest in future primary supply, even the lowest-cost producers are deciding to preserve long-term value by leaving uranium in the ground. Adding to security of supply concerns today is the role of commercial and state-owned entities in the uranium market, and the disconnect between where uranium is produced and where it is consumed. Nearly 80% of primary production is in the hands of state-owned enterprises, after taking into account the cuts to primary production that have occurred over the last several years. Furthermore, almost 90% of primary production comes from countries that consume little-to-no uranium, and 90% of uranium consumption occurs in countries that have little-to-no primary production. As a result, government-driven trade policies can be particularly disruptive for the uranium market. Some of the more significant supply developments are:

•	In the US, which has the largest fleet of nuclear reactors in the world, the US Nuclear Fuel Working Group (NFWG)<br>was established to further analyze the state of nuclear fuel production in the US. This action followed the determination by the President of the United States under Section 232 of the Trade Expansion Act that imports of foreign uranium do not<br>constitute a national security threat, and that new restrictions on imports were not required. The NFWG has submitted its report to the President, however, the details of the report have not been made public and the President has not made any<br>determinations.
•	The concern regarding expanded sanctions on Iran that could extend to countries providing nuclear fuel products<br>and services to Iran (i.e. Russia, China, and some European nations), and therefore disrupt Russian nuclear fuel imports into the US. Compounding this concern is the continued uncertainty regarding Russian sanctions and whether existing quotas on<br>imports of Russian uranium into the US, under the Russian Suspension Agreement, will be extended or amended prior to its expiry in 2020.
---	---
•	Trade tensions with China continue. On August 14, 2019, the US issued sanctions that involved China General<br>Nuclear Power Group and three of its subsidiaries, effectively banning US companies from supplying these groups with specific nuclear-related commercial or dual-use goods. This has not impacted uranium sales.<br>
---	---
•	Kazatomprom (KAP) announced that, given current market conditions, it intends to extend its current production<br>limits (20% reduction from planned production volumes) across all its production assets through 2021. Combined with reductions from prior years, KAP indicated its cutbacks are equivalent to stopping all production in Kazakhstan for about one year.<br>They have also indicated that a return to full production will not occur until there is a sustained market recovery. In addition, during the third quarter KAP offered a secondary placement of its shares, increasing its publicly-traded share capital<br>from 15% to 18.8%.
---	---
•	Energy Resources of Australia Ltd. reconfirmed that it is required to discontinue mining and processing<br>activities at the Ranger uranium mine in the Northern Territory of Australia by January 2021.
---	---
•	The board of directors of Orano’s Cominak mine announced that the mine will shut down in March 2021 due to<br>depletion of reserves.
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10	CAMECO CORPORATION
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Demand has recovered and is growing

The demand gap left by forced and premature nuclear reactor shut-downs since March of 2011 has been filled. According to the International Atomic Energy Agency (IAEA) five new reactors began commercial operation in 2019, and 53 reactors are under construction. With a number of reactor construction projects recently approved, and many more planned, the demand for uranium is growing. This growth is largely occurring in Asia and the Middle East. Some of this growth is tempered by early reactor retirements, plans for reduced reliance on nuclear, or phase-out policies in other regions. However, there is growing recognition of the role nuclear power must play in providing safe, reliable, affordable carbon-free baseload electricity and achieving a low-carbon future. Some of the more significant demand developments are:

•	The World Nuclear Association’s 2019 Nuclear Fuel Report shows demand is forecast to be higher in all<br>scenarios examined over the period 2019 through 2040. In addition, the report shows that under all demand scenarios, the industry needs to at least double projected primary uranium production by 2040, which will require the appropriate market<br>signals to ensure current levels of production continue, the return of idled production capacity, completion of projects under development, and development of currently planned and prospective projects.
•	In its latest uranium market outlook report, UxC increased its annual demand outlook by 8 million pounds per<br>year and moved its assumed structural deficit from 2026 to 2022.
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•	In May 2019, the International Energy Agency released its first nuclear report in 20 years, “Nuclear Power<br>in a Clean Energy System”. The report highlights that a steep decline in nuclear power would threaten energy security and climate change goals and result in billions of tonnes of additional carbon emissions by 2040.
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•	In October 2019, the IAEA held its first ever conference recognizing the critical role for nuclear power in<br>combating climate change, “International Conference on Climate Change and the Role of Nuclear Power”. The IAEA advocates that it will be difficult to achieve the goal of reducing greenhouse gas emissions without a significant increase in<br>nuclear power.
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•	In November 2019, the European Parliament adopted a resolution recognizing the role of nuclear energy in<br>achieving its 2050 climate plan calling for net zero emissions.
---	---
•	This year, China National Nuclear Company received the first new construction approval in China in about three<br>years for units 1 and 2 at Zhangzhou, and construction began at unit 1 in October 2019.
---	---
•	NextEra Energy’s Turkey Point 3 and 4 in Florida received the first ever subsequent license renewal,<br>allowing them to operate for 80 years.
---	---
•	Duke Energy announced it is seeking to renew the operating licences to 80 years for the 11 reactors it operates<br>in North and South Carolina to support carbon reduction plans. Tennessee Valley Authority also announced plans to extend the licences for its six reactors in Tennessee and Alabama to 80 years.
---	---
•	Three Mile Island nuclear power plant was retired from service by Exelon after 45 years of operation in<br>Pennsylvania.
---	---
•	In Ohio, a bill was passed providing funding to support the ongoing operation of the Perry and Davis-Besse<br>nuclear power plants, similar to incentives enacted by other states including Illinois, New Jersey, New York, Connecticut, and pending legislation in Pennsylvania.
---	---
•	There were reports that Kyushu Electric Power Co. and other utilities in Japan expect to temporarily close their<br>currently operating units over the coming years to complete the implementation of the antiterrorism measures required by the nuclear regulators. Some of these units are expected to shut down starting in 2020 before returning to service within a<br>year.
---	---
•	Brazil announced the possible construction of six more nuclear reactors by 2050, in addition to completion of<br>Angra unit 3, which is currently under construction. Brazil also plans to restart domestic uranium mining in 2019 for the first time in five years, and is open to private sector investment.
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MANAGEMENT’S DISCUSSION AND ANALYSIS	11
---	---

OPPORTUNITIES FOR THOSE WHO CAN WAIT

UxC reports that over the last five years only 396 million pounds have been locked-up in the long-term market, while over 831 million pounds have been consumed in reactors. We remain confident that utilities have a growing gap to fill.

Like other commodities, the uranium industry is cyclical. History demonstrates that in general, when prices are rising and high, uranium is perceived as scarce, and a lot of contracting activity takes place. The heavy contracting that takes place during price runs, drives investment in higher-cost sources of production. Once that production is in the market, it tends to stay in the market longer than is economically rational, creating the perception that uranium is abundant and always will be, and prices decline. When prices are declining and low, like we have seen over the past eight years, there is no perceived urgency to contract, and contracting activity and investment in new supply drops off. After years of low investment in supply, as has been the case since 2011, security of supply tends to overtake price concerns at some point, and utilities re-enter the long-term market to ensure they have the reliable supply of uranium they need to run their reactors.

12	CAMECO CORPORATION

We believe the current backlog of long-term contracting presents a substantial opportunity for commercially motivated suppliers like us that can weather the low-price part of the cycle. As a low-cost producer, we manage our operations with these price cycles in mind.

In our industry, customers do not come to the market right before they need to load uranium into their reactors. To operate a reactor that could run for more than 60 years, natural uranium and the downstream services have to be purchased years in advance, allowing time for a number of processing steps before it arrives at the power plant as a finished fuel bundle. At present, we believe there is a significant amount of uranium that needs to be contracted to keep reactors running into the next decade.

UxC estimates that cumulative uncovered requirements are about 1.5 billion pounds to the end of 2035. The longer the recovery of the long-term market is delayed, the less certainty there will be about the availability of future supply to fill growing demand. In fact, recent data from the US Energy Information Administration shows that utility inventories are starting to decline and are approaching levels that could put security of supply at risk. Ultimately, we expect the current market uncertainty to give way to increasing concerns about the security of future supply.

As utilities’ uncovered requirements grow, annual supply declines, demand for uranium from producers and financial players increases, and with trade policy potentially restricting access to some markets, we believe the pounds available in the spot market will not be adequate to satisfy the growing backlog of long-term demand. As a result, we expect there will be increased competition to secure uranium under long-term contracts on terms that will ensure the availability of reliable primary supply to meet growing demand.

MANAGEMENT’S DISCUSSION AND ANALYSIS	13

Global population is on the rise, and with the world’s need for safe, clean, reliable baseload energy, nuclear remains an important part of the energy mix. We remain confident in the future of the nuclear industry. With demand coming on in the form of restarts and new reactors, and supply becoming less certain as a result of low prices, production curtailments, lack of investment, and market access and trade policy issues, we’re continuing to expect a market transition. While the timing of a market transition remains uncertain, we will continue to take the actions we believe are necessary to position the company for long-term success. Therefore, we will undertake contracting activity which aligns with the uncertain timing of a market recovery and is intended to ensure we have adequate protection and will benefit from higher prices under our contract portfolio, while maintaining exposure to the rewards that come from having uncommitted, low-cost supply to deliver into a strengthening market.

14	CAMECO CORPORATION

Our strategy

Our strategy is set within the context of a challenging market environment, which we expect to give way to strong long-term fundamentals driven by increasing populations, and the impact of growing electricity demand on the world’s climate. Nuclear energy must be a central part of the solution to the world’s shift to a low-carbon, climate resilient economy. It is an option that can provide the power needed, not only reliably, but also safely and affordably, and in a way that will help avoid some of the worst consequences of climate change.

Tier-one focus

We are a pure-play nuclear fuel investment, focused on providing a clean source of energy, and taking advantage of the long-term growth we see coming in our industry. Our strategy is to focus on our tier-one assets and profitably produce at a pace aligned with market signals in order to preserve the value of those assets and increase long-term shareholder value, and to do that with an emphasis on safety, people and the environment.

URANIUM

Uranium production is central to our strategy, as it is the biggest value driver of the nuclear fuel cycle and our business. In accordance with market conditions, and to mitigate risk, we will evaluate the optimal mix of our production, inventory and purchases in order to satisfy our contractual commitments and in order to return the best value possible. We will not produce from our tier-one assets to sell into an oversupplied spot market. During a prolonged period of uncertainty, this could mean leaving our uranium in the ground. As conditions improve, we expect to meet rising demand with production from our best margin operations.

In light of today’s lingering uncertainty as to how long the weak market conditions will persist, we are focused on preserving the value of our lowest cost assets, on maintaining a strong balance sheet, on protecting and extending the value of our contract portfolio and on efficiently managing the company in a low price environment. We have undertaken a number of deliberate and disciplined actions. In 2019, these actions resulted in:

•	generation of $527 million in cash from operations
•	retirement of one-third, $500 million, of our outstanding debt<br>
---	---
•	a year-end balance of $1.1 billion in cash on our balance sheet<br>
---	---

Consistent with our actions, our McArthur River/Key Lake operation remains on care and maintenance for an indeterminate duration, removing 18 million pounds of uranium annually from the market. Some of our actions have a cost in the short term, and we must weigh these costs against the value we expect they will generate over the long term. Accordingly, we will adjust our actions based on market signals with the intent of being able to self-manage risk, and to ensure our tier-one assets are available to us in a market that values them appropriately.

FUEL SERVICES

Our fuel services division is a source of profit and supports our uranium segment while allowing us to vertically integrate across the fuel cycle.

The UF6 conversion market has gone through a transition that has seen the industry average North American spot price increase by more than 280% and the industry average North American term price increase by almost 40% since the end of 2017. In this environment, with our Port Hope facility the only UF6 plant currently operating in North America, we are focused on securing new long-term contracts that reflect today’s prices and that will allow us to continue to consistently support the long-term needs of our customers.

In addition, we are pursuing non-traditional markets for our UO2 and fuel fabrication business and have been actively securing new contracts for reactor components to support refurbishment of Canadian reactors.

Our focus will continue to be on maintaining and optimizing the profitability of this segment of our business.

OTHER FUEL CYCLE INVESTMENTS

We continue to explore other opportunities within the nuclear fuel cycle. In particular, we are interested in the second largest value driver of the fuel cycle, enrichment. Having operational control of uranium production, conversion, and enrichment facilities would offer operational synergies that could enhance profit margins.

MANAGEMENT’S DISCUSSION AND ANALYSIS	15

In 2019, we signed a binding agreement to increase our interest in Global Laser Enrichment (GLE) from 24% to 49%. GLE is testing a third-generation enrichment technology that, if successful, will use lasers to commercially enrich uranium. Closing of the agreement is conditional upon receipt of US regulatory approval and GLE’s contract with the US Department of Energy (DOE) regarding DOE’s inventory of depleted tails remaining in full force and effect.

Capital allocation – focus onvalue

Delivering returns to our long-term shareholders is a top priority. We continually evaluate our investment options to ensure we allocate our capital in a way that we believe will:

•	create the greatest long-term value for our shareholders
•	allow us to navigate by our investment-grade rating and mitigate risk
---	---
•	allow us to execute on our dividend while ensuring it is appropriately aligned with the cyclical nature of our<br>earnings
---	---

To deliver value, free cash flow must be productively reinvested in the business or returned to shareholders, which requires good execution and disciplined allocation. Our decisions are based on the run rate of our business, not one-time events. Cash on our balance sheet that exceeds value-adding growth opportunities and/or is not needed to self-manage risk should be returned to shareholders.

We have a multidisciplinary capital allocation team that evaluates all possible uses of investable capital.

We start by determining how much cash we have to invest (investable capital), which is based on our expected cash flow from operations minus expenses we consider to be a higher priority, such as dividends and financing costs, and could include others. This investable capital can be reinvested in the company or returned to shareholders.

Our capital allocation decisions will continue to pivot on what the market is providing. With the continued market uncertainty we are facing, and our ongoing dispute with CRA, the objective of our capital allocation is to maximize cash flow, while navigating by our investment-grade rating through close management of our balance sheet metrics.

With the metrics that inform an investment-grade rating in mind, and in this period of low uranium prices, we have taken steps to improve margin and cash flow by:

•	responsibly managing our sources of supply thereby preserving the value of our<br>tier-one assets
•	restructuring our activities to reduce our operating, capital, and general and administrative spending<br>
---	---
•	reducing our annual dividend from $0.40 per share to $0.08 per share in 2018
---	---
•	implementing an initiative intended to provide a greater focus on technology and its applications to improve<br>efficiency and reduce costs across the organization, with a particular focus on innovation and accelerating the adoption of advanced digital and automation technologies
---	---

As a result, we are well positioned to self-manage risk.

REINVESTMENT

If a decision is made to reinvest capital in sustaining, capacity replacement, or growth, all opportunities are ranked and only those that meet the required risk-adjusted return criteria are considered for investment. We also must identify, at the corporate level, the expected impact on cash flow, earnings, and the balance sheet. All project risks must be identified, including the risks of not investing. Allocation of capital only occurs once an investment has cleared these hurdles.

This may result in some opportunities being held back in favour of higher return investments, and should allow us to generate the best return on investment decisions when faced with multiple prospects, while also controlling our costs. If there are not enough good investment prospects internally or externally, this may result in residual investable capital, which we would then consider returning directly to shareholders.

16	CAMECO CORPORATION

We have not yet seen the market transition needed to restart our idled production capacity. Therefore, until we see that transition, our capital expenditures for 2020 through 2022 will be focused primarily on sustaining and capacity replacement capital, and demonstrating our continued commitment to a clean environment through ongoing investment in the Vision in Motion project in Port Hope. In addition, we will focus on improving operational effectiveness across our operations, including the use of digital and automation technologies with a particular goal of substantially reducing operating costs and increasing operational flexibility when it comes time to restart the McArthur River/Key Lake operation. Any opportunities will be rigorously assessed before an investment decision is made. If we get clarity on our CRA dispute prior to a market transition, which generates a one-time cash infusion, we will focus on the debt portion of our ratings metrics. This may mean an even greater emphasis on reducing the debt on our balance sheet. However, if the market does begin to transition and higher uranium prices are beginning to flow through our contract portfolio, and we are able to increase our portfolio of acceptable long-term contracts, the earnings portion of our rating metrics are expected to improve. In that scenario, reducing debt would not be the priority. Our priority would be to invest in restarting our idled tier-one assets, and if warranted, turn to value-adding growth opportunities.

RETURN

We believe in returning cash to shareholders, but are also focused on protecting the company and rewarding those shareholders who understand and support our strategy to build long-term value. If we have excess cash and determine the best use is to return it to shareholders, we can do that through a share repurchase or dividend—an annual dividend, one-time supplemental dividend or a progressive dividend. When deciding between these options, we consider a number of factors, including the nature of the excess cash (one time or cash generated by our business operations), growth prospects for the company, and growth prospects for the industry.

Sharebuyback: If we were generating excess cash while there were few or no growth prospects for the company or the industry, then a share buyback might make sense. However, our current view is that the long-term fundamentals for Cameco and the industry remain strong.

Dividend: The amount and type of dividend paid, annual, progressive or one-time supplemental is evaluated by our board of directors with careful consideration of our cash flow, financial position, strategy, and other relevant factors including appropriate alignment with the cyclical nature of our earnings.

Marketing framework – balanced contract portfolio

As with our corporate strategy and approach to capital allocation, the purpose of our marketing framework is to deliver value. Our approach is to secure a solid base of earnings and cash flow by maintaining a balanced contract portfolio that optimizes our realized price.

We evaluate our strategy in the context of our market environment and continue to adjust our actions in accordance with our marketing framework:

•	First, we will not produce from our tier-one assets to sell into an<br>oversupplied spot market. We will not produce from these assets unless we can deliver our tier-one pounds under long-term contracts that provide an acceptable rate of return on these assets for our owners.<br>
•	Second, we do not intend to build up an inventory of excess uranium. Excess inventory serves to contribute to the<br>sense that uranium is abundant and creates an overhang on the market, and it ties up working capital on our balance sheet.
---	---
•	Third, in addition to our committed sales, we will capture demand in the market where we think we can obtain<br>value. We will take advantage of opportunities the market provides, where it makes sense from an economic, logistical and strategic point of view. Those opportunities may come in the form of spot, mid-term or<br>long-term demand, and will be additive to our current committed sales.
---	---
•	Fourth, once we capture demand, we will decide how to best source material to satisfy that demand. Depending on<br>the timing and volume of our production, purchase commitments, and our inventory volumes, this means we will be active buyers in the market in order to meet our demand obligations.
---	---
•	And finally, in general, if we choose to source material to meet demand by purchasing it, we expect the price of<br>that material will be more than offset by the leverage to market prices in our sales portfolio over a rolling 12-month period.
---	---

In addition to this framework, our contracting decisions always factor in who the customer is, our desire for regional diversification, the product form, and logistical factors.

MANAGEMENT’S DISCUSSION AND ANALYSIS	17

Ultimately, our goal is to protect and extend the value of our contract portfolio on terms that recognize the value of our assets and provide adequate protection when prices go down and allow us to benefit when prices rise. We believe using this framework will allow us to create long-term value for our shareholders. Our focus will continue to be on maximizing cash flow, so we can execute on our strategy and self-manage risk.

LONG-TERM CONTRACTING

Uranium is not traded in meaningful quantities on a commodity exchange. Utilities have historically bought the majority of their uranium and fuel services products under long-term contracts with suppliers, and have met the rest of their needs on the spot market. We sell uranium and fuel services directly to nuclear utilities around the world as uranium concentrates, UO2 and UF6, conversion services, or fuel fabrication. We have a solid portfolio of long-term sales contracts that reflect the long-term, trusting relationships we have with our customers.

In general, we are always active in the market, buying and selling uranium when it is beneficial for us and in support of our long-term contract portfolio. We undertake activity in the spot and term markets prudently, looking at the prices and other business factors to decide whether it is appropriate to purchase or sell into the spot or term market. Not only is this activity a source of profit, it gives us insight into underlying market fundamentals.

We deliver large volumes of uranium every year, therefore our net earnings and operating cash flows are affected by changes in the uranium price. Market prices are influenced by the fundamentals of supply and demand, market access and trade policy issues, geopolitical events, disruptions in planned supply and demand, and other market factors.

The objectives of our contracting strategy are to:

•	maximize realized price while reducing volatility of our future earnings and cash flow
•	focus on meeting the nuclear industry’s growing annual uncovered requirements with our future uncommitted<br>supply while ensuring adequate regional diversity
---	---
•	establish and grow market share with strategic customers
---	---

We target a ratio of 40% fixed-pricing and 60% market-related pricing in our portfolio of long-term contracts, including mechanisms to protect us when the market price is declining and allow us to benefit when market prices go up. This is a balanced and flexible approach that allows us to adapt to market conditions and put a floor on our average realized price, and deliver the best value to shareholders over the long term.

This approach has allowed us to realize prices higher than the market prices during periods of weak uranium demand, and we expect it will enable us to realize increases linked to higher market prices in the future.

Fixed-price contracts for uranium: are typically based on a term-price indicator at the time the contract is accepted and escalated over the term of the contract.

Market-related contracts foruranium: are different from fixed-price contracts in that they may be based on either the spot price or the long-term price, and that price is as quoted at the time of delivery rather than at the time the contract is accepted. These contracts sometimes provide for discounts, and often include floor prices and/or ceiling prices, which are usually escalated over the term of the contract.

Fuelservices contracts: the majority of our fuel services contracts are at a fixed price per kgU, escalated over the term of the contract, and reflect the market at the time the contract is accepted.

OPTIMIZING THE CONTRACT PORTFOLIO

We work with our customers to optimize the value of our existing contract portfolio. In cases where a customer is seeking relief due to a challenging policy, operating, or economic environment, we evaluate their specific circumstances and assess their long-term sustainability. Where we deem the customer’s long-term demand to be at risk, we may consider options that allow us to benefit from converting that uncertain future value into certain present value. In contrast, where the customer is considered to have a more certain and predictable future, we may offer relief. For example, in a low price environment, we may blend in more market-related volumes in the near term, but only where the customer is willing to extend the terms and conditions of that contract out into the future, and only where it is beneficial to us.

18	CAMECO CORPORATION

CONTRACT PORTFOLIO STATUS

We have commitments to sell over 130 million pounds of U3O8 with 31 customers worldwide in our uranium segment, and over 36 million kilograms as UF6 conversion with 28 customers worldwide in our fuel services segment. The annual average sales commitments over the next five years in our uranium segment is around 19 million pounds, with commitment levels in 2020 and 2021 higher than in 2022 through 2024.

Customers – U3O8:

Five largest customers account for 60% of commitments

Customers – UF6 conversion:

Five largest customers account for 60% of commitments

MANAGING OUR CONTRACT COMMITMENTS

To meet our delivery commitments, we use our uranium supply, which includes uranium obtained from:

•	our existing production
•	purchases under our JV Inkai agreement, from NUKEM, under long-term agreements and in the spot market<br>
---	---
•	our existing inventory
---	---

We allow sales volumes to vary year-to-year depending on:

•	the level of sales commitments in our long-term contract portfolio
•	our production volumes
---	---
•	purchases under existing and/or new arrangements
---	---
•	discretionary use of inventories
---	---
•	market opportunities
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MANAGEMENT’S DISCUSSION AND ANALYSIS	19
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Managing our costs

PRODUCTION COSTS

In order to operate efficiently and cost-effectively, we manage operating costs and improve plant reliability by prudently investing in production infrastructure, new technology, and business process improvements. Like all mining companies, our uranium segment is affected by the cost of inputs such as labour and fuel.

Given the current market dynamics, in 2020, our only operating property will be Cigar Lake. Our McArthur River/Key Lake, Rabbit Lake, and US operations are currently on care and maintenance. While we have these operations on standby, our annual cash production costs will reflect the operating cost of mining and milling our share of Cigar Lake mineral reserves, which is estimated to be between $15 and $16 per pound over the entire life-of-mine.

Operating costs in our fuel services segment are mainly fixed. In 2019, labour accounted for about 44% of the total. The largest variable operating cost is for zirconium, followed by anhydrous hydrogen fluoride, and energy (natural gas and electricity).

CARE AND MAINTENANCE COSTS

In 2020, we expect to incur between $150 million and $170 million in care and maintenance costs related to the suspension of production at our McArthur River/Key Lake mine and mill, Rabbit Lake mine and mill, and US operations. The largest proportion of these costs will be incurred at McArthur River/Key Lake.

Our expected care and maintenance costs have increased compared to 2019 due to planned expenditures that will allow us to fully assess our operating processes at McArthur River/Key Lake. Consistent with our tier-one strategy, we expect that production at McArthur River/Key Lake will be the first of our operations to restart once we see the appropriate market signals. Therefore, we are focused on improving operational effectiveness, including the use of digital and automation technologies with a particular goal of substantially reducing operating costs and increasing operational flexibility when it comes time to restart these operations. As a result, care and maintenance costs are expected to be higher compared to Rabbit Lake and in the US. Our Rabbit Lake and US operations are higher-cost, and with plenty of idle tier-one capacity and tier-one expansion capacity globally that can come back on line relatively quickly, the restart horizon is less certain.

While Rabbit Lake and our US operations are in standby, we will continue to evaluate our options in order to minimize costs.

20	CAMECO CORPORATION

PURCHASES AND INVENTORY COSTS

Our costs are also affected by the purchases of uranium and conversion services we make under long-term contracts and on the spot market.

To meet our delivery commitments, we make use of our mined production, inventories, purchases under long-term contracts, and purchases we make on the spot market. In 2020, the price for the majority of our purchases will be quoted at the time of delivery.

The cost of purchased material may be higher or lower than our other sources of supply, depending on market conditions. The cost of purchased material affects our cost of sales, which is determined by calculating the average of all of our sources of supply, including opening inventory, production, and purchases, and adding royalties, selling costs, and care and maintenance costs. If market prices exceed our cost of produced material including royalties, we expect the cost of sales to increase accordingly.

FINANCIAL IMPACT

As greater certainty returns to the uranium market, our view is that the market needs to transition to one where uranium prices reflect the cost of bringing on new primary production to meet growing demand.

We have taken a number of deliberate and disciplined actions to reduce supply and streamline operations. Some of these actions come with a cost in the near term, like care and maintenance costs, but we expect the benefit over the long term will far outweigh those costs.

We believe our actions will help shield the company from the nearer term risks we face and will reward shareholders for their continued patience and support of our strategy to build long-term value.

Committed to our values

Our values are at the core of everything we do and define who we are as a company.

SAFETY AND ENVIRONMENT

The safety of people and protection of the environment are the foundations of everything we do, locally and globally.

PEOPLE

We value the contribution of every employee and demonstrate respect for individual dignity, creativity and cultural diversity.

INTEGRITY

We lead by example, earn trust, honour our commitments and conduct our business ethically.

EXCELLENCE

Through leadership, collaboration and innovation, we strive to achieve our full potential and inspire others to reach theirs.

MANAGEMENT’S DISCUSSION AND ANALYSIS	21

Our approach to ESG matters

Our uranium is used around the world in the generation of safe, carbon-free, affordable, base-load nuclear energy. As we seek to bring the benefits of carbon-free nuclear energy to the world, we will do so in a manner that reflects our values. We are committed to identifying and addressing the environmental, social and governance (ESG) risks and opportunities that we believe may have a significant impact on our ability to add long-term value for our stakeholders.

SUSTAINABILITY: A KEY PART OF OUR STRATEGY, REFLECTING OUR VALUES

We view sustainability as an integrated approach to conducting business. We integrate sustainability principles and practices into all stages of our activities, from exploration to decommissioning, including factoring them into our objectives and approach to compensation, our overall corporate strategy, and our day-to-day operations. We adopt established and recognized management system frameworks to guide our integrated approach, which is embedded within ethical business practices and our robust and transparent governance framework. We seek to be transparent with our stakeholders, keeping them updated on the risks and opportunities that we believe may have a significant impact on our ability to add long-term value.

We have a sustainability policy that describes our commitments in this regard. We encourage you to review our sustainability policy at cameco.com/about/governance/policies-programs.

Safety and the Environment

We employ an integrated Safety, Health, Environment and Quality (SHEQ) management system that applies to all phases and aspects of our business. The system is governed by one integrated SHEQ policy that recognizes that the safety and health of our workers and the public, protection of the environment, and quality of our processes are the highest priority during all stages of our activities. The policy is supported by multiple corporate SHEQ management programs. We maintain ISO 14001 certification at a corporate level. We encourage you to review our SHEQ policy at cameco.com/about/governance/policies-programs.

Climate change: Nuclear power is part of the solution

There is growing recognition that uranium is the cleanest energy fuel in the world and of the role nuclear power must play in ensuring safe, reliable and affordable carbon-free electricity generation from key global agencies, such as the United Nations Economic Commission for Europe, the United Nations Intergovernmental Panel on Climate Change, and the Union of Concerned Scientists. Indeed, for the first time in nearly two decades, the International Energy Agency released a report on nuclear energy in the hopes of bringing it back into the global energy debate. The report highlighted that a steep decline in nuclear power would threaten energy security and climate change goals and result in four billion tonnes of additional carbon emissions by 2040.

The nuclear industry recognizes the scale and immediacy of the challenge outlined in the Paris Agreement, and the important role that all low-carbon and carbon-free energy sources have to play. Led by the World Nuclear Association, the nuclear industry has a program and vision for the future of electricity supply called “Harmony”. The Harmony program sets a target for nuclear power to provide 25% of electricity by 2050 to help avoid the worst consequences of climate change. As members of the World Nuclear Association, and through participation in other industry organizations we fully support and are advocates of this initiative.

We believe that the reduction of carbon and greenhouse gas (GHG) emissions is important and necessary in Canada and around the world, and that nuclear power must be a central part of the solution to the world’s shift to a low-carbon, climate resilient economy. As one of the world’s largest producers of the uranium fuel needed to fuel nuclear reactors, we believe there is a significant opportunity for us to be part of the solution to combating climate change and that we are well positioned to deliver significant long-term business value, while actively working to reduce our emission profile.

We are proud that our the high-grade uranium ores in Saskatchewan’s Athabasca Basin result in our Canadian uranium having among the lowest life cycle greenhouse gas emission intensity internationally, despite the constraints related to our geographic location. In fact, the production of Saskatchewan uranium requires at least one hundred times less greenhouse gas (GHG) emissions than production of the cleanest Canadian natural gas to produce the same amount of electricity and, all of the nuclear power produced is GHG emission free. We have tracked and reported GHG emissions for more than two decades, despite any regulatory requirement to do so. We continue to be focused on improving energy management and the visibility of energy consumption within our organization, with the overall goal of improving the energy intensity of our operations to create business value.

22	CAMECO CORPORATION

Stakeholder relations

Gaining the support of all our stakeholders is necessary to sustain our business.

We have a people policy that describes our commitment to developing and supporting a flexible, skilled, stable and diverse workforce. The policy is supported by multiple corporate human resource programs, standards and practices. We encourage you to review this policy at cameco.com/about/governance/policies-programs.

In addition, we strive to earn the support of the communities in which we operate, which is one of our key measures of success. We identify opportunities and initiatives that support and respect these communities and their cultures.

We recognize the substantial value in developing and maintaining long-term mutually beneficial relationships with Indigenous communities located within or near our operations and other activities.

Over more than 30 years of operation and partnership in northern Saskatchewan, we have developed a comprehensive strategy that applies to all our operations globally, and is aimed at ensuring the support of the communities with whom we work. The global strategy is flexible and is implemented locally to reflect the needs of the communities. The bulk of the strategy has evolved as a result of the commercial benefits we see from ensuring strong support among local communities wherever we operate and focuses on five key areas:

•	Workforce development: designed to deliver programming that aims to build educational and skills capacity<br>in local communities.
•	Business development: designed to promote involvement of locally-owned businesses in contracting<br>opportunities at our operations, to provide additional jobs, revenue streams and capacity building at the local community level.
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•	Community engagement: designed with the objective to ensure that we secure support for our operations from<br>local communities and satisfy the obligations placed on us by regulators and laws.
---	---
•	Community investment: designed to help local communities with much-needed funding for community<br>programming and infrastructure for initiatives focused on youth, education and literacy, health and wellness, and community development.
---	---
•	Environmental stewardship: designed to support our overall environmental programming and give communities<br>a voice in both the formal environmental assessment regulatory process, as well as ongoing monitoring activities.
---	---

We set standards for the measures that we will conform to in maintaining ongoing and meaningful engagement within the communities where we operate.

HOW WE ARE DOING

We produce a sustainability report for our stakeholders to tell them how we are performing against globally recognized key indicators that measure our environmental, social, governance and financial impacts in the areas that we believe may have a significant impact on our ability to add long-term value for our stakeholders. We use the Global Reporting Initiative’s Sustainability Framework (GRI), in addition to some corporate indicators that are unique to the company to measure and report our performance. This is our report card to our stakeholders. For our most recent performance results, we encourage you to review our sustainability report at cameco.com/about/sustainability.

Given the evolving nature of the ESG landscape, we have established a multi-disciplinary working group to review of our current approach in this area, including how we report. The working group is chaired by our Senior Vice-President and Chief Corporate Officer and will report to the relevant committees of the board.

GOVERNANCE: SOUND GOVERNANCE IS THE FOUNDATION FOR STRONG PERFORMANCE

We believe that sound governance is the foundation for strong corporate performance. Our board of directors is responsible for overseeing management, and our strategy and business affairs and the integration of ESG principles throughout the company. The board’s goal is to ensure we operate as a successful business, optimizing financial returns while effectively managing risk.

The board has formal governance guidelines that set out our approach to governance and the board’s governance role and practices. The guidelines ensure we comply with all of the governance rules and legislation in Canada and the United States that are applicable, conduct ourselves in the best interests of our stakeholders, and meet industry best practices. The guidelines are reviewed and updated regularly.

MANAGEMENT’S DISCUSSION AND ANALYSIS	23

Risk and Risk Management

We have a mature enterprise risk management (ERM) framework that consists of processes and controls to ensure risks are being appropriately managed and mitigated.

Decisions to accept, mitigate, or transfer identified risks guide management’s plans in our strategic planning and budgeting process. Employees throughout the company take ownership of the risks specific to their area, and are responsible for developing and implementing the controls to manage and re-assess risk, including ESG risks.

Our risk policy sets out a broad, systematic approach to identifying, assessing, reporting and managing the significant risks, including ESG risks, we face in our business and operations. The policy is reviewed annually to ensure that it continues to meet our needs.

See Managing the risks, starting on page 56, for a discussion of the risks, including ESG risks, that generally apply to all of our operations and advanced uranium projects, and that could have a material impact on business in the near term. We also recommend you review our most recent annual information form, which includes a discussion of other material risks that could have an impact on our business.

The board is responsible for overseeing management’s implementation of appropriate risk management processes and controls. Time is dedicated at board and committee meetings to risk identification, management, and reporting. In consultation with the board, management works on enhancing its enterprise risk oversight practices, processes and controls. While the board oversees the company’s strategic risks, including ESG/climate-related risks, it also allocates oversight of other top-tier risks to specific board committees. Set out below is an overview of the responsibilities allocated to specific board committees.

Audit and finance **** – supports the board in fulfilling its oversight responsibilities regarding the integrity of our accounting and financial reporting, the adequacy and effectiveness of our internal controls and disclosure controls, legal, regulatory (excluding safety, health and the environment) and ethical compliance, the independence and performance of our external and internal auditors, oversight of specific material risks, and prevention and detection of fraudulent activities and financial oversight.

Human resources – supports the board in fulfilling its oversight responsibilities regarding human resource policies, employee and labour relations matters, executive compensation, executive succession and development, pension plan governance, and oversight of material risks assigned to the committee.

Nominating, corporate governance and risk – supports the board in fulfilling its oversight responsibilities by developing and recommending a set of corporate governance principles, identifying and recommending qualified individuals as members of the board and its committees, assessing the effectiveness of the board and committees, and overseeing the risk program.

Reserves oversight - supports the board in fulfilling its oversight responsibilities regarding estimating and disclosing mineral reserves and resources.

Safety, health and environment – supports the board in fulfilling its oversight responsibilities regarding safety, health, environmental and climate-related matters, and supportive communities.

In addition, the safety, health and environment committee and the nominating, corporate governance and risk committees assist the board in fulfilling its oversight responsibility with respect to ESG matters.

More information about our shareholder commitment, our governance principles, how our board operates, its responsibilities, and the profiles of each of our directors can be found in our most recent management proxy circular and on our website at cameco.com/about/board-of-directors.

TARGETS AND METRICS: THE LINK BETWEEN ESG FACTORS AND EXECUTIVE PAY

We recognize the importance of integrating certain ESG factors, such as safety performance, a clean environment and supportive communities, into our executive compensation strategy as we see success in these areas as critical to the long term success of the company. For more information on our compensable targets and our reported performance against those targets see the Measuring our results section that follows and our most recent management proxy circular.

24	CAMECO CORPORATION

Measuring our results

Each year, we set corporate objectives that are aligned with our strategic plan. These objectives fall under our four measures of success, and performance against specific targets under these objectives forms the foundation for a portion of annual employee and executive compensation. See our most recent management proxy circular for more information on how executive compensation is determined.

2019 OBJECTIVES^1^	TARGET	RESULTS
OUTSTANDING FINANCIAL PERFORMANCE
Earnings measure	Achieve targeted adjusted net earnings.	•  adjusted net earnings was above the maximum target
Cash flow measure	Achieve cash flow from operations (after working capital changes).	•  cash flow from operations was above the maximum target
SAFE, HEALTHY AND REWARDING WORKPLACE
Workplace safety measure	Strive for no injuries at all Cameco-operated sites. Maintain a long-term downward trend in combined employee and contractor injury frequency and severity, and radiation doses.	•  best safety performance in the history of the company, however TRIR did not meet<br>the 2019 improvement target<br> <br><br><br><br>•  completion of corrective actions and job task observations exceeded the target<br><br><br><br> <br>•  average radiation doses<br>remained low and stable
CLEAN ENVIRONMENT
Environmental performance measures	Achieve divisional environmental aspect improvement targets.	•  performance was within the targeted range<br><br><br><br> <br>•  there were no significant<br>environmental incidents in 2019
SUPPORTIVE COMMUNITIES
Stakeholder support measure	Implement Collaboration Agreements by supporting northern business development opportunities and build corporate reputation.	•  of our two targets involving sourcing of services from preferred northern<br>Saskatchewan suppliers, one did not meet the minimum target and the other was above the maximum target
^1^	Detailed results for our 2019 corporate objectives and the related targets will be provided in our 2020<br>management proxy circular prior to our Annual Meeting of Shareholders on April 30, 2020.
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2020 objectives

OUTSTANDING FINANCIAL PERFORMANCE

•	Achieve targeted financial measures focused on controlling costs and generating cash.

SAFE, HEALTHY AND REWARDING WORKPLACE

•	Improve workplace safety performance at all sites.

CLEAN ENVIRONMENT

•	Improve environmental performance at all sites.

SUPPORTIVE COMMUNITIES

•	Build and sustain strong stakeholder support for our activities.
MANAGEMENT’S DISCUSSION AND ANALYSIS	25
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Financial results

This section of our MD&A discusses our performance, financial condition and outlook for the future.

27	2019 CONSOLIDATED FINANCIAL RESULTS
38	OUTLOOK FOR 2020
41	LIQUIDITY AND CAPITAL RESOURCES
46	2019 FINANCIAL RESULTS BY SEGMENT
46	URANIUM
48	FUEL SERVICES
49	FOURTH QUARTER FINANCIAL RESULTS
49	CONSOLIDATED RESULTS
52	URANIUM
54	FUEL SERVICES
26	CAMECO CORPORATION
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2019 consolidated financial results

This section of our MD&A discusses our performance, financial condition and outlook for the future.

As of January 1, 2018, due to restructuring and a change in our ownership interest, we began accounting for JV Inkai on an equity basis, with no restatement of prior periods.

HIGHLIGHTS							CHANGE FROM
DECEMBER 31 ( MILLIONS EXCEPT WHERE INDICATED)		2018		2017			2018 TO 2019
Revenue	1,863		2,092		2,157			(11	)%
Gross profit	242		296		436			(18	)%
Net earnings (loss) attributable to equity holders	74		166		(205	)		(55	)%
per common share (basic)	0.19		0.42		(0.52	)		(56	)%
per common share (diluted)	0.19		0.42		(0.52	)		(56	)%
Adjusted net earnings (non-IFRS, see page 28)	41		211		59			(81	)%
per common share (adjusted and diluted)	0.10		0.53		0.15			(81	)%
Cash provided by operations (after working capital changes)	527		668		596			(21	)%

All values are in US Dollars.

Net earnings

Our net earnings normally trend with revenue, but, in 2017, were significantly influenced by impairment charges due to the weakness in the uranium market.

The following table shows what contributed to the change in net earnings in 2019 compared to 2018 and 2017.

( MILLIONS)			2018			2017
Net earnings (losses) - previous year	166	****	****	(205	)	****	(62	)
Change in gross profit by segment
(we calculate gross profit by deducting from revenue the cost of products and<br>services sold, and depreciation and amortization (D&A), net of hedging benefits)
Uranium	(27	)		18			29
	(133	)		40			(222	)
	35			1			(36	)
	10			(186	)		180
	(115	)		(127	)		(49	)
Fuel services	13			1			(5	)
	(11	)		(5	)		21
	29			(1	)		(15	)
	31			(5	)		1
Other changes
Lower administration expenditures	17			21			44
Lower impairment charges	—			358			4
Lower exploration expenditures	6			10			13
Change in reclamation provisions	57			(60	)		(34	)
Lower loss on disposal of assets	—			5			16
Change in gains or losses on derivatives	113			(137	)		22
Change in foreign exchange gains or losses	(45	)		49			(17	)
Change in earnings from equity-accounted investments	13			32			—
Arbitration award in 2019 related to TEPCO contract	52			—			—
Gain on sale of interest in Wheeler River Joint Venture in 2018	(17	)		17			—
Gain on restructuring of JV Inkai in 2018	(49	)		49			—
Gain on customer contract restructuring in 2018	(6	)		6			—
Sale of exploration properties in 2018	(7	)		7			—
Gain on customer contract settlements in 2016	—			—			(59	)
Reversal of tax provision in 2018 related to CRA dispute	(61	)		61			—
Change in income tax recovery or expense	(126	)		62			(91	)
Other	45			23			7
Net earnings (losses) - current year	74	****	****	166	****	****	(205	)

All values are in US Dollars.

MANAGEMENT’S DISCUSSION AND ANALYSIS	27

Impairment charges

In the third quarter of 2017, we made changes to the way our global marketing activities were organized. The changes significantly impacted the marketing activities historically performed by NUKEM. As a result, we recognized an impairment charge for the full carrying value of goodwill of $111 million.

During the fourth quarter of 2017, we announced our plan to temporarily suspend production at the McArthur River/Key Lake operation in 2018. As a result, we re-evaluated the project to complete the new calciner at Key Lake, which was undertaken to allow for increased production. Given the production suspension, market conditions, and that we determined the existing calciner had sufficient capacity to reliably meet our ongoing production requirements, it was determined that no further investment would be made to complete the project. As a result, we recognized an impairment charge related to the new calciner of $55 million.

Also during the fourth quarter of 2017, we recorded a $184 million write down of our US assets. Due to the continued weakening of the uranium market and the reduction in mineral reserves, we concluded that it was appropriate to recognize an impairment charge for these assets.

Non-IFRS measures

ADJUSTED NET EARNINGS

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 is adjusted for impairment charges, reclamation provisions for our Rabbit Lake and US operations, which have been impaired, the gain on restructuring of JV Inkai, and income taxes on adjustments.

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.

To facilitate a better understanding of these measures, the table below reconciles adjusted net earnings with our net earnings for the years ended 2019, 2018 and 2017.

($ MILLIONS)	2019			2018			2017
Net earnings (loss) attributable to equity holders	****	74	****		166			(205	)
Adjustments
Adjustments on derivatives	****	(49	)		65			(108	)
Impairment charges	****	—	****		—			358
Reclamation provision adjustments	****	3	****		60			—
Gain on restructuring of JV Inkai	****	—	****		(49	)		—
Income taxes on adjustments	****	13	****		(31	)		14
Adjusted net earnings	****	41	****		211			59

Every quarter we are required to update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This normally results in an adjustment to an asset retirement obligation asset in addition to the provision balance. When the assets of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 15 of our annual financial statements for more information. This amount has been excluded from our adjusted net earnings measure.

28	CAMECO CORPORATION

The following table shows what contributed to the change in adjusted net earnings (non-IFRS measure, see above) in 2019 compared to the same period in 2018 and 2017.

( MILLIONS)			2018			2017
Adjusted net earnings - previous year	211	****	****	59	****	****	143	****
Change in gross profit by segment
(we calculate gross profit by deducting from revenue the cost of products and<br>services sold, and depreciation and amortization (D&A), net of hedging benefits)
Uranium	(27	)		18			29
	(133	)		40			(222	)
	35			1			(36	)
	10			(186	)		180
	(115	)		(127	)		(49	)
Fuel services	13			1			(5	)
	(11	)		(5	)		21
	29			(1	)		(15	)
	31			(5	)		1
Other changes
Lower administration expenditures	17			21			44
Lower (higher) exploration expenditures	6			10			13
Lower loss on disposal of assets	—			5			16
Change in gains or losses on derivatives	(1	)		36			44
Change in foreign exchange gains or losses	(45	)		49			(17	)
Change in earnings from equity-accounted investments	13			32			—
Arbitration award in 2019 related to TEPCO contract	52			—			—
Gain on sale of interest in Wheeler River Joint Venture in 2018	(17	)		17			—
Gain on customer contract restructuring in 2018	(6	)		6			—
Sale of exploration properties in 2018	(7	)		7			—
Gain on customer contract settlements in 2016	—			—			(59	)
Reversal of tax provision in 2018 related to CRA dispute	(61	)		61			—
Change in income tax recovery or expense	(82	)		17			(90	)
Other	45			23			13
Adjusted net earnings - current year	41	****	****	211	****	****	59	****

All values are in US Dollars.

Average realized prices

							CHANGE FROM
			2018		2017		2018 TO 2019
Uranium^1^	US/lb	33.77		37.01		36.13		(9	)%
	Cdn/lb	44.85		47.96		46.80		(6	)%
Fuel services	Cdn/kgU	26.21		26.78		27.20		(2	)%

All values are in US Dollars.

^1^	Average realized foreign exchange rate ($US/$Cdn): 2019 – 1.33, 2018 – 1.30 and 2017 – 1.30.<br>
MANAGEMENT’S DISCUSSION AND ANALYSIS	29
---	---

Revenue

The following table shows what contributed to the change in revenue for 2019.

( MILLIONS)
Revenue – 2018	****
Uranium
Lower sales volume	)
Lower realized prices (Cdn)	)
Fuel services
Higher sales volume
Lower realized prices (Cdn)	)
Other	)
Revenue – 2019	****

All values are in US Dollars.

See 2019 Financial results by segment on page 46 for more detailed discussion.

THREE-YEAR TREND

In 2018, revenue decreased by 3% compared to 2017 due to a decrease in sales volumes from NUKEM due to the restructuring of our marketing activities in 2017. This was partially offset by an increase in sales volumes and average realized price in our uranium segment.

In 2019, revenue decreased by 11% compared to 2018 due to a decrease in sales volume in the uranium segment and a decrease in the Canadian dollar average realized price despite an increase in the uranium spot price. This decrease in the uranium segment was partially offset by an increase in sales volumes in our fuel services segment.

REVENUE OUTLOOK FOR 2020

We expect consolidated revenue to be between $1,480 million and $1,630 million, lower than in 2019 due to a decrease in average realized prices in our uranium segment as a result of lower expected prices under our contract portfolio and a decrease in committed sales volumes. We will continue to be active buying and selling uranium in the spot market if it makes sense for us. If we make additional sales with deliveries in 2020, we would expect our revenue outlook to increase.

In our uranium and fuel services segments, our customers choose when in the year to receive deliveries. As a result, our quarterly delivery patterns and, therefore, our sales volumes and revenue can vary significantly. We expect the quarterly distribution of uranium deliveries in 2020 to be weighted to the last three quarters of the year as shown below. However, not all delivery notices have been received to date and the expected delivery pattern could change. Typically, we receive notices six months in advance of the requested delivery date.

30	CAMECO CORPORATION

Corporate expenses

ADMINISTRATION

($ MILLIONS)	2019		2018		CHANGE
Direct administration	****	113		112		1	%
Severance costs	****	1		14		(93	)%
Stock-based compensation	****	11		16		(31	)%
Total administration	****	125		142		(12	)%

Direct administration costs in 2019 were $1 million higher than 2018.

We recorded $11 million in stock-based compensation expenses in 2019 under our stock option, restricted share unit, deferred share unit, performance share unit and phantom stock option plans, $5 million lower than in 2018 due to the decrease in our share price compared to the same period in 2018. See note 24 to the financial statements.

Administration outlook for 2020

We expect direct administration costs to be between $110 million to $120 million, similar to 2019.

EXPLORATION

Our 2019 exploration activities were focused primarily on Canada. Our spending decreased from $20 million in 2018 to $14 million in 2019 due to a planned reduction in expenditures.

Exploration outlook for 2020

We expect exploration expenses to be about $13 million in 2020. The focus for 2020 will be on our core projects in Saskatchewan.

FINANCE COSTS

Finance costs were $99 million, a decrease from $112 million in 2018 due to a reduction in our outstanding debt as we retired our $500 million debenture that matured in September. See note 19 to the financial statements.

FINANCE INCOME

Finance income was $30 million compared to $22 million in 2018 due to higher cash balances throughout the year.

GAINS AND LOSSES ON DERIVATIVES

In 2019, we recorded $32 million in gains on our derivatives compared to $81 million in losses in 2018. The increase reflects the strength in the Canadian dollar compared to the US dollar at the end of 2019 compared to 2018. See Foreign exchange on page 36 and note 26 to the financial statements.

INCOME TAXES

We recorded an income tax expense of $61 million in 2019 compared to a recovery of $126 million in 2018. The increase in expense was primarily due to a change in the distribution of earnings among jurisdictions as well as the reversal in 2018 of the provision related to our CRA dispute in the amount of $61 million (see Tax Court of Canada decision below for more details). See note 21 to the financial statements.

In 2019, we recorded earnings of $229 million in Canada compared to losses of $257 million in 2018, while in foreign jurisdictions, we recorded a loss of $94 million compared to earnings of $297 million in 2018. The tax rate in Canada is higher than the average of the rates in the foreign jurisdictions in which our subsidiaries operate.

On an adjusted earnings basis, we recognized a tax expense of $48 million in 2019 compared to a recovery of $95 million in 2018. The table below presents our adjusted earnings and adjusted income tax expenses attributable to Canadian and foreign jurisdictions.

MANAGEMENT’S DISCUSSION AND ANALYSIS	31
($ MILLIONS)	2019			2018
---	---	---	---	---	---	---
Pre-tax adjusted earnings^1^
Canada	****	183	****		(181	)
Foreign	****	(94	)		297
Total pre-tax adjusted earnings	****	89	****		116
Adjusted income taxes^1^
Canada	****	55	****		(112	)
Foreign	****	(7	)		17
Adjusted income tax expense (recovery)	****	48	****		(95	)
^1^	Pre-tax adjusted earnings and adjusted income taxes are non-IFRS measures. Our IFRS-based measures have been adjusted by the amounts reflected in the table in adjusted net earnings (non-IFRS measures on page 28).<br>
---	---

TRANSFER PRICING DISPUTE

TaxCourt of Canada decision

On September 26, 2018, the Tax Court of Canada (Tax Court) ruled unequivocally in our favour in our case with the Canada Revenue Agency (CRA) for the 2003, 2005 and 2006 tax years.

The Tax Court ruled that our marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium purchase and sale agreements were in full compliance with Canadian laws for the three tax years in question. While the decision applies only to the three tax years under dispute, we believe there is nothing in the decision that would warrant a materially different outcome for subsequent tax years.

The Tax Court has referred the matter back to the Minister of National Revenue in order to issue new reassessments for the 2003, 2005 and 2006 tax years in accordance with the Tax Court’s decision. The total tax amount reassessed for those tax years was $11 million, and we remitted 50%. Therefore, we expect to receive refunds totaling about $5.5 million plus interest. The timing for the revised reassessments along with refunds plus interest may be delayed pending the outcome of the appeal. For further information regarding the appeal, see below.

On April 30, 2019, we announced the decision of the Tax Court in our application to recover costs in the amount of about $38 million ($20.5 million for legal fees and $17.9 million in disbursements), which were incurred over the course of this case. The Tax Court awarded $10.25 million in legal fees incurred, plus an amount for disbursements, which is yet to be determined. The amount of the award for disbursements will be determined by an officer of the Tax Court. We are optimistic we will recover all, or substantially all, of the $17.9 million in disbursements. Timing of any payments under the cost award is uncertain. The CRA has asked for the cost award to be overturned should it be successful in the appeals process.

Appeal process

On October 25, 2018, CRA filed a notice of appeal with the Federal Court of Appeal. In its notice of appeal, CRA is not appealing the Tax Court’s finding that sham was not present, but is appealing the Tax Court’s interpretation and application of the transfer pricing provisions in section 247 of the Income Tax Act. CRA filed its written submissions with the Federal Court of Appeal on May 31, 2019. In its written submission, CRA repeated its trial argument that the transactions should be recharacterized because arm’s length persons would not have entered into the various agreements that underpin the marketing and trading structure. CRA’s alternate argument is that the terms (focused on pricing) of these agreements would have been significantly different if these agreements had been made between arm’s length persons. CRA argues that either approach should result in the disputed reassessments being upheld in their totality.

The Federal Court of Appeal hearing is scheduled to be held on March 4, 2020, and we anticipate that we could receive a decision in 2020. We believe there is nothing in the Tax Court’s decision that would warrant a materially different outcome on appeal.

The decision of the Federal Court of Appeal can be appealed to the Supreme Court of Canada, but only if the Supreme Court of Canada agrees to hear the appeal. The request to appeal a decision of the Federal Court of Appeal to the Supreme Court of Canada must be made within 60 days of issuance of a Federal Court of Appeal decision.

32	CAMECO CORPORATION

In the event that either party appeals the Federal Court of Appeal decision, it would likely take about two years from the date the Federal Court of Appeal decision is issued to receive a decision from the Supreme Court of Canada should that court hear the appeal.

We expect to incur additional costs during the appeal process, and in connection with potential reassessments of subsequent years. There could also be costs incurred if a negotiated resolution with CRA is sought or achieved.

Potential exposure based on CRA appeal

Since 2008, CRA has disputed our marketing and trading structure and the related transfer pricing methodology we used for certain intercompany uranium sale and purchase agreements. To date, we have received notices of reassessment for our 2003 through 2013 tax years. While the Tax Court has ruled unequivocally in our favour for the 2003, 2005 and 2006 tax years, and we believe there is nothing in the decision that would warrant a materially different outcome on appeal, or for subsequent tax years we will continue to report on the potential exposure as we expect it will continue to tie up our financial capacity until the dispute is finally resolved for all years.

For the years 2003 to 2013, CRA has shifted Cameco Europe Limited’s income (as recalculated by CRA) back to Canada and applied statutory tax rates, interest and instalment penalties, and, from 2007 to 2011, transfer pricing penalties. We understand CRA is currently considering whether to impose a transfer pricing penalty for 2012 and 2013. Taxes of approximately $326 million for the 2003 to 2019 years have already been paid to date in a jurisdiction outside Canada. If CRA is successful on appeal, we will consider our options under bilateral international tax treaties to limit double taxation of this income. There is a risk that we will not be successful in eliminating all potential double taxation. The income adjustments claimed by CRA in its reassessments are represented by the amounts described below.

The Canadian income tax rules include provisions that generally require larger companies like us to remit or otherwise secure 50% of the cash tax plus related interest and penalties at the time of reassessment. We received the 2013 reassessment late in 2019. The CRA has advised that security remitted to date is sufficient to secure the tax debts they consider owing and as such, no further security is required at this time. To date, under these provisions, after applying elective deductions, we have paid or secured the amounts shown in the table below. Of these amounts, we expect to receive refunds totaling approximately $5.5 million plus interest for the years at issue in the Tax Court. The timing of the refund may be delayed pending the outcome of the appeal.

			INTEREST		TRANSFER
			AND INSTALMENT		PRICING				CASH		SECURED BY
YEAR PAID ($ MILLIONS)	CASH TAXES		PENALTIES		PENALTIES		TOTAL		REMITTANCE		LC
Prior to 2014		1		22		36		59		59		—
2014		106		47		—		153		153		—
2015		202		71		79		352		20		332
2016		51		38		31		120		32		88
2017		—		1		39		40		39		1
2018		17		40		—		57		—		57
2019		—		2		—		2		—		2
Total	****	377	****	221	****	185	****	783	****	303	****	480
MANAGEMENT’S DISCUSSION AND ANALYSIS	33
---	---

While we expect the Tax Court’s decision to be upheld on appeal and believe the decision should apply in principle to subsequent years, until such time as all appeals are exhausted, and a resolution is reached for all tax years in question, we will not be in a position to determine the definitive outcome of this dispute. We expect any further actions regarding the tax years 2007 through 2013 will be suspended until the three years covered under the decision are finally resolved, with the exception of the transfer pricing penalties noted above. The tax years 2014 and beyond have not yet been reassessed, and it is uncertain what approach CRA will take on audit. Despite the fact that we believe there is no basis to do so, and it is not our view of the likely outcome, CRA may continue to reassess us using the methodology it used to reassess the 2003 through 2013 tax years. In that scenario, and including the $5.7 billion already reassessed, we would expect to receive notices of reassessment for a total of approximately $8.7 billion of additional income taxable in Canada for the years 2003 through 2019, which would result in a related tax expense of approximately $2.6 billion. As well, CRA may continue to apply transfer pricing penalties to taxation years subsequent to 2011. In that case, we estimate that cash taxes and transfer pricing penalties claimed by CRA for these years would be between $1.95 billion and $2.15 billion. In addition, CRA may seek to apply interest and instalment penalties that would be material to us. While in dispute, we may be required to remit or otherwise provide security for 50% of the cash taxes and transfer pricing penalties (between $970 million and $1.07 billion), plus related interest and instalment penalties assessed, which would be material to us. However, as noted previously, CRA has informed us that no further security is required for the tax debts it considers owing at this time. We have already paid or secured $562 million in cash taxes and transfer pricing penalties and $221 million in interest and instalment penalties.

Under the Canadian federal and provincial tax rules, any amount required to be paid or secured 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 to date disallowed the use of any loss carry-backs for any transfer pricing adjustment, starting with the 2008 tax year. This does not impact the anticipated income tax expense for a particular year, but does impact the timing of any required security or payment. As noted above, for amounts reassessed after 2014, as an alternative to remitting cash, we used letters of credit to satisfy our obligations related to the reassessed income tax and related interest amounts. If required, we believe we will be able to continue to provide security in the form of letters of credit to satisfy these requirements. The amounts summarized in the table below reflect actual amounts paid or secured from 2003 through 2019 along with estimated post-2019 amounts if CRA were to continue to reassess based on the scenario outlined above, and include the expected timing adjustment for the inability to use any loss carry-backs starting with the 2008 tax year. The amounts have not been adjusted to reflect the refund of approximately $5.5 million plus interest we expect to receive based on the ruling of the Tax Court. The timing of such refund may be delayed pending the outcome of the appeal. We plan to update this table annually to include the estimated impact of reassessments expected for completed years subsequent to 2019.

$ MILLIONS	2003-2019		Post-2019		TOTAL
50% of cash taxes and transfer pricing penalties paid, secured or potentially owing in<br>the period
Cash payments		226		185 - 235		410 - 460
Secured by letters of credit		336		225 - 275		560 - 610
Total paid or potentiallyowing^1^	****	562	****	410 - 510	****	970 - 1070
^1^	These amounts do not include interest and instalment penalties, which totaled approximately $221 million<br>to December 31, 2019.
---	---

In light of our view of the likely outcome of the appeal, and the dispute for subsequent years, based on the Tax Court’s decision as described above, we expect to recover the amounts remitted, including the $783 million already paid or otherwise secured to date.

34	CAMECO CORPORATION

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 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 beginning on page 2 and also on the more specific assumptions and risks listed below. Actual outcomes may vary significantly.

Assumptions

•	CRA will reassess us for the years 2014 through 2019 using a similar methodology as for the years 2003 through 2013, and the reassessments will be issued on the basis we expect
•	we will be able to apply elective deductions and utilize letters of credit to the extent anticipated
---	---
•	CRA will seek to impose transfer pricing penalties (in a manner consistent with penalties charged in the years 2007 through 2011) in addition to interest charges and instalment penalties
---	---
•	we will be substantially successful in our dispute with CRA, including any appeals of the Tax Court’s decision or any decisions regarding other tax years, and we will not incur any significant tax liability<br>resulting from the outcome of the dispute or other costs, potentially including costs associated with a negotiated resolution with CRA
---	---
•	a favourable determination by the officer of the Tax Court of the amount of our disbursements award
---	---
<br>Material risks that could cause actual results to differ materially
---
•	CRA reassesses us for years 2014 through 2019 using a different methodology than for years 2003 through 2013, or we are unable to utilize elective deductions or letters of credit to the extent anticipated, resulting in<br>the required cash payments or security provided 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 in an appeal of the Tax Court’s decision or any tax decisions of the Tax Court for subsequent years, or appeals of those decisions, and the outcome of our dispute with CRA, potentially including<br>costs associated with a negotiated resolution with CRA, results in significant costs, cash taxes, interest charges and penalties 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
---	---
•	we are unable to effectively eliminate all double taxation
---	---
•	an unfavourable determination of the officer of the Tax Court of the amount of our disbursements award
---	---

Tax outlook for 2020

On an adjusted net earnings basis, we expect a tax expense of between $20 million and $30 million in 2020.

Our consolidated tax rate is a blend of the statutory rates applicable to taxable income earned or tax losses incurred in Canada and in our foreign subsidiaries. We have a global customer base and we have established a marketing and trading structure involving foreign subsidiaries, which entered into various intercompany purchase and sale arrangements, as well as uranium purchase and sale agreements with third parties. Cameco and its subsidiaries made reasonable efforts to put arm’s-length transfer pricing arrangements in place, and these arrangements expose the parties to the risks and rewards accruing to them under these contracts. The intercompany contract prices are generally comparable to those established in comparable contracts between arm’s-length parties entered into at that time. In 2017, we changed our global marketing organization to consolidate our international activities in Canada in order to achieve efficiencies. The existing purchase and sale arrangements will continue to be in place until they expire. As the existing contracts expire, we anticipate that more income will be earned in Canada.

We continue to expect our consolidated tax rate will trend toward the Canadian statutory rate in the longer term. The actual effective tax rate will vary from year-to-year, primarily due to the actual distribution of earnings among jurisdictions and the market conditions at the time transactions occur under both our intercompany and third-party purchase and sale arrangements.

MANAGEMENT’S DISCUSSION AND ANALYSIS	35

FOREIGN EXCHANGE

The exchange rate between the Canadian dollar and US dollar affects the financial results of our uranium and fuel services segments.

We sell the majority of our uranium and fuel services products under long-term sales contracts, which are routinely denominated in US dollars. Our product purchases are denominated in US dollars while our production costs are largely denominated in Canadian dollars. To provide cash flow predictability we hedge a portion of our net US/Cdn exposure (e.g. total US dollar sales less US dollar expenditures and product purchases) to manage shorter term exchange rate volatility.

Our risk management policy is based on a 60-month period and permits us to hedge 35% to 100% of our expected net exposure in the first 12 month period. Our normal practice is to layer in hedge contracts over a three- to four-year period with the hedge percentage being highest in the first 12 months and decreasing hedge percentages in subsequent years. The portion of our net exposure that remains unhedged is subject to prevailing market exchange rates for the period. Therefore, our results are affected by the movements in the exchange rate on our hedge portfolio (explained below), and on the unhedged portion of our net exposure. A weakening Canadian dollar would have a positive effect on the unhedged exposure, and a strengthening Canadian dollar would have a negative effect. See Revenue, adjusted net earnings, and cash flow sensitivity analysis on page 40 for more information on how a change in the exchange rate will impact our revenue, cash flow, adjusted net earnings (ANE), and gains and losses on derivatives, presented on an ANE basis.

Impact of hedging on IFRS earnings

We do not use hedge accounting under IFRS and, therefore, we are required to report gains and losses on all hedging activity, both for contracts that close in the period and those that remain outstanding at the end of the period. For the contracts that remain outstanding, we must treat them as though they were settled at the end of the reporting period (mark-to-market).

However, we do not believe the gains and losses that we are required to report under IFRS appropriately reflect the intent of our hedging activities, so we make adjustments in calculating our ANE to better reflect the impact of our hedging program in the applicable reporting period.

Impact of hedging on ANE

We designate contracts for use in particular periods, based on our expected net exposure in that period. Hedge contracts are layered in over time based on this expected net exposure. The result is that our current hedge portfolio is made up of a number of contracts which are currently designated to net exposures we expect in 2020 and future years and we will recognize the gains or losses in ANE in those periods.

For the purposes of ANE, gains and losses on derivatives are reported based on the difference between the effective hedge rate of the contracts designated for use in the particular period and the exchange rate at the time of settlement. This results in an adjustment to current period IFRS earnings to effectively remove reported gains or losses on derivatives that arise from contracts put in place for use in future periods. The effective hedge rate will lag the market in periods of rapid currency movement. See Non-IFRS measures on page 28.

The table below provides a summary of our hedge portfolio at December 31, 2019. You can use this information to estimate the expected gains or losses on derivatives for 2020 on an ANE basis. However, if we add contracts to the portfolio that are designated for use in 2020 or if there are changes in the US/Cdn exchange rates in the year, those expected gains or losses could change.

36	CAMECO CORPORATION

HEDGE PORTFOLIO SUMMARY

DECEMBER 31, 2019			AFTER
( MILLIONS)			2020			TOTAL
US dollar forward contracts	190			140			330
Average contract rate 1	1.27			1.30			1.28
US dollar option contracts	170			175			345
Average contract rate range1	1.29 to 1.33			1.29 to 1.33			1.29 to 1.33
Total US dollar hedge contracts	360	****	****	315	****	****	675	****
Effective hedge rate range2	1.28 to 1.30	****	****	1.29 to 1.32	****	****	1.29 to 1.31	****
Hedge ratio3	44	%	****	8	%	****	14	%

All values are in US Dollars.

^1^	The average contract rate is the weighted average of the rates stipulated in the outstanding contracts. ^^
^2^	The effective hedge rate is the exchange rate on the original hedge contract at the time it was established and<br>designated for use. Therefore the effective hedge rate range shown reflects an average of contract exchange rates at the time of designation.
---	---
^3^	Hedge ratio is calculated by dividing the amount (in foreign currency) of outstanding derivative contracts by<br>estimated future net exposures.
---	---

At December 31, 2019:

•	The value of the US dollar relative to the Canadian dollar was $1.00 (US) for $1.30 (Cdn), down from $1.00 (US)<br>for $1.36 (Cdn) at December 31, 2018. The exchange rate averaged $1.00 (US) for $1.33 (Cdn) over the year.
•	The mark-to-market position on<br>all foreign exchange contracts was a $4 million loss compared to a $53 million loss at December 31, 2018.
---	---

We manage counterparty risk associated with hedging by dealing with highly rated counterparties and limiting our exposure. At December 31, 2019, all of our hedging counterparties had a Standard & Poor’s (S&P) credit rating of A or better.

For information on the impact of foreign exchange on our intercompany balances, see note 26 to the financial statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS	37

Outlook for 2020

Our strategy is to focus on our tier-one assets and profitably produce at a pace aligned with market signals, in order to preserve the value of those assets and increase long-term shareholder value, and to do that with a focus on safety, people and the environment.

Our outlook for 2020 reflects the expenditures necessary to help us achieve our strategy. We have made significant progress in reducing our administration, exploration and operating costs, as well as our capital expenditures. We have also made a number of strategic decisions that come with significant costs in the near term, costs we factored into our decisions. As a result, and based on what we know today, including committed delivery volumes, from a gross profit point of view, 2020 is expected to be a weaker year for us. The lower delivery commitments and changing pricing terms under our existing contract portfolio are expected to adversely impact our revenue and average realized price in 2020 relative to 2019. In addition, our outlook for the average unit cost of sales in 2020 continues to be impacted by the proportion of purchased material compared to produced material making up our uranium supply and care and maintenance costs, which are expected to be between $150 million and $170 million. Despite the impact on our expected results, we continue to believe these are the right decisions to create long-term shareholder value.

In contrast, from a cash perspective, we expect to continue to maintain a significant cash balance. We expect to continue to generate cash from operations however, the amount of cash generated will be dependent on the timing and magnitude of our purchasing activity and therefore, cash balances may fluctuate throughout the year.

We report our results and outlook based on a calendar-year view, at a point in time. However, under our marketing framework, we plan on a rolling 12-month basis, which means our production, sales, inventory and purchases are all variables. Therefore, in accordance with market opportunities and as the year unfolds, we expect our actual production, sales, purchases and inventory may vary from what we are reporting in the 2020 Financial Outlook table.

In addition, there are a number of moving pieces both internally and externally, that could have a significant impact on the market and on our results, and it is important to keep them in mind. Some of the more significant items are:

•	the decision by the President of the United States to implement any of the recommendations contained in the NFWG<br>report, and the impact, if any, on the uranium market and uranium prices
•	whether the Russian Suspension Agreement gets amended or extended prior to its expiry at the end of 2020<br>
---	---
•	the impact if sanctions on Iran are expanded and extend to countries providing nuclear fuel products and services<br>to Iran, and therefore disrupt Russian nuclear fuel imports into the US
---	---
•	a potential decision from the Federal Court of Appeal in our tax dispute with CRA
---	---

See 2019 Financial results by segment on page 46 for details.

2019 outlook compared to actual results

Our actual results were largely in-line with the outlook provided in our third quarter MD&A. However, our total purchases for the year were 19 million pounds compared to our outlook of 21 million to 23 million pounds. Based on what we were seeing in the market, we decided to reduce our spot purchases in 2019 and to draw our inventory down. With the expected delivery pattern in 2020 heavily weighted to the last three quarters of the year and the timing of our 2020 purchase commitments, we are confident in our ability to meet our delivery commitments.

38	CAMECO CORPORATION

2020 FINANCIAL OUTLOOK

	CONSOLIDATED			URANIUM			FUEL SERVICES
EXPECTED CONTRIBUTION TO GROSS PROFIT		100	%		36	%		64	%
Production (owned and operated properties)		—			9.0 million lbs			13 to 14 million kgU
Purchases		—			20 to 22 million lbs			—
Sales/delivery volume		—			28 to 30 million lbs			12 to 13 million kgU
Revenue	$	1,480-1,630 million		$	1,120-1,210 million		$	340-370 million
Average realized price		—		$	40.90/lb			—
Average unit cost of sales (including D&A)		—		$	38.50-40.50/lb		$	19.70-20.70/kgU
Direct administration costs	$	110-120 million			—			—
Exploration costs		—		$	13 million			—
Expected loss on derivatives - ANE basis	$	0-10 million			—			—
Tax expense - ANE basis	$	20-30 million			—			—
Capital expenditures	$	120 million			—			—

We do not provide an outlook for the items in the table that are marked with a dash.

The following assumptions were used to prepare the outlook in the table above:

•	Purchases – are based on the volumes we currently have commitments to acquire under contract in 2020,<br>including our JV Inkai purchases and the purchase of NUKEM’s excess inventory, and it includes the additional volumes we are required to purchase in order to meet the sales/delivery commitments we have under contract in 2020 and maintain our<br>desired working inventory.
•	Our 2020 outlook for sales/delivery volume and revenue does not include sales between our uranium and fuel<br>services segments.
---	---
•	Sales/delivery volume is based on the volumes we currently have commitments to deliver under contract in 2020.<br>
---	---
•	Uranium revenue and average realized price are based on a uranium spot price of $24.35 (US) per pound (the UxC<br>spot price as of January 27, 2020), a long-term price indicator of $32.00 (US) per pound (the UxC long-term indicator on January 27, 2020) and an exchange rate of $1.00 (US) for $1.30 (Cdn).
---	---
•	Uranium average unit cost of sales (including D&A) is based on the expected unit cost of sales for produced<br>material, the planned purchases noted in the outlook at an anticipated average purchase price of $31.40 per pound, and includes care and maintenance costs of between $150 million and $170 million. If purchase volumes and/or uranium spot<br>prices vary in 2020, then we expect the overall unit cost of sales may be affected.
---	---
•	Direct administration costs do not include stock-based compensation expenses. See page 31 for more information.<br>
---	---
•	Our outlook for the tax expense is based on adjusted net earnings and the other assumptions listed in the table.<br>The outlook does not include our share of taxes on JV Inkai profits as the income from JV Inkai is net of taxes. If other assumptions change then the expected expense may be affected.
---	---

Our 2020 financial outlook is presented on the basis of equity accounting for our minority ownership interest in JV Inkai. Under equity accounting, our share of the profits earned by JV Inkai on the sale of its production will be included in “income from equity-accounted investees” on our consolidated statement of earnings. Our share of production will be purchased at a discount to the spot price and included at this value in inventory. In addition, JV Inkai capital is not included in our outlook for capital expenditures. Please see Inkai Planning for the future on page 70 and Capital spending on page 42 for more details.

For more information on how changes in the exchange rate or uranium prices can impact our outlook see Revenue, adjusted net earnings, and cash flowsensitivity analysis below, and Foreign exchange on page 36.

MANAGEMENT’S DISCUSSION AND ANALYSIS	39

REVENUE, ADJUSTED NET EARNINGS, AND CASH FLOW SENSITIVITY ANALYSIS

FOR 2020 ($ MILLIONS)	CHANGE			ANE			CASH FLOW
Uranium spot and term<br>price^1^	5(US)/lb increase	78			12			(10	)
	5(US)/lb decrease	(74	)		(9	)		14
Value of Canadian dollar vs US dollar	One cent decrease in CAD	10			3			2
	One cent increase in CAD	(10	)		(3	)		(2	)

All values are in US Dollars.

^1^	Assuming change in both UxC spot price ($24.35 (US) per pound on January 27, 2020) and the UxC long-term<br>price indicator ($32.00 (US) per pound on January 27, 2020).

In 2020, our cash flow is expected to move in the opposite direction from price. Cash inflows from revenue are expected to be relatively less sensitive to an increase in the spot price than cash outflows from purchases due the volume of planned deliveries at prices that have been fixed compared to the volume of spot purchases remaining based on our outlook.

PRICE SENSITIVITY ANALYSIS: URANIUM SEGMENT

The following table is not a forecast of prices we expect to receive. The prices we actually realize will be different from the prices shown in the table. It is designed to indicate how the portfolio of long-term contracts we had in place on December 31, 2019 would respond to different spot prices. In other words, we would realize these prices only if the contract portfolio remained the same as it was on December 31, 2019, and none of the assumptions we list below change.

We intend to update this table each quarter in our MD&A to reflect deliveries made and changes to our contract portfolio. As a result, we expect the table to change from quarter to quarter.

Expected realized uraniumprice sensitivity under various spot price assumptions

(rounded to the nearest $1.00)

SPOT PRICES
($US/lb U3O8)	20	40	60	80	100	120	140
2021
2022
2023
2024

All values are in US Dollars.

The table illustrates the mix of long-term contracts in our December 31, 2019 portfolio, and is consistent with our marketing strategy. It has been updated to reflect contracts entered into up to December 31, 2019.

Our portfolio includes a mix of fixed-price and market-related contracts, which we target at a 40:60 ratio. Those that are fixed at lower prices or have low ceiling prices will yield prices that are lower than current market prices.

Our portfolio is affected by more than just the spot price. We made the following assumptions (which are not forecasts) to create the table:

Sales

•	sales volumes on average of 19 million pounds per year, with commitment levels in 2020 and 2021 higher than in 2022 through 2024
•	excludes sales between our segments
---	---

Deliveries

•	deliveries include best estimates of requirements contracts and contracts with volume flex provisions

Annual inflation

•	is 2% in the US

Prices

•	the average long-term price indicator is the same as the average spot price for the entire year (a simplified approach for this purpose only). Since 1996, the long-term price indicator has averaged 21% higher than the<br>spot price. This differential has varied significantly. Assuming the long-term price is at a premium to spot, the prices in the table will be higher.
40	CAMECO CORPORATION
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Liquidity and capital resources

Our financial objective is to ensure we have the cash and debt capacity to fund our operating activities, investments and other financial obligations.

At the end of 2019, we had cash and short-term investments of $1.1 billion, while our total debt amounted to $1 billion.

We have large, creditworthy customers that continue to need uranium even during weak economic conditions, and we expect the uranium contract portfolio we have built to continue to provide a solid revenue stream. From 2020 through 2024, we have commitments to deliver an average of 19 million pounds per year, with commitment levels in 2020 and 2021 higher than in 2022 through 2024.

In the currently weak uranium price environment, our focus is on preserving the value of our tier-one assets and reducing our operating, capital and general and administrative spending. We have a number of alternatives to fund future capital requirements, including using our operating cash flow, drawing on our existing credit facilities, entering new credit facilities, and raising additional capital through debt or equity financings. We are always considering our financing options so we can take advantage of favourable market conditions when they arise. In addition, due to the deliberate cost reduction measures implemented over the past five years, the reduction in our dividend, and the drawdown of inventory in 2018 as a result of the suspension of production at our McArthur River/Key Lake operation, we have significant cash balances. We expect to continue to generate cash from operations however, the amount of cash generated will be dependent on the timing and magnitude of our purchasing activity and therefore, cash balances may fluctuate throughout the year. We expect our cash balances and operating cash flows to meet our capital requirements during 2020.

We received a favourable ruling in our case with CRA for the 2003, 2005 and 2006 tax years. We expect the ruling to be upheld on appeal, and we believe the ruling should apply in principle to subsequent tax years. However, until such time as all appeals are exhausted, and a resolution is reached for all tax years in question, in accordance with Canadian income tax rules we may be required to remit or otherwise secure 50% of any cash taxes plus related interest and penalties CRA may continue to reassess, even though we believe there is no basis for them to do so. See page 32 for more information. In the above scenario, the table on page 34 provides the amount and timing of the cash taxes and transfer pricing penalties paid or secured to date. In addition, it provides an estimate of the amounts we may potentially have to pay or secure upfront if CRA continues to reassess us using the same methodology it reassessed the 2003 to 2013 tax years. The timing of these amounts is uncertain.

FINANCIAL CONDITION

		2018
Cash position ( millions)	1,062		1,103
(cash and cash equivalents and short-term investments)
Cash provided by operations ( millions)	527		668
(net cash flow generated by our operating activities after changes in working<br>capital)
Cash provided by operations/net<br>debt1	n/a		170	%
(net debt is total consolidated debt, less cash position)
Net debt/total<br>capitalization1	n/a		7	%
(total capitalization is net debt and equity)

All values are in US Dollars.

^1^	As at December 31, 2019, Cameco’s net debt is negative due to its strong cash position.<br>

CREDIT RATINGS

The credit ratings assigned to our securities by external ratings agencies are important to our ability to raise capital at competitive pricing to support our business operations. We navigate by our investment-grade credit rating.

Third-party ratings for our commercial paper and senior debt as of February 6, 2020:

SECURITY	DBRS	S&P
Commercial paper	R-2 (middle)^1^	A-3^2^
Senior unsecured debentures	BBB^1^	BBB-^2^
Rating trend / rating outlook	Negative	Stable^2^
^1^	On May 24, 2019, DBRS lowered its long term corporate credit rating from BBB (high) to BBB and commercial<br>paper to R-2 (middle).
---	---
^2^	On March 1, 2019 S&P lowered its long term corporate credit rating from BBB to BBB-, commercial paper to A-3 and changed Cameco’s rating outlook to stable from negative.
---	---
MANAGEMENT’S DISCUSSION AND ANALYSIS	41
---	---

The rating agencies may revise or withdraw these ratings if they believe circumstances warrant. The rating trend/outlook represents the rating agency’s assessment of the likelihood and direction that the rating could change in the future.

A change in our credit ratings could affect our cost of funding and our access to capital through the capital markets.

Liquidity

($ MILLIONS)	2019			2018
Cash and cash equivalents at beginning of year	****	1,103	****		592
Cash from operations	****	527	****		668
Investment activities
Additions to property, plant and equipment and acquisitions	****	(75	)		(55	)
Other investing activities	****	121	****		34
Financing activities
Change in debt	****	(500	)		—
Interest paid	****	(72	)		(73	)
Other financing activities	****	(3	)		—
Dividends	****	(32	)		(71	)
Exchange rate on changes on foreign currency cash balances	****	(7	)		8
Cash and cash equivalents and short-term investments at end of year	****	1,062	****		1,103

CASH FROM OPERATIONS

Cash from operations was 21% lower than in 2018 due largely to the drawdown of inventory in 2018 in accordance with our strategy. Working capital provided $87 million less in 2019. Not including working capital requirements, our operating cash flows in the year were down $54 million. See note 23 to the financial statements.

INVESTING ACTIVITIES

Cash used in investing includes acquisitions and capital spending.

Capital spending

We classify capital spending as sustaining, capacity replacement or growth. As a mining company, sustaining capital is the money we spend to keep our facilities running in their present state, which would follow a gradually decreasing production curve, while capacity replacement capital is spent to maintain current production levels at those operations. Growth capital is money we invest to generate incremental production, and for business development.

CAMECO’S SHARE ($ MILLIONS)	2019 PLAN		2019 ACTUAL		2020 PLAN
Sustaining capital
McArthur River/Key Lake		5		2	****	10
Cigar Lake		15		9	****	15
Fuel services		30		28	****	45
Other		—		1	****	—
Total sustaining capital		50	****	40	****	70
Capacity replacement capital
Cigar Lake		45		35	****	50
Total capacity replacement capital		45	****	35	****	50
Total uranium & fuel services	****	95	****	75	****	120

Total capital expenditures for 2019 were lower than our outlook of $95 million as a result of the rescheduling of some expenditures at Cigar Lake to 2020.

42	CAMECO CORPORATION

Outlook for investing activities

CAMECO’S SHARE ($ MILLIONS)	2021 PLAN		2022 PLAN
Total uranium & fuel services	****	75-125	****	50-100
Sustaining capital		60-85		35-60
Capacity replacement capital		15-40		15-40
Growth capital		—		—

We expect total 2020 capital expenditures for uranium and fuel services to be about 58% higher than in 2019 due to ongoing investment in the Vision in Motion project at fuel services, increased mine development activity at Cigar Lake, and the rescheduling of some expenditures planned at Cigar Lake in 2019 to 2020.

Capital expenditures for JV Inkai are expected to be covered by JV Inkai cash flows in 2020, and are included in our overall equity investment.

Major sustaining and capacity replacement expenditures in 2020 include:

•	Fuel services – continuation of work on our Vision in Motion project
•	Cigar Lake – underground development and necessary ground freezing infrastructure to meet production targets<br>
---	---

Our 2020, 2021 and 2022 capital spending estimates assume that market conditions remain such that McArthur River and Key Lake remain in a state of ongoing care and maintenance. Capital spending could increase if we identify and approve investment in projects we expect will reduce costs and improve operational effectiveness and efficiency.

This information regarding currently expected capital expenditures for future periods is forward-looking information, and is based upon the assumptions and subject to the material risks discussed on pages 2 and 3. Our actual capital expenditures for future periods may be significantly different.

FINANCINGACTIVITIES

Cash from financing includes borrowing and repaying debt, and other financial transactions including paying dividends and providing financial assurance.

Long-term contractual obligations

			2021 AND		2023 AND		2025 AND
DECEMBER 31 ($ MILLIONS)	2020		2022		2024		BEYOND		TOTAL
Long-term debt		—		400		500		100		1,000
Interest on long-term debt		41		82		52		92		267
Provision for reclamation		55		53		98		921		1,127
Provision for waste disposal		1		3		3		1		8
Other liabilities		5		10		4		75		94
Capital commitments		38		—		—		—		38
Total	****	140	****	548	****	657	****	1,189	****	2,534

We have contractual capital commitments of approximately $38 million at December 31, 2019. Certain of the contractual commitments may contain cancellation clauses; however, we disclose the commitments based on management’s intent to fulfil the contracts.

We have unsecured lines of credit of about $2.5 billion, which include the following:

•	A $1.0 billion unsecured revolving credit facility that matures November 1, 2023. Each year on the<br>anniversary date, and upon mutual agreement, the facility can be extended for an additional year. In addition to borrowing directly from this facility, we can use up to $100 million of it to issue letters of credit. We may increase the<br>revolving credit facility above $1.0 billion, by increments of no less than $50 million, up to a total of $1.25 billion. The facility ranks equally with all of our other senior debt. At December 31, 2019, there were no amounts<br>outstanding under this facility.
•	At December 31, 2019, we had approximately $1.5 billion outstanding in financial assurances provided by<br>various financial institutions. We use these facilities mainly to provide financial assurance for future decommissioning and reclamation of our operating sites, for our obligations relating to the CRA dispute, and as overdraft protection.<br>
---	---
MANAGEMENT’S DISCUSSION AND ANALYSIS	43
---	---

In total we have $1.0 billion in senior unsecured debentures outstanding:

•	$400 million bearing interest at 3.75% per year, maturing on November 14, 2022
•	$500 million bearing interest at 4.19% per year, maturing on June 24, 2024
---	---
•	$100 million bearing interest at 5.09% per year, maturing on November 14, 2042
---	---

Debt covenants

Our revolving credit facility includes the following financial covenants:

•	our funded debt to tangible net worth ratio must be 1:1 or less
•	other customary covenants and events of default
---	---

Funded debt is total consolidated debt less non-recourse debt, $100 million in letters of credit, cash and short-term investments.

Not complying with any of these covenants could result in accelerated payment and termination of our revolving credit facility. At December 31, 2019, we complied with all covenants, and we expect to continue to comply in 2020.

OFF-BALANCE SHEET ARRANGEMENTS

We had three kinds of off-balance sheet arrangements at the end of 2019:

•	purchase commitments
•	financial assurances
---	---
•	other arrangements
---	---

Purchase commitments

We make purchases under long-term contracts where it is beneficial for us to do so and in order to support our long-term contract portfolio. The following table is based on our purchase commitments in our uranium and fuel services segments, as well as commitments previously contracted by NUKEM, at December 31, 2019^2^ but does not include purchases of our share of Inkai production. These commitments include a mix of fixed-price and market-related contracts. Actual payments will be different as a result of changes to our purchase commitments and, in the case of contracts with market-related pricing, the market prices in effect at the time of delivery. We will update this table as required in our MD&A to reflect material changes to our purchase commitments and changes in the prices used to estimate our commitments under market-related contracts.

			2021 AND		2023 AND		2025 AND
DECEMBER 31, 2019 ($ MILLIONS)	2020		2022		2024		BEYOND		TOTAL
Purchase commitments^1,2^		216		180		126		251		773
^1^	Denominated in US dollars and Japanese yen, converted from US dollars to Canadian dollars at the rate of 1.30<br>and from Japanese yen to Canadian dollars at the rate of $0.01.
---	---
^2^	These amounts have been adjusted for any additional purchase commitments that we have entered into since<br>December 31, 2019, but does not include deliveries taken under contract since December 31, 2019.
---	---

We have commitments of $773 million (Cdn) for the following:

•	approximately 18 million pounds of U3O8 equivalent from 2020 to 2028
•	approximately 0.3 million kgU as UF6 in conversion<br>services in 2020
---	---
•	about 0.1 million Separative Work Units (SWU) of enrichment services to meet existing forward sales<br>commitments under agreements with a non-Western supplier
---	---

The suppliers do not have the right to terminate agreements other than pursuant to customary events of default provisions.

Financial assurances

Standby letters of credit and surety bonds provide financial assurance for the decommissioning and reclamation of our mining and conversion facilities as well as for our obligations relating to the CRA dispute. We are required to provide financial assurances to various regulatory agencies until decommissioning and reclamation activities are complete. We are also providing letters of credit until the CRA dispute is resolved. Our financial assurances renew automatically on an annual basis, unless otherwise advised by the issuing institution. At December 31, 2019 our financial assurances totaled $1.5 billion, down from $1.6 billion at December 31, 2018. The decrease in 2019 was mainly due to small changes in reclamation requirements as well as the change in foreign exchange rates.

44	CAMECO CORPORATION

Other arrangements

We have arranged for standby product loan facilities with three different counterparties. The arrangements allow us to borrow up to 1.2 million kgU of UF6 conversion services over the period 2020 to 2022 with repayment in kind up to March 31, 2023. Under the loan facilities, standby fees of up to 1% are payable based on the market value of the facilities and interest is payable on the market value of any amounts drawn at rates ranging from 0.5% to 2.0%.

BALANCE SHEET

DECEMBER 31, 2019							CHANGE
($ MILLIONS EXCEPT PER SHARE AMOUNTS)	2019		2018		2017		2018 TO 2019
Inventory	****	321		468		950		(31	)%
Total assets	****	7,427		8,019		7,779		(7	)%
Long-term financial liabilities	****	2,099		2,102		2,448		—
Dividends per common share	****	0.08		0.08		0.40		—

Total product inventories decreased by 31% to $321 million this year due to higher sales volumes than the quantities produced and purchased during the year. At December 31, 2019, our average cost for uranium was $33.41 per pound, up from $32.62 per pound at December 31, 2018. As of December 31, 2019, we held an inventory of 6.1 million pounds of U3O8 equivalent (excluding broken ore).

At the end of 2019, our total assets amounted to $7.4 billion, a decrease of $0.6 billion compared to 2018, due to a decrease in cash and investment balances resulting from the repayment of long term debt, offset by strong cash flow from operations. In addition, lower inventories, the repayment of our loan to JV Inkai and ongoing depreciation on our property plant and equipment impacted our total assets. In 2018, the total asset balance increased by $0.2 billion compared to 2017, primarily due to an increase in cash and investment balances.

The major components of long-term financial liabilities are long-term debt, the provision for reclamation, deferred sales and financial derivatives.

MANAGEMENT’S DISCUSSION AND ANALYSIS	45

2019 financial results by segment

Uranium

HIGHLIGHTS			2019		2018		CHANGE
Production volume (million lbs)			****	9.0		9.2		(2	)%
Sales volume (million lbs)			****	31.5		35.1		(10	)%
Average spot price	US/lb	)	****	25.64		24.59		4	%
Average long-term price	US/lb	)	****	31.75		30.38		5	%
Average realized price	US/lb	)	****	33.77		37.01		(9	)%
	Cdn/lb	)	****	44.85		47.96		(6	)%
Average unit cost of sales (including D&A)	Cdn/lb	)	****	39.99		40.33		(1	)%
Revenue ( millions)			****	1,414		1,684		(16	)%
Gross profit ( millions)			****	153		268		(43	)%
Gross profit (%)			****	11		16		(31	)%

All values are in US Dollars.

Production volumes in 2019 decreased by 2% compared to 2018. See Uranium – production overview on page 59 for more information.

Uranium revenues this year were down 16% compared to 2018 due to a decrease in sales volumes of 10% and a decrease of 6% in the Canadian dollar average realized price. Although the spot price for uranium averaged $25.64 (US) per pound in 2019, an increase of 4% compared to the 2018 average price of $24.59 (US) per pound, the average realized price decreased due to a lower proportion of sales from higher priced fixed-price contracts and lower prices on market-related contracts due to a change in the protection from floor prices compared to 2018 partially offset by the weakening of the Canadian dollar compared to the prior year.

Total cost of sales (including D&A) decreased by 11% ($1.26 billion compared to $1.42 billion in 2018) mainly due to a decrease in sales volume of 10%.

The net effect was a $115 million decrease in gross profit for the year.

The following table shows the costs of produced and purchased uranium incurred in the reporting periods (non-IFRS measures, see below). These costs do not include care and maintenance costs, selling costs such as royalties, transportation and commissions, nor do they reflect the impact of opening inventories on our reported cost of sales.

($CDN/LB)	2019		2018		CHANGE
Produced
Cash cost	****	15.70		15.31		3	%
Non-cash cost	****	16.09		15.90		1	%
Total production cost 1	****	31.79		31.21		2	%
Quantity produced (million lbs)1	****	9.0		9.2		(2	)%
Purchased
Cash cost1	****	35.26		36.01		(2	)%
Quantity purchased (million lbs)1	****	19.0		14.0		36	%
Totals
Produced and purchased costs	****	34.14		34.11		0	%
Quantities produced and purchased (million lbs)	****	28.0		23.2		21	%
^1^	Our share of Inkai production was 3.7 million pounds (amended on Feb 13, 2020; previously 3.3 million pounds)<br>for 2019 (2018 - 2.9 million pounds). Due to equity accounting, our share of production is shown as a purchase at the time of delivery. JV Inkai purchases will fluctuate during the quarters and timing of purchases will not match production. In 2019<br>we purchased 3.5 million pounds at a purchase price per pound of $32.43 ($24.37 (US)).
---	---

The average cash cost of production was 3% higher in the year than in 2018. While McArthur River and Key Lake are shut down, our annual cash cost of production is expected to reflect the estimated life-of-mine operating cost, between $15 and $16 per pound, of mining and milling our share of Cigar Lake mineral reserves, but it may fluctuate from quarter-to-quarter.

The benefit of the estimated life-of-mine operating cost for Inkai’s production of between $8 and $9 per pound, is expected to be reflected in the line item on our statement of earnings called “share of earnings from equity-accounted investee”.

46	CAMECO CORPORATION

Although purchased pounds are transacted in US dollars, we account for the purchases in Canadian dollars. In the year, the average cash cost of purchased material was $35.26 (Cdn), or $26.49 (US) per pound, compared to $36.01 (Cdn), or $27.68 (US) per pound in the same period in 2018.

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 years ended 2019 and 2018 as reported in our financial statements.

CASH AND TOTAL COST PER POUND RECONCILIATION

($ MILLIONS)	2019			2018
Cost of product sold	****	1,041.9	****		1,138.9
Add / (subtract)
Royalties	****	(32.5	)		(39.1	)
Other selling costs	****	(10.5	)		(12.6	)
Care and maintenance and severance costs	****	(109.5	)		(168.3	)
Change in inventories	****	(78.2	)		(273.9	)
Cash operating costs (a)	****	811.2	****		645.0
Add / (subtract)
Depreciation and amortization	****	218.8	****		277.2
Care and maintenance costs	****	(44.4	)		(44.2	)
Change in inventories	****	(29.6	)		(86.7	)
Total operating costs (b)	****	956.0	****		791.3
Uranium produced & purchased (million lbs) (c)	****	28.0	****		23.2
Cash costs per pound (a ÷ c)	****	28.97	****		27.80
Total costs per pound (b ÷ c)	****	34.14	****		34.11
MANAGEMENT’S DISCUSSION AND ANALYSIS	47
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ROYALTIES

We pay royalties on the sale of all uranium extracted at our mines in the province of Saskatchewan. Two types of royalties are paid:

•	Basic royalty: calculated as 5% of gross sales of uranium, less the Saskatchewan resource credit of 0.75%.<br>
•	Profit royalty: a 10% royalty is charged on profit up to and including $23.76/kg U3O8 ($10.78/lb) and a 15% royalty is charged on profit in excess of $23.76/kg U3O8. Profit is determined as revenue less certain operating, exploration, reclamation and capital costs. Both exploration and capital costs are deductible at the discretion of the producer.<br>
---	---

As a resource corporation in Saskatchewan, we also pay a corporate resource surcharge of 3% of the value of resource sales.

URANIUM SEGMENT OUTLOOK

In July 2018 we announced the extension of the suspension of production at the McArthur River/Key Lake operation for an indeterminate duration and therefore, we expect to produce 9 million pounds in 2020. In addition, we expect to purchase between 20 million and 22 million pounds in 2020 to meet our sales commitments and achieve our desired inventory level. This includes our spot market purchases and other purchase commitments, including from JV Inkai and the purchase of NUKEM’s excess inventory. We anticipate an average purchase price of $31.40 per pound for our planned purchases, based on the uranium price and foreign exchange rate assumptions used in our outlook table on page 38.

Based on the contracts we have in place, and not including sales between our segments, we expect to deliver between 28 million and 30 million pounds of U3O8 in 2020. We expect the unit cost of sales to be between $38.50 per pound and $40.50 per pound, about the same as in 2019. The required spot market purchases and any additional discretionary purchases we may make in 2020 are subject to market prices throughout the year. If they are at a cost different than the assumptions noted, then we expect the overall unit cost of sales to be affected, as well as our revenue.

We expect revenue to be between $1,120 million to $1,210 million, lower than in 2019 as a result of a lower expected average realized price and lower sales volumes.

Fuel services

(includes results for UF6, UO2, UO3 and fuel fabrication)
HIGHLIGHTS			2019		2018		CHANGE
Production volume (million kgU)			****	13.3		10.5		27	%
Sales volume (million kgU)			****	14.1		11.6		22	%
Average realized price	Cdn/kgU	)	****	26.21		26.78		(2	)%
Average unit cost of sales (including D&A)	Cdn/kgU	)	****	19.84		21.86		(9	)%
Revenue ( millions)			****	370		313		18	%
Gross profit ( millions)			****	90		59		53	%
Gross profit (%)			****	24		19		26	%

All values are in US Dollars.

Total revenue increased by 18% from 2018 due to a 22% increase in sales volume that was partially offset by a 2% decrease in the realized price.

Total cost of products and services sold (including D&A) increased by 10% ($280 compared to $255 in 2018), due to the 22% increase in sales volume, partially offset by a 9% decrease in average unit cost of sales compared to 2018.

The net effect was a $31 million increase in gross profit.

FUEL SERVICES OUTLOOK

In 2020, we plan to produce 13 million to 14 million kgU, and we expect sales volumes, not including intersegment sales, to be 12 million to 13 million kgU. Overall revenue is expected to be between $340 million and $370 million, slightly lower than 2019 due to lower committed sales volumes. We expect the average unit cost of sales (including D&A) to be between $19.70/kgU and $20.70/kgU.

48	CAMECO CORPORATION

Fourth quarter financial results

Consolidated results

HIGHLIGHTS
( MILLIONS EXCEPT WHERE INDICATED)		2018		CHANGE
Revenue	874		831		5	%
Gross profit	184		207		(11	)%
Net earnings attributable to equity holders	128		160		(20	)%
per common share (basic)	0.32		0.40		(20	)%
per common share (diluted)	0.32		0.40		(20	)%
Adjusted net earnings (non-IFRS, see page 28)	94		202		(53	)%
per common share (adjusted and diluted)	0.24		0.51		(53	)%
Cash provided by operations (after working capital changes)	274		57		>100	%

All values are in US Dollars.

NET EARNINGS

The following table shows what contributed to the change in net earnings and adjusted net earnings (non-IFRS measure, see page 28) in the fourth quarter of 2019 compared to the same period in 2018.

( MILLIONS)			ADJUSTED
Net earnings - 2018	160	****	****	202	****
Change in gross profit by segment
(we calculate gross profit by deducting from revenue the cost of products and services sold, and depreciation and amortization (D&A), net of hedging benefits)
Uranium	20			20
	(84	)		(84	)
	6			6
	15			15
	(43	)		(43	)
Fuel services	5			5
	5			5
	11			11
	21			21
Other changes
Lower administration expenditures	2			2
Lower exploration expenditures	1			1
Change in reclamation provisions	36			—
Change in gains or losses on derivatives	64			(1	)
Change in foreign exchange gains or losses	(25	)		(25	)
Change in earnings from equity-accounted investments	7			7
Gain on sale of interest in Wheeler River Joint Venture in 2018	(17	)		(17	)
Change in income tax recovery or expense	(69	)		(44	)
Other	(9	)		(9	)
Net earnings - 2019	128	****	****	94	****

All values are in US Dollars.

MANAGEMENT’S DISCUSSION AND ANALYSIS	49

ADJUSTED NET EARNINGS

We use adjusted net earnings, a non-IFRS measure, as a more meaningful way to compare our financial performance from period to period. See page 28 for more information. The following table reconciles adjusted net earnings with our net earnings.

	THREE MONTHS ENDED
	DECEMBER 31
($ MILLIONS)	2019			2018
Net earnings attributable to equity holders	****	128	****		160
Adjustments
Adjustments on derivatives	****	(18	)		47
Reclamation provision adjustments	****	(26	)		10
Income taxes on adjustments	****	10	****		(15	)
Adjusted net earnings	****	94	****		202

Every quarter we are required to update the reclamation provisions for all operations based on new cash flow estimates, discount and inflation rates. This normally results in an adjustment to an asset retirement obligation asset in addition to the provision balance. When the assets of an operation have been written off due to an impairment, as is the case with our Rabbit Lake and US ISR operations, the adjustment is recorded directly to the statement of earnings as “other operating expense (income)”. See note 15 of our annual financial statements for more information. This amount has been excluded from our adjusted net earnings measure.

ADMINISTRATION

	THREE MONTHS ENDED
	DECEMBER 31
($ MILLIONS)	2019		2018		CHANGE
Direct administration	****	32		33		(3	)%
Stock-based compensation	****	2		3		(33	)%
Total administration	****	34	****	36	****	(6	)%

Direct administration costs were $32 million in the quarter, $1 million lower than the same period last year. Stock-based compensation expenses were $1 million lower from the fourth quarter of 2018. See note 24 to the financial statements.

Quarterly trends

HIGHLIGHTS											2018
( MILLIONS EXCEPT PER SHARE AMOUNTS)		Q3			Q2			Q1			Q4		Q3		Q2			Q1
Revenue	874		303			388			298			831		488		333			439
Net earnings (loss) attributable to equity holders	128		(13	)		(23	)		(18	)		160		28		(76	)		55
per common share (basic)	0.32		(0.03	)		(0.06	)		(0.05	)		0.40		0.07		(0.19	)		0.14
per common share (diluted)	0.32		(0.03	)		(0.06	)		(0.05	)		0.40		0.07		(0.19	)		0.14
Adjusted net earnings (loss) (non-IFRS, see page<br>28)	94		(2	)		(18	)		(33	)		202		15		(28	)		23
per common share (adjusted and diluted)	0.24		(0.01	)		(0.04	)		(0.08	)		0.51		0.04		(0.07	)		0.06
Cash provided by (used in) operations (after working capital changes)	274		232			(59	)		80			57		278		57			275

All values are in US Dollars.

Key things to note:

•	Our financial results are strongly influenced by the performance of our uranium segment, which accounted for 76%<br>of consolidated revenues in the fourth quarter of 2019 and 81% of consolidated revenues in the fourth quarter of 2018.
•	The timing of customer requirements, which tends to vary from quarter to quarter, drives revenue in the uranium<br>and fuel services segments.
---	---
•	Net earnings do not trend directly with revenue due to unusual items and transactions that occur from time to<br>time. We use adjusted net earnings, a non-IFRS measure, as a more meaningful way to compare our results from period to period (see page 28 for more information).
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50	CAMECO CORPORATION
---	---
•	Cash from operations tends to fluctuate as a result of the timing of deliveries and product purchases in our<br>uranium and fuel services segments.
---	---
•	Quarterly results are not necessarily a good indication of annual results due to the variability in customer<br>requirements noted above.
---	---

The table that follows presents the differences between net earnings and adjusted net earnings for the previous seven quarters.

HIGHLIGHTS	2019												2018
($ MILLIONS EXCEPT PER SHARE AMOUNTS)	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Net earnings (loss) attributable to equity holders	****	128	****		(13	)		(23	)		(18	)		160			28			(76	)		55
Adjustments
Adjustments on derivatives	****	(18	)		9			(17	)		(23	)		47			(24	)		20			22
Reclamation provision adjustments	****	(26	)		3			24			2			10			5			44			1
Gain on restructuring of JV Inkai	****	—	****		—			—			—			—			—			—			(49	)
Income taxes on adjustments	****	10	****		(1	)		(2	)		6			(15	)		6			(16	)		(6	)
Adjusted net earnings (losses) (non-IFRS, see page28)	****	94	****		(2	)		(18	)		(33	)		202			15			(28	)		23
MANAGEMENT’S DISCUSSION AND ANALYSIS	51
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Fourth quarter financial results by segment

Uranium

HIGHLIGHTS		2018		CHANGE
Production volume (million lbs)	2.7		2.4		13	%
Sales volume (million lbs)	14.0		12.6		11	%
Average spot price	25.08		28.27		(11	)%
Average long-term price	32.17		31.50		2	%
Average realized price	35.92		40.50		(11	)%
	47.50		53.11		(11	)%
Average unit cost of sales (including D&A)	37.80		38.89		(3	)%
Revenue ( millions)	666		670		(1	)%
Gross profit ( millions)	136		179		(24	)%
Gross profit (%)	20		27		(26	)%

All values are in US Dollars.

Production volumes this quarter were 13% higher compared to the fourth quarter of 2018. See Uranium – productionoverview on page 59 for more information.

Uranium revenues were down 1% due to an 11% decrease in the Canadian dollar average realized price offset by an 11% increase in sales volume. The US dollar average realized price decreased by 11% compared to 2018. Average realized price decreased due to a lower proportion of sales from higher priced fixed-price contracts compared to the same period in 2018 and lower prices on both fixed and market-related contracts. The Canadian dollar was slightly weaker compared to the same period last year, $1.00 (US) for $1.32 (Cdn) compared to $1.00 (US) for $1.31 (Cdn) in the fourth quarter of 2018.

Total cost of sales (including D&A) increased by 9% ($519 million compared to $477 million in 2018). This was primarily the result of the 11% increase in sales volume as the average unit cost of sales decreased by 3%.

The net effect was a $43 million decrease in gross profit for the quarter.

The following table 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 care and maintenance costs, selling costs such as royalties, transportation and commissions, nor do they reflect the impact of opening inventories on our reported cost of sales.

	THREE MONTHS ENDED
	DECEMBER 31
($CDN/LB)	2019		2018		CHANGE
Produced
Cash cost	****	17.21		14.91		15	%
Non-cash cost	****	15.54		15.07		3	%
Total production cost ^1^	****	32.75		29.98		9	%
Quantity produced (million lbs)^1^	****	2.7		2.4		13	%
Purchased
Cash cost^1^	****	34.17		38.13		(10	)%
Quantity purchased (million lbs)^1^	****	4.3		7.3		(41	)%
Totals
Produced and purchased costs	****	33.62		36.11		(7	)%
Quantities produced and purchased (million lbs)	****	7.0		9.7		(28	)%
^1^	Our share of Inkai production was 1.3 million pounds (amended on Feb 13, 2020; previously 0.9 million pounds)<br>for Q4, 2019. Due to equity accounting, our share of production will be shown as a purchase at the time of delivery. JV Inkai purchases will fluctuate during the quarters and timing of purchases will not match production. During the quarter, we<br>purchased 1.4 million pounds at a purchase price per pound of $32.18 ($24.40 (US)).
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52	CAMECO CORPORATION
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The average cash cost of production was 15% higher for the quarter than in the comparable period in 2018. While McArthur River and Key Lake are shut down, our annual cash cost of production is expected to reflect the estimated life-of-mine operating cost, between $15 and $16 per pound, of mining and milling our share of Cigar Lake mineral reserves, but it may fluctuate from quarter-to-quarter.

The benefit of the estimated life-of-mine operating cost for Inkai’s production of between $8 and $9 per pound, is expected to be reflected in the line item on our statement of earnings called “share of earnings from equity-accounted investee”.

Although purchased pounds are transacted in US dollars, we account for the purchases in Canadian dollars. In the fourth quarter, the average cash cost of purchased material was $34.17 (Cdn) per pound, or $25.87 (US) per pound in US dollar terms, compared to $38.13 (Cdn) per pound, or $29.08 (US) per pound in the fourth quarter of 2018.

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 fourth quarters of 2019 and 2018.

CASH AND TOTAL COST PER POUND RECONCILIATION

	THREE MONTHS ENDED
	DECEMBER 31
($ MILLIONS)	2019			2018
Cost of product sold	****	442.8	****		409.2
Add / (subtract)
Royalties	****	(14.3	)		(2.6	)
Other selling costs	****	(4.4	)		(4.4	)
Care and maintenance and severance costs	****	(29.7	)		(38.6	)
Change in inventories	****	(201.0	)		(49.5	)
Cash operating costs (a)	****	193.4	****		314.1
Add / (subtract)
Depreciation and amortization	****	87.4	****		81.1
Care and maintenance costs	****	(11.5	)		(13.4	)
Change in inventories	****	(33.9	)		(31.5	)
Total operating costs (b)	****	235.4	****		350.3
Uranium produced & purchased (million lbs) (c)	****	7.0	****		9.7
Cash costs per pound (a ÷ c)	****	27.63	****		32.38
Total costs per pound (b ÷ c)	****	33.62	****		36.11
MANAGEMENT’S DISCUSSION AND ANALYSIS	53
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Fuel services

(includes results for UF6, UO2, UO3 and fuel fabrication)

HIGHLIGHTS		2018		CHANGE
Production volume (million kgU)	4.0		3.5		14	%
Sales volume (million kgU)	6.2		5.1		22	%
Average realized price	24.61		23.56		4	%
Average unit cost of sales (including D&A)	17.11		18.76		(9	)%
Revenue ( millions)	152		120		27	%
Gross profit ( millions)	47		24		96	%
Gross profit (%)	31		20		55	%

All values are in US Dollars.

Total revenue increased by 27% due to a 22% increase in sales volumes and a 4% increase in average realized price. The increase in average realized price was due to higher realized prices for all product lines.

Total cost of sales (including D&A) increased by 12% to $106 million compared to the fourth quarter of 2018 due to the 22% increase in sales volumes partially offset by a decrease of 9% in the average unit cost of sales, primarily as a result lower costs for UF6 due to higher production rates.

The net effect was a $23 million increase in gross profit.

54	CAMECO CORPORATION

Operations and projects

This section of our MD&A is an overview of the mining properties we operate or have an interest in, our curtailed operations and our projects, what we accomplished this year, our plans for the future and how we manage risk.

56	MANAGING THE RISKS
59	URANIUM – PRODUCTION OVERVIEW
59	PRODUCTION OUTLOOK
60	URANIUM – TIER-ONE OPERATIONS
60	MCARTHUR RIVER MINE / KEY LAKE MILL
64	CIGAR LAKE
68	INKAI
71	URANIUM – TIER-TWO OPERATIONS
71	RABBIT LAKE
72	US ISR
73	URANIUM – ADVANCED PROJECTS
73	MILLENNIUM
73	YEELIRRIE
73	KINTYRE
74	URANIUM – EXPLORATION AND CORPORATE DEVELOPMENT
75	FUEL SERVICES
75	BLIND RIVER REFINERY
76	PORT HOPE CONVERSION SERVICES
76	CAMECO FUEL MANUFACTURING INC. (CFM)
MANAGEMENT’S DISCUSSION AND ANALYSIS	55
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Managing the risks

The nature of our operations means we face many potential risks and hazards that could have a significant impact on our business. Our risk policy and program involves a broad, systematic approach to identifying, assessing, reporting and managing the significant risks we face in our business and operations, including ESG risks. The policy establishes clear accountabilities for enterprise risk management. We use a common risk matrix throughout the company and consider any risk that has the potential to significantly affect our ability to achieve our corporate objectives or strategic plan as an enterprise risk. However, there is no assurance we will be successful in preventing the harm any of these risks and hazards could cause. We recommend you read our most recent management proxy circular for more information about our risk oversight.

Below we list the risks that generally apply to all of our operations and advanced projects. We also talk about how we manage specific risks in each operation or project update. These risks could have a material impact on our business in the near term.

We recommend you also review our annual information form, which includes a discussion of other material risks that could have an impact on our business.

Regulatory risks

A significant part of our economic value depends on our ability to:

•	obtain and renew the licences and other approvals we need to operate, to increase production at our mines and to<br>develop new mines. If we do not receive the regulatory approvals we need, or do not receive them at the right time, then we may have to delay, modify or cancel a project, which could increase our costs and delay or prevent us from generating revenue<br>from the project. Regulatory review, including the review of environmental matters, is a long and complex process.
•	comply with the conditions in these licences and approvals. Our right to continue operating facilities, increase<br>production at our mines and develop new mines depends on our compliance with these conditions.
---	---
•	comply with the extensive and complex laws and regulations that govern our activities. Environmental legislation<br>imposes strict standards and controls on almost every aspect of our operations and projects, and is not only introducing new requirements, but also becoming more stringent. For example:
---	---
•	we must complete the environmental assessment process before we can begin developing a new mine or make any<br>significant change to our operations
---	---
•	we may need regulatory approval to make changes to our operational processes, which can take a significant amount<br>of time because it may require an extensive review of supporting technical information. The complexity of this process can be further compounded when regulatory approvals are required from multiple agencies.
---	---
•	the federal government has recently introduced a new Impact Assessment Act as well as a Canadian Navigable Waters<br>Act along with significant revisions to the federal Fisheries Act. This new legislation will impact the scope and timeliness of approvals for projects and the revisions could impact existing operations.
---	---
•	Environment and Climate Change Canada has brought forward an amended national recovery plan for woodland caribou<br>that has the potential to impact economic and social development in northern Saskatchewan. Research completed in northern Saskatchewan has resulted in a report indicating the range in which our northern Saskatchewan operations are located, hosts a<br>secure and self-sustaining population of woodland caribou, perhaps one of the most secure boreal caribou populations in Canada. The population status was incorporated by Environment and Climate Change Canada into the amended national recovery plan;<br>however, potential habitat protection measures could still have an impact on our Saskatchewan operations and advanced projects.
---	---

We use significant management and financial resources to manage our regulatory risks.

Environmental risks

We have the safety, health and environmental risks associated with any mining and chemical processing company. Our uranium and fuel services segments also face unique risks associated with radiation.

56	CAMECO CORPORATION

Laws to protect the environment are becoming more stringent for members of the nuclear energy industry, including mining, milling and processing facilities, and have inter-jurisdictional aspects (both federal and provincial/state regimes are applicable). Once we have permanently stopped mining and processing activities at an operating site, we are required to decommission the site to the satisfaction of the regulators. We have developed preliminary decommissioning plans for our operating sites and use them to estimate our decommissioning costs. Regulators review and accept our preliminary decommissioning plans on a regular basis. As the site approaches or goes into decommissioning, regulators review the detailed decommissioning plans. This can result in further regulatory process, as well as additional requirements, costs and financial assurances.

Currently, Cameco has submitted updates to all Saskatchewan operations’ Preliminary Decommissioning Plan (PDP) and Preliminary Decommissioning Cost Estimate (PDCE) documents in accordance with the five year timeline specified in the regulations. Upon acceptance of the final PDP and PDCE documents by the Saskatchewan Ministry of Environment and Canadian Nuclear Safety Commission (CNSC) staff, a formal Commission proceeding will be required for final approval of the PDP and PDCE by the Commission. We have received the required approvals for the revised PDP and the letters of credit have been updated for McArthur River. For Cigar Lake and Key Lake, the revised PDP has been reviewed and accepted by staff and we are awaiting Commission proceedings to formally approve them. The revised PDP for Rabbit Lake is still under review by CNSC staff.

At the end of 2019, our estimate of total decommissioning and reclamation costs was $1.13 billion. This is the undiscounted value of the obligation and is based on our current operations. We had accounting provisions of $1.05 billion at the end of 2019 (the present value of the $1.13 billion). Regulatory approval is required prior to beginning decommissioning. Since we expect to incur most of these expenditures at the end of the useful lives of the operations they relate to, and none of our assets have approval for decommissioning, our expected costs for decommissioning and reclamation for the next five years are not material.

We provide financial assurances for decommissioning and reclamation such as letters of credit or surety bonds to regulatory authorities, as required. We had a total of about $994 million in financial assurances supporting our reclamation liabilities at the end of 2019. All of our North American operations have financial assurances in place in connection with our preliminary plans for decommissioning of the sites.

Some of the sites we own or operate have been under ongoing investigation and/or remediation and planning as a result of historic soil and groundwater conditions.

We use significant management and financial resources to manage our environmental risks.

We manage environmental risks through our safety, health, environment and quality (SHEQ) management system. Our chief executive officer is responsible for ensuring that our SHEQ management system is implemented. Our board’s safety, health and environment committee also oversees how we manage our environmental risks.

In 2019, we invested:

•	$73 million in environmental protection, monitoring and assessment programs, approximately 4% more than in<br>2018
•	$18 million in health and safety programs, or 10% less than 2018
---	---

The increase in environmental expenditures in 2019 was largely due to expenditures related to the Vision in Motion projects, but also some spending on projects involving tailings and waste rock in northern Saskatchewan. The decrease in health and safety related expenditures were due to overall cost reductions across Cameco operations.

Spending on environmental and health and safety programs is expected to level off in 2020 as a result of the continued impacts of the decisions to transition Rabbit Lake into care and maintenance and to curtail production at the US operations, as well as the continued shutdown of the McArthur River and Key Lake operations for an indeterminate duration.

MANAGEMENT’S DISCUSSION AND ANALYSIS	57

Operational risks

Other operational risks and hazards include:

•	environmental damage
•	industrial and transportation accidents
---	---
•	labour shortages, disputes or strikes
---	---
•	cost increases for labour, contracted or purchased materials, supplies and services
---	---
•	shortages of required materials, supplies and equipment
---	---
•	transportation and delivery disruptions
---	---
•	interruptions in the supply of electricity, water, and other utilities
---	---
•	equipment failures
---	---
•	non-compliance with laws and licences
---	---
•	catastrophic accidents
---	---
•	fires
---	---
•	blockades or other acts of social or political activism
---	---
•	natural phenomena, such as inclement weather conditions, floods and earthquakes
---	---
•	unusual, unexpected or adverse mining or geological conditions
---	---
•	underground floods
---	---
•	ground movement or cave-ins
---	---
•	tailings pipeline or dam failures
---	---
•	technological failure of mining methods
---	---
•	unanticipated consequences of our cost reduction strategies
---	---

We have insurance to cover some of these risks and hazards, but not all of them, and not to the full amount of losses or liabilities that could potentially arise.

58	CAMECO CORPORATION

Uranium – production overview

Production in our uranium segment in the fourth quarter was 2.7 million pounds, 13% higher compared to the same period in 2018, while production for the year was 9.0 million pounds, 2% lower than in 2018. See Uranium – Tier-one operations starting on page 60 for more information.

Uranium production

	THREE MONTHS ENDED				YEAR ENDED
CAMECO SHARE	DECEMBER 31				DECEMBER 31
(MILLION LBS)	2019		2018		2019		2018		2019 PLAN		2020 PLAN
McArthur River/Key Lake	****	—		—	****	—		0.1		—		—	^1^
Cigar Lake	****	2.7		2.4	****	9.0		9.0		9.0		9.0
US ISR	****	—		—	****	—		0.1		—		—	^1^
Total	****	2.7		2.4	****	9.0		9.2		9.0		9.0
^1^	The McArthur River/Key Lake and Rabbit Lake operations are in a safe and sustainable state of care and<br>maintenance, and we are no longer developing new wellfields at Crow Butte and Smith Ranch-Highland. Please see Uranium – Tier-one operations beginning on page 60 and Uranium – Tier-two operations beginning on page 71 for more information.
---	---

We expect total production from Inkai to be 8.3 million pounds in 2020 on a 100% basis. Due to equity accounting, our share of production is shown as a purchase.

ProductionOutlook

We remain focused on taking advantage of the long-term growth we see coming in our industry, while maintaining the ability to respond to market conditions as they evolve. Our strategy is to focus on our tier-one assets and profitably produce at a pace aligned with market signals in order to preserve the value of those assets and increase long-term shareholder value, and to do that with an emphasis on safety, people and the environment.

Given today’s weak market conditions and to mitigate risk, we plan to:

•	ensure we continue to operate safely
•	evaluate the optimal mix of production, inventory and purchases in order to retain the flexibility to deliver<br>long-term value
---	---
•	focus on technology and its applications to improve efficiency, reduce costs and improve operational<br>effectiveness across our operations, including the use of digital and automation technologies
---	---
MANAGEMENT’S DISCUSSION AND ANALYSIS	59
---	---

Uranium – Tier-one operations

McArthur River mine / Key Lake mill

2019 Production (our share)<br> <br><br><br><br>0.0M lbs<br> <br><br><br><br>2020 Production Outlook (our share)<br> <br><br><br><br>0.0M lbs<br> <br><br><br><br>Estimated Reserves (our share)<br> <br><br><br><br>273.6M lbs<br> <br><br><br><br>Estimated Mine Life^1^<br> <br><br><br><br>23 years
^1^	Estimated mine life based on the production schedule presented in the National Instrument 43-101 Technical Report dated March 29, 2019.
---	---

McArthur River is the world’s largest, high-grade uranium mine, and Key Lake is the world’s largest uranium mill.

Ore grades at the McArthur River mine are 100 times the world average, which means it can produce more than 18 million pounds per year by mining only 300 to 400 tonnes of ore per day. We are the operator of both the mine and mill.

In 2018, a decision was made to suspend production and place the mine and mill in care and maintenance, which will continue for an indeterminate duration.

McArthur River is considered a material uranium property for us. There is a technical report dated March 29, 2019 (effective December 31, 2018) that can be downloaded from SEDAR (sedar.com) or from EDGAR (sec.gov).

Location		Saskatchewan, Canada
Ownership		McArthur River – 69.805%
		Key Lake – 83.33%
Mine type		Underground
Mining methods		Primary: blasthole stoping
		Secondary: raiseboring
End product		Uranium concentrate
Certification		ISO 14001 certified
Estimated reserves		273.6 million pounds (proven and probable), average grade U3O8: 6.91%
Estimated resources		6.7 million pounds (measured and indicated), average grade U3O8: 2.36%
		1.8 million pounds (inferred), average grade U3O8: 2.85%
Licensed capacity		Mine and mill: 25.0 million pounds per year
Licence term		Through October, 2023
Total packaged production:	2000 to 2019	325.4 million pounds (McArthur River/Key Lake) (100% basis)
	1983 to 2002	209.8 million pounds (Key Lake) (100% basis)
2019 production		0 million pounds (0.0 million pounds on 100% basis)
2020 production outlook		0.0 million pounds (0.0 million pounds on 100% basis)
Estimated decommissioning cost^1^		$42 million – McArthur River (100% basis)
		$223 million – Key Lake (100% basis)

All values shown, including reserves and resources, represent our share only, unless indicated.

^1^	The Key Lake estimate is currently under regulatory review.
60	CAMECO CORPORATION
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BACKGROUND

Mine description

The McArthur River reported mineral reserves are contained within seven zones: Zones 1, 2, 3, 4, 4 South, A and B. Prior to care and maintenance, there were two active mining zones and one where development was significantly advanced.

Zone 2 has been actively mined since production began in 1999. The ore zone was initially divided into three freeze panels. As the freeze wall was expanded, the inner connecting freeze walls were decommissioned in order to recover the inaccessible uranium around the active freeze pipes. Mining of zone 2 is almost complete. About 4.8 million pound of mineral reserves remain and we expect to recover them using a combination of raisebore and blasthole stope mining.

Zone 4 has been actively mined since 2010. The zone was divided into four freeze panels, and like in zone 2, as the freeze wall was expanded, the inner connecting freeze walls were decommissioned. Zone 4 has 117.5 million pounds of mineral reserves secured behind freeze walls and it will be the main source of production when mine production restarts. Raisebore mining and blasthole stoping will be used to recover the mineral reserves.

Zone 1 is the next planned mine area to be brought into production. Freezehole drilling was 90% complete and brine distribution construction was approximately 10% complete when work was suspended in 2018 as part of the production suspension. Work remaining before production can begin includes completion of the freezehole drilling, brine distribution construction, ground freezing and drill and extraction chamber development. Once complete, an additional 46.6 million pounds of mineral reserves will be secured behind freeze walls. Blasthole stope mining is currently planned as the main extraction method.

We have successfully extracted over 325 million pounds (100% basis) since we began mining in 1999.

Mining methods and techniques

The McArthur River deposit presents unique challenges that are not typical of traditional hard or soft rock mines. These challenges are the result of mining in or near high pressure ground water in challenging ground conditions with significant radiation concerns due to the high-grade uranium ore. Therefore, mine designs and mining methods are selected based on their ability to mitigate hydrological, radiological and geotechnical risks.

There are three approved mining methods at McArthur River: raisebore mining, blasthole stope mining and boxhole mining. However, only raisebore and blasthole stope mining remain in use. In addition, we use ground freezing to mine the McArthur River deposit.

Ground freezing

All the mineralized areas discovered to date at McArthur River are in, or partially in, water-bearing ground with significant pressure at mining depths. This high pressure water source is isolated from active development and production areas in order to reduce the inherent risk of an inflow. To date, McArthur River has relied on pressure grouting and ground freezing to successfully mitigate the risks of the high pressure ground water.

Chilled brine is circulated through freeze holes to form an impermeable freeze barrier around the area being mined. This prevents water from entering the mine, and helps stabilize weak rock formations.

Blasthole stoping

Our use of blasthole stoping began in 2011 and has expanded; the majority of ore extraction is now carried out using this method. It is planned in areas where blastholes can be accurately drilled and small stable stopes excavated without jeopardizing the freeze wall integrity. The use of this method has allowed the site to improve operating costs by increasing overall extraction efficiency by reducing underground development, concrete consumption, mineralized waste generation and improving extraction cycle time.

Raisebore mining

Raisebore mining is an innovative non-entry approach that we adapted to meet the unique challenges at McArthur River, and it has been used since mining began in 1999. This method is favourable for mining the weaker rock mass areas of the deposit, and is suitable for massive high-grade zones where there is access both above and below the ore zone.

MANAGEMENT’S DISCUSSION AND ANALYSIS	61

Initial processing

McArthur River produces two product streams which are both shipped to the Key Lake mill to produce uranium ore concentrates. We carry out initial processing of two product streams at McArthur River: high-grade slurry and low-grade mineralization. Both product streams are shipped to Key Lake mill to produce uranium ore concentrate.

High-grade slurry is pumped to surface and, after blending and further thickening it is transported to Key Lake in slurry trucks.

The low-grade mineralization is hoisted to surface and hauled to Key Lake, where it is mixed with water, ground, thickened and blended with the high-grade slurry to a nominal 5% U3O8 mill feed grade. It is then processed into uranium ore concentrates and packaged.

Tailings capacity

Based on the current licence conditions, tailings capacity at Key Lake is sufficient to mill all the known McArthur River mineral reserves and resources, should they be converted to reserves, with additional capacity to toll mill ore from other regional deposits.

Licensed annual production capacity

The McArthur River mine and Key Lake mill are both licensed to produce up to 25 million pounds (100% basis) per year. The current production capacity of the Key Lake mill is sufficient to process McArthur River mineral reserves at a production rate of 18 million pounds U3O8 per year.

2019 UPDATE

Production suspension

The facilities remained in a state of safe and sustainable care and maintenance throughout 2019.

Approximately 175 employees remain at the McArthur River and Key Lake sites. Care and maintenance activities include mine dewatering, water treatment, freeze wall maintenance, and environmental monitoring. In addition, preservation maintenance and monitoring of the critical facilities continues. Our objective is that the McArthur River and Key Lake operations are available to return to production in a timely manner once a decision is made to end the production suspension.

Exploration

As a result of the production suspension, there was no exploration activity in 2019.

Labour relations

We reached a new collective agreement with unionized employees at our McArthur River/Key Lake operations. The new agreement expires on December 31, 2022.

PLANNING FOR THE FUTURE

Production

Due to continued uranium price weakness, we have suspended production for an indeterminate duration. As a result of the suspension, and the time required to restart the mine and mill, we do not expect the operation to produce any uranium in 2020. Our share of the cash and non-cash costs to maintain both operations during the suspension is expected to range between $8 million and $10 million per month. The increase in care and maintenance costs compared to 2019 is related to planned expenditures to fully assess our operating processes. See Innovation below.

Expansion potential

Once the market signals that new supply is needed and a decision is made to restart production, we will undertake the work necessary to optimize the capacity of both the McArthur River mine and Key Lake mill, up to a maximum of 25 million pounds per year (100% basis), the annual production licence limit. We expect that this paced approach will allow us to extract maximum value from the operation as the market transitions.

62	CAMECO CORPORATION

Innovation

While McArthur River/Key Lake is in a state of care and maintenance, we are taking the opportunity to fully assess our operating processes with the objective of enhancing the efficiency of these operations. Our goal is to streamline our processes and leverage digital and automation technologies to significantly reduce our future operating costs and increase operational flexibility when the time comes to restart. Any opportunities will be rigorously assessed before an investment decision is made.

MANAGING OUR RISKS

Production at McArthur River/Key Lake poses many challenges. These challenges include control of groundwater, weak rock formations, radiation protection, water inflow, mine area transitioning, regulatory approvals, surface and underground fires and other mining related challenges. Operational experience gained since the start of production has resulted in a significant reduction in risk.

Mine and mill restart

The operational changes we have made, including the suspension of production in 2018 for an indeterminate duration and the accompanying workforce reduction, carry with them the risks of a delay in restarting operations and subsequent production disruption.

There is increased uncertainty regarding the timing of a successful restart of the operations and the associated costs the longer the mine and mill are on care and maintenance.

Water inflow risk

Water inflows pose a significant risk to mine production. In 2003, a water inflow resulted in a three-month suspension of production. We also had a small water inflow in 2008 that did not impact production, but did cause significant development delays.

The consequences of another water inflow at McArthur River would depend on its magnitude, location and timing, but could include a significant interruption or reduction in production, a material increase in costs or a loss of mineral reserves.

We take significant steps and precautions to reduce the risk of inflows, but there is no guarantee that these will be successful. In the event that an inflow does occur, we believe we have sufficient pumping, water treatment and surface storage capacity to handle the estimated maximum sustained inflow.

We also manage the risks listed on pages 56 to 58.

MANAGEMENT’S DISCUSSION AND ANALYSIS	63

Uranium – Tier-one operations

Cigar Lake

2019 Production (our share)<br> <br><br><br><br>9.0M lbs<br> <br>2020 Production Outlook (our share)<br><br><br><br> <br>9.0M lbs<br><br><br>Estimated Reserves (our share)<br> <br><br><br><br>86.3M lbs<br> <br>Estimated Mine Life<br><br><br><br> <br>2029

Cigar Lake is the world’s highest grade uranium mine, with grades that are 100 times the world average. We are a 50% owner and the mine operator. Cigar Lake uranium is milled at Orano’s (previously AREVA) McClean Lake mill.

Cigar Lake is considered a material uranium property for us. There is a technical report dated March 29, 2016 (effective December 31, 2015) that can be downloaded from SEDAR (sedar.com) or from EDGAR (sec.gov).

Location	Saskatchewan, Canada
Ownership	50.025%
Mine type	Underground
Mining method	Jet boring system
End product	Uranium concentrate
Certification	ISO 14001 certified
Estimated reserves	86.3 million pounds (proven and probable), average grade U3O8: 14.69%
Estimated resources	50.8 million pounds (measured and indicated), average grade U3O8: 14.44%
	11.9 million pounds (inferred), average grade U3O8: 5.92%
Licensed capacity	18.0 million pounds per year (our share 9.0 million pounds per year*)*
Licence term	Through June, 2021
Total packaged production: 2014 to 2019	82.9 million pounds (100% basis)
2019 production	9.0 million pounds (18.0 million pounds on 100% basis)
2020 production outlook	9.0 million pounds (18.0 million pounds on 100% basis)
Estimated decommissioning cost^1^	$62 million (100% basis)

All values shown, including reserves and resources, represent our share only, unless otherwise indicated.

^1^	This updated estimate is currently under regulatory review.

BACKGROUND

Development

We began developing the Cigar Lake underground mine in 2005, but development was delayed due to water inflows in 2006 and 2008. The underground workings were successfully remediated and secured in 2011 and, in October 2014 the McClean Lake mill produced the first uranium concentrate from ore mined at the Cigar Lake operation. Commercial production was declared in May 2015.

64	CAMECO CORPORATION

Mine description

Cigar Lake’s geological setting is similar to McArthur River’s: the permeable sandstone, which overlays the deposit and basement rocks, contains large volumes of water at significant pressure. However, unlike McArthur River, the Cigar Lake deposit has the shape of a flat- to cigar-shaped lens. As a result of these challenging geological conditions, we are unable to utilize traditional mining methods that require access above the ore, necessitating the development of a non-entry mining method specifically adapted for this deposit: the Jet Boring System (JBS).

Mine development is carried out uniquely in the basement rocks below the ore horizon. New mine development is required throughout the mine life to gain access to the ore above.

Mining method

Bulk groundfreezing

The sandstone that overlays the deposit and basement rocks is water-bearing, and to prevent water from entering the mine, help stabilize weak rock formations, and meet our production schedule, we freeze the ground from surface. The ore zone and surrounding ground in the area to be mined must meet specific ground freezing requirements before we begin jet boring.

Jet boring system (JBS) mining

After many years of test mining, we selected jet boring, a non-entry mining method, which we have developed and adapted specifically for this deposit. This method involves:

•	drilling a pilot hole into the frozen orebody, inserting a high pressure water jet and cutting a cavity out of<br>the frozen ore
•	collecting the ore and water mixture (slurry) from the cavity and pumping it to storage (sump storage), allowing<br>it to settle
---	---
•	using a clamshell, transporting the ore from sump storage to an underground grinding and processing circuit<br>
---	---
•	once mining is complete, filling each cavity in the orebody with concrete
---	---
•	starting the process again with the next cavity
---	---

We have divided the orebody into production panels and at least three production panels need to be frozen at one time to achieve the full annual production rate of 18 million pounds. One JBS machine is located below each frozen panel. Three JBS machines are currently in operation. Two machines actively mine at any given time while the third is moving, setting up, or undergoing maintenance.

Initial processing

We carry out initial processing of the extracted ore at Cigar Lake:

•	the underground circuit grinds the ore and mixes it with water to form a slurry
•	the slurry is pumped 500 metres to the surface and stored in one of two ore slurry holding tanks<br>
---	---
•	it is blended and thickened, removing excess water
---	---
•	the final slurry, at an average grade of approximately 14%<br>U3O8, is pumped into transport truck containers and shipped to McClean Lake mill on a 69 kilometre<br>all-weather road
---	---

Water from this process, including water from underground operations, is treated on the surface. Any excess treated water is released into the environment.

MANAGEMENT’S DISCUSSION AND ANALYSIS	65

Milling

All of Cigar Lake’s ore slurry is being processed at the McClean Lake mill, operated by Orano. Given the McClean Lake mill’s capacity, it is able to:

•	operate at Cigar Lake’s targeted annual production level of 18.0 million pounds U3O8
•	process and package all of Cigar Lake’s current mineral reserves
---	---

Licensing annual production capacity

The Cigar Lake mine is licensed to produce up to 18 million pounds (100% basis) per year. Orano’s McClean Lake mill is licensed to produce 24 million pounds annually.

2019 UPDATE

Production

Total packaged production from Cigar Lake was 18.0 million pounds U3O8; our share was 9.0 million pounds, achieving our forecast.

During the year, we:

•	completed and commissioned the freeze plant expansion project
•	implemented an extended summer shutdown, during which maintenance activities were completed as well as a capital<br>upgrade to the mine exhaust fans
---	---
•	executed production activities from three production tunnels in the eastern part of the ore body<br>
---	---
•	extended our surface brine distribution infrastructure and expanded our ground freezing program ensuring<br>continued frozen ore inventory growth in alignment with our long-term production plans
---	---

Underground development

In alignment with our production plans, underground mine development restarted in 2019. Development included focus on two new production panels in the eastern portion of the ore body along with initial access development towards the western portion. Development in these specific areas will continue in 2020 to ensure new production panels are available in alignment with long-term production plans.

Labour relations

Orano reached a new three-year collective agreement with unionized employees at the McClean Lake mill. The previous contract expired on May 31, 2019.

PLANNING FOR THE FUTURE

Production

In 2020, we expect to produce 18 million packaged pounds at Cigar Lake; our share is 9.0 million pounds.

Our 2020 production plan for the Cigar Lake mine includes an extended shutdown during the third quarter. The shut-down will consist of a four-week production outage, preceded by a two-week maintenance period with mine start-up planned before the end of the third quarter.

66	CAMECO CORPORATION

In 2020, we expect to:

•	continue surface freeze drilling and complete construction and commissioning of the freeze distribution<br>infrastructure expansion in support of future production
•	continue underground mine development and complete three new production tunnels as well as expand ventilation and<br>access drifts in alignment with the long-term mine plan
---	---
•	expand underground piping and infrastructure towards new production panels required to sustain production<br>
---	---

MANAGING OUR RISKS

Cigar Lake is a challenging deposit to develop and mine. These challenges include control of groundwater, weak rock formations, radiation protection, chemical ore characteristics, performance of the water treatment system, water inflow, regulatory approvals, surface and underground fires and other mining-related challenges. To reduce this risk, we are applying our operational experience and the lessons we have learned about water inflows at McArthur River and Cigar Lake.

Operational changes

The operational changes we have made, including the extended summer shutdown, the workforce reduction, changes to the shift rotation schedule, and changes to the commuter flight services at the site, which are intended to achieve cost savings and improve efficiency, carry with them increased risk of production disruption.

Transition to new mining areas

In order to successfully achieve the planned production schedule, we must continue to successfully transition into new mining areas, which includes mine development and investment in critical support infrastructure.

Ground freezing

To manage our risks and meet our production schedule, the areas being mined must meet specific ground freezing requirements before we begin jet boring. We have identified greater variation of the freeze rates of different geological formations encountered in the mine, based on information obtained through surface freeze drilling. As a mitigation measure, we have increased the site freeze capacity to facilitate the mining of ore cavities as planned.

Environmental performance

The Cigar Lake orebody contains elements of concern with respect to the water quality and the receiving environment. The distribution of elements such as arsenic, molybdenum, selenium and others is non-uniform throughout the ore body, and this can present challenges in attaining and maintaining the required effluent concentrations.

There have been ongoing efforts to optimize the current water treatment process and water handling systems to ensure acceptable environmental performance, which is expected to avoid the need for additional capital upgrades and potential deferral of production.

Water inflow risk

A significant risk to development and production is from water inflows. The 2006 and 2008 water inflows were significant setbacks.

The consequences of another water inflow at Cigar Lake would depend on its magnitude, location and timing, but could include a significant delay or disruption in Cigar Lake production, a material increase in costs or a loss of mineral reserves.

We take the following steps to reduce the risk of inflows, but there is no guarantee that these will be successful:

•	Bulk freezing: Two of the primary challenges in mining the deposit are control of groundwater and ground support.<br>Bulk freezing reduces but does not completely eliminate the risk of water inflows.
•	Mine development: We plan for our mine development to take place away from known groundwater sources whenever<br>possible. In addition, we assess all planned mine development for relative risk and apply extensive additional technical and operating controls for all higher risk development.
---	---
•	Pumping capacity and treatment limits: We have pumping capacity to meet our standard for this operation of at<br>least one and a half times the estimated maximum inflow.
---	---

We believe we have sufficient pumping, water treatment and surface storage capacity to handle the estimated maximum inflow.

We also manage the risks listed on pages 56 to 58.

MANAGEMENT’S DISCUSSION AND ANALYSIS	67

Uranium – Tier-one operations

Inkai

2019 Production (100% basis)<br> <br><br><br><br>8.3 M lbs<br> <br>2020 Production Outlook (100% basis)<br><br><br><br> <br>8.3 M lbs<br><br><br>Estimated Reserves (our share)<br> <br><br><br><br>100.7M lbs<br> <br>Estimated Mine Life<br><br><br><br> <br>2045 (based on licence term)

Inkai is a very significant uranium deposit, located in Kazakhstan. The operator is JV Inkai limited liability partnership, which we jointly own (40%) with Kazatomprom (60%)^1^.

Inkai is considered a material uranium property for us. There is a technical report dated January 25, 2018 (effective January 1, 2018) that can be downloaded from SEDAR (sedar.com) or from EDGAR (sec.gov).

Location	South Kazakhstan
Ownership	40%^1^
Mine type	In situ recovery (ISR)
End product	Uranium concentrate
Certifications	BSI OHSAS 18001
	ISO 14001 certified
Estimated reserves	100.7 million pounds (proven and probable), average grade U3O8: 0.03%
Estimated resources	12.8 million pounds (measured and indicated), average grade U3O8: 0.03%
	30 million pounds (inferred), average grade U3O8: 0.03%
Licensed capacity (wellfields)	10.4 million pounds per year (our share 4.2 million pounds per year*)*^1^
Licence term	Through July 2045
Total packaged production: 2009 to 2019	57.5 million pounds (100% basis)
2019 production	8.3 million pounds (100% basis)
2020 production outlook	8.3 million pounds (100% basis*)*^1^
Estimated decommissioning cost (100% basis)	$11 million (US) (100% basis) (this estimate is currently under review)

All values shown, including reserves and resources, represent our share only, unless indicated.

^1^	Effective January 1, 2018, our ownership interest in the joint venture dropped to 40% and we now equity<br>account for our investment. Due to the transition to equity accounting, our share of production is shown as a purchase.

BACKGROUND

Mine description

The Inkai uranium deposit is a roll-front type orebody within permeable sandstones. The more porous and permeable units host several stacked and relatively continuous, sinuous “roll-fronts” of low-grade uranium forming a regional system. Superimposed over this regional system are several uranium projects and active mines.

Inkai’s mineralization ranges in depths from about 260 metres to 530 metres. The deposit has a surface projection of about 40 kilometres in length, and the width ranges from 40 to 1600 metres. The deposit has hydrogeological and mineralization conditions favourable for use of in-situ recovery (ISR) technology.

68	CAMECO CORPORATION

Mining and milling method

JV Inkai uses conventional, well-established, and very efficient ISR technology, developed after extensive test work and operational experience. The process involves five major steps:

•	leach the uranium in-situ by circulating an acid-based solution through<br>the host formation
•	recover it from solution with ion exchange resin (takes place at both main and satellite processing plants)<br>
---	---
•	precipitate the uranium with hydrogen peroxide
---	---
•	thicken, dewater, and dry it
---	---
•	package the uranium peroxide product in drums
---	---

Production

Total 2019 production from Inkai was 8.3 million pounds (100% basis), an increase from 2018. While the production volume was in accordance with Kazatomprom’s planned 20% decrease to the licensed production profile under the terms of the subsoil use contract, the subsoil use contract called for higher production in 2019 compared to 2018. The subsoil use law in Kazakhstan allows producers to produce within 20% (above or below) of their licensed capacity in a year.

Project funding and cash distribution

We had an outstanding loan for Inkai’s work on block 3 prior to the restructuring. Under the restructuring agreement, the partners agreed that JV Inkai would distribute excess cash, after working capital requirements, as priority repayment of this loan. In 2019, principal and interest payments of $92.7 million (US) were received, which repaid the loan in full. As a result, excess cash, after working capital requirements, will be distributed to the partners as dividends. Our share of dividends follows our production purchase entitlements as described below.

JV Inkai Restructuring Agreement

In 2016, we signed an agreement with our partner Kazatomprom and JV Inkai to restructure and enhance JV Inkai. The restructuring closed in December 2017 and took effect January 1, 2018. This restructuring was subject to obtaining all required government approvals including an amendment to JV Inkai’s Resource Use Contract, which were obtained. The restructuring consisted of the following:

•	JV Inkai has the right to produce 10.4 million pounds of<br>U3O8 per year, an increase from the prior licensed annual production of 5.2 million pounds
•	JV Inkai has the right to produce until 2045 (previously, the licence terms, based on the boundaries prior to the<br>restructuring, were to 2024 and 2030)
---	---
•	our ownership interest in JV Inkai is 40% and Kazatomprom’s share is 60%. However, during production rampup,<br>we are entitled to purchase 57.5% of the first 5.2 million pounds of annual production, and, as annual production increases over 5.2 million pounds, we are entitled to purchase 22.5% of such incremental production, to the maximum annual<br>share of 4.2 million pounds. Once the rampup to 10.4 million pounds annually is complete, we will be entitled to purchase 40% of such annual production, matching our ownership interest.
---	---
•	a governance framework that provides protection for us as a minority owner
---	---
•	the boundaries of the mining area match the agreed production profile for JV Inkai to 2045
---	---
•	priority payment of the loan that our subsidiary made to JV Inkai to fund exploration and evaluation of the<br>historically defined block 3 area
---	---

With Kazatomprom, we completed and reviewed a feasibility study for the purpose of evaluating the design, construction and operation of a uranium refinery in Kazakhstan. In accordance with the agreement, a decision was made not to proceed with construction of the uranium refinery as contemplated in the feasibility study. We subsequently signed an agreement to licence our proprietary UF6 conversion technology to Kazatomprom, which will allow Kazatomprom to examine the feasibility of constructing and operating its own UF6 conversion facility in Kazakhstan.

Our 2020 financial outlook is presented on the basis of equity accounting for our minority ownership interest in JV Inkai. Under equity accounting, our share of the profits earned by JV Inkai on the sale of its production are included in “income from equity-accounted investees” on our consolidated statement of earnings. Our share of production is purchased at a discount to the spot price and included at this value in inventory. In addition, JV Inkai capital is not included in our outlook for capital expenditures. Please see Planning forthe future below for more details.

MANAGEMENT’S DISCUSSION AND ANALYSIS	69

PLANNING FOR THE FUTURE

Production

We expect total production from Inkai to be 8.3 million pounds (100% basis) in 2020. Due to Kazatomprom’s announced plans to maintain its aggregate production reduction of 20%, an adjustment to the restructuring agreement, as described above, has been made. As a result of this adjustment, we are entitled to purchase 59.4% of JV Inkai’s planned production in 2020 which equates to 4.9 million pounds. Our share of the profits earned by JV Inkai on the sale of its production will be included in “income from equity-accounted investees” on our consolidated statement of earnings.

MANAGING OUR RISKS

Political risk

Kazakhstan declared itself independent in 1991 after the dissolution of the Soviet Union. Our investment in JV Inkai is subject to the greater risks associated with doing business in developing countries, which have significant potential for social, economic, political, legal and fiscal instability. Kazakh laws and regulations are complex and still developing and their application can be difficult to predict. The other owner of JV Inkai is Kazatomprom, an entity majority owned by the government of Kazakhstan. We have entered into agreements with JV Inkai and Kazatomprom intended to mitigate political risk. This risk includes the imposition of governmental laws or policies that could restrict or hinder JV Inkai paying us dividends, or selling us our share of JV Inkai production, or that impose discriminatory taxes or currency controls on these transactions. The restructuring of JV Inkai, which took effect January 1, 2018, was undertaken with the objective to better align the interests of Cameco and Kazatomprom and includes a governance framework that provides for protection for us as a minority owner of JV Inkai. We believe the political risk related to our investment in JV Inkai is manageable.

For more details on this risk, please our most recent annual information form under the heading political risks.

JV Inkai manages risks listed on pages 56 to 58.

70	CAMECO CORPORATION

Uranium – Tier-two operations

Rabbit Lake

Located in Saskatchewan, Canada, our 100% owned Rabbit Lake operation opened in 1975, and has the second largest uranium mill in the world. Due to market conditions, we suspended production at Rabbit Lake during the second quarter of 2016.

Location	Saskatchewan, Canada
Ownership	100%
End product	Uranium concentrates
ISO certification	ISO 14001 certified
Mine type	Underground
Estimated reserves	-
Estimated resources	38.6 million pounds (indicated), average grade U3O8: 0.95%
	33.7 million pounds (inferred), average grade U3O8: 0.62%
Mining methods	Vertical blasthole stoping
Licensed capacity	Mill: maximum 16.9 million pounds per year; currently 11 million
Licence term	Through October, 2023
Total production: 1975 to 2019	202.2 million pounds
2019 production	0 million pounds
2020 production outlook	0 million pounds
Estimated decommissioning cost^1^	$213 million
^1^	This updated estimate is currently under regulatory review.
---	---

PRODUCTION SUSPENSION

The facilities remained in a state of safe and sustainable care and maintenance throughout 2019.

While in standby, we continue to evaluate our options in order to minimize care and maintenance costs. We expect care and maintenance costs to range between $30 million and $35 million annually.

MANAGING OUR RISKS

We also manage the risks listed on pages 56 to 58.

MANAGEMENT’S DISCUSSION AND ANALYSIS	71

US ISR Operations

Located in Nebraska and Wyoming in the US, the Crow Butte and Smith Ranch-Highland (including the North Butte satellite) operations began production in 1991 and 1975. Each operation has its own processing facility. Due to market conditions, we curtailed production and deferred all wellfield development at these operations during the second quarter of 2016.

Ownership		100%
End product		Uranium concentrates
ISO certification		ISO 14001 certified
Estimated reserves	Smith Ranch-Highland:	-
	North Butte-Brown Ranch:	-
	Crow Butte:	-
Estimated resources	Smith Ranch-Highland:	24.9 million pounds (measured and indicated), average grade U3O8: 0.06%
		7.7 million pounds (inferred), average grade U3O8: 0.05%
	North Butte-Brown Ranch:	9.5 million pounds (measured and indicated), average grade U3O8: 0.07%
		0.4 million pounds (inferred), average grade U3O8: 0.07%
	Crow Butte:	13.9 million pounds (measured and indicated), average grade U3O8: 0.25%
		1.8 million pounds (inferred), average grade U3O8: 0.16%
Mining methods		In situ recovery (ISR)
Licensed capacity	Smith Ranch-Highland:^1^	Wellfields: 3 million pounds per year; processing plants: 5.5 million pounds per year
	Crow Butte:	Processing plants and wellfields: 2 million pounds per year
Licence term	Smith Ranch-Highland:	Through September, 2028
	Crow Butte:	Through October, 2024
Total production: 2002 to 2019		33.0 million pounds
2019 production		0 million pounds
2020 production outlook		0 million pounds
Estimated decommissioning cost*^2^*		Smith Ranch-Highland: $219 million (US), including North Butte
		Crow Butte: $52 million (US)
^1^	Including Highland mill
---	---
^2^	This updated estimate is currently under regulatory review.
---	---

PRODUCTION CURTAILMENT

As a result of our 2016 decision, production at the US operations ceased in 2018. We expect ongoing cash and non-cash care and maintenance costs to range between $14 million (US) and $16 million (US) for 2020.

FUTURE PRODUCTION

We do not expect any production in 2020.

IMPAIRMENT

In 2017, due to the continued weakening of the uranium market and a reduction in mineral reserves, we recorded a $184 million write down of our US assets.

MANAGING OUR RISKS

We manage the risks listed on pages 56 to 58.

72	CAMECO CORPORATION

Uranium – advanced projects

Work on our advanced projects has been scaled back and will continue at a pace aligned with market signals.

Millennium
Location	Saskatchewan, Canada
Ownership	69.9%
End product	Uranium concentrates
Potential mine type	Underground
Estimated resources (our share)	53.0 million pounds (indicated), average grade U3O8: 2.39%
	20.2 million pounds (inferred), average grade U3O8: 3.19%

BACKGROUND

The Millennium deposit was discovered in 2000, and was delineated through geophysical survey and surface drilling work between 2000 and 2013.

Yeelirrie
Location	Western Australia
Ownership	100%
End product	Uranium concentrates
Potential mine type	Open pit
Estimated resources	128.1 million pounds (measured and indicated), average grade U3O8: 0.15%

BACKGROUND

The deposit was discovered in 1972 and is a near-surface calcrete-style deposit that is amenable to open pit mining techniques. It is one of Australia’s largest undeveloped uranium deposits.

Kintyre
Location	Western Australia
Ownership	100%
End product	Uranium concentrates
Potential mine type	Open pit
Estimated resources	53.5 million pounds (indicated), average grade U3O8: 0.62%
	6.0 million pounds (inferred), average grade U3O8: 0.53%

BACKGROUND

The Kintyre deposit was discovered in 1985 and is amenable to open pit mining techniques.

2019 PROJECT UPDATES

We believe that we have some of the best undeveloped uranium projects in the world. However, in the current market environment our primary focus is on preserving the value of our tier-one uranium assets. We continue to await a signal from the market that additional production is needed prior to making any new development decisions.

PLANNING FOR THE FUTURE

2020 Planned activity

No work is planned at Millennium, Yeelirrie or Kintyre. Further progress towards a development decision is not expected until market conditions improve.

MANAGING THE RISKS

For all of our advanced projects, we manage the risks listed on pages 56 to 58.

MANAGEMENT’S DISCUSSION AND ANALYSIS	73

Uranium – exploration and corporate development

Our exploration program is directed at replacing mineral reserves as they are depleted by our production, and is key to sustaining our business. However, during this period of weak uranium prices, and as we have ample idled production capacity, we have reduced our spending to focus only on exploration near our existing operations where we have established infrastructure and capacity to expand. Globally, we have land with exploration and development prospects that are among the best in the world, mainly in Canada, Australia and the US. Our land holdings total about 0.8 million hectares (1.9 million acres). In northern Saskatchewan alone, we have direct interests in about 0.7 million hectares (1.7 million acres) of land covering many of the most prospective exploration areas of the Athabasca Basin.

2019 UPDATE

Brownfield exploration

Brownfield exploration is uranium exploration near our existing operations, and includes expenses for advanced exploration on the evaluation of projects where uranium mineralization is being defined.

In 2019, we spent about $4 million on brownfields and advanced uranium projects in Saskatchewan and Australia. At the US operations we spent $1 million.

Regional exploration

We spent about $9 million on regional exploration programs (including support costs), primarily in Saskatchewan’s Athabasca Basin.

PLANNING FOR THEFUTURE

We will continue to focus on our core projects in Saskatchewan under our long-term exploration strategy. Long-term, we look for properties that meet our investment criteria. We may partner with other companies through strategic alliances, equity holdings and traditional joint venture arrangements. Our leadership position and industry expertise in both exploration and corporate social responsibility make us a partner of choice.

ACQUISITION PROGRAM

Currently, given the conditions in the uranium market, our extensive portfolio of reserves and resources and our belief that we have ample idle production capacity, our focus is on navigating by our investment-grade rating and preserving the value of our tier-one assets. We expect that these assets will allow us to meet rising uranium demand with increased production from our best margin operations, and will help to mitigate risk in the event of prolonged uncertainty.

However, we continually evaluate acquisition opportunities within the nuclear fuel cycle that could add to our future supply options, support our sales activities, and complement and enhance our business in the nuclear industry. We will invest when an opportunity is available at the right time and the right price. We strive to pursue corporate development initiatives that will leave us and our shareholders in a fundamentally stronger position. As such, an acquisition opportunity is never assessed in isolation. Acquisitions must compete for investment capital with our own internal growth opportunities. They are subject to our capital allocation process described in the strategy section, starting on page 15.

74	CAMECO CORPORATION

Fuel services

Refining, conversion and fuel manufacturing

We have about 25% of world UF6 primary conversion capacity and are a supplier of natural UO2. Our focus is on cost-competitiveness and operational efficiency.

Our fuel services segment is strategically important because it helps support the growth of the uranium segment. Offering a range of products and services to customers helps us broaden our business relationships and expand our uranium market share.

Blind River Refinery

Licensed Capacity<br> <br><br><br><br>24.0M kgU as UO3<br> <br><br><br><br>Licence renewal in<br> <br><br><br><br>Feb, 2022

Blind River is the world’s largest commercial uranium refinery, refining uranium concentrates from mines around the world into UO3.

Location	Ontario, Canada
Ownership	100%
End product	UO3
ISO certification	ISO 14001 certified
Licensed capacity	18.0 million kgU as UO3 per year, approved to 24.0 million subject to the completion of certain equipment upgrades (advancement depends on market<br>conditions)
Licence term	Through February, 2022
Estimated decommissioning cost	$48 million
MANAGEMENT’S DISCUSSION AND ANALYSIS	75
---	---

Port Hope Conversion Services

Licensed Capacity<br> <br><br><br><br>12.5M kgU as UF6<br> <br><br><br><br>2.8M kgU as UO2<br> <br><br><br><br>Licence renewal in<br> <br><br><br><br>Feb, 2027

Port Hope is the only uranium conversion facility in Canada and a supplier of UO2 for Canadian-made CANDU reactors.

Location	Ontario, Canada
Ownership	100%
End product	UF6, UO2
ISO certification	ISO 14001 certified
Licensed capacity	12.5 million kgU as UF6 per year<br><br><br>2.8 million kgU as UO2 per year
Licence term	Through February, 2027
Estimated decommissioning cost	$129 million

Cameco Fuel Manufacturing Inc. (CFM)

Licensed Capacity<br> <br><br><br><br>1.2M kgU as UO2 fuel pellets<br><br><br><br> <br>Licence renewal in<br><br><br><br> <br>Feb, 2022

CFM produces fuel bundles and reactor components for CANDU reactors.

Location	Ontario**,**  Canada
Ownership	100%
End product	CANDU fuel bundles and components
ISO certification	ISO 9001 certified, ISO 14001 certified
Licensed capacity	1.2 million kgU as UO2 fuel pellets
Licence term	Through February, 2022
Estimated decommissioning cost	$21 million
76	CAMECO CORPORATION
---	---

2019 UPDATE

Production

Fuel services produced 13.3 million kgU, 27% higher than 2018. This was a result of increased demand.

Port Hope conversion facility cleanup and modernization (Vision in Motion)

Vision in Motion is a unique opportunity that demonstrates our continued commitment to a clean environment. It has been made possible by the opening of a long-term waste management facility by the government of Canada’s Port Hope Area Initiative project. There is a limited opportunity during the life of this project to engage in clean-up and renewal activities that address legacy waste at the Port Hope Conversion facility inherited from historic operations. We made significant progress on the Vision in Motion project in 2019 and will continue with the implementation work in 2020.

PLANNING FOR THE FUTURE

Production

We plan to produce between 13 million and 14 million kgU in 2020.

In addition, in conjunction with our initiative intended to provide a greater focus on technology and its applications to improve efficiency and reduce costs across the organization, we will continue to look for opportunities to improve operational effectiveness, including the use of digital and automation technologies.

MANAGING OUR RISKS

Labour relations

A new collective agreement with unionized employees at our conversion facility in Port Hope was reached. The new agreement is for three years and expires on July 1, 2022.

We also manage the risks listed on pages 56 to 58.

MANAGEMENT’S DISCUSSION AND ANALYSIS	77

Mineral reserves and resources

Our mineral reserves and resources are the foundation of our company and fundamental to our success.

We have interests in a number of uranium properties. The tables in this section show the estimates of the proven and probable mineral reserves, and measured, indicated, and inferred mineral resources at those properties. However, only three of the properties listed in those tables are material uranium properties for us: McArthur River/Key Lake, Cigar Lake and Inkai. Mineral reserves and resources are all reported as of December 31, 2019.

We estimate and disclose mineral reserves and resources in five categories, using the definition standards adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council, and in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101), developed by the Canadian Securities Administrators. You can find out more about these categories at www.cim.org.

About mineral resources

Mineral resources do not have to demonstrate economic viability, but have reasonable prospects for eventual economic extraction. They fall into three categories: measured, indicated and inferred. Our reported mineral resources are exclusive of mineral reserves.

•	Measured and indicated mineral resources can be estimated with sufficient confidence to allow the<br>appropriate application of technical, economic, marketing, legal, environmental, social and governmental factors to support evaluation of the economic viability of the deposit.
•	measured resources: we can confirm both geological and grade continuity to support detailed mine planning<br>
---	---
•	indicated resources: we can reasonably assume geological and grade continuity to support mine planning<br>
---	---
•	Inferred mineral resources are estimated using limited geological evidence and sampling information. We do<br>not have enough confidence to evaluate their economic viability in a meaningful way. You should not assume that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource, but it is reasonably<br>expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.
---	---

Our share of uranium in the following mineral resource tables is based on our respective ownership interests. Mineral resources that are not mineral reserves have no demonstrated economic viability.

About mineral reserves

Mineral reserves are the economically mineable part of measured and/or indicated mineral resources demonstrated by at least a preliminary feasibility study. The reference point at which mineral reserves are defined is the point where the ore is delivered to the processing plant, except for ISR operations where the reference point is where the mineralization occurs under the existing or planned wellfield patterns. Mineral reserves fall into two categories:

•	proven reserves: the economically mineable part of a measured resource for which at least a preliminary<br>feasibility study demonstrates that, at the time of reporting, economic extraction could be reasonably justified with a high degree of confidence
•	probable reserves: the economically mineable part of a measured and/or indicated resource for which at<br>least a preliminary feasibility study demonstrates that, at the time of reporting, economic extraction could be reasonably justified with a degree of confidence lower than that applying to proven reserves
---	---

We use current geological models, an average uranium price of $44 (US) per pound U3O8, and current or projected operating costs and mine plans to report our mineral reserves, allowing for dilution and mining losses. We apply our standard data verification process for every estimate.

Our share of uranium in the mineral reserves table below is based on our respective ownership interests.

78	CAMECO CORPORATION

Changes this year

Our share of proven and probable mineral reserves decreased from 467 million pounds U3O8 at the end of 2018, to 461 million pounds at the end of 2019. The change was primarily the result of:

•	production at Cigar Lake and Inkai, which removed 13 million pounds from our mineral inventory<br>

partially offset by:

•	a mineral resource and reserve estimate update at Cigar Lake, which added approximately 7 million pounds of<br>proven and probable reserves

Our share of measured and indicated mineral resources slightly increased from 423 million pounds U3O8 at the end of 2018, to 424 million pounds at the end of 2019. Our share of inferred mineral resources is 175 million pounds U3O8, a slight decrease of 1 million pounds from the end of 2018. The variance in mineral resources was primarily the result of the Cigar Lake mineral resource estimate update and minor mineral resource estimation work at McArthur River.

MANAGEMENT’S DISCUSSION AND ANALYSIS	79

Qualified persons

The technical and scientific information discussed in this MD&A for our material properties (McArthur River/Key Lake, Cigar Lake and Inkai) was approved by the following individuals who are qualified persons for the purposes of NI 43-101:

MCARTHUR RIVER/KEY LAKE

•	Greg Murdock, general manager, McArthur River/Key Lake, Cameco
•	Alain D. Renaud, lead geologist, technical services, Cameco
---	---
•	Scott Bishop, director, technical services, Cameco
---	---

CIGAR LAKE

•	Lloyd Rowson, general manager, Rabbit Lake/Cigar Lake, Cameco
•	Scott Bishop, director, technical services, Cameco
---	---
•	Alain D. Renaud, lead geologist, technical services, Cameco
---	---

INKAI

•	Alain D. Renaud, lead geologist, technical services, Cameco
•	Scott Bishop, director, technical services, Cameco
---	---

Important information about mineralreserve and resource estimates

Although we have carefully prepared and verified the mineral reserve and resource figures in this document, the figures are estimates, based in part on forward-looking information.

Estimates are based on knowledge, mining experience, analysis of drilling results, the quality of available data and management’s best judgment. They are, however, imprecise by nature, may change over time, and include many variables and assumptions, including:

•	geological interpretation
•	extraction plans
---	---
•	commodity prices and currency exchange rates
---	---
•	recovery rates
---	---
•	operating and capital costs
---	---

There is no assurance that the indicated levels of uranium will be produced, and we may have to re-estimate our mineral reserves based on actual production experience. Changes in the price of uranium, production costs or recovery rates could make it unprofitable for us to operate or develop a particular site or sites for a period of time. See page 2 for information about forward-looking information.

Please see our mineral reserves and resources section of our annual information form for the specific assumptions, parameters and methods used for McArthur River, Inkai and Cigar Lake mineral reserve and resource estimates.

Important information for USinvestors

We present information about mineralization, mineral reserves and resources as required by National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (NI 43-101), in accordance with applicable Canadian securities laws. As a foreign private issuer filing reports with the US Securities and Exchange Commission (SEC) under the Multijurisdictional Disclosure System, we are not required to comply with the SEC’s disclosure requirements relating to mining properties. Investors in the United States should be aware that the disclosure requirements of NI 43-101 are different from those under applicable SEC rules, and the information that we present concerning mineralization, mineral reserves and resources may not be comparable to information made public by companies that comply with the SEC’s reporting and disclosure requirements for mining companies.

80	CAMECO CORPORATION

Mineral reserves

As at December 31, 2019 (100% – only the shaded column shows our share)

PROVEN AND PROBABLE

(tonnes in thousands; pounds in millions)

																					OUR
																					SHARE
			PROVEN						PROBABLE						TOTAL MINERAL RESERVES						RESERVES
	MINING				GRADE		CONTENT				GRADE		CONTENT				GRADE		CONTENT		CONTENT		METALLURGICAL
PROPERTY	METHOD		TONNES		% U3O8		(LBS U3O8)		TONNES		% U3O8		(LBS U3O8)		TONNES		% U3O8		(LBS U3O8)		(LBS U3O8)		RECOVERY (%)
Cigar Lake		UG		261.9		15.50		89.5		270.8		13.90		83.0		532.7		14.69		172.5		86.3		98.5
Key Lake		OP		61.1		0.52		0.7		—		—		—		61.1		0.52		0.7		0.6		99
McArthur River		UG		2,034.0		7.14		320.2		538.5		6.04		71.7		2,572.5		6.91		391.9		273.6		99
Inkai		ISR		204,440.9		0.04		160.0		152,994.7		0.03		91.8		357,435.6		0.03		251.8		100.7		85
Total			****	206,797.9	****	—	****	570.4	****	153,804.0	****	—	****	246.5	****	360,601.9	****	—	****	816.9	****	461.2	****	—

(UG – underground, OP – open pit, ISR – in situ recovery)

Note that the estimates in the above table:

•	Use a constant dollar average uranium price of approximately $44 (US) per pound U3O8
•	are based on exchange rates of $1.00 US=$1.25 Cdn and 405 Kazakhstan Tenge to $1.00 Cdn
---	---

Our estimate of mineral reserves and mineral resources may be positively or negatively affected by the occurrence of one or more of the material risks discussed under the heading Caution about forward-looking information beginning on page 2, as well as certain property-specific risks. See Uranium – Tier-one operations starting on page 60.

Metallurgical recovery

We report mineral reserves as the quantity of contained ore supporting our mining plans, and provide an estimate of the metallurgical recovery for each uranium property. The estimate of the amount of valuable product that can be physically recovered by the metallurgical extraction process is obtained by multiplying the quantity of contained metal (content) by the planned metallurgical recovery percentage. The content and our share of uranium in the table above are before accounting for estimated metallurgical recovery.

MANAGEMENT’S DISCUSSION AND ANALYSIS	81

Mineral resources

As at December 31, 2019 (100% – only the shaded columns show our share)

MEASURED, INDICATED AND INFERRED

(tonnes in thousands; pounds in millions)

															OUR<br>SHARE									OUR<br><br><br>SHARE
	MEASURED RESOURCES (M)						INDICATED RESOURCES (I)										INFERRED RESOURCES
													TOTAL M+I		TOTAL M+I									INFERRED
			GRADE		CONTENT				GRADE		CONTENT		CONTENT		CONTENT					GRADE		CONTENT		CONTENT
PROPERTY	TONNES		% U3O8		(LBS U3O8)		TONNES		% U3O8		(LBS U3O8)		(LBS U3O8)		(LBS U3O8)			TONNES		% U3O8		(LBS U3O8)		(LBS U3O8)
Cigar Lake		11.6		8.54		2.2		307.1		14.66		99.3		101.5		50.8			182.1		5.92		23.8		11.9
Fox Lake		—		—		—		—		—		—		—		—			386.7		7.99		68.1		53.3
Kintyre		—		—		—		3,897.7		0.62		53.5		53.5		53.5			517.1		0.53		6.0		6.0
McArthur River		97.8		2.57		5.5		85.0		2.12		4.0		9.5		6.7			41.0		2.85		2.6		1.8
Millennium		—		—		—		1,442.6		2.39		75.9		75.9		53.0			412.4		3.19		29.0		20.2
Rabbit Lake		—		—		—		1,836.5		0.95		38.6		38.6		38.6			2,460.9		0.62		33.7		33.7
Tamarack		—		—		—		183.8		4.42		17.9		17.9		10.3			45.6		1.02		1.0		0.6
Yeelirrie		27,172.9		0.16		95.9		12,178.3		0.12		32.2		128.1		128.1			—		—		—		—
Crow Butte		1,601.0		0.19		6.7		939.3		0.35		7.3		14.0		14.0			531.4		0.16		1.8		1.8
Gas Hills - Peach		687.2		0.11		1.7		3,626.1		0.15		11.6		13.3		13.3			3,307.5		0.08		6.0		6.0
Inkai		36,680.9		0.03		21.3		21,132.2		0.02		10.7		32.0		12.8			116,394.6		0.03		75.0		30.0
North Butte - Brown Ranch		621.3		0.08		1.1		5,530.3		0.07		8.4		9.5		9.5			294.5		0.07		0.4		0.4
Ruby Ranch		—		—		—		2,215.3		0.08		4.1		4.1		4.1			56.2		0.14		0.2		0.2
Shirley Basin		89.2		0.16		0.3		1,638.2		0.11		4.1		4.4		4.4			508.0		0.10		1.1		1.1
Smith Ranch -Highland		3,711.3		0.10		7.9		14,372.3		0.05		17.0		24.9		24.9			6,861.0		0.05		7.7		7.7
Total	****	70,673.2	****	—	****	142.6	****	69,384.7	****	—	****	384.6	****	527.2	****	424.0		****	131,999.0	****	—	****	256.4	****	174.7

Note that mineral resources:

•	do not include amounts that have been identified as mineral reserves
•	do not have demonstrated economic viability
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82	CAMECO CORPORATION
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Additional information

Due to the nature of our business, we are required to make estimates that affect the amount of assets and liabilities, revenues and expenses, commitments and contingencies we report. We base our estimates on our experience, our best judgment, guidelines established by the Canadian Institute of Mining, Metallurgy and Petroleum and on assumptions we believe are reasonable.

We believe the following critical accounting estimates reflect the more significant judgments used in the preparation of our financial statements. These estimates affect all of our segments, unless otherwise noted.

Decommissioning and reclamation

In our uranium and fuel services segments, we are required to estimate the cost of decommissioning and reclamation for each operation, but we normally do not incur these costs until an asset is nearing the end of its useful life. Regulatory requirements and decommissioning methods could change during that time, making our actual costs different from our estimates. A significant change in these costs or in our mineral reserves could have a material impact on our net earnings and financial position. See note 15 to the financial statements.

Property,plant and equipment

We depreciate property, plant and equipment primarily using the unit-of-production method, where the carrying value is reduced as resources are depleted. A change in our mineral reserves would change our depreciation expenses, and such a change could have a material impact on amounts charged to earnings.

We assess the carrying values of property, plant and equipment and goodwill every year, or more often if necessary. If we determine that we cannot recover the carrying value of an asset or goodwill, we write off the unrecoverable amount against current earnings. We base our assessment of recoverability on assumptions and judgments we make about future prices, production costs, our requirements for sustaining capital and our ability to economically recover mineral reserves. A material change in any of these assumptions could have a significant impact on the potential impairment of these assets.

In performing impairment assessments of long-lived assets, assets that cannot be assessed individually are grouped together into the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Management is required to exercise judgment in identifying these cash generating units.

Taxes

When we are preparing our financial statements, we estimate taxes in each jurisdiction we operate in, taking into consideration different tax rates, non-deductible expenses, valuation of deferred tax assets, changes in tax laws and our expectations for future results.

We base our estimates of deferred income taxes on temporary differences between the assets and liabilities we report in our financial statements, and the assets and liabilities determined by the tax laws in the various countries we operate in. We record deferred income taxes in our financial statements based on our estimated future cash flows, which includes estimates of non-deductible expenses, future market conditions, production levels and intercompany sales. If these estimates are not accurate, there could be a material impact on our net earnings and financial position.

Controls and procedures

We have evaluated the effectiveness of our disclosure controls and procedures and internal control over financial reporting as of December 31, 2019, as required by the rules of the US Securities and Exchange Commission and the Canadian Securities Administrators.

MANAGEMENT’S DISCUSSION AND ANALYSIS	83

Management, including our Chief Executive Officer (CEO) and our Chief Financial Officer (CFO), supervised and participated in the evaluation, and concluded that our disclosure controls and procedures are effective to provide a reasonable level of assurance that the information we are required to disclose in reports we file or submit under securities laws is recorded, processed, summarized and reported accurately, and within the time periods specified. It should be noted that, while the CEO and CFO believe that our disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect the disclosure controls and procedures or internal control over financial reporting to be capable of preventing all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Management, including our CEO and our CFO, is responsible for establishing and maintaining internal control over financial reporting and conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2019.

During the first quarter of 2019, we implemented a new marketing system resulting in a material change in internal controls over financial reporting. The new system provides for contract administration, including the processing and recording of delivery obligations as well as revenue forecasting and reporting. The implementation process included extensive involvement by key end users and management and incorporated user acceptance testing, change management procedures, data migration strategies and a parallel run period where users validated the new system. Post-implementation reviews and testing were conducted by management to ensure that internal controls surrounding the implementation process were properly designed to prevent material financial statement errors.

There have been no other changes in our internal control over financial reporting during the year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

New standards adopted

On January 1, 2019, we adopted the following new standards as issued by the International Accounting Standards Board (IASB).

IFRS 16, Leases, eliminates the dual model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting. We adopted IFRS 16 using the modified retrospective approach which does not require comparative information to be restated.

IFRIC 23, Uncertainty over Income Tax Treatments provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments. The adoption of the standard did not have a material impact on the financial statements.

84	CAMECO CORPORATION

Cameco Corporation

2019 consolidated financial statements

February 6, 2020

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	85

Report of management’s accountability

The accompanying consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Management is responsible for ensuring that these statements, which include amounts based upon estimates and judgments, are consistent with other information and operating data contained in the annual financial review and reflect the corporation’s business transactions and financial position.

Management is also responsible for the information disclosed in the management’s discussion and analysis including responsibility for the existence of appropriate information systems, procedures and controls to ensure that the information used internally by management and disclosed externally is complete and reliable in all material respects.

In addition, management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. The internal control system includes an internal audit function and a code of conduct and ethics, which is communicated to all levels in the organization and requires all employees to maintain high standards in their conduct of the Company’s affairs. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and that the Company’s assets are appropriately accounted for and adequately safeguarded. Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the criteria established in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s system of internal control over financial reporting was effective as at December 31, 2019.

KPMG LLP has audited the consolidated financial statements in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States).

The board of directors annually appoints an audit and finance committee comprised of directors who are not employees of the corporation. This committee meets regularly with management, the internal auditor and the shareholders’ auditors to review significant accounting, reporting and internal control matters. Both the internal and shareholders’ auditors have unrestricted access to the audit and finance committee. The audit and finance committee reviews the consolidated financial statements, the report of the shareholders’ auditors, and management’s discussion and analysis and submits its report to the board of directors for formal approval.

Original signed by Tim S. Gitzel	Original signed by Grant E. Isaac
President and Chief Executive Officer	Senior Vice-President and Chief Financial Officer
February 6, 2020	February 6, 2020
86	CAMECO CORPORATION
---	---

Report of independent registered public accounting firm

To the Shareholders and Board of Directors of Cameco Corporation:

Opinion on the consolidated financial statements

We have audited the accompanying consolidated statements of financial position of Cameco Corporation (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of earnings, comprehensive income, changes in equity, and cash flows for each of the years then ended, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2019, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 6, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit and finance committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Assessment of recoverability of deferred tax assets

As discussed in note 21 to the consolidated financial statements, as at December 31, 2019 the Company recorded deferred tax assets of $956,376,000 relating to tax losses incurred in certain jurisdictions and temporary differences. The assessment of the recoverability of these deferred tax assets is dependent on the generation of future taxable income. Significant judgment and estimation is required to assess the sufficiency of future taxable income to utilize the recognized deferred tax assets. The Company uses projections of future taxable income in order to assess the probability that the deferred tax assets will be realized. Predicting future taxable income is dependent on assumptions and judgments regarding future market conditions, production rates, and intercompany sales. The Company determined that the realization of these deferred tax assets is probable.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	87

We identified the assessment of the recoverability of deferred tax assets as a critical audit matter due to the high degree of judgment required in assessing the significant assumptions and judgments that are reflected in the projections of future taxable income.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s assessment of the recoverability of the deferred tax asset, including controls over the assumptions and judgments used in the projections of future taxable income. To assess the Company’s ability to estimate future taxable income, we compared the Company’s previous forecasts to actual results. To assess the Company’s estimate of future taxable income, we evaluated key assumptions in the model by comparing (1) forecast uranium sales prices to published views of independent market participants, (2) foreign exchange rates to external analyst estimates, (3) forecast sales to historical trends, board approved budgets and committed sales volumes, including to a sample of committed sales contracts, and (4) forecast production volumes to historical data, board approved budgets and life of mine plans. We performed a sensitivity analysis over the key assumptions to assess their impact on the Company’s determination that the deferred tax assets were realizable. We involved income tax professionals with specialized skills and knowledge in assessing the Company’s application of the tax regulations in relevant jurisdictions.

Original signed by KPMG LLP

Chartered Professional Accountants

We have served as the Company’s auditor since 1988.

Saskatoon, Canada

February 6, 2020

88	CAMECO CORPORATION

Consolidated statements of earnings

For the years ended December 31
($Cdn thousands, except per share amounts)	Note		2019			2018
Revenue from products and services		17	$	1,862,925		$	2,091,661
Cost of products and services sold				1,345,551			1,467,940
Depreciation and amortization				275,749			327,973
Cost of sales				1,621,300			1,795,913
Gross profit				241,625			295,748
Administration				124,869			141,552
Exploration				13,686			20,283
Research and development				6,058			1,757
Other operating expense		15		2,732			59,616
Loss on disposal of assets				1,869			2,303
Earnings from operations				92,411			70,237
Finance costs		19		(98,622	)		(111,779	)
Gain (loss) on derivatives		26		32,269			(81,081	)
Finance income				29,760			22,071
Share of earnings from equity-accounted investee		11		45,360			32,321
Other income		20		33,840			108,160
Earnings before income taxes				135,018			39,929
Income tax expense (recovery)		21		61,077			(126,306	)
Net earnings			$	73,941	****	$	166,235	****
Net earnings (loss) attributable to:
Equity holders				74,000			166,323
Non-controlling interest				(59	)		(88	)
Net earnings			$	73,941	****	$	166,235	****
Earnings per common share attributable to equity holders:
Basic		22	$	0.19		$	0.42
Diluted		22	$	0.19		$	0.42

See accompanying notes to consolidated financial statements.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	89

Consolidated statements of comprehensive income

For the years ended December 31
($Cdn thousands)	Note		2019			2018
Net earnings			$	73,941	****	$	166,235	****
Other comprehensive income (loss), net of taxes:
Items that will not be reclassified to net earnings:
Remeasurements of defined benefit<br>liability^1^		25		(8,112	)		6,226
Equity investments at FVOCI - net change in fair value^2^				(4,044	)		(9,728	)
Equity investments at FVOCI - net change in fair value -equity-accounted investee				(709	)		—
Items that are or may be reclassified to net earnings:
Exchange differences on translation of foreign operations				(27,888	)		(1,875	)
Reclassification of foreign currency translation reserve to net earnings		20		—			(5,450	)
Other comprehensive loss, net of taxes				(40,753	)		(10,827	)
Total comprehensive income			$	33,188	****	$	155,408	****
Other comprehensive income (loss) attributable to:
Equity holders			$	(40,740	)	$	(10,854	)
Non-controlling interest				(13	)		27
Other comprehensive loss for the year			$	(40,753	)	$	(10,827	)
Total comprehensive income (loss) attributable to:
Equity holders			$	33,260		$	155,469
Non-controlling interest				(72	)		(61	)
Total comprehensive income for the year			$	33,188	****	$	155,408	****
^1^	Net of tax (2019 - $2,301; 2018 - $(2,200))
---	---
^2^	Net of tax (2019 - $453; 2018 - $1,349)
---	---

See accompanying notes to consolidated financial statements.

90	CAMECO CORPORATION

Consolidated statements of financial position

As at December 31
($Cdn thousands)	Note		2019		2018
Assets
Current assets
Cash and cash equivalents			$	1,062,431	$	711,528
Short-term investments				—		391,025
Accounts receivable		6		328,044		402,350
Current tax assets				3,667		6,996
Inventories		7		320,770		467,795
Supplies and prepaid expenses				85,502		89,206
Current portion of long-term receivables, investments and other		10		6,564		13,826
Total current assets				1,806,978		2,082,726
Property, plant and equipment		8		3,720,672		3,881,926
Intangible assets		9		60,410		65,602
Long-term receivables, investments and other		10		630,131		751,868
Investment in equity-accounted investee		11		252,681		230,502
Deferred tax assets		21		956,376		1,006,012
Total non-current assets				5,620,270		5,935,910
Total assets			$	7,427,248	$	8,018,636
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities		12	$	181,799	$	224,754
Current tax liabilities				6,290		19,633
Current portion of long-term debt		13		—		499,599
Current portion of other liabilities		14		33,073		79,573
Current portion of provisions		15		56,248		52,316
Total current liabilities				277,410		875,875
Long-term debt		13		996,718		996,072
Other liabilities		14		153,927		142,061
Provisions		15		1,004,230		1,011,036
Total non-current liabilities				2,154,875		2,149,169
Shareholders’ equity
Share capital				1,862,749		1,862,652
Contributed surplus				234,681		234,982
Retained earnings				2,825,596		2,791,321
Other components of equity				71,699		104,327
Total shareholders’ equity attributable to equity holders				4,994,725		4,993,282
Non-controlling interest				238		310
Total shareholders’ equity				4,994,963		4,993,592
Total liabilities and shareholders’ equity			$	7,427,248	$	8,018,636

Commitments and contingencies [notes 8, 15, 21]

See accompanying notes to consolidated financial statements.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	91

Consolidated statements of changes in equity

	Attributable to equity holders
									Foreign			Equity						Non-
	Share		Contributed			Retained			currency			investments						controlling			Total
($Cdn thousands)	capital		surplus			earnings			translation			at FVOCI			Total			interest			equity
Balance at January 1, 2019	$	1,862,652	$	234,982		$	2,791,321		$	104,989		$	(662	)	$	4,993,282		$	310		$	4,993,592
Net earnings (loss)		—		—			74,000			—			—			74,000			(59	)		73,941
Other comprehensive loss		—		—			(8,112	)		(27,875	)		(4,753	)		(40,740	)		(13	)		(40,753	)
Total comprehensive income (loss)		—		—			65,888			(27,875	)		(4,753	)		33,260			(72	)		33,188
Share-based compensation		—		14,342			—			—			—			14,342			—			14,342
Stock options exercised		97		(16	)		—			—			—			81			—			81
Restricted and performance share units released		—		(6,258	)		—			—			—			(6,258	)		—			(6,258	)
Modification of share-based arrangement [note 24]		—		(8,369	)		—			—			—			(8,369	)		—			(8,369	)
Dividends		—		—			(31,613	)		—			—			(31,613	)		—			(31,613	)
Balance at December 31, 2019	$	1,862,749	$	234,681		$	2,825,596		$	77,114		$	(5,415	)	$	4,994,725		$	238		$	4,994,963
Balance at January 1, 2018	$	1,862,652	$	224,812		$	2,650,417		$	112,341		$	9,066		$	4,859,288		$	371		$	4,859,659
Net earnings (loss)		—		—			166,323			—			—			166,323			(88	)		166,235
Other comprehensive income (loss)		—		—			6,226			(7,352	)		(9,728	)		(10,854	)		27			(10,827	)
Total comprehensive income (loss)		—		—			172,549			(7,352	)		(9,728	)		155,469			(61	)		155,408
Share-based compensation		—		14,976			—			—			—			14,976			—			14,976
Restricted and performance share units released		—		(4,806	)		—			—			—			(4,806	)		—			(4,806	)
Dividends		—		—			(31,645	)		—			—			(31,645	)		—			(31,645	)
Balance at December 31, 2018	$	1,862,652	$	234,982		$	2,791,321		$	104,989		$	(662	)	$	4,993,282		$	310		$	4,993,592

See accompanying notes to consolidated financial statements.

92	CAMECO CORPORATION

Consolidated statements of cash flows

For the years ended December 31
($Cdn thousands)	Note		2019			2018
Operating activities
Net earnings			$	73,941		$	166,235
Adjustments for:
Depreciation and amortization				275,749			327,973
Deferred charges				(13,013	)		10,683
Unrealized loss (gain) on derivatives				(55,048	)		74,295
Share-based compensation		24		14,342			14,976
Loss on disposal of assets				1,869			2,303
Finance costs		19		98,622			111,779
Finance income				(29,760	)		(22,071	)
Share of earnings from equity-accounted investee		11		(45,360	)		(32,321	)
Other expense (income)		20		18,961			(100,310	)
Other operating expense		15		2,732			59,616
Income tax expense (recovery)		21		61,077			(126,306	)
Interest received				30,944			18,311
Income taxes paid				(18,589	)		(20,709	)
Dividends from equity-accounted investee		31		14,079			—
Other operating items		23		96,478			183,062
Net cash provided by operations			****	527,024	****	****	667,516	****
Investing activities
Additions to property, plant and equipment				(75,211	)		(55,362	)
Decrease (increase) in short-term investments				391,025			(391,025	)
Decrease in long-term receivables, investments and other				120,913			33,508
Proceeds from sale of property, plant and equipment				679			1,249
Net cash provided by (used in) investing			****	437,406	****	****	(411,630	)
Financing activities
Decrease in long-term debt				(500,000	)		—
Interest paid				(72,484	)		(72,976	)
Proceeds from issuance of shares, stock option plan				81			—
Lease principal payments				(2,904	)		—
Dividends paid				(31,613	)		(71,224	)
Net cash used in financing			****	(606,920	)	****	(144,200	)
Increase in cash and cash equivalents, during the year				357,510			111,686
Exchange rate changes on foreign currency cash balances				(6,607	)		8,222
Cash and cash equivalents, beginning of year				711,528			591,620
Cash and cash equivalents, end of year			$	1,062,431	****	$	711,528	****
Cash and cash equivalents is comprised of:
Cash			$	427,986		$	317,296
Cash equivalents				634,445			394,232
Cash and cash equivalents			$	1,062,431		$	711,528

See accompanying notes to consolidated financial statements.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	93

Notes to consolidated financial statements

For the years ended December 31, 2019 and 2018

1.	Cameco Corporation

Cameco Corporation is incorporated under the Canada Business Corporations Act. The address of its registered office is 2121 11th Street West, Saskatoon, Saskatchewan, S7M 1J3. The consolidated financial statements as at and for the year ended December 31, 2019 comprise Cameco Corporation and its subsidiaries (collectively, the Company or Cameco) and the Company’s interests in associates and joint arrangements.

Cameco is one of the world’s largest providers of the uranium needed to generate clean, reliable baseload electricity around the globe. The Company currently has one mine operating in northern Saskatchewan, Cigar Lake, as well as a 40% interest in Joint Venture Inkai LLP (JV Inkai), a joint arrangement with Joint Stock Company National Atomic Company Kazatomprom (Kazatomprom), located in Kazakhstan. JV Inkai is accounted for on an equity basis (see note 11).

It also has two operations in Northern Saskatchewan which are in care and maintenance. Rabbit Lake was placed in care and maintenance in the second quarter of 2016 while operations at McArthur River/Key Lake were suspended indefinitely in the third quarter of 2018 (see note 28 for financial statement impact). Cameco’s operations in the United States, Crow Butte and Smith Ranch-Highland, are also not currently producing as the decision was made in 2016 to curtail production and defer all wellfield development.

The Company is also a leading provider of nuclear fuel processing services, supplying much of the world’s reactor fleet with the fuel to generate one of the cleanest sources of electricity available today. It operates the world’s largest commercial refinery in Blind River, Ontario, controls about 25% of the world UF6 primary conversion capacity in Port Hope, Ontario and is a leading manufacturer of fuel assemblies and reactor components for CANDU reactors at facilities in Port Hope and Cobourg, Ontario.

2.	Significant accounting policies
A.	Statement of compliance
---	---

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

These consolidated financial statements were authorized for issuance by the Company’s board of directors on February 6, 2020.

B.	Basis of presentation

These consolidated financial statements are presented in Canadian dollars, which is the Company’s functional currency. All financial information is presented in Canadian dollars, unless otherwise noted. Amounts presented in tabular format have been rounded to the nearest thousand except per share amounts and where otherwise noted.

The consolidated financial statements have been prepared on the historical cost basis except for the following material items which are measured on an alternative basis at each reporting date:

94	CAMECO CORPORATION
Derivative financial instruments<br> <br>Equity<br>investments	Fair value through profit or loss (FVTPL)<br><br><br>Fair value through other comprehensive income (FVOCI)
---	---
Liabilities for cash-settled share-based payment arrangements	FVTPL
Net defined benefit liability	Fair value of plan assets less the present value of the defined benefit obligation

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may vary from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 5.

This summary of significant accounting policies is a description of the accounting methods and practices that have been used in the preparation of these consolidated financial statements and is presented to assist the reader in interpreting the statements contained herein. These accounting policies have been applied consistently to all entities within the consolidated group.

C.	Consolidation principles
i.	Business combinations
---	---

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Company. The Company measures goodwill at the acquisition date as the fair value of the consideration transferred, including the recognized amount of any non-controlling interests in the acquiree, less the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognized immediately in earnings. In a business combination achieved in stages, the acquisition date fair value of the Company’s previously held equity interest in the acquiree is also considered in computing goodwill.

Consideration transferred includes the fair values of the assets transferred, liabilities incurred and equity interests issued by the Company. Consideration also includes the fair value of any contingent consideration and share-based compensation awards that are replaced mandatorily in a business combination.

The Company elects on a transaction-by-transaction basis whether to measure any non-controlling interest at fair value, or at their proportionate share of the recognized amount of the identifiable net assets of the acquiree, at the acquisition date.

Acquisition-related costs are expensed as incurred, except for those costs related to the issue of debt or equity instruments.

ii.	Subsidiaries

The consolidated financial statements include the accounts of Cameco and its subsidiaries. Subsidiaries are entities over which the Company has control. Subsidiaries are fully consolidated from the date on which control is acquired by the Company and are deconsolidated from the date that control ceases.

iii.	Investments in equity-accounted investees

Cameco’s investments in equity-accounted investees include investments in associates.

Associates are those entities over which the Company has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity, but can also arise where the Company holds less than 20% if it has the power to be actively involved and influential in policy decisions affecting the entity.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	95

Investments in associates are accounted for using the equity method. The equity method involves the recording of the initial investment at cost and the subsequent adjusting of the carrying value of the investment for Cameco’s proportionate share of the earnings or loss and any other changes in the associates’ net assets, such as dividends. The cost of the investment includes transaction costs.

Adjustments are made to align the accounting policies of the associate with those of the Company before applying the equity method. When the Company’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, Cameco resumes recognizing its share of those profits only after its share of the profits equals the share of losses not recognized.

iv.	Joint arrangements

A joint arrangement can take the form of a joint operation or joint venture. All joint arrangements involve a contractual arrangement that establishes joint control.

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint operation may or may not be structured through a separate vehicle. These arrangements involve joint control of one or more of the assets acquired or contributed for the purpose of the joint operation. The consolidated financial statements of the Company include its share of the assets in such joint operations, together with its share of the liabilities, revenues and expenses arising jointly or otherwise from those operations. All such amounts are measured in accordance with the terms of each arrangement.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. A joint venture is always structured through a separate vehicle. It operates in the same way as other entities, controlling the assets of the joint venture, earning its own revenue and incurring its own liabilities and expenses. Interests in joint ventures are accounted for using the equity method of accounting, whereby the Company’s proportionate interest in the assets, liabilities, revenues and expenses of jointly controlled entities are recognized on a single line in the consolidated statements of financial position and consolidated statements of earnings. The share of joint ventures results is recognized in the Company’s consolidated financial statements from the date that joint control commences until the date at which it ceases.

v.	Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated in the same manner as unrealized gains, but only to the extent that there is no evidence of impairment.

D.	Foreign currency translation

Items included in the financial statements of each of Cameco’s subsidiaries, associates and joint arrangements are measured using their functional currency, which is the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Canadian dollars, which is Cameco’s functional and presentation currency.

96	CAMECO CORPORATION
i.	Foreign currency transactions
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Foreign currency transactions are translated into the respective functional currency of the Company and its entities using the exchange rates prevailing at the dates of the transactions. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. The applicable exchange gains and losses arising on these transactions are reflected in earnings with the exception of foreign exchange gains or losses on provisions for decommissioning and reclamation activities that are in a foreign currency, which are capitalized in property, plant and equipment.

ii.	Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Canadian dollars at exchange rates at the reporting dates. The revenues and expenses of foreign operations are translated to Canadian dollars at exchange rates at the dates of the transactions.

Foreign currency differences are recognized in other comprehensive income. When a foreign operation is disposed of, in whole, the relevant amount in the foreign currency translation account is transferred to earnings as part of the gain or loss on disposal.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of the net investment in a foreign operation, and are recognized in other comprehensive income and presented within equity in the foreign currency translation account.

E.	Cash and cash equivalents

Cash and cash equivalents consists of balances with financial institutions and investments in money market instruments, which have a term to maturity of three months or less at the time of purchase and are classified as at amortized cost.

F.	Short-term investments

Short-term investments are comprised of money market instruments with terms to maturity between three and 12 months and are classified as at amortized cost.

G.	Inventories

Inventories of broken ore, uranium concentrates, and refined and converted products are measured at the lower of cost and net realizable value.

Cost includes direct materials, direct labour, operational overhead expenses and depreciation. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Consumable supplies and spares are valued at the lower of cost or replacement value.

H.	Property, plant and equipment
i.	Buildings, plant and equipment and other
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Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment charges. The cost of self-constructed assets includes the cost of materials and direct labour, borrowing costs and any other costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by management, including the initial estimate of the cost of dismantling and removing the items and restoring the site on which they are located.

When components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment and depreciated separately.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	97

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in earnings.

ii.	Mineral properties and mine development costs

The decision to develop a mine property within a project area is based on an assessment of the commercial viability of the property, the availability of financing and the existence of markets for the product. Once the decision to proceed to development is made, development and other expenditures relating to the project area are deferred as part of assets under construction and disclosed as a component of property, plant and equipment with the intention that these will be depreciated by charges against earnings from future mining operations. No depreciation is charged against the property until the production stage commences. After a mine property has been brought into the production stage, costs of any additional work on that property are expensed as incurred, except for large development programs, which will be deferred and depreciated over the remaining life of the related assets.

The production stage is reached when a mine property is in the condition necessary for it to be capable of operating in the manner intended by management. The criteria used to assess the start date of the production stage are determined based on the nature of each mine construction project, including the complexity of a mine site. A range of factors is considered when determining whether the production stage has been reached, which includes, but is not limited to, the demonstration of sustainable production at or near the level intended (such as the demonstration of continuous throughput levels at or above a target percentage of the design capacity).

iii.	Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of the asset less its residual value. Assets which are unrelated to production are depreciated according to the straight-line method based on estimated useful lives as follows:

Land	Not depreciated
Buildings	15 - 25 years
Plant and equipment	3 - 15 years
Furniture and fixtures	3 - 10 years
Other	3 - 5 years

Mining properties and certain mining and conversion assets for which the economic benefits from the asset are consumed in a pattern which is linked to the production level are depreciated according to the unit-of-production method. For conversion assets, the amount of depreciation is measured by the portion of the facilities’ total estimated lifetime production that is produced in that period. For mining assets and properties, the amount of depreciation or depletion is measured by the portion of the mines’ proven and probable mineral reserves recovered during the period.

Depreciation methods, useful lives and residual values are reviewed at each reporting period and are adjusted if appropriate.

iv.	Borrowing costs

Borrowing costs on funds directly attributable to finance the acquisition, production or construction of a qualifying asset are capitalized until such time as substantially all the activities necessary to prepare the qualifying asset for its intended use are complete. A qualifying asset is one that takes a substantial period of time to prepare for its intended use. Capitalization is discontinued when the asset enters the production stage or development ceases. Where the funds used to finance a project form part of general borrowings, interest is capitalized based on the weighted average interest rate applicable to the general borrowings outstanding during the period of construction.

v.	Repairs and maintenance

The cost of replacing a component of property, plant and equipment is capitalized if it is probable that future economic benefits embodied within the component will flow to the Company. The carrying amount of the replaced component is derecognized. Costs of routine maintenance and repair are charged to products and services sold.

98	CAMECO CORPORATION
I.	Goodwill and intangible assets
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Goodwill arising from the acquisition of subsidiaries is initially recognized at cost, measured as the excess of the fair value of the consideration paid over the fair value of the identifiable net assets acquired. At the date of acquisition, goodwill is allocated to the cash generating unit (CGU), or group of CGUs that is expected to receive the economic benefits of the business combination. Goodwill is subsequently measured at cost, less accumulated impairment losses.

Intangible assets acquired individually or as part of a group of assets are initially recognized at cost and measured subsequently at cost less accumulated amortization and impairment losses. Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. The cost of a group of intangible assets acquired in a transaction, including those acquired in a business combination that meet the specified criteria for recognition apart from goodwill, is allocated to the individual assets acquired based on their relative fair values.

Intangible assets that have finite useful lives are amortized over their estimated remaining useful lives.****Amortization methods and useful lives are reviewed at each reporting period and are adjusted if appropriate.

J.	Leases

Commencing in 2019 (see note 8), Cameco recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which is the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, less any lease incentives received, and subsequently at cost less any accumulated depreciation and impairment losses. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the cost of the right-of-use asset reflects that the Company will exercise a purchase option, in which case the right-of-use asset will be depreciated on the same basis as that of property, plant and equipment.

The lease liability is measured at amortized cost using the effective interest method. It is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease, or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, Cameco uses its incremental borrowing rate as the discount rate. Current borrowing rates available for classes of leased assets are compared with the rates of Cameco’s existing debt facilities to ensure that use of the Company’s incremental borrowing rate is reasonable.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.

Cameco uses judgement in determining the lease term for some lease contracts that include renewal options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which affects the amount of lease liabilities and right-of-use assets recognized.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases that have a lease term of 12 months or less. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.

K.	Finance income and finance costs

Finance income comprises interest income on funds invested. Interest income and interest expense are recognized in earnings as they accrue, using the effective interest method. Finance costs comprise interest and fees on borrowings, unwinding of the discount on provisions and costs incurred on redemption of debentures.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are expensed in the period incurred.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	99
L.	Research and development costs
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Expenditures on research are charged against earnings when incurred. Development costs are recognized as assets when the Company can demonstrate technical feasibility and that the asset will generate probable future economic benefits.

M.	Impairment
i.	Non-derivative financial assets
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Cameco recognizes loss allowances for expected credit losses (ECLs) on financial assets measured at amortized cost, debt investments measured at FVOCI, and contract assets. It measures loss allowances at an amount equal to lifetime ECLs, except for debt securities that are determined to have low credit risk at the reporting date and other debt securities, loans advanced and bank balances for which credit risk has not increased significantly since initial recognition. For these, loss allowances are measured equal to 12-month ECLs.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument while 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive. ECLs are discounted at the effective interest rate of the financial asset.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward-looking information.

The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations in full, without recourse by Cameco to actions such as realizing security (if any is held).

The Company considers a debt security to have low credit risk when it is at least an A (low) DBRS or A- S&P rating.

Financial assets carried at amortized cost and debt securities at FVOCI are assessed at each reporting date to determine whether they are ‘credit-impaired’. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental effect on the estimated future cash flows of the financial asset have occurred. Evidence can include significant financial difficulty of the borrower or issuer, a breach of contract, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy or other financial reorganization, or the disappearance of an active market for a security.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to earnings and is recognized in OCI. The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof.

ii.	Non-financial assets

The carrying amounts of Cameco’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

100	CAMECO CORPORATION

For impairment testing, assets are grouped together into CGUs which are the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. Fair value is determined as the amount that would be obtained from the sale of the asset or CGU in an arm’s-length transaction between knowledgeable and willing parties. For exploration properties, fair value is based on the implied fair value of the resources in place using comparable market transaction metrics.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses are recognized in earnings. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

Impairment losses recognized in prior periods are assessed at each reporting date whenever events or changes in circumstances indicate that the impairment may have reversed. If the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. A reversal of an impairment loss is recognized immediately in earnings. An impairment loss in respect of goodwill is not reversed.

N.	Exploration and evaluation expenditures

Exploration and evaluation expenditures are those expenditures incurred by the Company in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. These expenditures include researching and analyzing existing exploration data, conducting geological studies, exploratory drilling and sampling, and compiling prefeasibility and feasibility studies. Exploration and evaluation expenditures are charged against earnings as incurred, except when there is a high degree of confidence in the viability of the project and it is probable that these costs will be recovered through future development and exploitation.

The technical feasibility and commercial viability of extracting a resource is considered to be determinable based on several factors, including the existence of proven and probable reserves and the demonstration that future economic benefits are probable. When an area is determined to be technically feasible and commercially viable, the exploration and evaluation assets attributable to that area are first tested for impairment and then transferred to property, plant and equipment.

Exploration and evaluation costs that have been acquired in a business combination or asset acquisition are capitalized under the scope of IFRS 6, Exploration for and Evaluation of Mineral Resources, and are reported as part of property, plant and equipment.

O.	Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the risk-adjusted expected future cash flows at a pre-tax risk-free rate that reflects current market assessments of the time value of money. The unwinding of the discount is recognized as a finance cost.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	101
i.	Environmental restoration
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The mining, extraction and processing activities of the Company normally give rise to obligations for site closure and environmental restoration. Closure and restoration can include facility decommissioning and dismantling, removal or treatment of waste materials, as well as site and land restoration. The Company provides for the closure, reclamation and decommissioning of its operating sites in the financial period when the related environmental disturbance occurs, based on the estimated future costs using information available at the reporting date. Costs included in the provision comprise all closure and restoration activity expected to occur gradually over the life of the operation and at the time of closure. Routine operating costs that may impact the ultimate closure and restoration activities, such as waste material handling conducted as a normal part of a mining or production process, are not included in the provision.

The timing of the actual closure and restoration expenditure is dependent upon a number of factors such as the life and nature of the asset, the operating licence conditions and the environment in which the mine operates. Closure and restoration provisions are measured at the expected value of future cash flows, discounted to their present value using a current pre-tax risk-free rate. Significant judgments and estimates are involved in deriving the expectations of future activities and the amount and timing of the associated cash flows.

At the time a provision is initially recognized, to the extent that it is probable that future economic benefits associated with the reclamation, decommissioning and restoration expenditure will flow to the Company, the corresponding cost is capitalized as an asset. The capitalized cost of closure and restoration activities is recognized in property, plant and equipment and depreciated on a unit-of-production basis. The value of the provision is gradually increased over time as the effect of discounting unwinds. The unwinding of the discount is an expense recognized in finance costs.

Closure and rehabilitation provisions are also adjusted for changes in estimates. The provision is reviewed at each reporting date for changes to obligations, legislation or discount rates that effect change in cost estimates or life of operations. The cost of the related asset is adjusted for changes in the provision resulting from changes in estimated cash flows or discount rates, and the adjusted cost of the asset is depreciated prospectively.

ii.	Waste disposal

The refining, conversion and manufacturing processes generate certain uranium-contaminated waste. The Company has established strict procedures to ensure this waste is disposed of safely. A provision for waste disposal costs in respect of these materials is recognized when they are generated. Costs associated with the disposal, the timing of cash flows and discount rates are estimated both at initial recognition and subsequent measurement.

P.	Employee future benefits
i.	Pension obligations
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The Company accrues its obligations under employee benefit plans. The Company has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan other than a defined contribution plan. Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

102	CAMECO CORPORATION

The liability recognized in the consolidated statements of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets. The defined benefit obligation is calculated annually, by qualified independent actuaries using the projected unit credit method prorated on service and management’s best estimate of expected plan investment performance, salary escalation, retirement ages of employees and expected health care costs. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

The Company recognizes all actuarial gains and losses arising from defined benefit plans in other comprehensive income, and reports them in retained earnings. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized immediately in earnings.

For defined contribution plans, the contributions are recognized as employee benefit expense in earnings in the periods during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

ii.	Other post-retirement benefit plans

The Company provides certain post-retirement health care benefits to its retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit pension plans. Actuarial gains and losses are recognized in other comprehensive income in the period in which they arise. These obligations are valued annually by independent qualified actuaries.

iii.	Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be measured reliably.

iv.	Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or whenever an employee accepts an entity’s offer of benefits in exchange for termination of employment. Cameco recognizes termination benefits as an expense at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognizes costs for a restructuring. If benefits are payable more than 12 months after the reporting period, they are discounted to their present value.

v.	Share-based compensation

For equity-settled plans, the grant date fair value of share-based compensation awards granted to employees is recognized as an employee benefit expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For cash-settled plans, the fair value of the amount payable to employees is recognized as an expense, with a corresponding increase in liabilities, over the period that the employees unconditionally become entitled to payment. The liability is re-measured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognized as employee benefit expense in earnings.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	103

When the terms and conditions of equity-settled plans at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cameco’s contributions under the employee share ownership plan are expensed during the year of contribution. Shares purchased with Company contributions and with dividends paid on such shares become unrestricted on January 1 of the second plan year following the date on which such shares were purchased.

Q.	Revenue recognition

Cameco supplies uranium concentrates, uranium conversion services, fabrication services and other services. Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it transfers control, as described below, over a good or service to a customer. Customers do not have the right to return products.

Cameco’s sales arrangements with its customers are pursuant to enforceable contracts that indicate the nature and timing of satisfaction of performance obligations, including significant payment terms, where payment is usually due in 30 days. Each delivery is considered a separate performance obligation under the contract.

Uranium supply

In a uranium supply arrangement, Cameco is contractually obligated to provide uranium concentrates to its customers. Cameco-owned uranium may be physically delivered to either the customer or to conversion facilities (Converters).

For deliveries to customers, terms in the sales contract specify the location of delivery. Revenue is recognized when the uranium has been delivered and accepted by the customer at that location.

When uranium is delivered to Converters, the Converter will credit Cameco’s account for the volume of accepted uranium. Based on delivery terms in the sales contract with its customer, Cameco instructs the Converter to transfer title of a contractually specified quantity of uranium to the customer’s account at the Converter’s facility. At this point, control has been transferred and Cameco recognizes revenue for the uranium supply.

Toll conversion services

In a toll conversion arrangement, Cameco is contractually obligated to convert customer-owned uranium to a chemical state suitable for enrichment. Based on delivery terms in a sales contract with its customer, Cameco either (i) physically delivers converted uranium to enrichment facilities (Enrichers) where it instructs the Enricher to transfer title of a contractually specified quantity of converted uranium to the customer’s account at the Enricher’s facility, or (ii) transfers title of a contractually specified quantity of converted uranium to either an Enricher’s account or the customer’s account at Cameco’s Port Hope conversion facility. At this point, the customer obtains control and Cameco recognizes revenue for the toll conversion services.

Conversion supply

A conversion supply arrangement is a combination of uranium supply and toll conversion services. Cameco is contractually obligated to provide converted uranium to its customers. Based on delivery terms in the sales contract, Cameco either (i) physically delivers converted uranium to the Enricher where it instructs the Enricher to transfer title of a contractually specified quantity of converted uranium to the customer’s account at the Enricher’s facility, or (ii) transfers title of a contractually specified quantity of converted uranium to either an Enricher’s account or a customer’s account at Cameco’s Port Hope conversion facility. At this point, the customer obtains control and Cameco recognizes revenue for both the uranium supplied and the conversion service provided.

104	CAMECO CORPORATION

Fabrication services

In a fabrication services arrangement, Cameco is contractually obligated to provide fuel bundles or reactor components to its customers. In a contract for fuel bundles, the bundles are inspected and accepted by the customer at Cameco’s Port Hope fabrication facility or another location based on delivery terms in the sales contract. At this point, the customer obtains control and Cameco recognizes revenue for the fabrication services.

In some contracts for reactor components, the components are made to a customer’s specification and if a contract is terminated by the customer, Cameco is entitled to reimbursement of the costs incurred to date, including a reasonable margin. Since the customer controls all of the work in progress as the products are being manufactured, revenue and associated costs are recognized over time, before the goods are delivered to the customer’s premises. Revenue is recognized on the basis of units produced as the contracts reflect a per unit basis. Revenue from these contracts represents an insignificant portion of Cameco’s total revenue. In other contracts where the reactor components are not made to a specific customer’s specification, when the components are delivered to the location specified in the contract, the customer obtains control and Cameco recognizes revenue for the services.

Other services

Uranium concentrates and converted uranium are regulated products and can only be stored at regulated facilities. In a storage arrangement, Cameco is contractually obligated to store uranium products at its facilities on behalf of the customer. Cameco invoices the customer in accordance with the contract terms and recognizes revenue on a monthly basis.

Cameco also provides customers with transportation of its uranium products. In the contractual arrangements where Cameco is acting as the principal, revenue is recognized as the product is delivered.

R.	Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another.

Trade receivables and debt securities are initially recognized when they are originated. All other financial assets and liabilities are initially recognized when the company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

i.	Financial assets

On initial recognition, financial assets are classified as measured at: amortized cost, fair value through other comprehensive income, or fair value through profit or loss based on the Company’s business model for managing its financial assets and their cash flow characteristics. Classifications are not changed subsequent to initial recognition unless the Company changes its business model for managing its financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in business model.

Amortized cost

A financial asset is measured at amortized cost if it is not designated as at fair value through profit or loss, is held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding. Assets in this category are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss, as is any gain or loss on derecognition.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	105

Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it is not designated as at fair value through profit or loss, is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and its contractual terms give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding. These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income (OCI). On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

On initial recognition of an equity investment that is not held for trading, Cameco may irrevocably elect to present subsequent changes in the investments fair value in OCI. This election is made on an investment by investment basis. These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss.

Fair value through profit or loss (FVTPL)

All financial assets not classified as measured at amortized cost or FVOCI are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

Derecognition of financial assets

Cameco derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which it neither transfers or retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

If the Company enters into a transaction whereby it transfers assets recognized in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets would not be derecognized.

ii.	Financial liabilities

On initial recognition, financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held-for-trading, is a derivative or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss as is any gain or loss on derecognition.

A financial liability is derecognized when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

iii.	Derivative financial instruments

The Company holds derivative financial instruments to reduce exposure to fluctuations in foreign currency exchange rates and interest rates. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

106	CAMECO CORPORATION

Derivative financial instruments are initially measured at fair value in the consolidated statements of financial position, with any directly attributable transaction costs recognized in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes in fair value are recognized in profit or loss.

The purpose of hedging transactions is to modify the Company’s exposure to one or more risks by creating an offset between changes in the fair value of, or the cash flows attributable to, the hedged item and the hedging item. When hedge accounting is appropriate, the hedging relationship is designated as a fair value hedge, a cash flow hedge, or a foreign currency risk hedge related to a net investment in a foreign operation. The Company does not have any instruments that have been designated as hedge transactions at December 31, 2019 and 2018.

S.	Income tax

Income tax expense is comprised of current and deferred taxes. Current tax and deferred tax are recognized in earnings except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustments to tax payable in respect of previous years. Current tax assets and liabilities are measured at the amount expected to be paid or recovered from the taxation authorities.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable income will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

The Company’s exposure to uncertain tax positions is evaluated and a provision is made where it is probable that this exposure will materialize.

T.	Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares are recognized as a reduction of equity, net of any tax effects.

U.	Earnings per share

The Company presents basic and diluted earnings per share data for its common shares. Earnings per share is calculated by dividing the net earnings attributable to equity holders of the Company by the weighted average number of common shares outstanding.

Diluted earnings per share is determined by adjusting the net earnings attributable to equity holders of the Company and the weighted average number of common shares outstanding, for the effects of all dilutive potential common shares. The calculation of diluted earnings per share assumes that outstanding options which are dilutive to earnings per share are exercised and the proceeds are used to repurchase shares of the Company at the average market price of the shares for the period. The effect is to increase the number of shares used to calculate diluted earnings per share.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	107
V.	Segment reporting
---	---

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other segments. To be classified as a segment, discrete financial information must be available and operating results must be regularly reviewed by the Company’s executive team.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill.

3.	Accounting standards
A.	Changes in accounting policy
---	---

On January 1, 2019, Cameco adopted the new standard, IFRS 16, Leases (IFRS 16) and the interpretation, IFRIC 23, Uncertainty over Income Tax Treatments (IFRIC 23) as issued by the IASB.

i.	Leases

IFRS 16 eliminates the dual model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to finance lease accounting under IAS 17. Cameco adopted IFRS 16 using the modified retrospective approach which does not require comparative information to be restated. The following practical expedients were used during initial application:

•	No reassessment of whether a contract is, or contains, a lease at the date of initial application. Contracts that<br>were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a lease under IFRS 16;
•	Reliance on an assessment under IAS 37 for onerous contracts as an alternative to performing an impairment<br>review;
---	---
•	No recognition of right-of-use<br>assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application or for leases of low value assets; and
---	---
•	Use of hindsight when determining the lease terms.
---	---

When measuring lease liabilities for leases that were classified as operating, lease payments were discounted using Cameco’s incremental borrowing rate at January 1, 2019, which was 4.65%. Adoption of the standard did not have a material impact on the consolidated financial statements. See notes 8, 14 and 26.

ii.	Income tax

IFRIC 23 provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments. The adoption of the standard did not have a material impact on the financial statements:

4.	Determination of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair value, for both financial and non-financial assets and liabilities.

The fair value of an asset or liability is generally estimated as the amount that would be received on sale of an asset, or paid to transfer a liability in an orderly transaction between market participants at the reporting date. Fair values of assets and liabilities traded in an active market are determined by reference to last quoted prices, in the principal market for the asset or liability. In the absence of an active market for an asset or liability, fair values are determined based on market quotes for assets or liabilities with similar characteristics and risk profiles, or through other valuation techniques. Fair values determined using valuation techniques require the use of inputs, which are obtained from external, readily observable market data when available. In some circumstances, inputs that are not based on observable data must be used. In these cases, the estimated fair values may be adjusted in order to account for valuation uncertainty, or to reflect the assumptions that market participants would use in pricing the asset or liability.

108	CAMECO CORPORATION

All fair value measurements are categorized into one of three hierarchy levels, described below, for disclosure purposes. Each level is based on the transparency of the inputs used to measure the fair values of assets and liabilities:

Level 1 – Values based on unadjusted quoted prices in active markets that are accessible at the reporting date for identical assets or liabilities.

Level 2 – Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3 – Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

When the inputs used to measure fair value fall within more than one level of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety.

Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period during which the transfer occurred. There were no transfers between level 1, level 2, or level 3 during the period. Cameco does not have any recurring fair value measurements that are categorized as level 3 as of the reporting date.

Further information about the techniques and assumptions used to measure fair values is included in the following notes:

Note 24 - Share-based compensation plans

Note 26 - Financial instruments and risk management

5.	Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future period affected.

Information about critical judgments in applying the accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is discussed below. Further details of the nature of these judgments, estimates and assumptions may be found in the relevant notes to the consolidated financial statements.

A.	Recoverability of long-lived and intangible assets

Cameco assesses the carrying values of property, plant and equipment, and intangible assets when there is an indication of possible impairment. Goodwill and intangible assets not yet available for use or with indefinite useful lives are tested for impairment annually. If it is determined that carrying values of assets or goodwill cannot be recovered, the unrecoverable amounts are charged against current earnings. Recoverability is dependent upon assumptions and judgments regarding market conditions, costs of production, sustaining capital requirements and mineral reserves. Other assumptions used in the calculation of recoverable amounts are discount rates, future cash flows and profit margins. A material change in assumptions may significantly impact the potential impairment of these assets.

B.	Cash generating units

In performing impairment assessments of long-lived assets, assets that cannot be assessed individually are grouped together into the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Management is required to exercise judgment in identifying these CGUs.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	109
C.	Provisions for decommissioning and reclamation of assets
---	---

Significant decommissioning and reclamation activities are often not undertaken until near the end of the useful lives of the productive assets. Regulatory requirements and alternatives with respect to these activities are subject to change over time. A significant change to either the estimated costs, timing of the cash flows or mineral reserves may result in a material change in the amount charged to earnings.

D.	Income taxes

Cameco operates in a number of tax jurisdictions and is, therefore, required to estimate its income taxes in each of these tax jurisdictions in preparing its consolidated financial statements. In calculating income taxes, consideration is given to factors such as tax rates in the different jurisdictions, non-deductible expenses, changes in tax law and management’s expectations of future operating results. Cameco estimates deferred income taxes based on temporary differences between the income and losses reported in its consolidated financial statements and its taxable income and losses as determined under the applicable tax laws. The tax effect of these temporary differences is recorded as deferred tax assets or liabilities in the consolidated financial statements. The calculation of income taxes requires the use of judgment and estimates. The determination of the recoverability of deferred tax assets is dependent on assumptions and judgments regarding future market conditions, production rates and intercompany sales, which can materially impact estimated future taxable income. If these judgments and estimates prove to be inaccurate, future earnings may be materially impacted.

E.	Mineral reserves

Depreciation on property, plant and equipment is primarily calculated using the unit-of-production method. This method allocates the cost of an asset to each period based on current period production as a portion of total lifetime production or a portion of estimated mineral reserves. Estimates of life-of-mine and amounts of mineral reserves are updated annually and are subject to judgment and significant change over time. If actual mineral reserves prove to be significantly different than the estimates, there could be a material impact on the amounts of depreciation charged to earnings.

F.	Gain on restructuring

The gain recorded on the restructuring of JV Inkai was calculated based on the fair value of the asset being given up. The determination of fair value requires Cameco to make assumptions, estimates and judgments, some of which are inherently subjective.

6.	Accounts receivable
	2019		2018
---	---	---	---	---
Trade receivables	$	321,638	$	392,865
GST/VAT receivables	****	4,614		3,711
Other receivables	****	1,792		5,774
Total	$	328,044	$	402,350

The Company’s exposure to credit and currency risks as well as credit losses related to trade and other receivables, excluding goods and services tax (GST)/value added tax (VAT) receivables, is disclosed in note 26.

110	CAMECO CORPORATION
7.	Inventories
---	---
	2019		2018
---	---	---	---	---
Uranium
Concentrate	$	204,123	$	335,276
Broken ore	****	51,094		51,545
	****	255,217		386,821
Fuel services	****	62,701		75,541
Other	****	2,852		5,433
Total	$	320,770	$	467,795

Cameco expensed $1,398,000,000 of inventory as cost of sales during 2019 (2018 - $1,501,000,000). Included in cost of sales for the year ended December 31, 2018 is a $29,296,000 net write-down to reflect net realizable value. No write-down was recorded in the current year.

8.	Property, plant and equipment

At December 31, 2019

	Land			Plant			Furniture						Exploration
	and			and			and			Under			and
	buildings			equipment			fixtures			construction			evaluation			Total
Cost
Beginning of year	$	5,089,908		$	2,654,944		$	80,083		$	63,465		$	1,121,061		$	9,009,461
Additions		2,327			7,179			158			65,482			65			75,211
Transfers		17,157			28,453			951			(46,561	)		—			—
Change in reclamation provision [note 15]		24,883			—			—			—			—			24,883
Disposals		(923	)		(3,486	)		(142	)		(507	)		(693	)		(5,751	)
Effect of movements in exchange rates		(32,642	)		(8,925	)		(181	)		(17	)		(48,593	)		(90,358	)
End of year	****	5,100,710	****	****	2,678,165	****	****	80,869	****	****	81,862	****	****	1,071,840	****	****	9,013,446	****
Accumulated depreciation and impairment																		****
Beginning of year		2,835,037			1,697,178			74,860			36,799			483,661			5,127,535
Depreciation charge		128,579			105,700			2,057			—			—			236,336
Change in reclamation provision [note 15]		2,732			—			—			—			—			2,732
Disposals		(225	)		(2,194	)		(139	)		—			(639	)		(3,197	)
Effect of movements in exchange rates		(30,035	)		(7,635	)		(177	)		—			(24,636	)		(62,483	)
End of year	****	2,936,088	****	****	1,793,049	****	****	76,601	****	****	36,799	****	****	458,386	****		5,300,923
Right-of-use assets																		****
Beginning of year		—			—			—			—			—			—
Additions		3,517			5,768			851			—			—			10,136
Disposals		—			(9	)		—			—			—			(9	)
Depreciation charge		(871	)		(675	)		(432	)		—			—			(1,978	)
End of year	****	2,646	****	****	5,084	****	****	419	****	****	—	****	****	—	****	****	8,149	****
Net book value at December 31, 2019	$	2,167,268	****	$	890,200	****	$	4,687	****	$	45,063	****	$	613,454	****	$	3,720,672	****
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	111
---	---

At December 31, 2018

	Land			Plant			Furniture						Exploration
	and			and			and			Under			and
	buildings			equipment			fixtures			construction			evaluation			Total
Cost
Beginning of year	$	5,045,112		$	2,729,635		$	90,817		$	154,731		$	1,120,280		$	9,140,575
Additions		1,944			7,274			—			45,516			628			55,362
Transfers		104,760			20,044			288			(129,436	)		4,344			—
Change in reclamation provision		132,317			—			—			—			—			132,317
Disposals		(186	)		(7,355	)		(4,714	)		(1,663	)		(414	)		(14,332	)
JV Inkai restructuring^(a)^		(245,882	)		(109,748	)		(6,624	)		(5,739	)		—			(367,993	)
Effect of movements in exchange rates		51,843			15,094			316			56			(3,777	)		63,532
End of year	****	5,089,908	****	****	2,654,944	****	****	80,083	****	****	63,465	****	****	1,121,061	****	****	9,009,461	****
Accumulated depreciation and impairment			****
Beginning of year		2,717,249			1,611,460			80,752			55,832			483,390			4,948,683
Depreciation charge		120,754			111,465			3,217			—			—			235,436
Transfers		13,036			6,333			(322	)		(19,047	)		—			—
Change in reclamation provision		59,616			—			—			—			—			59,616
Disposals		(185	)		(5,853	)		(4,647	)		—			—			(10,685	)
JV Inkai restructuring^(a)^		(123,919	)		(38,783	)		(4,441	)		—			—			(167,143	)
Effect of movements in exchange rates		48,486			12,556			301			14			271			61,628
End of year	****	2,835,037	****	****	1,697,178	****	****	74,860	****	****	36,799	****	****	483,661	****	****	5,127,535	****
Net book value at December 31, 2018	$	2,254,871	****	$	957,766	****	$	5,223	****	$	26,666	****	$	637,400	****	$	3,881,926	****

Cameco has contractual capital commitments of approximately $38,000,000 at December 31, 2019. Certain of the contractual commitments may contain cancellation clauses, however the Company discloses the commitments based on management’s intent to fulfill the contract. The majority of this amount is expected to be incurred in 2020.

(a)	Effective January 1, 2018, Cameco’s ownership interest in JV Inkai was reduced to 40% resulting in JV<br>Inkai being accounted for on an equity basis instead of proportionate consolidation (see note 11).
112	CAMECO CORPORATION
---	---
9.	Intangible assets
---	---
A.	Reconciliation of carrying amount
---	---

At December 31, 2019

				Intellectual
	Contracts			property		Total
Cost
Beginning of year	$	119,371		$	118,819	$	238,190
Effect of movements in exchange rates		(5,664	)		—		(5,664	)
End of year	****	113,707	****	****	118,819	****	232,526	****
Accumulated amortization and impairment
Beginning of year		115,434			57,154		172,588
Amortization charge		1,181			3,868		5,049
Effect of movements in exchange rates		(5,521	)		—		(5,521	)
End of year	****	111,094	****	****	61,022	****	172,116	****
Net book value at December 31, 2019	$	2,613	****	$	57,797	$	60,410	****

At December 31, 2018

			Intellectual
	Contracts		property		Total
Cost
Beginning of year	$	109,812	$	118,819	$	228,631
Effect of movements in exchange rates		9,559		—		9,559
End of year	****	119,371	****	118,819	****	238,190
Accumulated amortization and impairment
Beginning of year		104,939		53,680		158,619
Amortization charge		1,325		3,474		4,799
Effect of movements in exchange rates		9,170		—		9,170
End of year	****	115,434	****	57,154	****	172,588
Net book value at December 31, 2018	$	3,937	$	61,665	$	65,602
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	113
---	---
B.	Amortization
---	---

The intangible asset values relate to intellectual property acquired with Cameco Fuel Manufacturing Inc. (CFM) and purchase and sales contracts acquired with NUKEM. The CFM intellectual property is being amortized on a unit-of-production basis over its remaining life. Amortization is allocated to the cost of inventory and is recognized in cost of products and services sold as inventory is sold. The NUKEM purchase and sales contracts will be amortized to earnings over the remaining terms of the underlying contracts, which extend to 2022. Amortization of the purchase contracts is allocated to the cost of inventory and is included in cost of products and services sold as inventory is sold. Sales contracts are amortized to revenue.

10.	Long-term receivables, investments and other
	2019			2018
---	---	---	---	---	---	---
Investments in equity securities [note<br>26]^(a)^	$	24,408	****	$	28,916
Derivatives [note 26]	****	10,504	****		3,881
Advances receivable from JV Inkai [note 31]	****	—	****		124,533
Investment tax credits	****	95,474	****		95,246
Amounts receivable related to tax dispute [note 21]	****	303,222	****		303,222
Product loan^(b)^	****	176,904	****		176,904
Other	****	26,183	****		32,992
	****	636,695	****		765,694
Less current portion	****	(6,564	)		(13,826	)
Net	$	630,131	****	$	751,868
(a)	At January 1, 2018, Cameco designated the investments shown below as equity securities at FVOCI because<br>these equity securities represent investments that the Company intends to hold for the long term for strategic purposes. There were no dividends recognized on any of these investments during the year.
---	---
	2019		2018
---	---	---	---	---
Investment in Denison Mines Corp.	$	13,292	$	15,507
Investment in UEX Corporation	****	7,253		8,754
Investment in ISO Energy Ltd.	****	1,481		1,777
Investment in GoviEx	****	2,000		2,313
Other	****	382		565
	$	24,408	$	28,916
(b)	During 2018, as a result of the decision to temporarily suspend production at the McArthur River mine, Cameco<br>loaned 5,400,000 pounds of uranium concentrate to its joint venture partner, Orano Canada Inc., (Orano). Orano is obligated to repay us in kind with uranium concentrate no later than December 31, 2023. The loan was recorded at Cameco’s<br>weighted average cost of inventory.
---	---
11.	Equity-accounted investee
---	---

JV Inkai is the operator of the Inkai uranium deposit located in Kazakhstan. Cameco holds a 40% interest and Kazatomprom holds a 60% interest in JV Inkai. Cameco does not have joint control over the joint venture and as a result, Cameco accounts for JV Inkai on an equity basis.

JV Inkai is a uranium mining and milling operation that utilizes in-situ recovery (ISR) technology to extract uranium. The participants in JV Inkai purchase uranium from Inkai and, in turn, derive revenue directly from the sale of such product to third-party customers.

114	CAMECO CORPORATION

The following tables summarize the financial information of JV Inkai (100%):

	2019			2018
Cash and cash equivalents	$	16,699	****	$	41,717
Other current assets	****	139,324	****		160,784
Non-current assets	****	398,721	****		407,816
Current liabilities	****	(71,162	)		(151,728	)
Non-current liabilities	****	(41,508	)		(41,746	)
Net assets	$	442,074	****	$	416,843
	2019			2018
Revenue from products and services	$	261,860	****	$	203,359
Cost of products and services sold	****	(64,199	)		(52,172	)
Depreciation and amortization	****	(27,740	)		(27,504	)
Finance income	****	651	****		160
Finance costs	****	(2,939	)		(6,251	)
Other expense	****	(23,767	)		(30,419	)
Income tax expense	****	(30,999	)		(20,860	)
Net earnings	****	112,867	****		66,313
Other comprehensive loss	****	(1,773	)		—
Total comprehensive income	$	111,094	****	$	66,313

The following table reconciles the summarized financial information to the carrying amount of Cameco’s interest in JV Inkai:

	2019			2018
Opening net assets	$	416,843	****	$	374,650
Total comprehensive income^(a)^	****	111,094	****		66,313
Dividends declared	****	(66,369	)		—
Impact of foreign exchange	****	(19,494	)		(24,120	)
Closing net assets	****	442,074	****		416,843
Cameco’s share of net assets	****	176,830	****		166,737
Consolidating adjustments^(b)^	****	(30,633	)		(33,978	)
Fair value increment^(c)^	****	91,697	****		94,633
Dividends declared but not received	****	13,859	****		—
Impact of foreign exchange	****	928	****		3,110
Carrying amount in the statement of financial position at December 31, 2019	$	252,681	****	$	230,502
(a)	Cameco’s share of earnings from equity-accounted investee as reported on the statement of earnings will<br>not equal its share of JV Inkai’s other comprehensive income when Cameco receives dividends from JV Inkai that are not in proportion to its 40% ownership interest.
---	---
(b)	In addition to its proportionate share of earnings from JV Inkai, Cameco records certain consolidating<br>adjustments to eliminate unrealized profit and amortize historical differences in accounting policies. This amount is amortized to earnings over units of production.
---	---
(c)	Following the restructuring, in addition to the adjustments noted in (b), Cameco also amortizes the fair values<br>assigned to assets and liabilities at the time of the restructuring over units of production.
---	---
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	115
---	---
12.	Accounts payable and accrued liabilities
---	---
	2019		2018
---	---	---	---	---
Trade payables	$	100,407	$	123,219
Non-trade payables	****	66,815		92,183
Payables due to related parties	****	14,577		9,352
Total	$	181,799	$	224,754

The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 26.

13.	Long-term debt
	2019		2018
---	---	---	---	---	---
Unsecured debentures
Series D - 5.67% debentures due September 2, 2019	$	—	$	499,599
Series E - 3.75% debentures due November 14, 2022	****	399,152		398,873
Series F - 5.09% debentures due November 14, 2042	****	99,302		99,286
Series G - 4.19% debentures due June 24, 2024	****	498,264		497,913
	****	996,718		1,495,671
Less current portion	****	—		(499,599	)
Total	$	996,718	$	996,072

Cameco has a $1,000,000,000 unsecured revolving credit facility that is available until November 1, 2023. 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 $100,000,000 can be used for the issuance of letters of credit and, to the extent necessary, it may be used to provide liquidity support for the Company’s commercial paper program. The agreement also provides the ability to increase the revolving credit facility above $1,000,000,000 by increments no less than $50,000,000, to a total of $1,250,000,000. The facility ranks equally with all of Cameco’s other senior debt. As of December 31, 2019 and 2018, there were no amounts outstanding under this facility.

Cameco has $1,719,120,000 (2018 - $1,716,473,000) in letter of credit facilities. Outstanding and committed letters of credit at December 31, 2019 amounted to $1,528,603,000 (2018 - $1,572,984,000), the majority of which relate to future decommissioning and reclamation liabilities (note 15).

Cameco is bound by a covenant in its revolving credit facility. The covenant requires a funded debt to tangible net worth ratio equal to or less than 1:1. Non-compliance with this covenant could result in accelerated payment and termination of the revolving credit facility. At December 31, 2019, Cameco was in compliance with the covenant and does not expect its operating and investing activities in 2020 to be constrained by it.

The Company has arranged for standby product loan facilities with three different counterparties. The arrangements allow it to borrow up to 1.2 million kgU of UF6 conversion services over the period 2020 to 2022 with repayment in kind up to March 31, 2023. Under the loan facilities, standby fees of up to 1% are payable based on the market value of the facilities and interest is payable on the market value of any amounts drawn at rates ranging from 0.5% to 2.0%.

116	CAMECO CORPORATION

The table below represents currently scheduled maturities of long-term debt:

2020		2021		2022		2023		2024		Thereafter		Total
$	—		—		399,152		—		498,264		99,302	$	996,718
14.	Other liabilities
---	---
	2019			2018
---	---	---	---	---	---	---
Deferred sales [note 17]	$	17,418	****	$	30,727
Derivatives [note 26]	****	12,524	****		61,387
Accrued pension and post-retirement benefit liability [note 25]	****	80,737	****		68,255
Lease obligation	****	12,869	****		—
Other	****	63,452	****		61,265
	****	187,000	****		221,634
Less: current portion	****	(33,073	)		(79,573	)
Net	$	153,927	****	$	142,061

Expenses related to short-term leases and leases of low-value assets were insignificant during 2019.

15.	Provisions
	Reclamation			Waste disposal			Total
---	---	---	---	---	---	---	---	---	---
Beginning of year	$	1,053,892		$	9,460		$	1,063,352
Changes in estimates and discount rates [note 8]
Capitalized in property, plant and equipment		22,151			—			22,151
Recognized in earnings		2,732			645			3,377
Provisions used during the period		(31,933	)		(457	)		(32,390	)
Unwinding of discount [note 19]		20,634			155			20,789
Effect of movements in exchange rates		(16,801	)		—			(16,801	)
End of period	$	1,050,675	****	$	9,803	****	$	1,060,478	****
Current	$	54,806		$	1,442		$	56,248
Non-current		995,869			8,361			1,004,230
	$	1,050,675	****	$	9,803	****	$	1,060,478	****
A.	Reclamation provision
---	---

Cameco’s estimates of future decommissioning obligations are based on reclamation standards that satisfy regulatory requirements. Elements of uncertainty in estimating these amounts include potential changes in regulatory requirements, decommissioning and reclamation alternatives and amounts to be recovered from other parties.

Cameco estimates total undiscounted future decommissioning and reclamation costs for its existing operating assets to be $1,127,487,000 (2018 - $1,157,208,000). The expected timing of these outflows is based on life-of-mine plans with the majority of expenditures expected to occur after 2024. These estimates are reviewed by Cameco technical personnel as required by regulatory agencies or more frequently as circumstances warrant. In connection with future decommissioning and reclamation costs, Cameco has provided financial assurances of $994,129,000 (2018 - $1,050,546,000) in the form of letters of credit to satisfy current regulatory requirements.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	117

The reclamation provision relates to the following segments:

	2019		2018
Uranium	$	831,352	$	828,781
Fuel services	****	219,323		225,111
Total	$	1,050,675	$	1,053,892
B.	Waste disposal
---	---

The fuel services segment consists of the Blind River refinery, Port Hope conversion facility and Cameco Fuel Manufacturing Inc.. The refining, conversion and manufacturing processes generate certain uranium contaminated waste. These include contaminated combustible material (paper, rags, gloves, etc.) and contaminated non-combustible material (metal parts, soil from excavations, building and roofing materials, spent uranium concentrate drums, etc.). These materials can in some instances be recycled or reprocessed. A provision for waste disposal costs in respect of these materials is recognized when they are generated.

Cameco estimates total undiscounted future costs related to existing waste disposal to be $8,451,000 (2018 - $9,617,000). The majority of these expenditures are expected to occur within the next five years.

16.	Share capital

Authorized share capital:

•	Unlimited number of first preferred shares
•	Unlimited number of second preferred shares
---	---
•	Unlimited number of voting common shares, no stated par value, not convertible or redeemable, and<br>
---	---
•	One Class B share
---	---
A.	Common Shares
---	---
Number issued (number of shares)	2019		2018
---	---	---	---	---
Beginning of year	****	395,792,732		395,792,732
Issued:
Stock option plan [note 24]	****	5,000		—
End of year	****	395,797,732		395,792,732

All issued shares are fully paid. Holders of the common shares are entitled to exercise one vote per share at meetings of shareholders, are entitled to receive dividends if, as and when declared by our Board of Directors and are entitled to participate in any distribution of remaining assets following a liquidation.

The shares of Cameco are widely held and no shareholder, resident in Canada, is allowed to own more than 25% of the Company’s outstanding common shares, either individually or together with associates. A non-resident of Canada is not allowed to own more than 15%. In addition, no more than 25% of total shareholder votes cast may be cast by non-resident shareholders.

B.	Class B share

One Class B share issued during 1988 and assigned $1 of share capital entitles the shareholder to vote separately as a class in respect of any proposal to locate the head office of Cameco to a place not in the province of Saskatchewan.

C.	Dividends

Dividends on Cameco Corporation common shares are declared in Canadian dollars. For the year ended December 31, 2019, the dividend declared per share was $0.08 (December 31, 2018 - $0.08).

118	CAMECO CORPORATION
17.	Revenue
---	---

Cameco’s sales contracts with customers contain both fixed and market-related pricing. Fixed-price contracts are typically based on a term-price indicator at the time the contract is accepted and escalated over the term of the contract. Market-related contracts are based on either the spot price or long-term price, and the price is quoted at the time of delivery rather than at the time the contract is accepted. These contracts often include a floor and/or ceiling prices, which are usually escalated over the term of the contract. Escalation is generally based on a consumer price index. The Company’s contracts contain either one of these pricing mechanisms or a combination of the two. There is no variable consideration in the contracts and therefore no revenue is considered constrained at the time of delivery. Cameco expenses the incremental costs of obtaining a contract as incurred as the amortization period is less than a year.

The following table summarizes Cameco’s sales disaggregated by geographical region and contract type and includes a reconciliation to the Company’s reportable segments (note 28):

For the year ended December 31, 2019

	Uranium		Fuel services		Other		Total
Customer geographical region
Americas	$	569,535	$	206,226	$	59,300	$	835,061
Europe		288,134		79,629		3,587		371,350
Asia		556,140		84,422		15,952		656,514
	$	1,413,809	$	370,277	$	78,839	$	1,862,925
Contract type
Fixed-price	$	349,021	$	305,383	$	69,703	$	724,107
Market-related		1,064,788		64,894		9,136		1,138,818
	$	1,413,809	$	370,277	$	78,839	$	1,862,925

For the year ended December 31, 2018

	Uranium		Fuel services		Other		Total
Customer geographical region
Americas	$	695,678	$	191,791	$	69,012	$	956,481
Europe		275,096		50,000		10,693		335,789
Asia		713,282		72,198		13,911		799,391
	$	1,684,056	$	313,989	$	93,616	$	2,091,661
Contract type
Fixed-price	$	577,143	$	293,400	$	83,706	$	954,249
Market-related		1,106,913		20,589		9,910		1,137,412
	$	1,684,056	$	313,989	$	93,616	$	2,091,661
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	119
---	---

Deferred sales

The following table provides information about contract liabilities (note 14) from contracts with customers:

	2019			2018
Beginning of year	$	30,727	****	$	29,148
Additions	****	9,783	****		25,695
Recognized in revenue	****	(23,067	)		(24,025	)
Effect of movements in exchange rates	****	(25	)		(91	)
End of year	$	17,418	****	$	30,727

Deferred sales primarily relates to advance consideration received from customers for future conversion deliveries and fuel fabrication services as well as revenue related to the storage of uranium and converted uranium held at Cameco facilities. The revenue related to the fuel fabrication services and storage is recognized over time while the revenue related to future conversion deliveries is expected to be recognized between 2020 and 2025.

Cameco recognized $78,000 of revenue (2018 - $5,468,000 reduction of revenue) during 2019 from performance obligations satisfied (or partially satisfied) in previous periods. This is due to the difference between actual pricing indices and the estimates at the time of invoicing.

Future sales commitments

Cameco’s sales portfolio consists of short and long-term sales commitments. The contracts can be executed well in advance of a delivery and include both fixed and market-related pricing. The following table summarizes the expected future revenue, by segment, related to only fixed-price contracts with remaining future deliveries as follows:

	2020		2021		2022		2023		2024		Thereafter		Total
Uranium	$	271,642	$	183,422	$	145,920	$	169,234	$	166,015	$	532,429	$	1,468,662
Fuel services		274,755		265,126		212,562		150,266		150,773		593,612		1,647,094
Other		4,030		4,212		—		—		—		—		8,242
Total	$	550,427	$	452,760	$	358,482	$	319,500	$	316,788	$	1,126,041	$	3,123,998

The sales contracts are denominated largely in US dollars and converted from US to Canadian dollars at a rate of $1.30.

The amounts in the table represent the consideration the Company will be entitled to receive when it satisfies the remaining performance obligations in the contracts. The amounts include assumptions about volumes for contracts that have volume flexibility. Cameco’s total revenue that will be earned will also include revenue from contracts with market-related pricing. The Company has elected to exclude these amounts from the table as the transaction price will not be known until the time of delivery. Contracts with an original duration of one year or less have been included in the table.

120	CAMECO CORPORATION
18.	Employee benefit expense
---	---

The following employee benefit expenses are included in cost of products and services sold, administration, exploration, research and development and property, plant and equipment:

	2019			2018
Wages and salaries	$	238,000	****	$	305,367
Statutory and company benefits	****	41,972	****		50,477
Expenses related to defined benefit plans [note 25]	****	4,790	****		3,527
Expenses related to defined contribution plans [note 25]	****	11,767	****		13,431
Equity-settled share-based compensation [note 24]	****	17,469	****		18,821
Cash-settled share-based compensation [note 24]	****	(1,437	)		3,597
Total	$	312,561	****	$	395,220
19.	Finance costs
---	---
	2019		2018
---	---	---	---	---
Interest on long-term debt	$	63,136	$	73,039
Unwinding of discount on provisions [note 15]	****	20,789		23,681
Other charges	****	14,697		15,059
Total	$	98,622	$	111,779

No borrowing costs were determined to be eligible for capitalization during the year.

20.	Other income (expense)
	2019			2018
---	---	---	---	---	---
Arbitration award^(a)^	$	52,801	****	$	—
Foreign exchange gains	****	(18,961	)		26,205
Gain on restructuring of JV Inkai^(b)^	****	—	****		48,570
Sale of exploration interests^(c)^	****	—	****		25,027
Contract restructuring	****	—	****		6,201
Other	****	—	****		2,157
Total	$	33,840	****	$	108,160
(a)	In the third quarter of 2019, Cameco received an award from the tribunal of international arbitrators<br>(Tribunal) with respect to its contract dispute with Tokyo Electric Power Company Holdings, Inc. (TEPCO). The Tribunal rejected TEPCO’s assertion that it had the right to terminate its uranium supply agreement and awarded damages of $40,300,000<br>(US). Damages were based on the Tribunal’s interpretation of losses under this supply agreement.
---	---
(b)	Effective January 1, 2018, Cameco’s ownership interest in JV Inkai was reduced from 60% to 40% based<br>on an implementation agreement with Kazatomprom. Cameco recognized a gain on the change in ownership interests of $48,570,000. Included in this gain is $5,450,000 which has been reclassified from the foreign currency translation reserve to net<br>earnings.
---	---
(c)	In 2018, Cameco sold its interest in the Wheeler River Joint Venture to Denison Mines Corp. in exchange for<br>24,615,000 common shares (note 10). Cameco recorded a gain of $17,231,000 on the transaction.
---	---
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	121
---	---
21.	Income taxes
---	---
A.	Significant components of deferred tax assets and liabilities
---	---
	Recognized in earnings						As at December 31
---	---	---	---	---	---	---	---	---	---	---
	2019			2018			2019		2018
Assets
Property, plant and equipment	$	74,039	****	$	119,132		$	319,185	$	245,206
Provision for reclamation	****	2,325	****		(36,622	)	****	193,514		191,189
Inventories	****	(2,163	)		1,137		****	—		2,163
Foreign exploration and development	****	(14	)		(14	)	****	5,267		5,281
Income tax losses (gains)	****	(108,839	)		39,289		****	390,341		499,180
Defined benefit plan actuarial losses	****	—	****		—		****	7,947		5,646
Long-term investments and other	****	(17,377	)		24,169		****	40,423		57,347
Deferred tax assets	****	(52,029	)		147,091		****	956,677		1,006,012
Liabilities
Inventories	****	301	****		—		****	301		—
Deferred tax liabilities	****	301	****		—		****	301		—
Net deferred tax asset (liability	$	(52,330	)	$	147,091		$	956,376	$	1,006,012
Deferred tax allocated as	2019		2018
---	---	---	---	---
Deferred tax assets	$	956,376	$	1,006,012
Deferred tax liabilities	****	—		—
Net deferred tax asset	$	956,376	$	1,006,012

Cameco has recorded a deferred tax asset of $956,376,000 (December 31, 2018 - $1,006,012,000). The realization of this deferred tax asset is dependent upon the generation of future taxable income in certain jurisdictions during the periods in which the Company’s deferred tax assets are available. The Company considers whether it is probable that all or a portion of the deferred tax assets will not be realized. In making this assessment, management considers all available evidence, including recent financial operations, projected future taxable income and tax planning strategies. Based on projections of future taxable income over the periods in which the deferred tax assets are available, realization of these deferred tax assets is probable and consequently the deferred tax assets have been recorded.

122	CAMECO CORPORATION
B.	Movement in net deferred tax assets and liabilities
---	---
	2019			2018
---	---	---	---	---	---	---
Deferred tax asset at beginning of year	$	1,006,012	****	$	848,704
Recovery (expense) for the year in net earnings	****	(52,330	)		147,091
Recovery (expense) for the year in other comprehensive income	****	2,754	****		(851	)
Change to equity accounting - JV Inkai	****	—	****		10,849
Effect of movements in exchange rates	****	(60	)		219
End of year	$	956,376	****	$	1,006,012
C.	Significant components of unrecognized deferred tax assets
---	---
	2019		2018
---	---	---	---	---
Income tax losses	$	280,330	$	270,154
Property, plant and equipment	****	2,321		2,344
Provision for reclamation	****	75,082		88,036
Long-term investments and other	****	70,380		72,500
Total	$	428,113	$	433,034
D.	Tax rate reconciliation
---	---

The provision for income taxes differs from the amount computed by applying the combined expected federal and provincial income tax rate to earnings before income taxes. The reasons for these differences are as follows:

	2019			2018
Earnings before income taxes and non-controlling<br>interest	$	135,018	****	$	39,929
Combined federal and provincial tax rate	****	26.9	%		26.9	%
Computed income tax expense	****	36,320	****		10,741
Increase (decrease) in taxes resulting from:
Difference between Canadian rates and rates applicable to subsidiaries in other<br>countries	****	5,558	****		(78,138	)
Change in unrecognized deferred tax assets	****	19,646	****		18,027
Share-based compensation plans	****	1,146	****		1,292
Change in tax provision related to transfer pricing	****	—	****		(61,000	)
Non-deductible<br>(non-taxable) capital amounts	****	—	****		(13,249	)
Income in equity-accounted investee	****	(12,074	)		—
Change in uncertain tax positions	****	2,572	****		(3,517	)
Other permanent differences	****	7,909	****		(462	)
Income tax expense (recovery)	$	61,077	****	$	(126,306	)
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	123
---	---
E.	Earnings and income taxes by jurisdiction
---	---
	2019			2018
---	---	---	---	---	---	---
Earnings (loss) before income taxes
Canada	$	229,429	****	$	(257,291	)
Foreign	****	(94,411	)		297,220
	$	135,018	****	$	39,929
Current income taxes
Canada	$	7,969	****	$	5,913
Foreign	****	778	****		14,872
	$	8,747	****	$	20,785
Deferred income taxes (recovery)
Canada	$	60,010	****	$	(149,284	)
Foreign	****	(7,680	)		2,193
	$	52,330	****	$	(147,091	)
Income tax expense (recovery)	$	61,077	****	$	(126,306	)
F.	Reassessments
---	---

Canada

In 2008, as part of the ongoing annual audits of Cameco’s Canadian tax returns, Canada Revenue Agency (CRA) disputed the transfer pricing structure and methodology used by Cameco and its wholly owned Swiss subsidiary, Cameco Europe Ltd., in respect of sale and purchase agreements for uranium products. From December 2008 to date, CRA issued notices of reassessment for the taxation years 2003 through 2013, which in aggregate have increased Cameco’s income for Canadian tax purposes by approximately $5,700,000,000. CRA has also issued notices of reassessment for transfer pricing penalties for the years 2007 through 2011 in the amount of $371,000,000. It is uncertain whether CRA will reassess Cameco’s tax returns for subsequent years on a similar basis and if these will require Cameco to make future remittances or provide security on receipt of the reassessments.

On September 26, 2018, the Tax Court of Canada (Tax Court) ruled in our favour in our case with the Canada Revenue Agency (CRA) for the 2003, 2005 and 2006 tax years.

The Tax Court ruled that our marketing and trading structure involving foreign subsidiaries and the related transfer pricing methodology used for certain intercompany uranium purchase and sale agreements were in full compliance with Canadian laws for the three tax years in question. While the decision applies only to the three tax years in question, we believe there is nothing in the decision that would warrant a materially different outcome for subsequent tax years. We expect to recover any amounts remitted or secured as a result of the reassessments.

On October 25, 2018, CRA filed a notice of appeal with the Federal Court of Appeal. We anticipate that it will take about two years from the start of the appeal process to receive a decision from the Federal Court of Appeal.

124	CAMECO CORPORATION

We expect the Tax Court’s decision to be upheld on appeal. We expect any further actions regarding the tax years 2007 through 2013 will be suspended until the three years covered in the decision are finally resolved. Despite the fact that we believe there is no basis to do so, and it is not our view of the likely outcome, CRA may continue to reassess us using the methodology it used to reassess the 2003 through 2013 tax years. In that scenario, and including the $5,700,000,000 already reassessed, we expect to receive notices of reassessment for a total of approximately $8,700,000,000 for the years 2003 through 2019, which would increase Cameco’s income for Canadian tax purposes and result in a related tax expense of approximately $2,600,000,000. In addition to penalties already imposed, CRA may continue to apply penalties to taxation years subsequent to 2011. As a result, we estimate that cash taxes and transfer pricing penalties would be between $1,950,000,000 and $2,150,000,000. In addition, we estimate there would be interest and instalment penalties applied that would be material to Cameco. While in dispute, we would be responsible for remitting or otherwise securing 50% of the cash taxes and transfer pricing penalties (between $970,000,000 and $1,070,000,000), plus related interest and instalment penalties assessed, which would be material to Cameco.

Under Canadian federal and provincial tax rules, 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. CRA disallowed the use of any loss carry-backs to be applied to any transfer pricing adjustment, starting with the 2008 tax year. In light of our view of the likely outcome of the case, we expect to recover the amounts remitted to CRA, including cash taxes, interest and penalties totalling $303,222,000 already paid as at December 31, 2019 (December 31, 2018 - $303,222,000) (note 10). In addition to the cash remitted, we have provided $480,000,000 in letters of credit to secure 50% of the cash taxes and related interest.

Management believes that the ultimate resolution will not be material to Cameco’s financial position, results of operations or liquidity in the year(s) of resolution. Resolution of this matter as stipulated by CRA would be material to Cameco’s financial position, results of operations or liquidity in the year(s) of resolution and other unfavourable outcomes for the years 2003 to date could be material to Cameco’s financial position, results of operations and cash flows in the year(s) of resolution.

G.	Income tax losses

At December 31, 2019, income tax losses carried forward of $2,509,669,000 (2018 - $2,809,926,000) are available to reduce taxable income. These losses expire as follows:

Date of expiry	Canada		US		Other		Total
2026	$	—	$	—	$	80,000	$	80,000
2030		47		—		—		47
2031		—		20,859		—		20,859
2032		272		22,464		—		22,736
2033		173,691		38,296		—		211,987
2034		322,359		21,125		—		343,484
2035		372,558		14,699		—		387,257
2036		209,265		44,674		—		253,939
2037		143		33,462		—		33,605
2038		5,581		51,896		—		57,477
2039		6,524		40,559		—		47,083
No expiry		—		—		1,051,195		1,051,195
	$	1,090,440	$	288,034	$	1,131,195	$	2,509,669

Included in the table above is $1,048,264,000 (2018 - $987,639,000) of temporary differences related to loss carry forwards where no future benefit has been recognized.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	125
22.	Per share amounts
---	---

Per share amounts have been calculated based on the weighted average number of common shares outstanding during the period. The weighted average number of paid shares outstanding in 2019 was 395,796,677 (2018 - 395,792,732).

	2019		2018
Basic earnings per share computation
Net earnings attributable to equity holders	$	74,000	$	166,323
Weighted average common shares outstanding	****	395,797		395,793
Basic earnings per common share	$	0.19	$	0.42
Diluted earnings per share computation
Net earnings attributable to equity holders	$	74,000	$	166,323
Weighted average common shares outstanding	****	395,797		395,793
Dilutive effect of stock options	****	258		257
Weighted average common shares outstanding, assuming dilution	****	396,055		396,050
Diluted earnings per common share	$	0.19	$	0.42
23.	Supplemental cash flow information
---	---

Other operating items included in the statements of cash flows are as follows:

	2019			2018
Changes in non-cash working capital:
Accounts receivable	$	58,488	****	$	(44,353	)
Inventories	****	113,388	****		241,496
Supplies and prepaid expenses	****	3,612	****		52,192
Accounts payable and accrued liabilities	****	(62,250	)		(39,616	)
Reclamation payments	****	(32,390	)		(31,311	)
Other	****	15,630	****		4,654
Total	$	96,478	****	$	183,062
126	CAMECO CORPORATION
---	---

The changes arising from financing activities were as follows:

	Long-term			Interest			Dividends			Share
	debt^(a)^			payable			payable			capital		Total
Balance at January 1, 2019	$	1,495,671		$	13,539		$	—		$	1,862,652	$	3,371,862
Changes from financing cash flows:
Dividends paid		—			—			(31,613	)		—		(31,613	)
Interest paid		—			(72,484	)		—			—		(72,484	)
Shares issued, stock option plan		—			—			—			81		81
Repayment of long-term debt		(500,000	)		—			—			—		(500,000	)
Total cash changes	****	(500,000	)	****	(72,484	)	****	(31,613	)	****	81	****	(604,016	)
Non-cash changes:
Amorization of issue costs		1,047			—			—			—		1,047
Dividends declared		—			—			31,613			—		31,613
Interest expense		—			61,780			—			—		61,780
Lease interest expense		—			309			—			—		309
Shares issued, stock option plan		—			—			—			16		16
Foreign exchange		—			(114	)		—			—		(114	)
Total non-cash changes	****	1,047	****	****	61,975	****	****	31,613	****	****	16	****	94,651	****
Balance at December 31, 2019	$	996,718	****	$	3,030	****	$	—	****	$	1,862,749	$	2,862,497	****
(a)	Includes current portion of long-term debt
---	---
24.	Share-based compensation plans
---	---

The Company has the following equity-settled plans:

A.	Stock option plan

The Company has established a stock option plan under which options to purchase common shares may be granted to employees of Cameco. Options granted under the stock option plan have an exercise price of not less than the closing price quoted on the Toronto Stock Exchange (TSX) for the common shares of Cameco on the trading day prior to the date on which the option is granted. The options carry vesting periods of one to three years, and expire eight years from the date granted.

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 27,875,289 shares have been issued.

Stock option transactions for the respective years were as follows:

(Number of options)	2019			2018
Beginning of year	****	8,820,805	****		8,324,666
Options granted	****	886,740	****		1,473,430
Options forfeited	****	(270,025	)		(315,340	)
Options expired	****	(815,423	)		(661,951	)
Options exercised [note 16]	****	(5,000	)		—
End of year	****	8,617,097	****		8,820,805
Exercisable	****	6,290,380	****		6,007,557
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	127
---	---

Weighted average exercise prices were as follows: ****

	2019		2018
Beginning of year	$	19.75	$	22.19
Options granted	****	15.27		11.32
Options forfeited	****	22.59		25.43
Options expired	****	38.43		28.90
Options exercised	****	16.38		—
End of year	$	17.44	$	19.75
Exercisable	$	18.90	$	22.83

Total options outstanding and exercisable at December 31, 2019 were as follows:

		Options outstanding				Options exercisable
Option price per share		Weighted<br>average<br>remaining<br>life		Weighted<br>average<br>exercisable<br>price		Number		Weighted<br>average<br>exercisable<br>price
11.32 - 15.83	3,733,210		5.7	$	13.50		1,406,493	$	13.52
15.84 - 26.81	4,883,887		1.9	$	20.45		4,883,887	$	20.45
	8,617,097					****	6,290,380

All values are in US Dollars.

The foregoing options have expiry dates ranging from May 14, 2020 to February 28, 2027.

B.	Restricted share unit (RSU)

The Company has established an RSU plan whereby it provides each plan participant an annual grant of RSUs in an amount determined by the board. Each RSU represents one phantom common share that entitles the participant to a payment of one Cameco common share purchased on the open market, or cash with an equivalent market value, at the board’s discretion. The RSUs carry vesting periods of one to three years, and the final value of the units will be based on the value of Cameco common shares at the end of the vesting periods. During the vesting period, dividend equivalents accrue to the participants in the form of additional share units as of each normal cash dividend payment date of Cameco’s common shares. As of December 31, 2019, the total number of RSUs held by the participants was 443,274, (2018 - 456,704).

C.	Employee share ownership plan

Cameco also has an employee share ownership plan, whereby both employee and Company contributions are used to purchase shares on the open market for employees. The Company’s contributions are expensed during the year of contribution. Under the plan, employees have the opportunity to participate in the program to a maximum of 6% of eligible earnings each year with Cameco matching the first 3% of employee-paid shares by 50%. Cameco contributes $1,000 of shares annually to each employee that is enrolled in the plan. Shares purchased with Company contributions and with dividends paid on such shares become unrestricted 12 months from the date on which such shares were purchased. At December 31, 2019, there were 2,253 participants in the plan (2018 - 2,317). The total number of shares purchased in 2019 with Company contributions was 235,915 (2018 - 304,147). In 2019, the Company’s contributions totaled $3,127,000 (2018 - $3,845,000).

128	CAMECO CORPORATION

Cameco records compensation expense under its equity-settled plans with an offsetting credit to contributed surplus, to reflect the estimated fair value of units granted to employees. During the year, the Company recognized the following expenses under these plans:

	2019		2018
Stock option plan	$	4,418	$	4,744
Performance share unit plan^(a)^	****	7,245		7,690
Restricted share unit plan	****	2,679		2,542
Employee share ownership plan	****	3,127		3,845
Total	$	17,469	$	18,821
(a)	In the fourth quarter, the performance share unit plan was amended to allow eligible participants to elect<br>payout of their grants in cash or shares, provided they have met their share ownership requirements. As a result, this plan is now considered cash-settled. This amount represents the expense recorded prior to the plan modification.<br>
---	---

Fair value measurement of equity-settled plans

The fair value of the units granted through the performance share unit plan was determined based on Monte Carlo simulation and the fair value of options granted under the stock option plan was measured based on the Black-Scholes option-pricing model. The fair value of RSUs granted was determined based on their intrinsic value on the date of grant. Expected volatility was estimated by considering historic average share price volatility.

The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment plans were as follows:

	Stock option plan			PSU			RSU
Number of options granted		886,740			477,250			212,496
Expected vesting		—			106	%		—
Average strike price	$	15.27			—		$	15.33
Expected dividend	$	0.08			—			—
Expected volatility		36	%		38	%		—
Risk-free interest rate		1.8	%		1.8	%		—
Expected life of option		4.9 years			3.0 years			—
Expected forfeitures		7	%		12	%		15	%
Weighted average grant date fair values	$	4.92		$	15.33		$	15.33

The Company has the following cash-settled plans:

A.	Deferred share unit (DSU)

Cameco offers a DSU plan to non-employee directors. A DSU is a notional unit that reflects the market value of a single common share of Cameco. 60% of each director’s annual retainer is paid in DSUs. In addition, on an annual basis, directors can elect to receive 25%, 50%, 75% or 100% of the remaining 40% of their annual retainer and any additional fees in the form of DSUs. If a director meets their ownership requirements, the director may elect to take 25%, 50%, 75% or 100% of their annual retainer and any fees in cash, with the balance, if any, to be paid in DSUs. Each DSU fully vests upon award. Dividend equivalents accrue to the participants in the form of additional share units as of each normal cash dividend payment date of Cameco’s common shares. The DSUs will be redeemed for cash upon a director leaving the board. The redemption amount will be based upon the weighted average of the closing prices of the common shares of Cameco on the TSX for the last 20 trading days prior to the redemption date multiplied by the number of DSUs held by the director. As of December 31, 2019, the total number of DSUs held by participating directors was 474,266 (2018 - 528,483).

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	129
B.	Executive performance share unit (PSU)
---	---

The Company has established a PSU plan whereby it provides each plan participant an annual grant of PSUs in an amount determined by the board. Each PSU represents one phantom common share that entitles the participant to a payment of one Cameco common share purchased on the open market, or cash with an equivalent market value, at the participant’s discretion, at the end of each three-year period if certain performance and vesting criteria have been met. The final value of the PSUs will be based on the value of Cameco common shares at the end of the three-year period and the number of PSUs that ultimately vest. During the vesting period, dividend equivalents accrue to the participants in the form of additional share units as of each normal cash dividend payment date of Cameco’s common shares. Vesting of PSUs at the end of the three-year period will be based on total shareholder return over the three years, Cameco’s ability to meet its annual operating targets and whether the participating executive remains employed by Cameco at the end of the three-year vesting period. If the participant elects a cash payout, the redemption amount will be based on the volume-weighted average trading price of Cameco’s common shares on March 1 or, if March 1 is not a trading day, on the first trading day following March 1. As of December 31, 2019, the total number of PSUs held by the participants, after adjusting for forfeitures on retirement, was 1,465,618 (2018 - 1,343,971).

C.	Phantom stock option

Cameco makes annual grants of bonuses to eligible non-North American employees in the form of phantom stock options. Employees receive the equivalent value of shares in cash when exercised. Options granted under the phantom stock option plan have an award value equal to the closing price quoted on the TSX for the common shares of Cameco on the trading day prior to the date on which the option is granted. The options vest over three years and expire eight years from the date granted. As of December 31, 2019, the number of options held by participating employees was 406,270 (2018 - 353,580) with exercise prices ranging from $11.32 to $26.81 per share (2018 - $11.32 to $39.53) and a weighted average exercise price of $16.48 (2018 - $17.74).

Cameco has recognized the following expenses (recoveries) under its cash-settled plans:

	2019			2018
Deferred share unit plan	$	(1,001	)	$	2,922
Performance share unit plan^(a)^	****	—	****		—
Phantom stock option plan	****	(436	)		675
Total	$	(1,437	)	$	3,597
(a)	The modification to the PSU plan resulted in a reclassification, at the date of modification, of $8,369,000<br>from equity to liabilities. The liability recognized on the date of the modification was less than the amount previously recognized as an increase in equity. Since the plan modification did not change the performance and vesting criteria, no<br>incremental fair value was granted.
---	---

At December 31, 2019, a liability of $14,577,000 (2018 - $9,352,000) was included in the consolidated statements of financial position to recognize accrued but unpaid expenses for cash-settled plans.

Fair value measurement of cash-settledplans

The fair value of the units granted through the PSU plan was determined based on Monte Carlo simulation and the fair value of the phantom stock option plan was measured based on the Black-Scholes option-pricing model. Expected volatility is estimated by considering historic average share price volatility.

The inputs used in the measurement of the fair values of the cash-settled share-based payment plans at the grant and reporting dates were as follows:

130	CAMECO CORPORATION
	PSUs						Phantom stock options
---	---	---	---	---	---	---	---	---	---	---	---	---
	Grant date			Reporting<br><br><br>date			Grant date			Reporting<br><br><br>date
	Mar 1, 2019			Dec 31, 2019			Mar 1, 2019			Dec 31, 2019
Number of units		477,250			1,465,618			68,890			406,720
Expected vesting		106	%		80	%		—			—
Average strike price		—			—		$	15.27		$	16.48
Expected dividend		—			—		$	0.08		$	0.08
Expected volatility		38	%		31	%		37	%		35	%
Risk-free interest rate		1.8	%		1.7	%		1.5	%		1.7	%
Expected life of option		3.0 years			1.4 years			4.5 years			4.0 years
Expected forfeitures		12	%		10	%		8	%		8	%
Weighted average measurement date fair values	$	15.33		$	10.07		$	5.07		$	2.14

In addition to these inputs, other features of the PSU grant were incorporated into the measurement of fair value. The market condition based on total shareholder return was incorporated by utilizing a Monte Carlo simulation. The non-market criteria relating to realized selling prices and operating targets have been incorporated into the valuation at both grant and reporting date by reviewing prior history and corporate budgets.

25.	Pension and other post-retirement benefits

Cameco maintains both defined benefit and defined contribution plans providing pension benefits to substantially all of its employees. All regular and temporary employees participate in a registered defined contribution plan. This plan is registered under the Pension Benefits Standard Act, 1985. In addition, all Canadian-based executives participate in a non-registered supplemental executive pension plan which is a defined benefit plan.

Under the supplemental executive pension plan (SEPP), Cameco provides a lump sum benefit equal to the present value of a lifetime pension benefit based on the executive’s length of service and final average earnings. The plan provides for unreduced benefits to be paid at the normal retirement age of 65, however unreduced benefits could be paid if the executive was at least 60 years of age and had 20 years of service at retirement. This program provides for a benefit determined by a formula based on earnings and service, reduced by the benefits payable under the registered base plan. Security is provided for the SEPP benefits through a letter of credit held by the plan’s trustee. The face amount of the letter of credit is determined each year based on the wind-up liabilities of the supplemental plan, less any plan assets currently held with the trustee. A valuation is required annually to determine the letter of credit amount. Benefits will continue to be paid from plan assets until the fund is exhausted, at which time Cameco will begin paying benefits from corporate assets.

Cameco also maintains non-pension post-retirement plans (“other benefit plans”) which are defined benefit plans that cover such benefits as group life insurance and supplemental health and dental coverage to eligible employees and their dependents. The costs related to these plans are charged to earnings in the period during which the employment services are rendered. These plans are funded by Cameco as benefit claims are made.

The board of directors of Cameco has final responsibility and accountability for the Cameco retirement programs. The board is ultimately responsible for managing the programs to comply with applicable legislation, providing oversight over the general functions and setting certain policies.

Cameco expects to pay $1,106,000 in contributions and letter of credit fees to its defined benefit plans in 2020.

The post-retirement plans expose Cameco to actuarial risks, such as longevity risk, market risk, interest rate risk, liquidity risk and foreign currency risk. The other benefit plans expose Cameco to risks of higher supplemental health and dental utilization than expected. However, the other benefit plans have limits on Cameco’s annual benefits payable.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	131

The effective date of the most recent valuation for funding purposes on the registered defined benefit pension plans is January 1, 2018. The next planned effective date for valuations is January 1, 2021.

Cameco has more than one defined benefit plan and has generally provided aggregated disclosures in respect of these plans, on the basis that these plans are not exposed to materially different risks. Information relating to Cameco’s defined benefit plans is shown in the following table:

	Pension benefit plans						Other benefit plans
	2019			2018			2019			2018
Fair value of plan assets, beginning of year	$	7,177	****	$	8,061		$	—	****	$	—
Interest income on plan assets	****	262	****		259		****	—	****		—
Return on assets excluding interest income	****	280	****		(292	)	****	—	****		—
Employer contributions	****	—	****		61		****	—	****		—
Benefits paid	****	(912	)		(910	)	****	—	****		—
Administrative costs paid	****	(1	)		(2	)	****	—	****		—
Fair value of plan assets, end of year	$	6,806	****	$	7,177		$	—	****	$	—
Defined benefit obligation, beginning of year	$	54,271	****	$	55,972		$	21,161	****	$	26,893
Current service cost	****	1,586	****		1,670		****	817	****		1,429
Interest cost	****	1,807	****		1,668		****	841	****		946
Actuarial loss (gain) arising from:
- demographic assumptions	****	—	****		—		****	—	****		(192	)
- financial assumptions	****	6,925	****		(3,776	)	****	2,877	****		(1,887	)
- experience adjustment	****	777	****		56		****	114	****		(2,919	)
Past service cost	****	—	****		—		****	—	****		(1,929	)
Benefits paid	****	(1,705	)		(2,028	)	****	(855	)		(1,180	)
Foreign exchange	****	(1,073	)		709		****	—	****		—
Defined benefit obligation, end of year	$	62,588	****	$	54,271		$	24,955	****	$	21,161
Defined benefit liability [note 14]	$	(55,782	)	$	(47,094	)	$	(24,955	)	$	(21,161	)

The percentages of the total fair value of assets in the pension plans for each asset category at December 31 were as follows:

	Pension benefit plans
	2019			2018
Asset category^(a)^
Canadian equity securities	****	9	%		9	%
U.S. equity securities	****	12	%		0	%
Global equity securities	****	9	%		21	%
Canadian fixed income	****	30	%		29	%
Other^(b)^	****	40	%		41	%
Total	****	100	%		100	%
(a)	The defined benefit plan assets contain no material amounts of related party assets at December 31, 2019<br>and 2018 respectively.
---	---
(b)	Relates to the value of the refundable tax account held by the Canada Revenue Agency. The refundable total is<br>approximately equal to half of the sum of the realized investment income plus employer contributions less half of the benefits paid by the plan.
---	---
132	CAMECO CORPORATION
---	---

The following represents the components of net pension and other benefit expense included primarily as part of administration:

	Pension benefit plans				Other benefit plans
	2019		2018		2019		2018
Current service cost	$	1,586	$	1,670	$	817	$	1,429
Net interest cost	****	1,545		1,409	****	841		946
Past service cost	****	—		—	****	—		(1,929	)
Administration cost	****	1		2	****	—		—
Defined benefit expense [note 18]	****	3,132		3,081	****	1,658		446
Defined contribution pension expense [note 18]	****	11,767		13,431	****	—		—
Net pension and other benefit expense	$	14,899	$	16,512	$	1,658	$	446

The total amount of actuarial losses (gains) recognized in other comprehensive income is:

	Pension benefit plans						Other benefit plans
	2019			2018			2019		2018
Actuarial loss (gain)	$	7,702	****	$	(3,720	)	$	2,991	$	(4,998	)
Return on plan assets excluding interest income	****	(280	)		292		****	—		—
	$	7,422	****	$	(3,428	)	$	2,991	$	(4,998	)

The assumptions used to determine the Company’s defined benefit obligation and net pension and other benefit expense

were as follows at December 31 (expressed as weighted averages):

	Pension benefit plans						Other benefit plans
	2019			2018			2019			2018
Discount rate - obligation	****	3.0	%		3.7	%	****	3.1	%		3.9	%
Discount rate - expense	****	3.7	%		3.4	%	****	3.9	%		3.4	%
Rate of compensation increase	****	3.0	%		3.0	%	****	—	****		—
Initial health care cost trend rate	****	—	****		—		****	6.0	%		6.0	%
Cost trend rate declines to	****	—	****		—		****	5.0	%		5.0	%
Year the rate reaches its final level	****	—	****		—		****	2022	****		2022
Dental care cost trend rate	****	—	****		—		****	5.0	%		5.0	%

At December 31, 2019, the weighted average duration of the defined benefit obligation for the pension plans was 20.0 years (2018 - 19.4 years) and for the other benefit plans was 15.2 years (2018 - 14.3 years).

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	133

A 1% change at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the following:

	Pension benefit plans						Other benefit plans
	Increase			Decrease			Increase			Decrease
Discount rate	$	(8,141	)	$	10,595		$	(3,284	)	$	4,133
Rate of compensation increase	****	2,832	****		(2,608	)	****	n/a	****		n/a

A 1% change in any of the other assumptions would not have a significant impact on the defined benefit obligation.

The methods and assumptions used in preparing the sensitivity analyses are the same as the methods and assumptions used in determining the financial position of Cameco’s plans as at December 31, 2019. The sensitivity analyses are determined by varying the sensitivity assumption and leaving all other assumptions unchanged. Therefore, the sensitivity analyses do not recognize any interdependence in the assumptions. The methods and assumptions used in determining the above sensitivity are consistent with the methods and assumptions used in the previous year.

In addition, an increase of one year in the expected lifetime of plan participants in the pension benefit plans would increase the defined benefit obligation by $1,621,000.

To measure the longevity risk for these plans, the mortality rates were reduced such that the average life expectancy for all members increased by one year. The reduced mortality rates were subsequently used to re-measure the defined benefit obligation of the entire plan.

26.	Financial instruments and related risk management

Cameco is exposed in varying degrees to a variety of risks from its use of financial instruments. Management and the board of directors, both separately and together, discuss the principal risks of our businesses. The board sets policies for the implementation of systems to manage, monitor and mitigate identifiable risks. Cameco’s risk management objective in relation to these instruments is to protect and minimize volatility in cash flow. The types of risks Cameco is exposed to, the source of risk exposure and how each is managed is outlined below.

Market risk

Market risk is the risk that changes in market prices, such as commodity prices, foreign currency exchange rates and interest rates, will affect the Company’s earnings or the fair value of its financial instruments. Cameco engages in various business activities which expose the Company to market risk. As part of its overall risk management strategy, Cameco uses derivatives to manage some of its exposures to market risk that result from these activities.

Derivative instruments may include financial and physical forward contracts. Such contracts may be used to establish a fixed price for a commodity, an interest-bearing obligation or a cash flow denominated in a foreign currency. Market risks are monitored regularly against defined risk limits and tolerances.

Cameco’s actual exposure to these market risks is constantly changing as the Company’s portfolios of foreign currency, interest rate and commodity contracts change.

The types of market risk exposure and the way in which such exposure is managed are as follows:

A.	Commodity price risk

As a significant producer and supplier of uranium and nuclear fuel processing services, Cameco bears significant exposure to changes in prices for these products. A substantial change in prices will affect the Company’s net earnings and operating cash flows. Prices for Cameco’s products are volatile and are influenced by numerous factors beyond the Company’s control, such as supply and demand fundamentals and geopolitical events.

134	CAMECO CORPORATION

Cameco’s sales contracting strategy focuses on reducing the volatility in future earnings and cash flow, while providing both protection against decreases in market price and retention of exposure to future market price increases. To mitigate the risks associated with the fluctuations in the market price for uranium products, Cameco seeks to maintain a portfolio of uranium product sales contracts with a variety of delivery dates and pricing mechanisms that provide a degree of protection from pricing volatility.

B.	Foreign exchange risk

The relationship between the Canadian and US dollar affects financial results of the uranium business as well as the fuel services business. Sales of uranium product, conversion and fuel manufacturing services are routinely denominated in US dollars while production costs are largely denominated in Canadian dollars.

Cameco attempts to provide some protection against exchange rate fluctuations by planned hedging activity designed to smooth volatility. To mitigate risks associated with foreign currency, Cameco enters into forward sales and option contracts to establish a price for future delivery of the foreign currency. These foreign currency contracts are not designated as hedges and are recorded at fair value with changes in fair value recognized in earnings. Cameco also has a natural hedge against US currency fluctuations because a portion of its annual cash outlays, including purchases of uranium and conversion services, is denominated in US dollars.

Cameco holds a number of financial instruments denominated in foreign currencies that expose the Company to foreign exchange risk. Cameco measures its exposure to foreign exchange risk on financial instruments as the change in carrying values that would occur as a result of reasonably possible changes in foreign exchange rates, holding all other variables constant. As of the reporting date, the Company has determined its pre-tax exposure to foreign currency exchange risk on financial instruments to be as follows based on a 5% weakening of the Canadian dollar:

	Currency				Gain (loss)
Cash and cash equivalents			120,675		$	6,034
Accounts receivable			280,877			14,044
Net foreign currency derivatives			(4,333	)		(30,851	)

All values are in US Dollars.

A 5% strengthening of the Canadian dollar against the currencies above at December 31, 2019 would have had an equal but opposite effect on the amounts shown above, assuming all other variables remained constant.

C.	Interest rate risk

The Company has a strategy of minimizing its exposure to interest rate risk by maintaining target levels of fixed and variable rate borrowings. The proportions of outstanding debt carrying fixed and variable interest rates are reviewed by senior management to ensure that these levels are within approved policy limits. At December 31, 2019, the proportion of Cameco’s outstanding debt that carries fixed interest rates is 85% (2018 - 67%).

Cameco is exposed to interest rate risk through its interest rate swap contracts whereby fixed rate payments on a notional amount of $150,000,000 of the Series E senior unsecured debentures were swapped for variable rate payments. The Series E swaps terminate on November 14, 2022. Under the terms of the swaps, Cameco makes interest payments based on the three-month Canada Dealer Offered Rate plus an average margin of 1.2% and receives fixed interest payments of 3.75%. The Series D swaps terminated on September 2, 2019. At December 31, 2019, the fair value of Cameco’s interest rate swap net asset was $2,313,000 (2018 - $856,000).

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	135

Cameco measures its exposure to interest rate risk as the change in cash flows that would occur as a result of reasonably possible changes in interest rates, holding all other variables constant. As of the reporting date, the Company has determined the impact on earnings of a 1% increase in interest rate on its interest rate contracts to be a loss of $1,524,000.

Counterparty credit risk

Counterparty credit risk is associated with the ability of counterparties to satisfy their contractual obligations to Cameco, including both payment and performance. The maximum exposure to credit risk, as represented by the carrying amount of the financial assets, at December 31 was:

	2019		2018
Cash and cash equivalents	$	1,062,431	$	711,528
Short-term investments	****	—		391,025
Accounts receivable [note 6]	****	323,430		398,639
Advances receivable from JV Inkai [note 31]	****	—		124,533
Derivative assets [note 10]	****	10,504		3,881

Cash and cash equivalents

Cameco held cash and cash equivalents of $1,062,000,000 at December 31, 2019 (2018 - $712,000,000). Cameco mitigates its credit risk by ensuring that balances are held with counterparties with high credit ratings. The Company monitors the credit rating of its counterparties on a monthly basis and has controls in place to ensure prescribed exposure limits with each counterparty are adhered to.

Impairment on cash and cash equivalents has been measured on a 12-month ECL basis and reflects the short maturities of the exposures. The Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties. Cameco has assessed its counterparty credit risk on cash and cash equivalents by applying historic global default rates to outstanding cash balances based on S&P rating. The conclusion of this assessment is that the loss allowance is insignificant.

Accounts receivable

Cameco’s sales of uranium product, conversion and fuel manufacturing services expose the Company to the risk of non-payment. Cameco manages the risk of non-payment by monitoring the credit-worthiness of its customers and seeking pre-payment or other forms of payment security from customers with an unacceptable level of credit risk.

A summary of the Company’s exposure to credit risk for trade receivables is as follows:

	Carrying<br>value
Investment grade credit rating	$	244,315
Non-investment grade credit rating		77,323
Total gross carrying amount	$	321,638
Loss allowance		—
Net	$	321,638

At December 31, 2019, there were no significant concentrations of credit risk and no amounts were held as collateral. Historically, Cameco has experienced minimal customer defaults and, as a result, considers the credit quality of its accounts receivable to be high.

136	CAMECO CORPORATION

Cameco uses customer credit rating data, historic default rates and aged receivable analysis to measure the ECLs of trade receivables from corporate customers, which comprise a small number of large balances. Since the Company has not experienced customer defaults in the past, applying historic default rates in calculating ECLs, as well as considering forward-looking information, resulted in an insignificant allowance for losses.

The following table provides information about Cameco’s aged trade receivables as at December 31, 2019:

	Corporatecustomers		Othercustomers		Total
Current (not past due)	$	274,249	$	5,306	****	279,555
1-30 days past due		39,690		1,221	****	40,911
More than 30 days past due		301		871	****	1,172
Total	$	314,240	$	7,398	****	321,638

Liquidity risk

Financial liquidity represents Cameco’s ability to fund future operating activities and investments. Cameco ensures that there is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Company’s holdings of cash and cash equivalents. The Company believes that these sources will be sufficient to cover the likely short-term and long-term cash requirements.

The table below outlines the Company’s available debt facilities at December 31, 2019:

	Total amount		Outstanding and<br>committed		Amount available
Unsecured revolving credit facility	$	1,000,000	$	—	$	1,000,000
Letter of credit facilities [note 13]		1,719,120		1,528,603		190,517

The tables below present a maturity analysis of Cameco’s financial liabilities, including principal and interest, based on the

expected cash flows from the reporting date to the contractual maturity date:

	Carrying<br>amount		Contractual<br>cash flows		Due in<br>less than<br>1 year		Due in 1-3<br>years		Due in 3-5<br>years		Due after 5<br>years
Accounts payable and accrued liabilities	$	181,799	$	181,799	$	181,799	$	—	$	—	$	—
Long-term debt		996,718		1,000,000		—		400,000		500,000		100,000
Foreign currency contracts		4,333		4,333		4,168		165		—		—
Lease obligation [note 14]		12,869		14,004		3,967		8,031		2,006		—
Total contractual repayments	$	1,195,719	$	1,200,136	$	189,934	$	408,196	$	502,006	$	100,000
			Total		Due in<br>less than<br>1 year		Due in 1-3years		Due in 3-5years		Due after 5years
Total interest payments on long-term debt			$	266,820	$	41,040	$	82,080	$	52,080	$	91,620
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	137
---	---

Measurement of fair values

A.	Accounting classifications and fair values

The following tables summarize the carrying amounts and accounting classifications of Cameco’s financial instruments at the reporting date:

At December 31, 2019

	FVTPL			Amortizedcost		FVOCI -designated		Total
Financial assets
Cash and cash equivalents	$	—		$	1,062,431	$	—	$	1,062,431
Accounts receivable [note 6]		—			328,044		—		328,044
Derivative assets [note 10]
Foreign currency contracts		8,191			—		—		8,191
Interest rate contracts		2,313			—		—		2,313
Investments in equity securities [note 10]		—			—		24,408		24,408
	$	10,504	****	$	1,390,475	$	24,408	$	1,425,387
Financial liabilities
Accounts payable and accrued liabilities [note 12]	$	—		$	181,799	$	—	$	181,799
Lease obligation [note 14]		—			12,869		—		12,869
Derivative liabilities [note 14]
Foreign currency contracts		12,524			—		—		12,524
Long-term debt [note 13]		—			996,718		—		996,718
	****	12,524	****	****	1,191,386	****	—	****	1,203,910
Net	$	(2,020	)	$	199,089	$	24,408	$	221,477

At December 31, 2018

	FVTPL			Amortizedcost			FVOCI -designated		Total
Financial assets
Cash and cash equivalents	$	—		$	711,528		$	—	$	711,528
Short-term investments		—			391,025			—		391,025
Accounts receivable [note 6]		—			402,350			—		402,350
Derivative assets [note 10]
Foreign currency contracts		2,201			—			—		2,201
Interest rate contracts		1,680			—			—		1,680
Investments in equity securities [note 10]		—			—			28,916		28,916
Advances receivable from Inkai [note 31]		—			124,533			—		124,533
	$	3,881	****	$	1,629,436	****	$	28,916	$	1,662,233	****
Financial liabilities
Accounts payable and accrued liabilities [note 12]	$	—		$	224,754		$	—	$	224,754
Current portion of long-term debt [note 13]		—			499,599			—		499,599
Derivative liabilities [note 14]
Foreign currency contracts		54,866			—			—		54,866
Interest rate contracts		823			—			—		823
Uranium contracts		5,698			—			—		5,698
Long-term debt [note 13]		—			996,072			—		996,072
	****	61,387	****	****	1,720,425	****	****	—	****	1,781,812	****
Net	$	(57,506	)	$	(90,989	)	$	28,916	$	(119,579	)
138	CAMECO CORPORATION
---	---

Cameco has pledged $195,729,000 of cash as security against certain of its letter of credit facilities. This cash is being used as collateral for an interest rate reduction on the letter of credit facilities. The collateral account has a term of five years effective July 1, 2018. Cameco retains full access to this cash.

The investments in equity securities represent investments that Cameco intends to hold for the long-term for strategic purposes. As permitted by IFRS 9, these investments have been designated at the date of initial application as measured at FVOCI. The accumulated fair value reserve related to these investments will never be reclassified to profit or loss.

Cameco has not irrevocably designated a financial asset that would otherwise meet the requirements to be measured at amortized cost at FVOCI or FVTPL to eliminate or significantly reduce an accounting mismatch that would otherwise arise.

The following tables summarize the carrying amounts and fair values of Cameco’s financial instruments, including their levels in the fair value hierarchy:

As at December 31, 2019

				Fair value
	Carrying value			Level 1		Level 2			Total
Derivative assets [note 10]
Foreign currency contracts	$	8,191	****	$	—	$	8,191		$	8,191
Interest rate contracts	****	2,313	****		—		2,313			2,313
Investments in equity securities [note 10]	****	24,408	****		24,408		—			24,408
Derivative liabilities [note 14]
Foreign currency contracts	****	(12,524	)		—		(12,524	)		(12,524	)
Long-term debt [note 13]	****	(996,718	)		—		(1,111,923	)		(1,111,923	)
Net	$	(974,330	)	$	24,408	$	(1,113,943	)	$	(1,089,535	)

As at December 31, 2018

				Fair value
	Carrying value			Level 1		Level 2			Total
Derivative assets [note 10]
Foreign currency contracts	$	2,201	****	$	—	$	2,201		$	2,201
Interest rate contracts	****	1,680	****		—		1,680			1,680
Investments in equity securities [note 10]	****	28,916	****		28,916		—			28,916
Current portion of long-term debt [note 13]	****	(499,599	)		—		(511,210	)		(511,210	)
Derivative liabilities [note 14]
Foreign currency contracts	****	(54,866	)		—		(54,866	)		(54,866	)
Interest rate contracts	****	(823	)		—		(823	)		(823	)
Uranium contracts	****	(5,698	)		—		(5,698	)		(5,698	)
Long-term debt [note 13]	****	(996,072	)		—		(1,111,782	)		(1,111,782	)
Net	$	(1,524,261	)	$	28,916	$	(1,680,498	)	$	(1,651,582	)

The preceding tables exclude fair value information for financial instruments whose carrying amounts are a reasonable approximation of fair value. The carrying value of Cameco’s cash and cash equivalents, short-term investments, accounts receivable, and accounts payable and accrued liabilities approximates its fair value as a result of the short-term nature of the instruments.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	139

There were no transfers between level 1 and level 2 during the period. Cameco does not have any financial instruments that are classified as level 3 as of the reporting date.

B.	Financial instruments measured at fair value

Cameco measures its derivative financial instruments, material investments in equity securities, current portion of long-term debt and long-term debt at fair value. Investments in publicly held equity securities are classified as a recurring level 1 fair value measurement while derivative financial instruments and long-term debt are classified as a recurring level 2 fair value measurement.

The fair value of investments in equity securities is determined using quoted share prices observed in the principal market for the securities as of the reporting date. The fair value of Cameco’s long-term debt is determined using quoted market yields as of the reporting date, which ranged from 1.7% to 1.8% (2018 - 1.9% to 2.2%).

Foreign currency derivatives consist of foreign currency forward contracts, options and swaps. The fair value of foreign currency options is measured based on the Black Scholes option-pricing model. The fair value of foreign currency forward contracts and swaps is measured using a market approach, based on the difference between contracted foreign exchange rates and quoted forward exchange rates as of the reporting date.

Interest rate derivatives consist of interest rate swap contracts. The fair value of interest rate swaps is determined by discounting expected future cash flows from the contracts. The future cash flows are determined by measuring the difference between fixed interest payments to be received and floating interest payments to be made to the counterparty based on Canada Dealer Offer Rate forward interest rate curves.

Uranium contract derivatives consist of price swaps. The fair value of uranium price swaps is determined by discounting expected future cash flows from the contracts. The future cash flows are determined by measuring the difference between fixed purchases or sales under contracted prices, and floating purchases or sales based on Numerco forward uranium price curves. The swaps were settled during the year so there were none outstanding at the reporting date.

Where applicable, the fair value of the derivatives reflects the credit risk of the instrument and includes adjustments to take into account the credit risk of the Company and counterparty. These adjustments are based on credit ratings and yield curves observed in active markets at the reporting date.

140	CAMECO CORPORATION

Derivatives

The following table summarizes the fair value of derivatives and classification on the consolidated statements of financial position:

	2019			2018
Non-hedge derivatives:
Foreign currency contracts	$	(4,333	)	$	(52,665	)
Interest rate contracts	****	2,313	****		857
Uranium contracts	****	—	****		(5,698	)
Net	$	(2,020	)	$	(57,506	)
Classification:
Current portion of long-term receivables, investments and other [note 10]	$	4,144	****	$	1,028
Long-term receivables, investments and other [note 10]	****	6,360	****		2,853
Current portion of other liabilities [note 14]	****	(7,505	)		(35,534	)
Other liabilities [note 14]	****	(5,019	)		(25,853	)
Net	$	(2,020	)	$	(57,506	)

The following table summarizes the different components of the gains (losses) on derivatives included in net earnings:

	2019			2018
Non-hedge derivatives:
Foreign currency contracts	$	31,863	****	$	(85,967	)
Interest rate contracts	****	2,068	****		2,032
Uranium contracts	****	(1,662	)		2,854
Net	$	32,269	****	$	(81,081	)
27.	Capital management
---	---

Cameco’s management considers its capital structure to consist of bank overdrafts, long-term debt, short-term debt (net of cash and cash equivalents and short-term investments), non-controlling interest and shareholders’ equity.

Cameco’s capital structure reflects its strategy and the environment in which it operates. Delivering returns to long-term shareholders is a top priority. The Company’s objective is to maximize cash flow while maintaining its investment grade rating through close capital management of our balance sheet metrics. Capital resources are managed to allow it to support achievement of its goals while managing financial risks such as the continued weakness in the market, litigation risk and refinancing risk. The overall objectives for managing capital in 2019 reflect the environment that the Company is operating in, similar to the prior comparative period.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	141

The capital structure at December 31 was as follows:

	2019			2018
Current portion of long-term debt [note 13]	$	—	****	$	499,599
Long-term debt [note 13]	****	996,718	****		996,072
Cash and cash equivalents	****	(1,062,431	)		(711,528	)
Short-term investments	****	—	****		(391,025	)
Net debt	****	(65,713	)		393,118
Non-controlling interest	****	238	****		310
Shareholders’ equity	****	4,994,725	****		4,993,282
Total equity	****	4,994,963	****		4,993,592
Total capital	$	4,929,250	****	$	5,386,710

Cameco is bound by certain covenants in its general credit facilities. These covenants place restrictions on total debt, including guarantees and set minimum levels for net worth. As of December 31, 2019, Cameco met these requirements.

28.	Segmented information

Cameco has two reportable segments: uranium and fuel services. Cameco’s reportable segments are strategic business units with different products, processes and marketing strategies. The uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate. The fuel services segment involves the refining, conversion and fabrication of uranium concentrate and the purchase and sale of conversion services.

Cost of sales in the uranium segment includes care and maintenance costs for our operations that currently have production suspensions. Cameco expensed $153,924,000 (2018 - $212,511,000) of care and maintenance costs during the year, including $260,000 (2018 - $32,111,000) of severance costs. This had a negative impact on gross profit in the uranium segment.

Accounting policies used in each segment are consistent with the policies outlined in the summary of significant accounting policies. Segment revenues, expenses and results include transactions between segments incurred in the ordinary course of business. These transactions are priced on an arm’s length basis, are eliminated on consolidation and are reflected in the “other” column.

142	CAMECO CORPORATION
A.	Business segments - 2019
---	---

For the year ended December 31, 2019

	Uranium			Fuelservices		Other			Total
Revenue	$	1,413,809		$	370,277	$	78,839		$	1,862,925
Expenses
Cost of products and services sold		1,041,922			234,423		69,206			1,345,551
Depreciation and amortization		218,832			45,856		11,061			275,749
Cost of sales		1,260,754			280,279		80,267			1,621,300
Gross profit (loss)	****	153,055	****	****	89,998	****	(1,428	)	****	241,625	****
Administration		—			—		124,869			124,869
Exploration		13,686			—		—			13,686
Research and development		—			—		6,058			6,058
Other operating expense		2,732			—		—			2,732
Loss on disposal of assets		1,869			—		—			1,869
Finance costs		—			—		98,622			98,622
Gain on derivatives		—			—		(32,269	)		(32,269	)
Finance income		—			—		(29,760	)		(29,760	)
Share of earnings from equity-accounted investee		(45,360	)		—		—			(45,360	)
Other expense (income)		(52,801	)		—		18,961			(33,840	)
Earnings (loss) before income taxes	****	232,929	****	****	89,998	****	(187,909	)	****	135,018	****
Income tax expense										61,077
Net earnings									****	73,941	****
Capital expenditures for the year	$	48,092	****	$	27,117	$	2	****	$	75,211	****
2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	143
---	---

For the year ended December 31, 2018

	Uranium			Fuelservices		Other			Total
Revenue	$	1,684,056		$	313,989	$	93,616		$	2,091,661
Expenses
Cost of products and services sold		1,138,940			219,240		109,760			1,467,940
Depreciation and amortization		277,171			35,977		14,825			327,973
Cost of sales	****	1,416,111	****	****	255,217	****	124,585	****	****	1,795,913	****
Gross profit (loss)	****	267,945	****	****	58,772	****	(30,969	)	****	295,748	****
Administration		—			—		141,552			141,552
Exploration		20,283			—		—			20,283
Research and development		—			—		1,757			1,757
Other operating expense		59,616			—		—			59,616
Loss on disposal of assets		1,008			1,264		31			2,303
Finance costs		—			—		111,779			111,779
Loss on derivatives		—			—		81,081			81,081
Finance income		—			—		(22,071	)		(22,071	)
Share of earnings from equity-accounted investee		(32,321	)		—		—			(32,321	)
Other income		(81,955	)		—		(26,205	)		(108,160	)
Earnings (loss) before income taxes	****	301,314	****	****	57,508	****	(318,893	)	****	39,929	****
Income tax recovery										(126,306	)
Net earnings									****	166,235	****
Capital expenditures for the year	$	44,114	****	$	11,226	$	22	****	$	55,362	****
B.	Geographic segments
---	---

Revenue is attributed to the geographic location based on the location of the entity providing the services. The Company’s revenue from external customers is as follows:

	2019		2018
United States	$	1,295,195	$	1,660,727
Canada	****	567,730		424,079
Switzerland	****	—		4,038
Germany	****	—		2,817
	$	1,862,925	$	2,091,661

The Company’s non-current assets, excluding deferred tax assets and  financial instruments, by geographic location are as follows:

	2019		2018
Canada	$	3,267,376	$	3,401,828
Australia	****	392,500		414,084
United States	****	121,102		131,526
Kazakhstan	****	80		49
Germany	****	24		41
	$	3,781,082	$	3,947,528
144	CAMECO CORPORATION
---	---
C.	Major customers
---	---

Cameco relies on a small number of customers to purchase a significant portion of its uranium concentrates and uranium conversion services. During 2019, revenues from two customers of Cameco’s uranium and fuel services segments represented approximately $422,740,000 (2018 - $204,594,000), approximately 24% (2018 - 10%) of Cameco’s total revenues from these segments. As customers are relatively few in number, accounts receivable from any individual customer may periodically exceed 10% of accounts receivable depending on delivery schedule.

29.	Group entities

The following are the principal subsidiaries and associates of the Company:

	Principal place		Ownership interest
	of business		2019			2018
Subsidiaries:
Cameco Fuel Manufacturing Inc.		Canada		100	%		100	%
Cameco Marketing Inc.		Canada		100	%		100	%
Cameco Inc.		US		100	%		100	%
Power Resources, Inc.		US		100	%		100	%
Crow Butte Resources, Inc.		US		100	%		100	%
NUKEM, Inc.		US		100	%		100	%
Cameco Australia Pty. Ltd.		Australia		100	%		100	%
Cameco Europe Ltd.		Switzerland		100	%		100	%
Associates:
JV Inkai		Kazakhstan		40	%		40	%
30.	Joint operations
---	---

Cameco conducts a portion of its exploration, development, mining and milling activities through joint operations located around the world. Operations are governed by agreements that provide for joint control of the strategic operating, investing and financing activities among the partners. These agreements were considered in the determination of joint control. Cameco’s significant Canadian uranium joint operation interests are McArthur River, Key Lake and Cigar Lake. The Canadian uranium joint operations allocate uranium production to each joint operation participant and the joint operation participant derives revenue directly from the sale of such product. Mining and milling expenses incurred by joint operations are included in the cost of inventory.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	145

Cameco reflects its proportionate interest in these assets and liabilities as follows:

	Principal place
	of business		Ownership			2019		2018
Total assets
McArthur River		Canada		69.81	%	$	1,046,556	$	1,065,562
Key Lake		Canada		83.33	%	****	524,324		537,233
Cigar Lake		Canada		50.03	%	****	1,354,399		1,503,863
						$	2,925,279	$	3,106,658
Total liabilities
McArthur River				69.81	%	$	32,132	$	32,829
Key Lake				83.33	%	****	227,562		222,369
Cigar Lake				50.03	%	****	47,396		38,478
						$	307,090	$	293,676
31.	Related parties
---	---
A.	Transactions with key management personnel
---	---

Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel of the Company include executive officers, vice-presidents, other senior managers and members of the board of directors.

In addition to their salaries, Cameco also provides non-cash benefits to executive officers and vice-presidents and contributes to pension plans on their behalf (note 25). Senior management and directors also participate in the Company’s share-based compensation plans (note 24).

Executive officers are subject to terms of notice ranging from three to six months. Upon resignation at the Company’s request, they are entitled to termination benefits of up to the lesser of 18 to 24 months or the period remaining until age 65. The termination benefits include gross salary plus the target short-term incentive bonus for the year in which termination occurs.

Compensation for key management personnel was comprised of:

	2019		2018
Short-term employee benefits	$	21,225	$	24,821
Share-based compensation^(a)^	****	12,034		12,796
Post-employment benefits	****	5,542		4,323
Termination benefits	****	272		860
Total	$	39,073	$	42,800
(a)	Excludes deferred share units held by directors (see note 24).
---	---
B.	Other related party transactions
---	---

Cameco funded JV Inkai’s project development costs through an unsecured shareholder loan. The limit of the loan facility is $175,000,000 (US) and advances under the facility bear interest at a rate of LIBOR plus 2%. At December 31, 2019, there was no balance outstanding as the loan was fully repaid in the third quarter (2018 - $124,533,000 ($91,320,000 (US)) (notes 10 and 30). For the year ended December 31, 2019, Cameco recorded interest income of $1,878,000 relating to this balance (2018 - $5,603,000).

146	CAMECO CORPORATION

Cameco purchases uranium concentrates from JV Inkai. For the year ended December 31, 2019, Cameco had purchases of $112,861,000 ($84,827,000 (US)) (2018 - $94,063,000 ($72,007,000 (US))). Cameco received a cash dividend from JV Inkai of $14,079,000 ($10,635,000 (US)) (2018 - nil).

32.	Comparative Figures

Certain prior year balances have been reclassified to conform to the current financial statement presentation.

2019 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	147

Investor Information

Common Shares

Toronto (CCO)  |  New York (CCJ)

Transfer Agents and Registrars

The registrar and transfer agent for Cameco’s common shares is AST Trust Company. For information on common shareholdings, dividend cheques, lost share certificates and address changes, contact:

Canada<br> <br><br><br><br>AST Trust Company (Canada)<br> <br><br><br><br>P.O. Box 700, Station B<br> <br><br><br><br>Montreal, Quebec H3B 3K3	USA<br> <br><br><br><br>American Stock Transfer &<br> <br><br><br><br>Trust Company, LLC<br> <br><br><br><br>6201 15th Avenue<br> <br><br><br><br>Brooklyn, NY 11219
Telephone<br> <br><br><br><br>1-800-387-0825 or<br> <br><br> <br>1-416-682-3860 (outside of North America)<br> <br><br><br><br>www.astfinancial.com/ca-en
Inquiries<br> <br><br><br><br>Cameco Corporation<br> <br><br><br><br>2121 - 11th Street West<br> <br><br><br><br>Saskatoon, Saskatchewan S7M 1J3	For comprehensive<br> <br><br><br><br>financial information, visit:
	cameco.com
Phone:    <br>306-956-6200<br> <br><br> <br>Fax:         306-956-6201
Annual Meeting	Dividends
---	---
The annual meeting of shareholders of Cameco Corporation is scheduled to be held on<br>April 30, 2020 at Cameco’s head office in Saskatoon, Saskatchewan.	In 2019, our board of directors declared a dividend of $0.08 per common share, which was<br>paid December 13, 2019. The decision to declare a dividend by our board is based on our cash flow, financial position, strategy and other relevant factors including appropriate alignment with the cyclical nature of our earnings.