Message from the Chair

Dear Shareholder,

2011 was certainly a year of change. The March events in Japan have had a significant impact on the nuclear industry, but an even bigger impact on the people of that country, many of whom are our customers and friends, and our thoughts are with them as they continue to rebuild.

As for our industry, it faced a challenging environment this year. However, Cameco's performance, as you'll see in this report, continued to be positive, and looking forward, the long term fundamentals for the industry remain strong.

The board is responsible for overseeing management to ensure the company stays on course to achieve its strategy to increase annual uranium production to 40 million pounds by 2018, and deliver value to you, the shareholder. With this in mind, the board and its committees have been devoting more time and attention to risk oversight, strategic planning and succession planning.

Risk oversight is important as the company focuses on its goal of increased production. The board works with management to identify the company's principal risks, and to ensure we have a robust system for managing them across the organization. In 2011, the board enhanced the established process by approving a formal risk policy that increases reporting to the board.

Strategic planning is also key to our long-term success, and the board has been taking a more active role, working closely with management on plans for the company's future. As a result, we are pleased with the progress to date and confident in management's strategy to achieve its goals.

On the subject of management, 2011 saw a successful CEO transition at Cameco, with Tim Gitzel stepping seamlessly into the role after Jerry Grandey's retirement in June. The board had an active role in the succession plan, and is pleased that it was possible to find such a qualified candidate within the company. Tim brings a wealth of experience to the position, including a deep knowledge of Cameco and its operations, as well as wider experience of the industry from his years spent at Areva.

In addition, Grant Isaac was appointed chief financial officer, and Alice Wong was appointed senior vice-president, corporate services. Ken Seitz was also new to his role, completing his first year as senior vice-president, marketing and business development. This new management team has a mix of experience and enthusiasm that led to excellent results in 2011, and we believe will prove to be effective in the years to come.

The board itself gained two new members in 2011—president and CEO, Tim Gitzel, and former Èlectricitè de France senior executive, Daniel Camus. Both bring extensive industry experience to the board, as well as valuable international experience. For 2012, the nominating, corporate governance and risk committee and the board are also pleased to announce Ian Bruce as a new nominated director. Mr. Bruce brings experience in investment banking, finance and mergers and acquisitions.

The board is excited by the additions to management and the board, and the new energy they bring. We look forward to seeing this energy translating into increased value for you, our shareholders.

I would encourage you to take the opportunity to meet our management team and members of the board at this year's Annual General Meeting, which will be held May 15 in Saskatoon Saskatchewan. It's a great chance to meet Cameco's leadership and other shareholders, while also getting an overview of our operations and plans for the future.

Victor J. Zaleschuk
Chair of the board