6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

Under the Securities Exchange Act of 1934

For the month of April, 2021

Cameco Corporation

(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 No.	Description	Page No.
99.1	Notice of 2021 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: April 6, 2021	Cameco Corporation
	By:	“Sean A. Quinn”
		Sean A. Quinn
		Senior Vice-President, Chief Legal Officer and Corporate Secretary

Page 2

EX-99.1

Exhibit 99.1

Notice of our 2021 annual meeting of shareholders

You are invited to our 2021 annual meeting:

When

Thursday, May 6, 2021

8:30 a.m. CST

Via live webcast from Saskatoon, SK

https://web.lumiagm.com/169464941

password: cameco2021 (case sensitive)

Your vote is important

If you held Cameco common shares on March 10, 2021, you are entitled to receive notice of and to vote at this meeting.

You can vote at the virtual meeting live or by proxy. We encourage shareholders to vote by proxy in advance of the meeting.

See pages 9 through 15 of the attached management proxy circular for information about how to vote.

By order of the board of directors,

FOR MORE INFORMATION

Read about the business of the meeting beginning on page 7 of the attached management proxy circular.

The deadline for submitting a shareholder proposal for our 2022 annual meeting is December 31, 2021 and we require advance notice for nominating directors.

Access our 2020 annual report and other documents and information online:

• cameco.com

• sedar.com (SEDAR)

• sec.gov/edgar.shtml (EDGAR)

See pages 53 and 54 for more information.

Sean Quinn

Senior Vice-President,

Chief Legal Officer and Corporate Secretary

Saskatoon, Saskatchewan

April 6, 2021

COMMON SHARES OUTSTANDING
396,262,741	December 31, 2020
397,200,356	March 10, 2021
AST Trust Company (Canada) is our transfer agent and registrar for Canada.
American Stock Transfer & Trust Company LLC is our transfer agent and registrar for the US.

EX-99.2

Exhibit 99.2

	Notice and Access Notification to Shareholders
	Notice of 2021 Annual Meeting of Shareholders and Notice of Availability of Meeting Materials

Annual Meeting of Shareholders of Cameco Corporation will be held:

When:	Thursday, May 6, 2021	Via live audio webcast from Saskatoon, SK at
	8:30 a.m. local time	https://web.lumiagm.com/169464941

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 2021 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 2020 annual report (which includes its audited consolidated financial statements for the fiscal year ended December 31, 2020 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 at cameco.com/invest/2021-annual-meeting	•   The company’s page on SEDAR (sedar.com)

MATTERS TO BE RECEIVED OR VOTED ON AT THE MEETING (see pages 7 and 8 of management proxy circular)	Page references in management proxy circular
•  Elect the directors – election of the directors of Cameco Corporation	page 7 and pages 17 to 27
•  Reappoint the auditors – reappoint the independent auditors and authorize the directors to fix their remuneration	page 7
•  Receive the financial statements – receive the audited consolidated financial statements for the financial year ended December 31, 2020 and the auditor’s report thereon	page 8
•  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 8 and pages 61 to 102

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

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 1-888-433-6443 (toll free) or 416-682-3801 outside Canada and the United States

• Sending an email to: fulfilment@astfinancial.com

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 22, 2021 (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. To vote in advance of the meeting, 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 voting instructions 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 8:30 a.m. CST on Tuesday, May 4, 2021, or if the meeting is postponed or adjourned, no later than 48 hours (excluding Saturdays, Sundays and statutory holidays) before the meeting is reconvened.

Registered shareholders and duly appointed proxyholders will be able to participate in the meeting, submit questions and vote, all in real time, by connecting to the meeting via the internet to https://web.lumiagm.com/169464941 using the latest version of Chrome, Safari, Edge or Firefox on your computer, tablet or smartphone. Non-registered shareholders who have appointed themselves as proxyholders will be able to participate in the meeting, submit questions and vote. Non-registered shareholders who have not appointed themselves as proxyholders, may attend as guests, and guests will not be able to vote or ask questions at the meeting.

Any shareholder that wishes to appoint a person other than the management nominees identified on the form of proxy or voting instruction form (including a non-registered shareholder who wishes to appoint themselves to attend) must carefully follow the instructions in the circular and on the form of proxy or voting instruction form. These instructions include the additional step of registering with our transfer agent, AST Trust Company (Canada), prior to the meeting, but after submitting the form of proxy or voting instruction form. You must follow these instructions closely as the steps are different than for in-person meetings.

See voting instructions on pages 9 through 15 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 and the CEO	1
ESG Content map	4
Notice of our 2021 annual meeting of shareholders	5
Management proxy circular	6
Business of the meeting	7
•   Delivery of meeting materials	9
•   Voting	9
About the nominated directors	17
•   Director profiles
•   2020 Meetings and attendance
•   Director compensation and share ownership
Our board	32
•   Board structure, composition and succession
•   Skills, attributes and experience
•   Board diversity
•   Board, committee and director assessments
•   Director development
Our corporate governance	41
Key elements of our corporate governance	41
How the board operates	41
•   Role of the board
•   Executive succession planning and leadership development
•   Internal controls
Our expectations of directors	47
•   Code of conduct and ethics
•   Serving on other boards
•   Board interlocks
•   Change in position
Board independence standards	50
Stakeholder engagement	50
•   Disclosure
•   Engagement with the investment community
•   Say on pay
•   How to engage with the board
Voting results	53
Shareholder proposals	53
Advance notice by-law	53
Accessing our governance and other regulatory disclosure	53
Compliance	54
Governance guidelines	54
Board committees	55
•   Committee responsibilities

What’s inside
•   Committee membership
•   Committee chair rotation
•   Cross-committee attendance
•   Access to management and outside advisors
•   Committee reports
Message from the Chair of Human Resources and Compensation Committee	62
Compensation discussion and analysis	65
Our 2020 named executive officers	66
Compensation governance	67
•   Independent advice
Compensation program risk management	68
•   Clawback policy
•   Share ownership requirements
•   Anti-hedging policy
Compensation program decision-making process	69
Our approach to executive compensation	70
•   Compensation comparator group
•   Target compensation
•   Share ownership requirements
Our executive compensation program aligns with our strategy and ESG performance	72
Compensation components overview	73
•   Base salary
•   Short-term incentive (STI) plan
•   Long-term incentive (LTI) program
•   Performance share unit plan
•   Restricted share unit plan
•   Stock option plan
•   Pension
•   Benefits
2020 Performance and decisions	80
•   Market context
•   Share performance and executive compensation
•   Base salary
•   Short-term incentive (STI) results and scorecard
•   PSU results and scorecard
CEO compensation summary	89
•   2020 Key results
•   CEO compensation
•   CEO realized and realizable pay
•   Lookback
•   Share ownership

What’s inside
2021 Compensation decisions	91
•   Base salary
•   Short-term incentive (STI)
•   Long-term incentive (LTI)
2020 Compensation details	92
•   Summary compensation table
•   Incentive plan awards
•   Options exercised and value realized during the year
•   Equity compensation plan information
•   Pension benefits
•   Loans to executives
•   Termination and change of control benefits
Appendices	103

Message from the Chair of the Board and the CEO¹

	We are pleased to invite you to Cameco’s annual meeting of shareholders at 8:30 a.m. (CST) on May 6, 2021. 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 2021 compensation decisions. The board’s goal is to deliver long-term value to Cameco’s stakeholders. The board pays particular attention to strategy and value creation, ESG and risk oversight, board governance and management succession – all areas the board sees as fundamental to Cameco’s sustainability and future success. Decisive action to protect our people Challenges created by the COVID-19 pandemic affected every aspect of the company in 2020, and Cameco’s management team took proactive measures to protect the health and well-being of Cameco’s workers, their families and their communities. The board was fully engaged with management as it acted quickly and carefully at the outset to protect Cameco’s workers and to help slow down the spread of the virus. When the pandemic was declared in March 2020, the majority of our corporate workforce quickly transitioned to physically distanced, work-from-home arrangements to keep people safe and prevent potential community spread of the virus. Our remote Cigar Lake operation in northern Saskatchewan was temporarily placed in safe care and maintenance and, at our fuel services division in Ontario, production was temporarily suspended at the Blind River refinery and UF6 plant in Port Hope. These measures ensured far fewer people were on site allowing us to achieve physical distancing wherever possible, and to put new COVID-19 safety protocols in place.
Ian Bruce, Chair
Tim Gitzel, CEO

Under the guidance of provincial re-opening plans, we implemented extensive new screening and protective measures at all our facilities. We continued to focus on protecting employees and our neighbouring communities as we restarted production. Despite restarting our Cigar Lake mine in September 2020, in response to increased case numbers in northern Saskatchewan and growing uncertainty about the availability of the required workforce, production was again suspended at the mine in mid-December 2020. We remain vigilant throughout our operations, and our COVID-19 screening and safety measures will be kept in place for the foreseeable future. We also continue to work closely with public health officials, particularly in the remote northern Saskatchewan region where we operate fly-in, fly-out facilities.

We continued to pay all our employees during the periods of suspended production.

Strategic focus

The board is focused on Cameco’s strategic direction and risk oversight in order to help the company achieve its vision to energize a clean-air world. The board works closely with management, reviewing and discussing strategy at every regular board meeting and, in 2020, the board met an additional 10 times (either as formal

¹  The message from the chair of the board and the CEO contains forward-looking information and is based upon the assumptions and subject to the material risks described at pages 2 through 4 of our 2020 management’s discussion and analysis (MD&A). Actual outcomes for future periods may be significantly different.

2021 MANAGEMENT PROXY CIRCULAR    1

meetings or update calls) to provide strategic oversight on various matters as the company navigated the challenges of the pandemic environment.

Despite the disruptions, Cameco executed on all strategic fronts in 2020. Management continued to focus on preserving the value of Cameco’s 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. Cameco is increasingly confident that the uranium market will undergo a transition, similar to what happened in the UF₆ conversion market and is now benefitting the fuel services segment of Cameco’s business. The board and management are optimistic about the drivers of long-term growth in the nuclear industry and remain committed to taking the necessary steps to execute on Cameco’s strategy, self-manage risk and successfully navigate the market transition. We are also pleased that, following two lower court decisions in our favour, the Supreme Court of Canada has denied CRA’s appeal request and that the dispute for the 2003, 2005 and 2006 tax years are fully and finally resolved.

Increasing populations and growing electricity demand around the world are driving the long-term fundamentals for nuclear. Momentum is also building for non-traditional uses of nuclear power. As countries and companies around the world are committing to net-zero carbon targets, there is increasing recognition that nuclear energy must play a central role in the shift to a low-carbon, climate resilient economy.

Initiatives are underway at Cameco to improve efficiency and reduce costs across the organization. Several 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 advance toward achieving our vision to energize a clean-air world.

Cameco is pursuing non-traditional markets for UO₂ and fuel fabrication in its fuel services business. We have also been actively securing new contracts for reactor components to support refurbishment of Canadian nuclear reactors. We recently increased our 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.

ESG and risk oversight

Cameco has a mature enterprise risk management program with processes and controls to ensure we are appropriately monitoring, 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. In 2020, the board spent time discussing environmental, social and governance (ESG) matters and climate risks as well as various other risks that were heightened due to the COVID-19 pandemic.

Cameco’s commitment to ESG matters is closely monitored by the board and its committees. A safe, healthy and rewarding workplace, a clean environment and supportive communities are all 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 its employees and Indigenous communities in northern Saskatchewan. We are a leading industrial employer of First Nations and Métis people and have a dedicated team 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 been a member of our board since 2009.

Given the evolving ESG landscape, Cameco established a multi-disciplinary ESG working group to review our current approach to sustainability and ESG governance and reporting. As a result, we plan to issue an ESG report later in 2021 that will reflect both Sustainability Accounting Standard Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) principles. For more information about our approach to ESG, please refer to the ESG Content Map that follows this message or the Sustainability section of our website (cameco.com/about/sustainability).

2     CAMECO CORPORATION

Sound governance

We serve Cameco and its stakeholders with a strong governance foundation and commitment to good governance principles. 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 enhance governance at Cameco.

We are proud of the quality and experience of our directors as well as the mix of gender, skills, background and other characteristics they bring to the board, and are committed to broadening the board’s diversity. 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 the expectations of our stakeholders.

Community leadership

We believe that strong relationships with our communities is a key measure of Cameco’s sustainability and long-term success. In response to COVID-19, we initiated two Cameco COVID-19 Relief Funds for Saskatoon/ northern Saskatchewan and Blind River/Northumberland County in Ontario, providing $1.25 million for 102 local pandemic-related projects led by First Nations, charitable, and community-based organizations in Saskatchewan and Ontario, and we donated a significant amount of personal protective equipment to these communities.

In 2020, we also held our second annual Step Up for Mental Health initiative as a virtual run/walk event. With close to 4,000 people participating in the event, we raised more than $380,000 for mental health projects in Saskatchewan and awarded grants to 22 projects, ranging from education and training programs to direct support for people struggling with mental health and addiction.

Looking ahead

Anne McLellan is retiring from the board after serving as a director for 15 years and as a chair of the nominating, corporate governance and risk committee for the last five years. On behalf of the board and management, we thank Anne for her dedicated service, leadership and governance expertise over these many years. We wish Anne well and thank her for her guidance and support. In 2020, Leontine Atkins was appointed as a director. Leontine brings financial and corporate strategy expertise as well as experience in the global mining, power, utility and oil and gas industries to our board.

At Cameco we have a skilled and dedicated team that is focused on delivering results. The senior leadership team conducts itself with integrity and with an emphasis on safety, people and the environment. It has a wealth of global experience and 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.

We know that we may be dealing with COVID-19 for some time, and our efforts to protect our people, our communities and our business remain our top priority. 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 for its stakeholders.

Sincerely,

Ian Bruce	Tim Gitzel
Chair of the Board	President and Chief Executive Officer

2021 MANAGEMENT PROXY CIRCULAR    3

ESG content map

We include information about environmental, social and governance (ESG) matters throughout our disclosure, including this circular. You can also find ESG information in Cameco’s 2020 annual report, 2020 annual information form and 2020 Sustainability Reporting. These documents are available on cameco.com under Invest > Financials (cameco.com/invest/financial-information).

Below is a reference guide on how to locate Cameco’s ESG information.

	Cameco.com	2020 Annual Report	2020 Sustainability Reporting – 2019 GRI Index Update	2021 Management Proxy Circular	2020 Annual Information Form
	Navigation	Pages	Pages	Pages	Pages
Vision, Values and Measure of Success	About › Sustainability ›	25	1-4	1, 47	82
Our Approach to ESG Matters	About › Sustainability › Our Approach to ESG Reporting	25	1-4		82
Strategy	Invest › Strategy	18		1	8
Related Policies	About › Governance › Policies & Programs
GOVERNANCE
Board Oversight	About › Sustainability › Our Approach to ESG Reporting › Governance	29		42	85
Risk and Risk Management		3, 30, 63		43	85, 95
Business Ethics, Integrity and Anti-corruption		29	40-41	47	84
ENVIRONMENT
Environmental Management System Overview	About › Sustainability › Our Approach to ESG Reporting › Environment	26			81
Environmental Data	2020 Sustainability Reporting › GRI Index Update › Environment		13-25		82
Site Level Information	2020 Sustainability Reporting › Businesses				20
GHG Emissions	About › Sustainability › Our 2019 GRI Performance Index		16-17		82
Tailings / Waste	About › Sustainability › Our 2019 GRI Performance Index Library › Documents › Cameco Tailings Management		21-23		27, 43, 99
SOCIAL
Health and Safety	2020 Sustainability Reporting › Businesses	27	28-29, 45		83
COVID-19	Invest › Strategy › Our COVID-19 Response Community	8, 27	3	1	82
Our People (including worker, labour and human rights)	About › Sustainability › Our Approach to ESG Reporting › Social Careers › Why Cameco	28	2, 8, 26-27, 30-32	37, 45	83
Inclusion and Diversity	About › Sustainability › Our Approach to ESG Reporting › Social Careers › Why Cameco › A Diverse Workforce	28	8, 31	37, 45	83
Stakeholder Relations and Community Engagement	Community About › Sustainability › Our Approach to ESG Reporting › Social	28	2, 11, 32-38, 44	1, 52	84

We plan to issue an ESG report later in 2021 that aligns with SASB and TCFD principles. Please visit the Sustainability section of our website to learn more about sustainability at Cameco and our approach to ESG reporting (cameco.com/about/sustainability).

4     CAMECO CORPORATION

Notice of our 2021 annual meeting of shareholders

You are invited to our 2021 annual meeting:

When

Thursday, May 6, 2021

8:30 a.m. CST

Via live webcast from Saskatoon, SK

https://web.lumiagm.com/169464941

password: cameco2021 (case sensitive)

Your vote is important

If you held Cameco common shares on March 10, 2021, you are entitled to receive notice of and to vote at this meeting.

You can vote at the virtual meeting live or by proxy. We encourage shareholders to vote by proxy in advance of the meeting.

See pages 9 through 15 of the attached management proxy circular for information about how to vote.

By order of the board of directors,

Sean Quinn

Senior Vice-President,

Chief Legal Officer and Corporate Secretary

Saskatoon, Saskatchewan

April 6, 2021

FOR MORE INFORMATION

Read about the business of the meeting beginning on page 7 of the attached management proxy circular.

The deadline for submitting a shareholder proposal for our 2022 annual meeting is December 31, 2021 and we require advance notice for nominating directors.

Access our 2020 annual report and other documents and information online:

• cameco.com

• sedar.com (SEDAR)

• sec.gov/edgar.shtml (EDGAR)

See pages 53 and 54 for more information.

COMMON SHARES OUTSTANDING
396,262,741	December 31, 2020
397,200,356	March 10, 2021
AST Trust Company (Canada) is our transfer agent and registrar for Canada.
American Stock Transfer & Trust Company LLC is our transfer agent and registrar for the US.

2021 MANAGEMENT PROXY CIRCULAR    5

	Read about the four items of business and how to vote your shares pages 7 to 15	Management proxy circular You have received this circular because you owned Cameco common shares on March 10, 2021. Management is soliciting your proxy for the 2021 annual meeting of shareholders, and we pay all proxy solicitation costs.
	Learn about our nominated directors, governance practices and how the board operates pages 16 to 60	As a shareholder, you have the right to attend the annual meeting of shareholders on May 6, 2021 and to vote your shares. In light of the ongoing impact of the COVID-19 pandemic and the associated public health measures, we are holding this year’s meeting virtually. If you are unable to attend the meeting during the live webcast, you can also listen to the webcast on our website (cameco.com) following the meeting.
	Find out what we paid our executive officers in 2020 and why pages 61 to 102	The board of directors approved the content of this circular on March 15, 2021 and has authorized us to distribute it to you. We have also sent a copy to each of our directors and to our auditors.
		Date of information	Currency
		The information contained in this circular is as of March 10, 2021, except where otherwise noted.	All dollar amounts are in Canadian dollars, unless indicated otherwise.

THINGS TO NOTE

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.

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 circular or voting at the virtual meeting.

Cameco employees or representatives of Kingsdale Advisors (Kingsdale), our strategic shareholder advisor and proxy solicitation agent, may contact you by mail or phone to encourage you to vote. If you 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 contactus@kingsdaleadvisors.com.

We are paying Kingsdale approximately $57,500 for their 2021 services.

6     CAMECO CORPORATION

Business of the meeting

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 the Majority voting for non-executive directors section on page 18).

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. Leontine Atkins is standing for election for the first time this year, having been appointed to the board on August 1, 2020. For information about each nominee, see the director profiles starting on page 19.

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 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 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 directly linked to the financial statements that are required by regulators and conducting audits of employee benefit plans.

• tax services relate to tax compliance and tax advice that are beyond the scope of the 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.

The table below shows the fees paid to KPMG and its affiliates for services in 2019 and 2020. The board has invited a representative of KPMG to attend the meeting.

	2020 ($)		% of total fees (%)		2019 ($)		% of total fees (%)
Audit fees
Cameco1		1,845,700		75.7		1,968,900		78.9
Subsidiaries2		335,300		13.8		221,800		8.9
Total audit fees		2,181,000		89.5		2,190,700		87.8
Audit-related fees
Pensions		27,300		1.1		27,300		1.1
Total audit-related fees		27,300		1.1		27,300		1.1
Tax fees
Compliance		32,400		1.3		37,900		1.5
Planning and advice3		157,400		6.5		200,800		8.1
Total tax fees		189,800		7.8		238,700		9.6
All other fees
Other non-audit fees4		39,000		1.6		38,300		1.5
Total fees		2,437,100		100.0		2,456,700		100.0

1. For the audit of Cameco’s annual consolidated financial statements and the review of interim financial statements.

2. For the audit of Cameco’s subsidiary financial statements.

3. For transfer pricing advisory.

4. For Cameco’s I-4 membership.

2021 MANAGEMENT PROXY CIRCULAR    7

Receive the financial statements

Our consolidated financial statements for the year ended December 31, 2020 will be presented at the meeting.

You can download a copy of our 2020 annual report (which includes our consolidated financial statements for the year ended December 31, 2020 and management’s discussion and analysis (MD&A) and the auditors’ report) on our website (cameco.com/invest/financial-information). You will receive 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 for executive compensation, the shareholders accept the approach to executive compensation disclosed in Cameco’s management proxy circular delivered in advance of the 2021 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 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 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 was incorporated under the Canada Business Corporations Act (CBCA).

You can find more information about our history in our most recent annual information form, which is available on our website (cameco.com/invest).

8     CAMECO CORPORATION

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 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 an environmentally friendly and 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/2021-annual-meeting and on SEDAR (sedar.com).

How to request a paper copy

Before the meeting

Starting on April 6, 2021, 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, make your request right away and no later than 4 p.m. (Saskatoon time) on April 22, 2021.

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

After the meeting

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

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 10, 2021 (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, 2021, we had 397,200,356 common shares issued and outstanding.

Principal holders of common shares

We have two principal holders of our common shares as of December 31, 2020, as reported in Schedule 13G filings made with the US Securities and Exchange Commission. Beutel, Goodman & Company Ltd. of Toronto, Ontario (including its subsidiaries) held 20,861,650 common shares (approximately 5.26%, of our total common shares outstanding) and T. Rowe Price Associates, Inc. of Baltimore, Maryland (including its subsidiaries) held 20,145,790 common shares (approximately 5.00% of our total common shares outstanding).

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

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 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,

2021 MANAGEMENT PROXY CIRCULAR    9

(b) amend the articles in a way that would change the rights of class B shareholders, or

(c) amalgamate, if the amalgamation would require an amendment to Part 1 of Schedule B of the articles.

Ownership and voting restrictions

Restrictions on owning, controlling and voting Cameco common shares are set out in the Eldorado Nuclear Limited Reorganization and Divestiture Act (Canada) (ENL Reorganization Act) and our company articles. See Appendix A on page 103 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 factors 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 determine compliance with our ownership restrictions.

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.

How to vote

You have various options for voting. You may vote in advance of the meeting online or by phone, fax or mail. You may also attend and vote in person during the live webcast or you may appoint another person (called a proxyholder) to attend the meeting and vote on your behalf. 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.

However you choose to vote, please carefully follow the instructions below for the option you select and note that the process for appointing proxyholders and for voting in person at the meeting is different this year than it has been in the past.

You must also 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. To be valid, AST Trust Company (Canada), our transfer agent, must receive your voting instructions before 8:30 a.m. CST on Tuesday, May 4, 2021 (the

10     CAMECO CORPORATION

proxy deadline). Non-registered (beneficial) shareholders must also ensure that their instructions are submitted by the deadline specified in their voting instruction form and in any case in sufficient time for their intermediary to act on those instructions prior to the proxy deadline. Submit your voting instructions right away to meet the proxy deadline.

	NON-REGISTERED (BENEFICIAL) SHAREHOLDERS	REGISTERED SHAREHOLDERS
The voting process is different depending on whether you are a registered or non-registered shareholder (see details on how to determine what you are to the right).	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. Many of our shareholders are non-registered shareholders.	You are a registered shareholder if your name appears on your share certificate.
Vote your shares in advance.	Follow the instructions on your voting instruction form to submit your voting instructions using one of the following methods: •   Online: Visit www.proxyvote.com and vote using the unique control number located on your voting information form. •   Phone: Call 1-800-474-7493 (English) or 1-800-474-7501 (French). •   Fax: Send your duly completed, signed and dated voting instruction form by fax to 1-905-507-7793 or 1-514-281-8911. •   Mail: Using the envelope provided, send the duly completed, signed and dated voting instruction form by mail. Submit your voting instructions by the time specified on your voting information form, which will be at least 24 hours prior to the proxy deadline.	Follow the instructions on your proxy form and return it using one of the following methods: •   Online: Visit www.astvotemyproxy.com and vote using the control number located on your proxy form. •   Email: Return a scanned copy of your completed, signed and dated proxy form (both sides) to proxyvote@astfinancial.com. •   Fax: Send your duly completed, signed and dated proxy form by fax to 1-866-781-3111. •   Mail: Using the envelope provided, send the duly completed, signed and dated form of proxy by mail. To be valid, your proxy form must be received by our transfer agent by the proxy deadline. The online voting option will be available until the proxy deadline.
Vote online during the meeting.	If you wish to attend and vote at the meeting you will need to appoint yourself as proxyholder and register with our transfer agent by carefully following the instructions below. If you do not complete each of the steps below then you will not be able to attend and vote your shares at the meeting. •   Step 1: To appoint yourself as your proxyholder you may either: •   Visit www.proxyvote.com and enter the control number listed on your voting instruction form and insert your name in the “Change Appointee” section of the voting site and follow all other instructions provided to you by your nominee. •   Insert your name as proxy holder in the space provided on your voting instruction form and sign, date the form and return it in the envelope provided or as otherwise instructed by your intermediary. Do not complete the voting instructions as you will attend and vote at the meeting yourself. You must provide your instructions by the time specified on your voting information form, which will be at least 24 hours prior to the proxy deadline. •   Step 2: Register yourself with our transfer agent to obtain your 13-digit control number, which you will require to access and vote at the meeting. You may register online at:	If you wish to attend and vote at the meeting, you must follow these instructions on the day of the meeting: •   Log into the meeting at https://web.lumiagm.com/169464941. •   Click “I have a control number” and enter the 13-digit control number from your proxy form. •   Enter the password cameco2021 (case sensitive). •   Follow the instructions to vote your shares when prompted. You should allow ample time (and at least 15 minutes) to log into the meeting online and complete the procedures above.

2021 MANAGEMENT PROXY CIRCULAR    11

	NON-REGISTERED (BENEFICIAL) SHAREHOLDERS	REGISTERED SHAREHOLDERS
Continued ... Vote online during the meeting.	https://lp.astfinancial.com/control-number-request-en.html or by phone at 1-866-751-6315. Your registration must be complete by no later than the proxy deadline. •   Step 3: Once you have appointed yourself as proxyholder and obtained a control number, you must follow these instructions on the day of the meeting to access and vote at the meeting: •   Log into the meeting at https://web.lumiagm.com/169464941. •   Click “I have a control number” and enter the 13-digit control number you received from our transfer agent. •   Enter the password cameco2021 (case sensitive). •   Follow the instructions to vote your shares when prompted. You should allow ample time (and at least 15 minutes) to log into the meeting online and complete the procedures above. If you hold shares in more than one account, ensure that you appoint yourself as proxyholder for all accounts concurrently so that you will only require one control number. If you do not appoint yourself as your proxyholder, you may still attend the meeting, but you must do so as a guest. Guests cannot vote or ask questions.
You can revoke your proxy or voting instructions if you change your mind. Any new instructions will only take effect if they are received by AST Trust Company (Canada) before 8:30 a.m. CST on Tuesday, May 4, 2021 or 48 hours before the meeting is reconvened if the meeting is postponed or adjourned.	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 to vote at the meeting instead.	If you voted online in advance of the meeting and you wish to change your voting instructions, you may re-enter your vote using the control number on your proxy form by following the instructions on your proxy form and using any of the methods listed above. You can also revoke your proxy without providing new voting instructions by: •   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 business day before the meeting (Wednesday, May 5, 2021) •   giving a notice in writing to the chair of the meeting before the start of the meeting •   giving notice in any other manner permitted by law. The notice can be from you or your attorney, if they have your written authorization. If your shares are owned by a corporation, the written notice must be from its authorized officer or attorney. Please note that if you attend the meeting and vote your shares on any matter you will be deemed to have revoked any prior proxy or voting instruction for all matters.
Attending the virtual meeting as a guest.	Guests can log into the meeting and view the meeting, but they are not able to vote or ask questions at the meeting. Guests can access the meeting using the following instructions: •   Log into the meeting at https://web.lumiagm.com/169464941. •   Click “Guest” and complete the requested information. You should be automatically redirected to the virtual meeting. You should allow ample time (and at least 15 minutes) to log into the meeting online and complete the procedures above.

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

12     CAMECO CORPORATION

Voting by proxy

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.

If you vote in advance and do not appoint another person as your proxyholder, one of the Cameco proxyholders will be your proxyholder. 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 wish to appoint another person as your proxyholder, you may do so by carefully following the instructions below. Because this year’s meeting is being held virtually, the process for appointing a proxyholder (other than the Cameco proxyholders) is different and failure to register that other proxyholder as described below will result in your proxyholder not receiving the control number that is required to vote at the meeting.

NON-REGISTERED (BENEFICIAL) SHAREHOLDERS

REGISTERED SHAREHOLDERS

To appoint another person (other than the Cameco proxyholders) as proxy holder you must appoint that person and they must be registered with our transfer agent by carefully following the instructions below. If you do not complete each of the steps below then your proxyholder will not be able to attend and vote your shares at the meeting. •   Step 1: To appoint your proxyholder you may either: •   Visit: www.proxyvote.com and enter the control number listed on your voting instruction form and insert that person’s name in the “Change Appointee” section of the voting site and follow all other instructions provided to you by your intermediary. •   Insert that person’s name as proxy holder in the space provided on your voting instruction form and sign, date the form and return it in the envelope provided or as otherwise instructed by your intermediary. Your intermediary must receive your instructions by the time specified on your voting information form, which will be at least 24 hours prior to the proxy deadline. •   Step 2: Your must register your proxyholder with our transfer agent and provide the required information and AST will provide your proxyholder their 13-digit control number, which your proxyholder will require to access and vote at the meeting. Your proxyholder may register online at https://lp.astfinancial.com/control-number-request-en.html or by phone at 1-866-751-6315. The proxyholder’s registration must be complete by no later than the proxy deadline. •   Step 3: Once you have appointed your proxyholder and your proxyholder obtained a control number from our transfer agent, your proxyholder must follow these instructions on the day of the meeting to access and vote at the meeting: •   Log into the meeting at https://web.lumiagm.com/169464941. •   Click “I have a control number” and enter the 13-digit control number they received from our transfer agent. •   Enter the password cameco2021 (case sensitive). •   Follow the instructions to vote when prompted. Your proxyholder should allow ample time (and at least 15 minutes) to log into the meeting online and complete the procedures above. If you hold shares in more than one intermediary account, ensure that you appoint your proxyholder as proxyholder for all accounts concurrently so that they will only require one control number. If you appoint another person as your proxyholder, you may still attend the meeting but you must do so as a guest. Guests cannot vote or ask questions.

To appoint another person (other than the Cameco proxyholders) as proxyholder you must appoint that person and they must be registered with our transfer agent by carefully following the instructions below. If you do not complete each of the steps below then your proxyholder will not be able to attend and vote your shares at the meeting. •   Step 1: To appoint your proxyholder you must enter their name in the space provided on your proxy form or in the online form using any one of the methods described above under “Vote your shares in advance”. This step must be completed by at least 24 hours prior to the proxy deadline. •   Step 2: You must register your proxyholder with our transfer agent to obtain their 13-digit control number, which your proxyholder will require to access and vote at the meeting. You may register your proxyholder online at https://lp.astfinancial.com/control-number-request-en.html or by phone at 1-866-751-6315. The proxyholder’s registration must be completed by no later than the proxy deadline. •   Step 3: Once you have appointed your proxyholder and your proxyholder obtained a control number from our transfer agent, your proxyholder must follow these instructions on the day of the meeting to access and vote at the meeting: •   Log into the meeting at https://web.lumiagm.com/169464941. •   Click “I have a control number” and enter the 13-digit control number they received from our transfer agent. •   Enter the password cameco2021 (case sensitive). •   Follow the instructions to vote when prompted. Your proxyholder should allow ample time (and at least 15 minutes) to log into the meeting online and complete the procedures above. If you appoint another person as your proxyholder, you may still attend the meeting but you must do so as a guest.

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Technology required to access the virtual meeting

The meeting will be entirely virtual and shareholders and proxyholders will not be able to attend in person. If you are a registered shareholder or a duly appointed proxyholder (including non-registered shareholders who have duly appointed themselves as proxyholder), you will be able to attend, vote and ask questions at the meeting, all in real time. If you are a non-registered shareholder who does not appoint themselves as proxyholder then you may attend the meeting as a guest, but you will not be able to vote or ask questions at the meeting.

You will be able to participate in the meeting using an internet-connected device such as a laptop, computer, tablet or mobile phone. In order to run the meeting platform, you will need the latest version of Chrome, Safari, Edge or Firefox, that are running the most updated version of the applicable software plugins and that meet the minimum system requirements. If you have any doubt, you can check your system’s compatibility by visiting https://www.lumiglobal.com/faq for additional information.

If you are accessing the meeting you must remain connected to the internet at all times during the meeting in order to vote when balloting commences. It is your responsibility to ensure internet connectivity for the duration of the meeting. Note that if you lose connectivity once the meeting has commenced, there may be insufficient time to resolve your issue before ballot voting is completed. Even if you plan to attend the meeting, you should consider voting your shares in advance so that your vote will be counted in case you later decide not to attend the meeting or in the event that you experience any technical difficulties and are unable to access the meeting and vote for any reason. Please note that you cannot vote if you access the meeting by dialing in – voting at the meeting can only be done through the meeting portal. If you encounter technical difficulties, please contact Lumi at support@lumiglobal.com.

Asking questions at the virtual meeting

Cameco believes that the ability to participate in the meeting in a meaningful way remains important despite the decision to hold this year’s meeting virtually. It is anticipated that registered shareholders and proxyholders (including non-registered shareholders who have appointed themselves as proxyholders) will have substantially the same opportunity to ask questions on matters of business before the meeting as in past years when the annual shareholders meeting was held in person. Questions received from shareholders which relate to the business of the meeting will be read by the chair of the meeting or a designee of the chair and responded to by a representative of Cameco as they would be at a shareholders meeting that was being held in person. As at an in-person meeting, to ensure fairness for all attendees, the chair of the meeting will decide on the amount of time allocated to each question and will have the right to limit or consolidate questions and to reject questions that do not relate to the business of the meeting or which are determined to be inappropriate or otherwise out of order.

Voting of proxies

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 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 reappointing KPMG LLP as auditors

• for the advisory vote on our approach to executive compensation.

14     CAMECO CORPORATION

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 their 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 12 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 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

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Board of Directors and Corporate Governance

Where to find it
About the nominated directors •   Director profiles •   2020 Meetings and attendance •   Director compensation and share ownership •   Approach •   Share ownership requirements •   Director fee schedule •   2020 Director compensation details	17
Our board	32
•   Board structure, composition and succession •   Independence assessment
•   Term limits and retirement
•   Board chair succession
•   Director recruitment
•   Nomination process
•   Skills, attributes and experience
•   Competency matrix and core attributes •   Board diversity
•   Gender
•   Indigenous perspective
•   Geographic representation
•   Age •   Board, committee and director assessments
•   Third-party board effectiveness assessment
•   Director development
•   Orientation
•   Continuing education
Our corporate governance	41
•   Key elements of our corporate governance	41
•   How the board operates	41
•   Role of the board
•   Mandate
•   Overseeing the CEO
•   Board oversight responsibilities
•   Strategic oversight •   ESG oversight •   Risk oversight •   Risk management •   Information technology security •   Executive succession planning and leadership development •   Commitment to inclusion and diversity •   Indigenous workforce •   Women in leadership •   Diversity of senior management •   Internal controls

Our expectations of directors •   Code of conduct and ethics •   Avoiding conflicts of interest •   Related party transactions •   Serving on other boards •   Board interlocks •   Change in position	47
Board independence standards	50
Stakeholder engagement	50
•   Disclosure
•   Engagement with the investment community
•   Say on pay
•   How to engage with the board
Voting results	53
Shareholder proposals	53
Advance notice by-law	53
Accessing our governance and other regulatory disclosure	53
Compliance	54
Governance Guidelines	54
Board committees •   Committee responsibilities •   Committee membership •   Committee chair rotation •   Cross-committee attendance •   Access to management and outside advisors •   Committee reports	56

16     CAMECO CORPORATION

About the nominated directors

Attributes, experience and skills                                                                        Diversity

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Our board of directors is responsible for overseeing management and our business affairs. 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 section on page 34.

Board composition

This year’s nominated directors have been selected based on several factors, including competencies and qualifications, experience, knowledge and other core attributes required of Cameco’s board members. When assessing board composition, the nominating, corporate governance and risk committee considers tenure, diversity, independence and the collective expertise of the board members on a broad range of issues the board faces when overseeing our business and affairs.

Independence

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

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

Majority voting for non-executive directors

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

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 within such 90-day period. The director who submitted a resignation does not participate in any board or committee deliberations on the matter. The board will announce its decision immediately by issuing a press release. 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 each nominated director, including their background, skills, experience, and other public company boards they sit on. The profiles also provide details about each nominee’s meeting attendance in 2020, share ownership and voting results at our 2020 annual meeting of shareholders.

18     CAMECO CORPORATION

Age: 67

Calgary, AB

Canadian

Director since: 2012

Independent

Key skills and experience

• Board / corporate governance

• Financial cumen

• Investor relations

• Investments / ergers and acquisitions

• Risk oversight

Ian brings a strong finance and investment 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, Chair of the Board

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 and compensation committees of other public-company boards. Ian became board chair of MEG Energy Corp. in 2020 and is a director of the private company, TriAxon Energy Services Inc., and is a member of its audit and compensation committees.

	2020 Attendance
Board and Committee membership	Regular		Special		Overall
Board chair*		7 of 7		5 of 5		100	%

* Ian is a member of all committees and he attended all committee meetings in 2020.

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

* Ian was a director of Northern Blizzard Resources Inc., a predecessor company to Cona Resources Inc., from 2011 to 2014, and continued to serve as a director from 2014 to 2018 after it changed its name to Cona Resources Ltd. and became a public company in 2014.

Securities held
Year	Cameco shares		DSUs		Total shares and DSUs		Market value of shares and DSUs1		Multiple of 2020 annual retainer (at market value)		Share ownership guideline compliant2
2020		75,000		79,673		154,673	$	2,637,175		7.0x	✓	Yes
2019		75,000		65,147		140,147	$	1,617,296
Change		—		14,526		14,526	$	1,019,879

¹  Based on total holdings multiplied by the closing price of Cameco common shares on the TSX on December 31: $11.54 (2019) and $17.05 (2020).

²  For evaluating compliance with Cameco’s share ownership guidelines, Ian’s shares and DSUs held at December 31, 2020 are valued at $3,116,573 and represent 8.3x the board chair retainer of $375,000.

2020 Voting results
	99.3% votes for	0.7% 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.

2021 MANAGEMENT PROXY CIRCULAR    19

Age: 56

Calgary, AB

Canadian and Dutch

Director since: 2020

Independent

Key skills and experience

• Financial acumen

• Board / corporate governance

• Human resources and executive compensation

• Risk oversight

• International energy markets

Leontine brings a strong audit and finance background to our board as well as corporate governance and merger and acquisition advisory experience. Leontine chairs the audit committees of two other publicly traded companies.

Leontine Atkins

Leontine Atkins is a corporate director and joined Cameco’s board on August 1, 2020. Leontine was a board member of KPMG Canada’s National Board of Directors until early 2019, serving on the National Acquisitions and Admissions and Succession committees. She was previously a Partner with KPMG Canada from 2006 to 2019. Prior to that she was a Partner at KPMG Netherlands until she moved to Canada in 2006. She has over 30 years of experience in the global mining, power, utility and oil and gas industries, with a focus on corporate strategy.

Leontine received a bachelor of business administration degree in finance from Acadia University and a master of business administration degree from Dalhousie University. She holds CPA and CA designations as well as the ICD.D designation from the Institute of Corporate Directors.

Leontine serves as a director and audit committee chair of both Points International Ltd. and Seven Generations Energy Ltd. She is a director of the municipal utility, EPCOR Utilities Inc. She served on the board and as audit committee chair of Calgary Economic Development from 2014 to 2020 and is a member of the executive committee of

the Calgary Chapter of the Institute of Corporate Directors.

	2020 Attendance
Board and committee membership	Regular		Special		Overall
Board of directors		2 of 2		1 of 1		100	%
Nominating, corporate governance and risk*		1 of 1				100	%
Reserves oversight*		1 of 1				100	%

* Leontine joined the nominating, corporate governance and risk and reserves oversight committees when she joined the board in August 2020.

Other public company boards in past five years
Points International Ltd. (TSX and NASDAQ)	2019 to present
Seven Generations Energy Ltd. (TSX)*	2019 to present

* A merger with ARC Resources Ltd. is pending and proposed to close in the second quarter of 2021.

Securities held

Year

Cameco shares

DSUs

Total shares and DSUs

Market value of shares and DSUs1

Multiple of 2020 annual retainer (at market value)

Share ownership guideline compliant2

2020

3,252

3,330

6,582

$

112,223

0.6x

✓

Yes

¹  Based on total holdings multiplied by the closing price of Cameco common shares of $17.05 on the TSX as of December 31, 2020.

²  For evaluating compliance with Cameco’s share ownership guidelines, Leontine’s shares and DSUs held at December 31, 2020 are valued at $112,221 and represent 0.6x the board member retainer of $200,000. Leontine has been on the board for less than one year and has until August 1, 2025 to meet the share ownership guideline target.

2020 Voting results
	Leontine’s appointment to the board followed the 2020 AGM

20    CAMECO CORPORATION

Age: 68

Westmount, QC

Canadian and French

Director since: 2011

Independent

Key skills and experience

• Financial acumen

• International business

• Investments / mergers and acquisitions

• Uranium / nuclear

• Risk oversight

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 another public company.

Daniel Camus

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 chaired 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 and of MedAccess plc, located in London, UK.

	2020 Attendance
Board and committee membership	Regular		Special		Overall
Board of directors		7 of 7		5 of 5		100	%
Audit and finance		5 of 5		1 of 1		100	%
Human resources and compensation		4 of 4				100	%

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

Securities held
Year	Cameco shares		DSUs		Total shares and DSUs		Market value of shares and DSUs1		Multiple of 2020 annual retainer (at market value)		Share ownership guideline compliant2
2020		—		87,059		87,059	$	1,484,356		7.4x	✓	Yes
2019		—		82,167		82,167	$	948,207
Change		—		4,892		4,892	$	536,149

¹  Based on total holdings multiplied by the closing price of Cameco common shares on the TSX on December 31 $11.54 (2019) and $17.05 (2020).

²  For evaluating compliance with Cameco’s share ownership guidelines, Daniel’s DSUs held at December 31, 2020 are valued at $1,636,725 and represent 8.2x the board member retainer of $200,000.

2020 Voting results
	98.5% votes for	1.5% votes withheld

2021 MANAGEMENT PROXY CIRCULAR    21

Age: 65

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’s experience 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 as a member of three of our board committees.

Donald Deranger

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 some of our key assets are located.

	2020 Attendance
Board and committee membership	Regular	Special	Overall
Board of directors	7 of 7	5 of 5		100	%
Nominating, corporate governance and risk	4 of 4			100	%
Reserves oversight	2 of 2			100	%
Safety, health and environment	3 of 3			100	%

Other public company boards in past five years

None

Securities held
Year	Cameco shares		DSUs		Total shares and DSUs		Market value of shares and DSUs1		Multiple of 2020 annual retainer (at market value)		Share ownership guideline compliant2
2020		—		71,847		71,847	$	1,224,991		6.1x	✓	Yes
2019		—		67,551		67,551	$	779,539
Change		—		4,296		4,296	$	445,453

1 Based on total holdings multiplied by the closing price of Cameco common shares on the TSX on December 31: $11.54 (2019) and $17.05 (2020).

2 For evaluating compliance with Cameco’s share ownership guidelines, Donald’s DSUs held at December 31, 2020 are valued at $1,378,498 and represent 6.9x the board member retainer of $200,000.

2020 Voting results
	99.5% votes for	0.5% votes withheld

22    CAMECO CORPORATION

Age: 59

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 analysis and 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

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). She is a past chair of the board of Women in Mining Canada where she served until March 2021. She served as a member of the Canadian Securities Administrators’ mining technical advisory and monitoring committee (CSA MTAMC) until October 2020.

Catherine was the principal of Catherine Gignac & Associates from 2011 to 2015. 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.

	2020 Attendance
Board and committee membership	Regular		Special		Overall
Board of directors		7 of 7		5 of 5		100	%
Audit and finance		5 of 5		1 of 1		100	%
Nominating, corporate governance and risk		4 of 4				100	%
Reserves oversight (chair)		2 of 2				100	%

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

Securities held
Year	Cameco shares		DSUs		Total shares and DSUs		Market value of shares and DSUs1		Multiple of 2020 annual retainer (at market value)		Share ownership guideline compliant2
2020		20,000		36,734		56,734	$	967,315		4.8x		Yes
2019		15,000		36,525		51,525	$	594,599
Change		5,000		209		5,209	$	372,716

1 Based on total holdings multiplied by the closing price of Cameco common shares on the TSX on December 31: $11.54 (2019) and $17.05 (2020).

2 For evaluating compliance with Cameco’s share ownership guidelines, Catherine’s shares and DSUs held at December 31, 2020 are valued at $992,008 and represent 5.0x the board member retainer of $200,000.

2020 Voting results
	99.6% votes for	0.4% votes withheld

2021 MANAGEMENT PROXY CIRCULAR    23

Age: 58

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’s president 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 the board of the World Nuclear Association and the Nuclear Energy Institute.

Tim Gitzel

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 was appointed Honorary Consul of Kazakhstan in Saskatchewan in 2020.

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	2020 Attendance
	Regular		Special		Overall
Board of directors		7 of 7		5 of 5		100	%

Other public company boards in past five years
The Mosaic Company (NYSE)	2013 to present

Securities held
Year	Cameco shares		PSUs*		RSUs		Total shares, PSUs and RSUs		Market value of shares, PSUs and RSUs**		Executive share ownership guideline compliant
2020		370,035		345,242		130,362		845,639	$	14,418,145		✓ Yes
2019		299,594		344,054		—		643,648	$	7,427,698
Change		70,441		1,188		130,362		201,991	$	6,990,447		(see pages 71 and 72	)

* Excludes PSUs that vested on December 31, 2020.

** Value of shares ($6,309,097), PSUs ($5,886,376) and RSUs ($2,222,672) for 2020 are calculated using $17.05 for 2020 and $11.54 for 2019, 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 94 for details about his stock options.

2020 Voting results
	99.5% votes for	0.5% votes withheld

24    CAMECO CORPORATION

Age: 69

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 executive with 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

Jim Gowans is a corporate director. 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. He served as interim president, CEO of Trilogy Metals Inc. from August 2019 to May 2020. 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. 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.

	2020 Attendance
Board and committee membership	Regular		Special			Overall
Board of directors		7 of 7		4 of 5	*		80	%
Audit and finance		5 of 5		1 of 1			100	%
Reserves oversight		2 of 2					100	%
Safety, health and environment (chair)		3 of 3					100	%

* For the special meeting Jim was unable to attend, he participated in a briefing and discussion on the content of the meeting with senior management.

Other public company boards in past five years
Marathon Gold Corporation	June 2020 to present
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

Securities held
Year	Cameco shares		DSUs		Total shares and DSUs		Market value of shares and DSUs1		Multiple of 2020 annual retainer (at market value)		Share ownership guideline compliant2
2020		9,000		82,598		91,598	$	1,561,746		7.8x		✓ Yes
2019		9,000		73,753		82,753	$	954,970
Change		—		8,845		8,845	$	606,776

1 Based on total holdings multiplied by the closing price of Cameco common shares on the TSX on December 31: $11.54 (2019) and $17.05 (2020).

2 For evaluating compliance with Cameco’s share ownership guidelines, Jim’s shares and DSUs held at December 31, 2020 are valued at $1,818,507 and represent 9.1x the board member retainer of $200,000.

2020 Voting results
	95.5% votes for	4.5% 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.

2021 MANAGEMENT PROXY CIRCULAR    25

Age: 63

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 senior management 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.

Kathryn (Kate) Jackson

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 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 and a board member of the private company, Duquesne Light Company. Kate serves as a member of the compensation committees of both Portland General Electric company and EQT Corporation.

	2020 Attendance
Board and committee membership	Regular		Special		Overall
Board of directors		7 of 7		5 of 5		100	%
Human resources and compensation		4 of 4				100	%
Nominating, corporate governance and risk		4 of 4				100	%
Safety, health and environment		3 of 3				100	%

Other public company boards in past five years
Rice Acquisition Corporation (NYSE)	October 2020 to present
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)	April to Nov 2017

Securities held
Year	Cameco shares		DSUs		Total shares and DSUs		Market value of shares and DSUs1		Multiple of 2020 annual retainer (at market value)		Share ownership guideline compliant2
2020		–		37,133		37,133	$	633,118		3.2x		✓ Yes
2019		–		27,915		27,915	$	322,139
Change		–		9,218		9,218	$	310,979

1 Based on total holdings multiplied by the closing price of Cameco common shares on the TSX on December 31: $11.54 (2019) and $17.05 (2020).

2 For evaluating compliance with Cameco’s share ownership guidelines, Kate’s DSUs held at December 31, 2020 are valued at $633,133, and represent 3.2x the board member retainer of $200,000.

2020 Voting results
	99.4% votes for	0.6% votes withheld

26    CAMECO CORPORATION

Age: 63

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 well as valuable insights into emerging Asian markets where Cameco does business. He serves on two of our committees, including as chair of the human resources and compensation committee.

Don Kayne

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 in 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 private company, VIDA Corporation, a Swedish wood products company of which Canfor owns 70%. He serves as director of the Forest Products Association of Canada, Alberta Forest Products Association and the BC Lumber Trade Council. He serves as chair of the Council of Forest Industries and as 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 a patron of the BCIT INSPIRE Campaign and is past chair and director 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.

	2020 Attendance
Board and committee membership	Regular		Special		Overall
Board of directors		7 of 7		5 of 5		100	%
Human resources and compensation (chair)		4 of 4				100	%
Reserves oversight*		1 of 1				100	%
Safety, health and environment		3 of 3				100	%

* Don left the reserves oversight committee in November 2020.

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.

Securities held
Year	Cameco shares		DSUs		Total shares and DSUs		Market value of shares and DSUs1		Multiple of 2020 annual retainer (at market value)		Share ownership guideline compliant2
2020		—		86,352		86,352	$	1,472,302		7.4x		✓ Yes
2019		—		68,487		68,487	$	790,340
Change		—		17,865		17,865	$	681,962

1 Based on total holdings multiplied by the closing price of Cameco common shares on the TSX on December 31: $11.54 (2019) and $17.05 (2020).

2 For evaluating compliance with Cameco’s share ownership guidelines, Don’s DSUs held at December 31, 2020 are valued at $1,472,296 and represent 7.4x the board member retainer of $200,000.

2020 Voting results
	94.3% votes for	5.7% votes withheld

2021 MANAGEMENT PROXY CIRCULAR    27

2020 Meetings and attendance

We believe that an active board governs more effectively. Directors are expected to attend all board and committee meetings. We recognize that directors may receive short notice for special meetings. We expect them to make their best effort to attend special meetings and they can participate by teleconference when attending in person does not permit. A majority of directors must be in attendance to hold a meeting and transact business. In 2020, the board conducted five special board meetings as well as five update calls.

As a regular feature at each board and committee meeting, the independent directors meet in camera. The chair or the committee chair, as the case may be, presides over the in camera sessions. The following table is a summary of the meetings held in 2020 and the overall attendance record. Meeting attendance for each director is provided in the director profiles.

	Number of meetings				Overall meeting
	Regular		Special		attendance
Board		7		5		99	%
Audit and finance		5		1		100	%
Human resources and compensation		4				100	%
Nominating, corporate governance and risk		4				100	%
Reserves oversight		2				100	%
Safety, health and environment		3				100	%
Total		25		6		100	%

The board chair is a member of each board committee and Ian Bruce attended all committee meetings in 2020. Board committees function independently of management, so Tim Gitzel, our president and CEO, is not a member of any board committee but is invited to attend all committee meetings.

Director compensation and share ownership

We have structured our director compensation program to align with market practice and to recognize the time commitment, responsibility and attention directors devote to board and committee responsibilities throughout the year. The human resources and compensation committee assists the board in overseeing the director compensation policies and program. You can read about compensation governance starting on page 67.

Approach

We have three goals:

• Recruit and retain qualified individuals to serve as members of our board and contribute to our overall success.

• Align the interests of our board and shareholders by requiring directors to own Cameco shares or 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 companies that are comparable in size and similar to Cameco in nature and scope of operations. We use the same comparator group to benchmark executive and director compensation. See page 70 to read about the comparator group.

Share ownership requirements

Share ownership is an important function of compensation governance. We require each director to own Cameco shares or deferred share units (DSUs) to align the interests of our directors and shareholders. The human resources and compensation committee regularly reviews and assesses our guidelines to make sure they continue to align with market practice.

28     CAMECO CORPORATION

We report each director’s holdings and their total value, including the Cameco shares they own or exercise control or direction over in the director profiles, based on the year-end closing price of Cameco shares on the TSX.

Year end	Closing price of Cameco common shares
December 31, 2019	$	11.54
December 31, 2020	$	17.05

We require directors to hold at least three times their annual retainer within five years of joining the board, and they must receive at least 60% of the annual retainer in DSUs until they meet the ownership requirement. The board chair has a higher ownership requirement because of the higher retainer for the role, and a director who assumes the chair position has an additional three years to meet the increased level. As president and CEO, Tim Gitzel is required to meet our executive share ownership guidelines (see page 71).

Directors can count Cameco shares and deferred share units (DSUs) to meet the ownership guidelines. 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 can only be redeemed by directors after they retire from the board.

A director who has met the share ownership guidelines can receive all of their retainer and fees in cash, or a portion in cash and the balance in DSUs in increments of 25%, which they decide before the beginning of each fiscal year. The director compensation details table on the following page shows the percentage of the annual retainer paid in DSUs in 2020 for each director.

To assess compliance, we use our year-end closing share price on the TSX or the price the shares or units were acquired at, whichever is higher. As of December 31, 2020, directors held a total of $9,238,146 worth of DSUs (representing approximately 541,827 common shares) based on the year-end closing price of Cameco shares on the TSX of $17.05. The table below provides share ownership details for each non-executive director.

	Annual retainer						Value of holdings ($) (using share ownership guideline value)		Value of holdings ($)1		Multiple achieved (#)		Meets share ownership guideline
			Total holdings						Using market value at year-end
Directors			Cameco shares		DSUs
Ian Bruce		375,000		75,000		79,673		3,116,573		2,637,175		7.0x		Yes
Leontine Atkins		200,000		3,252		3,330		112,221		112,223		0.6x		Has until August 1, 2025 to meet the guideline
Daniel Camus		200,000		—		87,059		1,636,725		1,484,356		7.4x		Yes
Donald Deranger		200,000		—		71,847		1,378,498		1,224,991		6.1x		Yes
Catherine Gignac		200,000		20,000		36,734		992,008		967,315		4.8x		Yes
Jim Gowans		200,000		9,000		82,598		1,818,507		1,561,746		7.8x		Yes
Kate Jackson		200,000		—		37,133		633,113		633,118		3.2x		Yes
Don Kayne		200,000		—		86,352		1,472,296		1,472,302		7.4x		Yes
Anne McLellan		200,000		100		57,100		1,263,403		975,260		4.9x		Yes

1. Based on total holdings multiplied by the closing share price of $17.05 on the TSX as of December 31, 2020.

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Director fee schedule

Non-executive directors receive the following compensation (all amounts are in Canadian dollars):

ANNUAL RETAINER
Non-executive chair of the board	$	375,000
Other 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 safety, health and environment)	$	11,000
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

Non-executive directors do not participate in our incentive compensation plans or pensions plans.

2020 Director compensation details

The next table shows the fees earned by each non-executive director in 2020, based on the current fee schedule and their committee memberships. Ian Bruce is our non-executive chair of the board and his annual retainer reflects the fees paid to him in this capacity.

	Annual retainer
			Other retainers										% of annual retainer paid in DSUs
	Board		Committee member		Committee chair		Other payments1		Travel fee2		Total paid
Name
Ian Bruce	$	375,000		—		—		—		—	$	375,000		50	%
Leontine Atkins	$	83,333		—		—	$	90,000		—	$	173,333		60	%
Daniel Camus	$	200,000	$	10,000	$	20,000		—	$	3,400	$	233,400		25	%
Donald Deranger	$	200,000	$	5,000		—		—	$	1,700	$	206,700		25	%
Catherine Gignac	$	200,000	$	10,000	$	11,000		—	$	3,400	$	224,400		—
Jim Gowans	$	200,000	$	10,000	$	11,000		—	$	1,700	$	222,700		50	%
Kate Jackson	$	200,000	$	10,000		—		—	$	4,200	$	214,200		60	%
Don Kayne3	$	200,000	$	9,198	$	20,000		—	$	1,700	$	230,898		100	%
Anne McLellan	$	200,000	$	5,000	$	11,000		—		—	$	216,000		25	%
Total	$	1,858,333	$	59,198	$	73,000	$	90,000	$	16,100	$	2,096,631		—

1. Payment made to Leontine Atkins for attending as an observer prior to joining the board.

2. Travel fees paid for attending February board and committee meetings, and for attending a board meeting held in December 2019 but paid in 2020. All other meetings in 2020 were held virtually.

3. Don Kayne served on more than two committees until November 2020.

30     CAMECO CORPORATION

Incentive plan awards – DSUs

The next table shows what each non-executive director earned in DSUs in 2020. 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 value of DSUs that the directors received in 2020, 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 2020.

• Share-based awards – Market or payout value of vested share-based awards not paid out or distributed provides the value of all of the directors’ DSUs that have vested. The DSUs were valued at the year-end closing price of Cameco shares on the TSX of $17.05. DSUs are not paid out until after the director retires from the board.

Name	Share-based awards
	Value vested during the year		Market or payout value of vested share-based awards not paid out or distributed
Ian Bruce	$	193,596	$	1,358,430
Leontine Atkins	$	50,110	$	56,774
Daniel Camus	$	65,201	$	1,484,364
Donald Deranger	$	57,324	$	1,224,992
Catherine Gignac	$	2,922	$	626,316
Jim Gowans	$	117,778	$	1,408,300
Kate Jackson	$	122,799	$	633,113
Don Kayne	$	237,475	$	1,472,296
Anne McLellan		$58,472		$973,561
Total	$	905,677	$	9,238,146

See the share ownership table on page 29 for the number of Cameco shares and DSUs held by each director.

Loans to directors

As of March 10, 2021, we and our subsidiaries had no loans outstanding to any current or former directors, except routine indebtedness as defined under Canadian securities laws.

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Our board

Board structure, composition and succession

The nominating, corporate governance and risk committee regularly reviews the composition of the board to make sure we have an appropriate combination of skills, experience, tenure and perspectives. The board recognizes the need to balance skills and experience with 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.

Independence assessment

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 directors. 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).

INDEPENDENT CHAIR

INDEPENDENT BOARD

Ian Bruce currently serves as independent chair of the board. The chair’s key responsibilities include: •   leading, managing and organizing the board consistent with our approach to governance •   encouraging high performance and commitment of all directors •   overseeing the board’s strategic focus to ensure that it represents Cameco’s best interests •   helping to set the tone and culture of Cameco •   overseeing the board’s procedures so it can carry out its work effectively, efficiently and independently of management •   overseeing all board matters so they are properly addressed and brought to resolution as required •   requiring any matters delegated to the board committees to be properly carried out •   acting as the liaison between the board and the CEO and providing advice, counsel and mentorship to the CEO •   meeting with shareholders and other stakeholders in consultation with management •   participating in the recruitment and orientation of new directors •   ensuring that Cameco provides timely and relevant 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 •   Board tenure limits – we are committed to 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 independent directors as a group is 7.5 years •   In camera sessions – it is our practice for the independent directors to meet without management present at each board and committee meeting •   Independent compensation consultant – the 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 •   Independent review of board assessments – an independent third-party undertakes a board effectiveness assessment every five years. This review is in addition to annual board, committee, and director assessments •   External advisors – each board committee, 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.

32     CAMECO CORPORATION

The board evaluates the independence of each director nominee by applying our independence criteria to the relationship between each nominee and Cameco to determine whether there is a material or other disqualifying relationship that could affect the nominee’s ability to exercise independent judgment.

Following completion of the board’s annual multi-step process for gathering information to assess director independence, the board has determined that, other than the CEO, all director nominees are independent. The board paid particular attention to Leontine Atkins as she is a new nominee standing for election to the Cameco board for the first time. The board specifically considered Leontine’s status as a retired partner of KPMG Canada when considering her as a director candidate and inviting her to serve as an observer to Cameco’s board prior to her appointment as a director in August 2020. Leontine resigned her position as a partner with KPMG Canada in April 2019 and during her tenure as a partner of that firm Ms. Atkins never served as part of Cameco’s audit team, nor did she provide advice to the audit team in any capacity. While the board has determined Leontine is independent, as a matter of good governance the board decided not to appoint her to the audit committee at this time.

Term limits and retirement

Directors are not nominated for election at an annual meeting after they complete 15 years of continuous service on the board 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 the 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 the director recruitment process and overseeing board succession It reviews the director competency and attribute matrix annually to ensure that the board has an appropriate 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 maintains 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 the 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 additional interviews are conducted by the nominating, corporate governance and risk committee and other committee chairs if necessary.

Anne McLellan is not standing for re-election to the board at our 2021 annual meeting as she has completed 15 years of continuous service. As chair of the nominating, corporate governance and risk committee, Anne led a diligent recruitment process to identify a qualified woman director candidate with strong financial acumen. This resulted in the appointment of Leontine Atkins to the board as of August 1, 2020. Leontine has a strong audit and finance background and also brings corporate governance and merger and acquisition advisory experience to the board. She served as a board observer prior to her appointment as part of her orientation.

Three directors have joined the board in the last five years and two of the three are women, increasing the board’s diversity. The new directors have senior leadership and CEO experience as well as strong financial acumen, experience in capital projects, the nuclear industry and international business and skills in mergers and acquisitions, marketing and sales, operational excellence, and human resources and executive compensation.

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Nomination process

The nominating, corporate governance and risk committee assesses the diversity, skills and experience of the board and is responsible for recommending director candidates for nomination on an annual basis. In assessing potential candidates, the committee reviews the list of potential conflict situations, as well as a report on actual and potential conflicts of interest, among other things, before recommending the nominees for election by shareholders.

Shareholders may at any time submit names of individuals for the board to consider as director nominees. The committee will consider any submissions when assessing the diversity, skills and experience required on the board to enhance overall composition and oversight capabilities. For additional information on nominating individuals, please see page 53.

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 affairs and strategic direction, understand issues that can arise with a company of our size and complexity, and make informed decisions.

The board maintains 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 the matrix annually and, along with the board, identifies any gaps in the skills and competencies considered most relevant for the company. Upon the retirement of John Clappison from the board in 2019 and the pending retirement of Anne McLellan in 2021, the committee prioritized the recruitment of a woman candidate with a strong finance and accounting background. This planning resulted in the recruitment and appointment of Leontine Atkins to the board in August 2020.

Competency matrix and core attributes

The nominating, corporate governance and risk committee reviews director competencies every year to ensure they continue to meet Cameco’s needs. All our directors exhibit the following set of core attributes:

•  Business judgment and a mindset for risk oversight   •  Integrity and accountability   •  Engagement giving proper time and attention to fulfill responsibilities to Cameco   •  Commitment to board priorities and leadership roles   •  Financial literacy •  Teamwork that fosters mutual trust, respect, and contribution   •  Communication fostering open discussion of key issues   •  Independent-mindedness to maintain one’s own views   •  Record of achievement that reflects high standards

34     CAMECO CORPORATION

Each director completes a self-assessment of his or her competencies following a prescribed rating scale to establish consistency. Directors 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 meets with each director to review their self-assessment. The committee reviews the results for consistency and to be satisfied that the directors possess skills in these areas. The table below shows the key skills and experience we require on our board and identifies those directors who self-assessed as having strong or expert knowledge for each category.

Skills and experience	I. Bruce	T. Gitzel	L. Atkins	D. Camus	D. Deranger	C. Gignac	J. Gowans	K. Jackson	D. Kayne
Board / corporate governance	●	●	●	●	●	●	●	●	●
Risk oversight	●	●	●	●	●	●	●	●	●
Capital projects	●	●	●	●	●	●	●	●	●
Enterprise leadership	●	●	●	●	●	●	●	●	●
Financial acumen	●	●	●	●	●	●	●	●	●
Legal / regulatory	●	●		●	●		●	●	●
Investor relations	●	●	●	●	●	●	●	●	●
Stakeholder relations / government / public policy	●	●		●	●		●	●	●
Human resources and executive compensation	●	●	●	●	●	●	●	●	●
Uranium / nuclear	●	●	●	●	●	●	●	●	●
International	●	●	●	●	●	●	●	●	●
Investments / mergers and acquisitions	●	●	●	●	●	●	●	●	●
Mining, exploration and operations	●	●	●		●	●	●		●
Operational excellence		●		●	●		●	●	●
Safety, health and environment / sustainability	●	●	●	●	●	●	●	●	●

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The next table outlines the skills and experience of the proposed board and the percentage of nominated directors who have indicated their level as expert or strong in each category.

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

36     CAMECO CORPORATION

Board 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 something we believe is important for sound decision-making and good governance.

We are committed to enhancing the overall diversity of our board. The board has a formal written diversity policy, which includes a set of measurable objectives for achieving diversity on the board, including the identification and nomination of directors who are women or who have an Indigenous heritage. The nominating, corporate governance and risk committee reviews our progress in achieving the measurable objectives in accordance with the diversity policy, as part of the annual board and committee assessments, and when selecting new director candidates.

The committee reviews board diversity every year, including the policies and appropriate diversity objectives for Cameco. Currently, our policy sets measurable objectives for women and Indigenous directors. 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 a disability or members of visible minorities.

Gender

Cameco values gender diversity and acknowledges, supports and respects all genders, gender identities, gender modalities and gender expressions. As one step toward broad representation, our board diversity policy requires at least 30% of directors to be women. Three (33%) of this year’s nominated
	directors are women and the level of representation of women on the board is considered when identifying and nominating candidates for election or re-election to the board.

Indigenous perspective

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 heritage and be from Saskatchewan to bring an understanding of the culture, heritage, values, beliefs and rights of the local Indigenous peoples to the board. The representation of directors with an Indigenous heritage is considered when identifying and nominating candidates for election or re-election to the board. One of our director nominees is Indigenous.

Geographic representation

The board also believes it is important to have directors with experience living or working in jurisdictions where 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 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.

Our board is subject to, and complies with, the terms of the Investment Canada 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 requires at least half of our directors to be Canadian residents.

Age   While the board recognizes the correlation between age and experience, it believes that directors of different ages bring a wider range of viewpoints. Our diversity policy requires the board to represent a range of ages.

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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 with each director by either the board chair or the chair of nominating, corporate governance and risk committee facilitate a discussion about capacity and commitment to the board as well as 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 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 directors. The board is evaluated by all directors. The board chair is evaluated by all directors, including the CEO. The committees and committee chairs are evaluated by committee members. Each independent director completes a self-assessment. The CEO is evaluated by all non-executive directors.	The board and nominating, corporate governance and risk committee review the board assessment results. The chair of the nominating, corporate governance and risk committee reviews the board chair assessment results. The applicable committees review the committee assessment results. The board chair and the chair of the nominating, corporate governance and risk committee review the committee chair assessment results and the independent director assessments. The board chair and the chair of the human resources and compensation committee review the CEO assessment results and meet with the CEO to discuss. The board and the human resources and compensation committee discuss the CEO assessment results.	Priorities and action plans are developed for the board, the board chair, the committees, and the committee chairs, as required. Development opportunities are identified, as required, for each director.

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 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.

38     CAMECO CORPORATION

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, 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, including copies of our recent regulatory filings, financial statements, governance documents and key policies

• presentations from management on the nuclear industry

• round-table discussions with the committee chairs and appropriate management representatives.

Leontine Atkins started her orientation as a board observer and attended various virtual presentations about Cameco and the nuclear industry.

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. Leontine was provided with a mentor to assist her in becoming acquainted with Cameco and its board.

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

• presentations by management that cover issues relating to key business decisions, strategic planning and enterprise risks

• presentations on topics directors request

• Cameco-operated facility or other nuclear facility tours

• conferences, webinars 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 director educational opportunities 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. There were no site visits in 2020 due to the COVID-19 pandemic.

We pay for director education, including the cost for directors to attend conferences or seminars that the board deems appropriate in order 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.

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In 2020, our directors took advantage of the abundance of virtual conferences, webinars and eforums that were available to them, and attended, in the aggregate over 100 development sessions. The table below provides an overview of our directors’ development in 2020:

Description of Development (including presenter)	Attendees
Nuclear industry, the uranium market and energy Our directors received presentations from management and attended webinars, conferences and eforums on the nuclear industry, the uranium market and the energy sector in general, which included matters such as nuclear innovation, energy transformation, transition to net zero, and resilience enhancement in the energy sector. Some examples of director development attended by our directors are listed below.
World nuclear association eForum 2020, World nuclear association (WNA)	Daniel Camus Donald Deranger Catherine Gignac Tim Gitzel	Kate Jackson Don Kayne Anne McLellan
International SMR and advanced nuclear reactor summit, Nuclear Energy Insider (Reuters event)	Leontine Atkins	Anne McLellan
International uranium fuel seminar, Nuclear Energy Institute	Leontine Atkins	Donald Deranger
2020 uranium market update, Treva Klingbeil, TradeTech	All directors
Governance and compensation Our directors received presentations and information about governance and executive compensation trends from management and our compensation consultant, Meridian Compensation Partners. They also attended webinars and conferences related to governance and executive compensation, which included matters such as compensation trends and emerging issues, governance trends and emerging issues, human capital and talent oversight, executive compensation considerations during COVID, inclusion and diversity and board oversight of strategy. Some examples of significant conferences and a webinar series attended by our directors are listed below.
ICD Annual conference – Next level governance of the new normal Institute of Corporate Directors (ICD)	Leontine Atkins Daniel Camus	Catherine Gignac Anne McLellan
NACD Compensation committee webinar series National Association of Corporate Directors (NACD)	Daniel Camus	Don Kayne
NACD Annual conference, NACD	Leontine Atkins Daniel Camus	Don Kayne
Risk, ESG, sustainability and cyber security Our directors received presentations and information about risk, ESG, sustainability and cyber security from management and also attended related webinars which included matters such as climate change and transitioning to a lower carbon economy, sustainability and profit, developments in cyber-security, addressing cyber challenges during COVID, analytics and predictive risk sensing, the board’s oversight of risk and ESG and navigating investor expectations related to ESG. Some examples of management presentations and webinar series attended by our directors are listed below.
ESG at Cameco, Cameco management	All directors
Climate change competitiveness webinar series, ICD	Leontine Atkins	Don Kayne
Audit and finance Our directors attended webinars, eforums and roundtables related to audit and finance matters. Some examples of forums and conferences attended by our directors are listed below.
Audit committee forum (mining industry) – COVID-19 implications for audit committees, Canadian Public Accountability Board (CPAB)	Leontine Atkins	Daniel Camus
IIA 2020 virtual national conference, Institute of Internal Auditors	Daniel Camus
The economy and geopolitics Our directors received presentations and attended webinars related to the economy and geopolitics which included matters such as post-election reviews of Canada-US relations, globalization in a post-pandemic world, the economic transition and geo-security. Some examples of management presentations attended by our directors are listed below.
Global economy update, Steven Poloz, Osler, Hoskin & Harcourt LLP	All directors
Post-US election briefing, Ambassador Gordon Giffin, Governor Howard Dean, Ron Kaufman and Andrew Shaw, Dentons	All directors, except Leontine Atkins

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Our corporate governance

Key elements of our corporate governance

✓ Independent board. Eight of our nine nominated directors (89%) are independent.

✓ Non-executive chair leads the board. We maintain separate chair and CEO 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 non-executive 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, operational and ESG 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 three new directors in the past five years.

✓ Diverse board. Our board has a diverse mix of skills, background and experience - 33% of this year’s director nominees are women and one nominee is an Indigenous.

✓ 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.

✓ 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.

x No overboarding of directors. No director sits on more than four other public company boards.

x No stock option awards for directors.

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 appropriate checks and balances for effective decision-making and approvals

• making decisions that set the tone, character and strategic direction for Cameco

• approving the vision and value statements and enterprise-level policies developed by management

• regularly monitoring management, including its leadership, recommendations, decisions and execution of strategies to ensure that they carry out their responsibilities and deliver value.

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 and ESG risks, and other matters (see Role of the board below and Board committees starting on page 55).

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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 integrity throughout Cameco

• strategic planning and monitoring our performance against the plan

• succession planning and monitoring management’s performance and compensation

• approving policies and procedures to manage our risks and overseeing management’s efforts to mitigate material risks.

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 55). Each board committee’s mandate is also reviewed annually.

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 for the 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. CEO performance is assessed every year and includes assessment and feedback from all directors.

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 $50 million in total per year

• cost overruns on budgeted project expenditures that are more than $15 million per transaction, or over $50 million in total per year

• any acquisition or disposition of assets over $10 million per transaction, or over $50 million in total per year.

The CEO position description is available on our website (cameco.com/about/governance/ceos-role).

Board oversight responsibilities

A significant portion of the board’s oversight responsibilities are focussed on strategy, ESG and risk as described below.

Strategy oversight

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 each year to develop, review and update Cameco’s strategic plan. The board committees are involved in the strategic planning process to provide oversight and accountability in specific areas of our strategic priorities. The board is also focused on ensuring our strategic priorities reflect our vision and our commitment to our values: safety and environment, people, integrity and excellence.

In 2020, the board devoted time at each regularly-scheduled meeting to discuss strategic matters with management and monitor and analyze progress on our strategic plan. During these meetings the board discussed the main risks facing the business, strategic issues, competitive developments and corporate opportunities. The board measures our progress and success in achieving our strategic plan by assessing our performance results against the annual corporate objectives. The board also discusses possible adjustments to the strategic plan in light of our progress and the current business environment. In 2020, the board had regular discussions about the impact of COVID-19 on the strategic plan and collaborated with management on adjusting the plan to reflect the impact of COVID-19 on Cameco’s operations.

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The board remains focused on our strategic priorities: preserving the value of our lowest cost assets, maintaining a strong balance sheet, protecting and extending the value of our contract portfolio and efficiently managing the company in a low-price environment. For additional information about Cameco’s strategic priorities, see the Our Strategy section of our MD&A. The company’s strategy is also discussed in our 2020 annual information circular (AIF) and 2020 annual report which are available on our website (cameco.com) and on SEDAR (sedar.com).

ESG oversight

Our commitment to sustainability starts at the top. Our board of directors is responsible for overseeing management, strategy and the integration of sustainability and ESG principles throughout the company. The board’s goal is to ensure we operate as a sustainable business, optimizing financial returns while effectively managing risk. Given the evolving ESG landscape, we established a multi-disciplinary working group in 2019, chaired by our Senior Vice-President and Chief Corporate Officer, to review our current approach to sustainability and ESG governance and reporting and evolving trends generally. The working group has provided updates to the board and committees and, as a result of these efforts, we are planning to issue an ESG report later in 2021 that reflects both Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) principles.

Board of directors	Oversight
Board committees
Executive officers	Management
Interdisciplinary ESG working group (Investor Relations, Governance, Legal, SHEQ, Risk, Sustainability, Communications)	Program development

ESG governance, risk oversight and disclosure is a regular topic of discussion at board and committee meetings. The board also oversees the integration of certain ESG factors (safety performance, a clean environment and supportive communities) into our executive compensation strategy as success in these areas is critical to Cameco’s long-term success and sustainability. For more information on our compensable targets and our reported performance against those targets see the Executive compensation section of this circular.

More information about our performance and achievements related to ESG factors is available at cameco.com/about/sustainability. You can also find a detailed ESG content map on page 4 of this circular.

Risk oversight

The nominating, corporate governance and risk committee assists the board in overseeing risk and 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 review strategic risks, which include risks to the key assumptions of our strategy. In 2020, the board continued to spend a significant amount of time considering market risk in light of the uncertainty of global trade matters and the uranium market outlook. Oversight of risk factors related to ESG matters is a core function of the board and the board spent time discussing ESG and climate risks as well as various other risks that were heightened due to the COVID-19 pandemic.

Management consults with the board on ways it is enhancing its enterprise risk oversight practices, processes and controls. Key performance indicators (KPIs) are tracked to monitor progress against the program objectives and management’s risk working group meets regularly throughout the year. In 2020, the enterprise risk management (ERM) group continued to focus on enhancing risk identification, management and reporting processes across the organization. This was supported by cross-functional sharing of risk identification and mitigation strategies across the company by management’s risk working group. Continuous improvement is a key component of the company’s risk management program and throughout the year consistency and efficiency of our program remained significant areas of focus.

Risks identified throughout the organization are assessed and categorized as either functional, tactical or strategic risks.

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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, market concentration with state-owned enterprises, global geopolitical uncertainty, loss of stakeholder support for our operations and risks related to culture and digital innovation.

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 55 and compensation program risk management on page 68.

Committee risk responsibilities
Audit and finance	Human resources and compensation	Nominating, corporate governance and risk	Reserves oversight	Safety, health and environment
Oversees financial risks, such as foreign currency, tax, and counterparty and credit exposure risks	Oversees compensation, talent management, succession, as well as cyber-security risks and risks related to the COVID-19 pandemic	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 AIF and annual report include more information about the risks relating to Cameco. The 2020 AIF and the 2020 annual report are available on our website (cameco.com) and on SEDAR (sedar.com).

Risk management

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. We review this approach every two years 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. These risks are validated and ranked by senior management and the top risks are monitored and reported on to the board and committees over the next year. Management also reviews monthly updates on our progress in managing the top risks.

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. We have a mature ERM framework that captures emerging and evolving risk factors in these areas. You can read more about enterprise risk management in our 2020 MD&A and annual information form. Both documents are available on our website.

Information technology security

The human resources and compensation committee is responsible for overseeing our cyber security risk and receives quarterly status reports that include mitigating plans, monitoring activities and how the risks are tracking. In addition to the regular reporting to the human resources and compensation committee, the board receives a quarterly cyber-security dashboard report which provides insight into external cyber risks faced by Cameco, trending on those risks and the potential impact of the threats to our cyber security. The quarterly dashboard report includes information about the current state of key security related controls, progress of current security initiatives, and updates on Cameco’s security program and playbook.

Regular penetration tests are conducted on Cameco’s information technology networks and systems and our networks and systems are regularly audited by our internal auditors or other external experts. The results of the audits and penetration tests are reported to, and monitored by, the audit and finance committee, the human resources and compensation committee, and the board, as applicable.

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All employees are required to take an information security course every year and submit an annual declaration that they commit to abide by Cameco’s policies and best practices for cyber-security compliance.

Executive 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. The human resources and compensation committee is responsible for ensuring that there is an orderly succession plan for the position of the president and chief executive officer and other members of senior management, including in the event of an unforeseen emergency affecting the availability of any of these individuals.

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

The human resources and compensation committee reviews an assessment of the operational and leadership competencies and other characteristics the committee believes are required to effectively manage our business and implement the strategic plan as approved by the board and how they are being developed among current candidates for the CEO role and other officer roles in the organization. The human resources and compensation committee annually reviews succession planning for other senior management positions and involves the audit and finance committee in reviewing the succession plan for the CFO, controller and senior finance roles. The board reviews the management succession plan and has the opportunity to meet high-potential employees through board presentations and informal social gatherings, such as board events/dinners and site visits.

Commitment to inclusion and diversity

We have made a formal commitment to inclusion and diversity that is communicated company-wide through our value statements. We understand the value of a diverse workforce and we embrace, encourage and support workplace inclusion and diversity. Members of a diverse workplace bring new ideas, perspectives, experiences and expertise to the company. Our diversity vision is to create a work environment where inclusion is the goal, and a diverse and representative workforce is our measure of success. Our people policy sets out our commitment to developing and supporting a flexible, skilled, stable and diverse workforce, and acting to eliminate racism wherever it exists. The policy is supported by multiple corporate human resource programs, standards and practices, including providing preference to Residents of Saskatchewan’s North (RSNs) for employment opportunities in our northern Saskatchewan operations. The policy is available on our website at cameco.com/about/governance/policies-programs.

Diversity is an important factor in our ability to continue to innovate, manage change and grow as a respected industry leader and employer of choice. We implemented a number of initiatives in 2020 to make continued progress in achieving our long-term inclusion and diversity plan.

We want a culture where each of our workers feels welcome, valued and an integral part of the team. We recognize that to successfully progress towards this culture, we must engage members of the workforce throughout the journey. As an example of our commitment to eliminate racism wherever it exists, in 2020 Cameco signed the BlackNorth initiative CEO pledge. In 2021, this diversity work will be championed through the establishment of an Inclusion and Diversity committee. Members of the committee will be drawn from across the organization and will help us engage the workforce through open and respectful communication, will advocate, lead and support change and provide awareness and understanding of the benefits of inclusion and diversity. The committee will report to the President and CEO and the Senior Vice-President and Chief Corporate Officer.

Indigenous workforce

Cameco is a large employer of First Nations and Métis people and our Indigenous employees make up more than 46% 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 includes our talent acquisition and development practices, collaboration and participation agreements with northern communities and our community liaisons located in northern Saskatchewan. We also have a dedicated team of employees within our stakeholder and sustainability relations department at our head office in Saskatoon and our human resources representatives at our four northern Saskatchewan operations and corporate office who focus their

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efforts on supporting our RSN employees. See our STI scorecard for details about our 2020 compensable objectives relating to the development of our RSN and Indigenous workforce.

Women in leadership

Cameco is committed to putting women in leadership at the forefront of our diversity agenda. In 2020, we undertook several initiatives to increase women in leadership:

• drafted a new three-year inclusion and diversity plan with focused efforts on recruitment, retention and development of women in male-dominated roles

• expanded our existing partnerships by partnering with external organizations committed to inclusion and diversity, such as Driving Advancement of Women in Nuclear (DAWN)

• hosted our third annual International Women’s Day event where executive officers presented their support for gender equity

• profiled various woman employed throughout the organization to increase awareness of their roles and their contributions to the organization, in addition to profiling men employed at Cameco who are champions and allies of gender diversity in the workplace

• continued our review of pay equity and job promotion/progression processes to ensure they are free of gender bias.

We have one woman who is an executive officer, representing 20% of the executive officers, and four women who are vice-presidents, together representing about 28% of our senior management team – up from 25% five years ago. We currently have 459 employees who are women across North America, representing approximately 25% of our workforce.

Generally executive officer appointments are a result of our succession planning framework designed to build advanced competencies throughout the organization and to identify high-potential employees, including women, and prepare them to take on executive roles in the future. When appointing executive officers, we strive for a complement of executive officers who are women that at a minimum reflects the proportion of women in our workforce. We expect that our long-term inclusion and diversity 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 women, individuals with an Indigenous heritage, persons with disabilities, or members of visible minority representation of executive officers. The diversity of our senior management team is about 28% female and 6% visible minority. No members of senior management have self-identified as Indigenous or a person with a disability.

A diverse senior management team is the goal and is considered when addressing succession. In particular, we consider the representation of women, members of visible minorities, individuals with an Indigenous heritage and persons with disabilities when succession planning for our executive officer appointments. 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.

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

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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.

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 conflict of interest

• develop an understanding of our strategy, business environment, operations, performance, financial position and the markets we operate in

• diligently prepare for each board and committee meeting

• attend all board meetings, their committee meetings and the annual meeting of shareholders

• actively participate in each meeting, and seek clarification from management and outside advisors to fully understand the issues

• participate in our board education program

• participate in the board, committee and director assessment process.

Code of conduct and ethics

Our code of conduct and ethics is our guide on how we uphold our value of integrity and it applies to all employees, officers and members of Cameco’s board and subsidiary boards. The code sets out our principles and guidelines for ethical behaviour at Cameco and with our shareholders, our communities and all our stakeholder groups.

We strive to create an environment where our employees live our values every day. Our code promotes the highest levels of personal conduct and ethical standards in compliance with applicable law, while promoting a spirit of fairness and honesty. The code promotes respect for privacy and confidential information and fosters open and honest communication and disclosure.

Our values define our culture and provide a framework for who we are, how we behave as we strive to achieve our purpose, and how we maintain an excellent reputation. The values we live by each day are organized according to the following four core themes.

SAFETY AND ENVIRONMENT	INTEGRITY
•   The safety of people and protection of the environment are the foundations of our work. All of us share in the responsibility of continually improving the safety of our workplace and the quality of our environment. •   We are committed to keeping people safe and conducting our business with respect and care for both the local and global environment.	•   Through personal and professional integrity, we lead by example, earn trust, honour our commitments and conduct our business ethically. •   We are committed to acting with integrity in every area of our business, wherever we operate.

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PEOPLE

EXCELLENCE

•   We value the contribution of every employee and we treat people fairly by demonstrating our respect for individual dignity, creativity and cultural diversity. By being open and honest, we achieve the strong relationships we seek. •   We are committed to developing and supporting a flexible, skilled, stable and diverse workforce, in an environment that: •  attracts and retains talented people and inspires them to be fully productive and engaged •  encourages relationships that build the trust, credibility and support we need to grow our business

•   We pursue excellence in all that we do. Through leadership, collaboration and innovation, we strive to achieve our full potential and inspire others to reach theirs. •   We are committed to achieving excellence in all aspects of our business.

Cameco’s code provides guidance on the most relevant issues related to business ethics, such as corruption, competition law and antitrust violations, and conflicts of interest, and is supported by our global anti-corruption and respectful workplace programs. Through our code and these programs, we have implemented several compliance measures, such as compliance training, confidential reporting channels, and business ethics awareness.

Our governance and compliance structures and processes include the following:

• our code details our high ethical standards, which are embedded in our internal training programs

• compliance professionals throughout the organization follow legislative, governance, regulatory and compliance rules, trends and best practices and strive to maintain a high level of good governance and a compliance mindset across Cameco

• robust policies and reporting mechanisms include an ethics (whistleblower) hotline and incident reporting procedures that protect anonymity and confidentiality

• our privacy officer provides guidance to the company on privacy matters

• strict policies on conflicts of interest, disclosure of material information and insider trading.

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

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 or human resources and our executive offices undergo special online training on the code and complete a declaration form every year. The training is 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 team. 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.

We are committed to respecting human rights and treating all employees fairly, including providing a harassment-free work environment. We have employee training and protocols for preventing, reporting and addressing harassment and prohibit retaliation against employees who raise concerns or complaints in good faith. All employees also receive mandatory training on a respectful workplace and unconscious bias.

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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 as necessary to determine whether a director has a conflict.

Related party transactions

Our code requires directors, officers and employees to report any related party transactions. In 2020, there were no material conflicts of interest or related party transactions reported by the board, the CEO or other senior executives.

Our corporate governance guidelines require a director to promptly inform the corporate secretary if an actual, potential or perceived conflict of interest arises. The corporate secretary will bring the matter to the attention of the nominating, corporate governance and risk committee right away for review and recommendation to the board.

If a director has an actual, potential or perceived material interest in a transaction or agreement involving Cameco, they do not participate in any committee or board discussions or decisions related to the possible conflict. Any transactions between Cameco and its officers or directors, other than routine transactions and situations arising in the ordinary course of business consistent with past practice, are reviewed by the audit and finance committee. A conflict of interest and mitigating plans must be approved by the board upon the recommendation of audit and finance committee. If a situation arises between scheduled committee meetings, the chair of the committee has the authority to review the transaction or situation, and report the results to the committee at its next meeting.

The board also reviews related party transactions when it conducts its annual review of director independence. The nominating, corporate governance and risk committee reviews any potential conflicts of interest involving a director for the purpose of determining independence and assesses whether such conflict limits or impairs the role of the director, and makes recommendations to the board respecting directors for nomination and election. The nominating, corporate governance and risk committee reviews the definition of independent director and related definitions to assist in making determinations as to the independence of directors.

Our internal audit, accounting, human resources and legal departments review any declared conflicts of interest or related party transactions reported by officers and employees, as applicable.

Serving on other boards

We believe that directors must be able to commit the necessary time to effectively serve on our board. This means they must devote sufficient time to properly prepare for and attend board and committee meetings, understand the issues and participate in each meeting. 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 Cameco 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 Cameco’s board. Other directors can serve on a maximum of five public company boards, including Cameco’s board. Members of our audit and finance committee cannot serve on the audit committees of more than two additional public companies without the board’s approval.

The chair of the board or the nominating, corporate governance and risk committee discusses board memberships with each director during their annual interview, including their 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 they declare 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.

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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 must promptly offer their resignation to the board chair. The board will then decide whether or not to accept the resignation.

Board independence standards

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.

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 more stringent independence tests set out under the applicable Canadian and U.S. and NYSE governance rules for the independence of audit committee and human resources committee members. We review the criteria and director independence status every year, and you can find our complete definition of independence on our website (cameco.com/about/governance/governance-guidelines).

A director is independent if they are not a member of management and 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 they may have. We have a robust three-step process for assessing independence:

• directors complete a detailed questionnaire

• the board reviews directors against our independence criteria, considering all relevant facts and circumstances, including the relationship the director may have with us – and any relationship that their spouse, children, principal business affiliations and any other relevant individuals have with the company

• directors declare any material interest in matters that may come before the board.

The nominating, corporate governance and risk committee assists the board in its independence assessment for board membership purposes and for service on the audit and finance and human resources and compensation committees.

Stakeholder engagement

We recognize the importance of strong and consistent engagement with stakeholders. The long-term sustainability of our business is dependent in part on our ability to effectively build relationships with our stakeholders and work constructively with them for our mutual benefit.

Informed by best practices, our approach to engagement involves setting standards for ways to meaningfully engage with stakeholders. We are committed to having constructive and open dialogue with stakeholders throughout the year on a variety of issues, including our financial performance and business strategy, our policies on corporate governance, our executive compensation program and practices, and our approach to ESG-related matters.

Through regular, ongoing engagement, stakeholders can increase their knowledge about Cameco and we can hear their views on our practices, strategy and disclosure and answer questions so there is a shared understanding about how Cameco is creating long-term, sustainable value. We consider all feedback and have enhanced our practices and disclosure over the years as a result.

Disclosure

We provide timely, open, 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.

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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 release

• evaluating the design and effectiveness of our disclosure controls and procedures to make 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

• providing regular updates on our public disclosure to the audit and finance committee.

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, management’s discussion and analysis (MD&A) and related news releases

• the safety, health and environment committee reviews the sustainable development report

• the reserves oversight committee reviews the reserve and resource estimates and technical reports

• the human resources and compensation committee and the nominating, corporate governance and risk committee review this management proxy circular.

The board also reviews and approves the following publicly-filed documents:

• prospectuses

• annual information forms

• US Form 40-F filings

• other disclosure documents that must be approved by the directors according to securities laws, securities regulations or stock exchange rules.

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.

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Engagement with the investment community

Our investor relations objective is to provide clear, consistent, accurate, and transparent communications to the investment community to facilitate informed investment decisions. We communicate regularly in various ways and the following is a summary of our engagement activities with the investment community:

Type of engagement	Frequency	Who engages	Who we engage with
Conference calls	Quarterly	Senior management	The investment community to discuss our progress on our strategy and the trends we are seeing in the market
Conference calls	Ad hoc	Senior management	With specific investors, and generally with the investment community when required to address other material company matters
Annual meeting of shareholders	Annually	Board of directors and senior management	Holders of Cameco common shares at our annual meeting of shareholders – shareholders are invited to attend the meeting, vote their shares and participate in the items of business
News releases	As required	Senior management	The media – we disclose material and other information throughout the year in news releases to the media
Non-deal investor road shows	Continuous	Senior management	We have individual meetings with security holders to discuss publicly-disclosed information about our business and operations, answer questions and obtain feedback
Conferences	Continuous	Senior management	Senior management speaks to the investment community at industry conferences about our business and operations, and key industry topics
Meetings, calls, discussions	As required	Investor relations	Investment advisors and institutional and non-institutional shareholders – we address any shareholder-related concerns and point them to publicly-available information
Direct board and shareholder engagement	As requested	Chair of the board (and other directors as may be identified by the chair)	Significant shareholders to address specific topics and related issues
Regular meetings	Annually	Senior management	Proxy advisory firms, Glass Lewis & Co., LLC and Institutional Shareholder Services (ISS), to discuss any issues or concerns or to receive feedback on a particular matter
Ad hoc meetings as requested	As requested	Chair of the board, chair of identified committees Senior management	Shareholder advocacy groups to discuss any issues or concerns or to obtain feedback on a particular subject matter

Say on pay

We have held an advisory vote on ‘say on pay’ every year since we introduced it in 2010 and have always received strong support from shareholders. We monitor developments in executive compensation and evolving best practices to make sure our policies, 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 to our business strategy as well as changes in the market and best practices. In 2020, 93.49%

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of the votes were in favour of our approach to executive compensation. You can write to the board or committee chair about your views on executive compensation.

How to engage with the board

You can engage with members of the board by contacting the corporate secretary at corporate_secretary@cameco.com, or by writing to us at our head office address below. You can write in confidence 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 2121-11th Street West Saskatoon, SK S7M 1J3   Private and strictly confidential 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 directing the letter. Envelopes will be delivered unopened to the appropriate party.

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/2021-annual-meeting) or on SEDAR (sedar.com) following the meeting to see the voting results.

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 2022. Proposals must be submitted to our corporate secretary by December 31, 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.

Advance notice by-law

Shareholders who collectively own more than 5% of Cameco’s outstanding shares may nominate individuals to serve as directors and have their nominations for election included in our management proxy circular for the 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 2022 annual meeting of shareholders is December 31, 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 nominations must be provided to our 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).

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

• our governance guidelines

• our code of conduct and ethics

• the mandates of the board and its committees

• definition of independent director and related definitions

• board diversity policy

• board education program

• position descriptions for the board chair and the CEO

• director and executive share ownership guidelines

• executive incentive compensation recoupment policy.

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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:

• 2020 annual report, which includes financial information about us, as provided in the audited 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 the audit 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 bylaws, and the board 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 its 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.

Compliance

Cameco is 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 the 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, 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 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 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 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 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.

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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 standing committee was formed to assist the board in providing detailed oversight in key areas. 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.

Specific matters that a committee oversees are addressed in the annual work plan, which drives its priorities and activities for the year.

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 do not mandate it so we can benefit from the 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 2020.

Committee reports

Committee reports that set out the key responsibilities and 2020 highlights for each committee are set out in the following pages.

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Daniel Camus (chair since May 2019)	Audit and finance committee 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, prevention and detection of fraudulent activities, and financial oversight.
Ian Bruce Catherine Gignac Jim Gowans 2020                            2020 meetings            attendance 6                                 100% The committee met separately with the internal auditor and external auditor at every regular meeting. 100% Independent and financially literate Daniel Camus is the audit and finance committee’s financial expert because he has financial expertise and meets the necessary requirements under US securities laws.	2020 Committee 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 •  approved the annual audit plan and the external auditors’ fees, including pre-approval of all services to be provided (see page 7 for details about the external auditor and the fees paid to them in 2020) •  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 Risk oversight and compliance •  reviewed the effectiveness and integrity of our internal control systems and disclosure controls
None of the committee’s members serve on the audit committee of more than two other public companies.	•  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 •  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 •  received reports on enterprise risks that the committee oversees •  received quarterly updates on the status of mitigation plans for risks that the committee oversees (including financial, fraud and other material risks within the 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 •  reviewed and recommended board approval of the redemption of $400 million in debt coming due in 2022 and issuing debentures for an equivalent amount
The committee reviewed its mandate and is satisfied that it carried out its duties and responsibilities.	•  received and reviewed reports pertaining to the financial aspects of the company’s operations (including monitoring of care and maintenance spend and developments related to the COVID-19 pandemic)

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               Don Kayne (chair since May 2018)   Ian Bruce Daniel Camus Kate Jackson Anne McLellan   2020                                  2020 meetings                 attendance 4                                     100%   100%   Independent   The committee also has an external consultant who provides independent 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 satisfied that it carried out its duties and responsibilities.   Human resources and compensation committee   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.   2020 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 changes to features of the long-term incentive plan and recommended to the board for approval   •  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 executive compensation and incentive plan measures and recommended them to the board for approval   •  assessed performance against measures   •  reviewed and adopted guiding principles for 2020 incentive payouts and potential COVID impacts   Succession planning   •  reviewed succession planning with management and oversaw the succession planning process   Risk oversight   •  received reports on enterprise risks that the committee oversees   •  received quarterly status updates on the mitigation plans for risks that the committee oversees (including compensation risk, third-party compensation risk assessments, talent management risk, succession risk, cyber-security risk, risks related to the COVID-19 pandemic 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  

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               Anne McLellan (chair since May 2016)   Ian Bruce Leontine Atkins (joined in August 2020) Donald Deranger Catherine Gignac Kate Jackson   2020                                  2020 Meetings                 attendance 4                                      100%   100% Independent     The committee reviewed its mandate and is satisfied that it carried out its duties and responsibilities. Nominating, corporate governance and risk committee   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.   2020 Committee highlights   Corporate governance   •  oversaw the director selection process, including the appointment of a new director effective August 1, 2020   •  monitored governance trends and emerging issues   •  received an update on TMX and ICD initiatives to update corporate governance guidance   •  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   •  reviewed the competency and attribute matrix   •  reviewed the board’s diversity policy   •  oversaw our director education program   •  oversaw orientation for the new director   •  reviewed the board budget and recommended it to the board for approval   Risk oversight   •  oversaw our risk program   •  monitored governance-related risks   •  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 ESG working group   •  received updates on the company’s ESG and sustainability website enhancements and reporting   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  

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               Catherine Gignac (chair since May 2015)   Ian Bruce Leontine Atkins (joined in August 2020) Donald Deranger Jim Gowans Don Kayne (left in November 2020)   2020                                  2020 Meetings                 attendance 2                                       100%   The committee met separately with the leading qualified person at every meeting.   100% Independent   The committee reviewed its mandate and is satisfied that it carried out its duties and responsibilities.   Reserves oversight committee   Key responsibilities   The reserves oversight committee supports the board in fulfilling its oversight responsibilities regarding estimating and disclosing mineral reserves and resources.   2020 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 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 by CSA Global Advisors on the external audit of mineral reserves and resources estimation at Reynolds Ranch and received updates on Cameco’s implementation plan relating to findings of the audit   Risk oversight   •  received reports on enterprise risks that the committee oversees   •  received status updates on the mitigation plans for risks that the committee oversees (including mineral reserves and resources risks and other material risks within the committee’s mandate)  

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                 Jim Gowans (chair since May 2015)   Ian Bruce Donald Deranger Kate Jackson Don Kayne   2020                              2020 meetings              attendance 3                                   100%   100% Independent     The committee reviewed its mandate and is satisfied that it carried out its duties and responsibilities.   Safety, health and environment committee   Key responsibilities   The safety, health and environment committee supports the board in fulfilling its oversight responsibilities regarding safety, health and environmental matters.   2020 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 reporting on the annual review of Cameco’s management system measures in accordance with the Cameco management system   •  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 measures and results for executive compensation and related impact   •  monitored trends, significant events and emerging issues through reports from management   Risk and ESG oversight   •  received reports on enterprise risks that the committee oversees   •  received status updates on the mitigation plans for risks that the committee oversees (including safety, health and environment risks and other material risks within the committee’s mandate)   •  received reports on the company’s sustainability and ESG website enhancements and reporting  

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Executive Compensation

Where to find it

Message from the Chair of the Human Resources and Compensation Committee	62
Compensation discussion and analysis	65
Our 2020 named executive officers	66
Compensation governance •   Independent advice	67
Compensation program risk management •   Clawback policy •   Share ownership requirements •   Anti-hedging policy	68
Compensation program decision-making process	69
Our approach to executive compensation •   Compensation comparator group •   Target compensation •   Share ownership requirements	70
Our executive compensation program aligns with our strategy and ESG performance	72
Compensation components overview •   Base salary •   Short-term incentive (STI) plan •   Setting STI performance measures •   Measuring corporate performance and determining the corporate performance multiplier •   Measuring individual performance •   Determining the payout •   Long-term incentive (LTI) program •   LTI components •   Performance share unit plan •   Setting PSU performance measures •   Measuring corporate performance and determining the corporate performance multiplier •   Restricted share unit plan •   Stock option plan •   Pension •   Benefits	73

2020 Performance and decisions •   Market context •   Share performance and executive compensation •   Base salary •   Short-term incentive (STI) results and scorecard •   Individual performance results •   PSU results and scorecard •   2018 PSU payouts	80
CEO compensation summary •   2020 Key results •   CEO compensation •   CEO realized and realizable pay •   Lookback •   Share ownership	89
2021 Compensation decisions •   Base salary •   Short-term incentive (STI) •   Long-term incentive (LTI)	91
2020 Compensation details •   Summary compensation table •   Incentive plan awards •   Options exercised and value realized during the year •   Equity compensation plan information •   Securities authorized for issue under equity compensation plans •   Burn rate •   Additional plan details •   Pension benefits •   Defined contribution plan •   Supplemental executive pension •   Early retirement •   Executive pension value disclosure •   Loans to executives •   Termination and change of control •   CEO •   Other named executives	92

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Message from the Chair of the

Human Resources and Compensation Committee¹

Dear Shareholder,

On behalf of the Human Resources and Compensation Committee and the board, I am pleased to share our approach to executive compensation and provide insights to this year’s compensation decisions.

The human resources and compensation committee oversees all aspects of executive compensation, executive development and succession planning. Detailed information about our compensation philosophy, pay-for-performance program, 2020 results and compensation governance is included in our compensation discussion and analysis section that follows this letter.

Our approach to compensation

Our compensation program supports Cameco’s vision of energizing a clean-air world. The program is designed to link strategy and performance with compensation and align the interests of our executives and shareholders by linking a significant portion of executive pay – including equity-based compensation – to the achievement of objectives that focus the executive team on Cameco’s long-term success and sustainability.

The committee reviews Cameco’s strategy and business plan and recommends performance measures and targets to the board that 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 corporate and executive performance and make compensation decisions, including the payouts of incentive awards to the executive team.

2020 Performance and COVID-19

The COVID-19 pandemic has resulted in a time of unprecedented volatility, and we have taken that into consideration when evaluating 2020 performance. Challenges created by the COVID-19 pandemic affected every aspect of the company, and Cameco’s management team took proactive measures to protect the health and well-being of Cameco’s workers, their families and their communities.

In addition to deliberate decisions to protect Cameco’s workers and to help slow down the spread of the COVID-19 virus, management also implemented strategic initiatives to strengthen the company for the future, including investing in Cameco’s digital transition program at McArthur River and Key Lake as well as other key areas of the company. This investment in digital technologies is expected to lower operating costs and provide operational flexibility in the future. Cameco also took advantage of favourable debt capital markets and further strengthened its balance sheet by accelerating the redemption of $400 million in debt coming due in 2022 and issuing debentures for an equivalent amount, securing a record-low coupon rate for Cameco of 2.95% and resetting the maturity date to 2027. The proactive decisions related to COVID-19 that were made in 2020 are consistent with Cameco’s values and support its strategy and vision. However, they resulted in unplanned costs, including costs associated with placing operations in care and maintenance, enhancing safety measures and purchasing safety equipment, purchasing additional pounds of uranium to cover the temporary supply curtailments and accelerating the redemption of the $400 million debenture.

In assessing financial performance for 2020, the committee capped financial performance results below target by not allowing all these additional costs to be excluded. At the same time, the committee excluded the benefits received from the Canadian emergency wage subsidy (CEWS) and savings achieved through reduced travel and project costs. By making these balanced and symmetrical adjustments as well as considering the challenges faced in the business and community in this extraordinary year, the committee avoided a short-term incentive payout that was significantly above target. In making this decision, the committee and the board were satisfied that the overall STI payout at target (100%) was fair, mitigated the impact of the uncontrollable outcomes driven directly by the pandemic, and provided a payout that was focused on controllable results and strategic achievements in a very challenging year.    

Despite the disruption of the COVID-19 pandemic on the company’s operations, Cameco continued to improve its safety performance, recorded the best safety performance in its history for the third consecutive year and recorded no lost-time injuries in 2020. The company also met all of its environmental performance targets which were focused on mitigating specific risks in each area of the operations.

¹  This message from the chair of the human resources and compensation committee contains forward-looking information and is based upon the assumptions and subject to the material risks described at pages 2 through 4 of our 2020 MD&A. Actual outcomes for future periods may be significantly different.

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As part of Cameco’s strategic initiative to move towards digital transition and to ensure that we have the digitally skilled workforce to meet our future operational needs, we targeted programs to enhance digital skills development for Residents of Saskatchewan’s North (RSNs). The target was exceeded in 2020, setting the foundation for further skills development work and supporting Cameco’s ongoing efforts to maintain its strong Indigenous employment record and important relationships with Northern and Indigenous communities in Saskatchewan.

The 2018 performance share unit (PSU) grant that vested on December 31, 2020 paid out above target at 143.6%, reflecting strong performance on all three measures. Cameco achieved a solid relative realized uranium sales price, lower all-in sustaining cash costs (AISCC) from the three Saskatchewan tier one operations, and a strong three-year TSR at the 69th percentile relative to the TSX 60. Cigar Lake was in care and maintenance for a significant portion of 2020 due to the COVID-19 pandemic. As a result, the costs for 2020 were lower than anticipated and not readily comparable to the three-year AISCC target. Actual 2020 AISCC were much lower than budgeted 2020 AISCC, which would have resulted in maximum performance for that measure. Instead of applying this higher factor, the actual production volume and costs achieved were analyzed and added to the budget plan for the months that the site was in care and maintenance. This estimate, combined with the actual care and maintenance costs at McArthur River and Key Lake, resulted in an AISCC result for 2020 that was about 4% better than target. The committee subsequently decided to cap the 2020 AISCC performance at 100% to further reduce the incentive while Cigar Lake was in care and maintenance.

President and Chief Executive Officer (CEO) compensation

The committee uses a robust assessment process for evaluating CEO performance and incorporates feedback from all board members before making its recommendations on CEO pay to the board.

A significant component of CEO compensation is variable or at risk. Tim Gitzel did not receive a salary increase in 2020 at his request. His 2020 short-term incentive award was $1,400,000, reflecting target corporate performance and continued strong individual performance and leadership during an unprecedented year. Tim’s leadership has helped Cameco navigate considerable external challenges, while strengthening its balance sheet and positioning the company to achieve its vision of energizing a clean-air world.

Program changes and looking ahead to 2021

The committee continually reviews Cameco’s compensation program and makes adjustments to align with market trends and best practices. In 2020, the 40% weighting allocated to stock options was replaced by restricted share units (RSUs) in the long-term incentive mix. RSUs align with Cameco’s share price, provide retention value and are a common form of long-term incentive used by companies in Cameco’s comparator group. RSUs reduce shareholder dilution because they are settled in shares that are purchased on the market.

Performance targets for both the short- and long-term plans are linked to our strategic plan and reward our long-term success. Every year our targets are scrutinized and tested to ensure stretch within the program. This includes a thoughtful examination of threshold, target and maximum levels for all metrics.

In light of the uncertainty as to when the uranium market will transition to reflect production cost economics and how the COVID-19 pandemic will impact the restart of the Cigar Lake operation, management and the board remain focused on preserving the value of Cameco’s lowest cost assets, maintaining a strong balance sheet, protecting and extending the value of Cameco’s contract portfolio, and efficiently managing the company in a low-price environment. Objectives for the 2021 short- and long-term incentive awards continue to support Cameco’s strategy and four measures of success, and incorporate the following factors, while recognizing the uncertainty due to the COVID-19 pandemic:

• prioritizing the health and safety of our workers, their families and communities

• returning Cigar Lake to production, on a basis that protects our employees and communities from COVID-19

• evaluating the optimal mix of production, inventory and purchases in order to retain the flexibility to deliver long-term value

• focusing on technology and its applications to improve efficiency, reduce costs and improve operational effectiveness across our operations, including the use of digital and automation technologies.

Base salaries for executives will not increase in 2021 based on the recommendation of the CEO and approval of the board.

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

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Thank you for your support

We are confident that Cameco’s compensation program works, is based on performance and aligns with Cameco’s vision of energizing a clean-air world. We remain focused on taking advantage of the long-term growth we see coming in our industry, while maintaining our ability to respond to market conditions as they evolve, all while keeping our workers and their families and communities safe.

In keeping with our ongoing commitment to good governance, we held our annual “say on pay” advisory vote at our 2020 annual meeting. Shareholders voted 93.49% 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.

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

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Compensation discussion and analysis

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 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 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 uranium price	✓
Benchmarking. We benchmark executive compensation against a size and industry appropriate comparator group and target compensation at the median of the group	✓
Caps on incentive payouts. Our STI and PSU plans cap payouts. The human resources and compensation committee and the board cannot use their discretion to exceed the caps	✓
Stress testing and back testing. We stress test different scenarios to assess appropriateness of pay and avoid excess risk-taking, and the committee considers 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 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. 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 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 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

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Our 2020 named executive officers

Our 2020 named executive officers (named executives) include the chief executive officer, chief financial officer, and the next three most highly compensated officers at December 31, 2020.

Name	Title
Tim Gitzel	President and Chief Executive Officer
Grant Isaac	Senior Vice-President and Chief Financial Officer
Brian Reilly	Senior Vice-President and Chief Operating Officer
Alice Wong	Senior Vice-President and Chief Corporate Officer
Sean Quinn	Senior Vice-President, Chief Legal Officer and Corporate Secretary

Tim Gitzel is president and chief executive officer, a position he has held since July 1, 2011. See the director profile on page 24 for his complete biography.

Grant Isaac was appointed senior vice-president and chief financial officer on July 1, 2011 and has executive oversight responsibilities for finance, tax, treasury, investor relations, strategy and risk, and marketing. Grant was previously senior vice-president, corporate services from 2009 to 2011.

Prior to joining Cameco, Grant was a professor at the Edwards School of Business, University of Saskatchewan beginning in 2000 and was appointed as the Dean of the Edwards School of Business in 2006. Grant earned a BA (economics) and an MA (economics) from the University of Saskatchewan and a PhD from the London School of Economics.

Brian Reilly was appointed senior vice-president and chief operating officer on July 1, 2017 and has executive oversight responsibilities for our fuel services division, mining operations, technical services and operational excellence. He was previously vice-president, mining, projects and technology. Brian’s career at Cameco began at Cameco Australia in 2011 where he was managing director responsible for strategic vision, planning and overall direction.

Prior to joining Cameco, Brian held the position of president & CEO of Titan Uranium and previous positions with Orano (formerly AREVA), including vice-president human resources and industrial relations. At Orano, Brian was responsible for coordinating and developing the KATCO project in Kazakhstan and the Kiggavik project in Nunavut.

Alice Wong was appointed senior vice-president and chief corporate officer in July 2011 and has executive oversight responsibilities for human resources, safety, health, environment, quality, regulatory relations, business technology services, supply chain management, internal audit and corporate ethics.

Alice’s career with Cameco spans more than 30 years. Previous roles include vice-president safety, health, environment, quality and regulatory relations where she led the company through an increasingly complex regulatory world with a focus on operational excellence. She also held leadership positions in corporate responsibility, communications, community investment, government relations and investor relations and has experience in marketing, corporate development and strategic planning. Alice has been a member of the board of Hecla Mining Company (NYSE:HL) since February 2021.

Sean Quinn was appointed senior vice-president, chief legal officer and corporate secretary on April 1, 2014. Sean has executive oversight responsibilities for legal, corporate development, exploration and our Kazakh joint venture. Sean was previously vice-president, law and general counsel from 2004 to 2014.

Sean’s career with Cameco spans almost 30 years. As legal counsel, he has been at the forefront of Cameco’s major international business deals, including acquisition of uranium operations in the US, the formation of JV Inkai in Kazakhstan, the spinoff and eventual divestiture of Cameco’s gold business to Centerra Gold Inc., and the acquisition of Kintyre and Yeelirrie uranium deposits in Australia. He served on the board of Bruce Power from 2007 to 2014, representing Cameco’s investment.

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Compensation governance

The board has ultimate responsibility for compensation at Cameco. It 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, adjust compensation upward.

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

• establishing the annual corporate objectives to assess performance

• determining the base salaries, short-term incentive awards and long-term incentive awards

• evaluating performance

• reviewing and recommending executive compensation to the board for review and approval.

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 19.

Years on committee
Don Kayne (chair)	4
Daniel Camus1	9
Anne McLellan2	13
Kate Jackson2	3
Ian Bruce1,2,3	6

Expertise of committee members
Business and industry experience	5 of 5
Executive compensation experience (as a 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 role of board chair.

Independent advice

Meridian Compensation Partners (Meridian) serves as the human resources and compensation committee’s independent consultant, a role it has fulfilled since December 2011. Management retains a different external consultant as a general resource on human resources and other matters and Mercer serves as management’s consultant.

The committee considers the independence of its compensation consultant, and reviews all fees and the terms of consulting services to be provided by the independent consultant. The committee reviewed Meridian’s 2020 report on independence as contemplated by the NYSE rules and is satisfied with the report. It also confirmed Meridian’s independence.

The committee considers recommendations provided by its compensation consultant and management along with other information, and is ultimately responsible for its own decisions.

Meridian assists the committee in its annual review of Cameco’s compensation program, and regularly reviews nine key areas of our compensation programs with the committee:

• compensation principles

• comparator groups

• positioning of target compensation

• pay mix

• incentive plan design

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• performance measures

• share ownership

• plan governance and risk mitigation

• supplemental executive pension program.

The table below shows the fees paid to Meridian in 2019 and 2020. Meridian did not provide any services to management in either year.

	2020			2019
Executive compensation-related fees	$	60,401		$	69,576
All other fees		—			—
Percent of work provided to the committee		100	%		100	%

Meridian provided a broad range of services in 2020, including:

• a review of the comparator group

• a compensation risk review

• two education sessions on compensation and governance trends

• a review of our executive compensation program and STI and PSU plan objectives and performance measures

• a review of the 2020 incentive plan targets and performance against targets

• a pay-for-performance assessment of CEO realizable pay

• a review of the compensation discussion and analysis (CD&A)

• consulting on numerous compensation governance matters, including clawbacks, proxy advisor positions, realized and realizable pay disclosure and ISS pay-for-performance modeling.

Compensation program risk management

We mitigate executive compensation risk through appropriate corporate governance oversight and compensation plan design. Compensation risk is addressed by the human resources and compensation committee each year (see page 57 for the committee’s 2020 highlights), and Meridian conducts a compensation risk review annually. Meridian’s 2020 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.

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.

Specific corporate governance policies related to compensation program risk management include our clawback policy, share ownership requirements, and anti-hedging policy.

Clawback policy

All named executives are subject to a clawback policy that applies to all 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 there is an accounting restatement due to material non-compliance with financial reporting requirements under securities laws, and the executive:

• engaged in gross negligence, intentional misconduct or fraud which caused or significantly contributed to the restatement

• was overcompensated as a result of the restatement.

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Share ownership requirements

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 71 for share ownership requirements).

Anti-hedging policy

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 securities 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 of Cameco securities.

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

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Our culture encourages management to be objective in assessing its own performance and making recommendations to the board to adjust compensation as appropriate. The compensation principles set out below were adopted by the board and guide all executive compensation decisions at Cameco.

Six compensation principles
Team	Performance	Retention
Promote executive teamwork by using incentive-based compensation that emphasizes corporate over individual 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 and long-term performance	Focus part of the LTI program (PSUs) on absolute and controllable performance measures to retain skilled executives
Shareholder alignment	Comparator	Market competitiveness
Use share ownership requirements and equity-based compensation to align executives with long-term interests of shareholders	Benchmark shareholder experience and compensation program against a comparable group of companies	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

Our approach to executive compensation

Our executive compensation program is based on strong principles, a disciplined process and thorough research and analysis. It has the following goals:

• attract, retain and motivate executives, who are operating in a highly-demanding, complex and competitive global business environment

• establish a clear link between corporate performance and executive pay

• motivate executives to create value by rewarding them when successfully achieving corporate and individual performance objectives over the short and long term

• ensure a significant portion of total compensation is at risk, reinforcing the importance of strong leadership and executives’ ability to influence business outcomes and financial and ESG performance, and is tied to share value to align the interests of executives and shareholders.

Compensation comparator group

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 by the human resources and compensation committee when making compensation decisions.

Our objective is to have a robust and stable group of companies that are comparable by size and industry to benchmark against. 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.

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, has established a comparator group of companies to assess both executive and director compensation. The comparator group 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.

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2020 Comparator group
Diversified metals and mining	Energy (oil, gas and methanol)	Utilities, energy infrastructure and power producers
Agnico-Eagle Mines Ltd. Centerra Gold Inc. Eldorado Gold Corporation First Quantum Minerals Ltd. Hudbay Minerals Inc. IAMGold Corporation Kinross Gold Corporation Lundin Mining Corporation New Gold Inc. Nutrien Ltd. Pan American Silver Corp. Teck Resources Limited Yamana Gold Inc.	ARC Resources Ltd. Crescent Point Energy Corp. Ovintiv Inc. (formerly EnCana Corp.) Enerplus Resources Fund MEG Energy Corp. Methanex Corporation	TransAlta Corporation

Target compensation

We target base salaries and total compensation within a competitive range of the median of our comparator group, for target performance.

The charts below show the 2020 target pay mix for total target direct compensation for our named executives, and the amount of at-risk compensation. We use financial, operational and ESG measures to assess performance for short- and long-term incentives.

Share ownership requirements

Share ownership is an important part of our compensation program as it aligns the interests of our executive officers with those of our shareholders. Ownership includes shares held directly or indirectly, and share equivalents such as PSUs and RSUs. The human resources and compensation committee regularly reviews and assesses our guidelines to make sure they continue to align with market practice.

Ownership guidelines by position	CEO - 4x base salary Other named executives - 2x base salary
Equity used to meet share ownership guidelines	Yes	•   Cameco shares that the NEO owns or is deemed to own, beneficially, directly or indirectly •   80% of the after-tax value of unvested PSUs (not to exceed 1⁄2 of the ownership level) •   The after-tax value of unvested RSUs	No	•   options, whether vested or unvested

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

For compliance purposes, we annually 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 (or share unit grant), whichever is higher.

All our named executives are in compliance with our share ownership guidelines. The table below shows each named executive’s holdings for purposes of our annual compliance assessment.

			Total holdings						Value of holdings ($) (using share ownership guideline value)		Value of holdings ($)1		Multiple achieved (#)		Compliant with share ownership guideline
					Qualifying share equivalents						Using market value at year-end
Named executives	2020 base salary		Cameco shares		PSUs2		RSUs3
Tim Gitzel4		1,060,900		370,035		138,097		65,181		10,428,140		9,774,987		9.2x		Yes
Grant Isaac		586,400		87,185		53,056		25,369		2,897,252		2,823,651		4.8x		Yes
Brian Reilly		502,400		21,573		21,573		19,567		1,070,849		1,286,985		2.6x		Yes
Alice Wong		474,100		75,485		34,316		16,402		2,240,426		2,151,761		4.5x		Yes
Sean Quinn		458,500		43,050		37,172		15,875		1,817,441		1,638,454		3.6x		Yes

1. Based on total holdings multiplied by the closing share price of $17.05 on the TSX as of December 31, 2020.

2. Number of qualifying PSUs for share ownership purposes, which number does not exceed number of Cameco common shares held and are reduced to account for deducting an estimated 50% for taxes.

3. Number of RSUs for share ownership purposes are reduced to account for deducting an estimated 50% for taxes.

4. See Tim Gitzel’s profile on page 24 for the total number and value of the CEO’s shares and all PSUs, not just qualifying PSUs.

Our executive compensation program aligns with our strategy and ESG performance

Our executive compensation program is directly aligned with the strategic plan, which includes ESG performance. Measures based on our corporate objectives form the basis of the compensable targets under the short-term incentive plan. Performance share units (PSUs) measure absolute and relative performance over a three-year period, with the actual payout determined by outcomes against targets based on our long-term strategic goals.

We establish corporate objectives to achieve our strategic plan and these are approved by the board for our incentive plans every year (see our most recent MD&A, particularly the Our strategy section for more information about our strategy). We group our corporate objectives into our four measures of success:

• outstanding financial performance

• safe, healthy and rewarding workplace

• clean environment

• supportive communities.

Our four measures of success allow us to proactively address the financial, social and environmental aspects of our strategy and business. We believe that each is integral to our overall success and that together they will ensure our long-term sustainability.

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Compensation components overview

The chart below shows the current multi-year, strategic balance of components that make up total direct compensation for the named executives.

The following table is a summary of the components that make up total compensation. Detailed explanations about each component follow.

Form	Performance period	How it is determined	Risk management features
Base salary	Fixed compensation that is competitive with the market
Cash	One year	Based on current business challenges, experience, scope of the role, market competitiveness, individual performance and internal equity.	Paid throughout the year and provides a base level certainty to named executives for fulfilling their responsibilities. Fixed pay represents 17-27% of target direct compensation for the named executives.
Short-term incentive (STI)	Variable, at-risk compensation that encourages achievement of pre-established corporate and individual performance objectives. Payout is subject to a clawback policy
Cash	One year	Focuses on specific annual objectives. Target payout based on market competitiveness and other factors. Actual payout based on corporate and individual 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 board. Targets are tested to determine the level of stretch. Using a balanced scorecard of different performance measures reduces the risk associated with emphasizing a single (or limited) performance measure.
Long-term incentive (LTI)	Variable, at-risk compensation that encourages achievement of longer-term performance and an opportunity to receive equity-based compensation aligned with shareholder interests. Payout is tied to Cameco share performance and is subject to a clawback policy
Performance share units	Three-year term, with vesting at the end of three years	Focuses on longer-term objectives. The PSU grant is based on market competitiveness of the LTI package and other factors. Payout is based on our overall absolute and relative performance and Cameco’s share price when the units vest. Payment is made in Cameco shares purchased on the open market, or in cash.	Provides a focus on long-term performance based on established targets for absolute and relative measures. Three-year vesting period supports long-term decision-making and management of the business. Vesting and payouts are capped. Stretch targets are based on challenging goals where achievement is better than the comparator group and market.

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Form	Performance period	How it is determined	Risk management features
Restricted share units	Three-year term, with vesting at the end of three years	The RSU grant is based on market competitiveness of the LTI package and other factors. The realized value is based on Cameco’s share price when the units vest. Payment is made in Cameco shares 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 of the business.
Stock options The last year stock options were granted was in 2019	Eight-year term, with one-third vesting each of the first three years starting on the first anniversary of the grant	The stock option grant was based on market competitiveness of the LTI package and other factors. The final realized value is based on the appreciation of Cameco’s share price.	Provides a balanced incentive to take appropriate risks. Three-year vesting eligibility period and eight-year term maintain longer-term focus for decision-making and management of the business.
Pension
Defined contribution pension plan and supplemental executive pension program (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 benefits
Group insurance, health and dental, income protection	Ongoing	Based on market competitiveness.

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) plan

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. The STI payout is based on the executives’ targets as a percentage of their base salary and actual corporate and individual performance.

Individual executive targets are set at the median of those of our comparator group. The human resources and compensation committee sets the target STI for each executive based on position, internal equity and market competitiveness. 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.

The table below shows the current target levels and weightings used to establish the actual payout.

Position	STI target level for 2020 (% of base salary)			Corporate performance weighting			Individual performance weighting
CEO		120	%		80	%		20	%
Senior vice-presidents		65-80	%		80	%		20	%

Setting STI performance measures

The board uses an additive balanced scorecard approach to establish the measures and weightings for STI performance measures every year based on the committee’s recommendation. STI performance measures are aligned with the strategic plan, which includes ESG performance.

STI performance measures 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. Stress testing is done on different performance scenarios and back testing of previous performance and

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compensation decisions to make sure decisions and outcomes are appropriate. The human resources and compensation committee then recommends the corporate objectives to the board for approval.

The non-financial objectives account for 50% of the STI payout and emphasize our balanced scorecard approach as well as our commitment to integrating ESG factors into our executive compensation strategy.

The CEO and other named executives have specific ESG-related goals as part of their individual performance measures under the STI plan related to safety, clean environment, and the company’s role in supporting communities where we operate.

Measuring corporate performance and determining the corporate performance multiplier

We assess our corporate performance by how well we achieve on the STI performance measures that reflect our four measures of success. Cameco must meet a minimum level of performance (threshold) for each measure before that measure can be counted towards the corporate performance multiplier that is ultimately used for calculating the payout. There is no payout if performance is below threshold. Achieving target produces a 100% payout on a measure. The maximum payout on any STI measure is 200%.

As part of the process in determining the corporate performance multiplier, 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.

The board can use discretion to make adjustments so that the corporate performance multiplier appropriately reflects performance and discourages excessive risk-taking when there are significant external challenges or opportunities that were not contemplated or reasonably expected when the objectives were set under the STI plan. The STI plan pays out at a maximum of 200% of target if performance is exceptional. The board cannot use their discretion to exceed this cap. We disclose any use of discretion, together with the rationale and the circumstance.

Measuring individual performance

The board assesses the CEO’s individual performance, and determines individual performance measures and weightings, 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

• achievement of the CEO’s individual performance objectives.

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.

The CEO assesses the individual performance of each senior vice-president and recommends to the committee the individual performance measures and weightings, using the annual corporate objectives, with consideration given to the executive’s influence in a given area. The CEO compares actual performance to the objectives 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.

Individual performance has a maximum payout factor of 150%.

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Determining the payout

The corporate performance multiplier and individual performance multiplier are used to calculate the annual STI bonus based on the formula below.

Long-term incentive (LTI) program

Our LTI program 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. Performance-based vesting and share price fluctuation impact the realized and realizable value of equity-based compensation, underscoring the strong link between pay and performance.

Our LTI program includes PSUs and RSUs, which vest at the end of three years and have different terms for vesting and payout. The LTI mix allows us to use different vesting criteria, eligibility and performance measures for at-risk compensation. PSUs vest based on absolute and relative performance, while RSUs vest after three years. Both LTI plans focus management on the importance of future value and drive corporate performance over the longer term. We no longer grant stock options under our LTI program and no stock option awards have been granted since 2019.

The committee evaluates the mix of the long-term incentive grants every year, discusses trends with its compensation consultant and considers the level of the position, internal equity and overall market competitiveness. The committee set the 2020 target mix of the long-term incentive grants at 60% PSUs and 40% RSUs.

Position	LTI grant (% of base salary)			Actual % of PSUs and RSUs granted in 2020 (PSUs/RSUs)
President and CEO		355	%		60/40
Senior Vice-President and Chief Financial Officer		250	%		60/40
Senior Vice-President and Chief Operating Officer		225	%		60/40
Senior Vice-President and Chief Corporate Officer		200	%		60/40
Senior Vice-President, Chief Legal Officer and Corporate Secretary		200	%		60/40

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LTI components

The chart below describes each component of our LTI program.

Grant	How it is used	Business focus	Who participates	Vesting	How it is settled	Alignment with shareholders
PSUs (page 77)	60% of target LTI award	Performance vesting criteria Directly linked to long-term, absolute and relative performance and share price	Vice-presidents and above	Vest after three years based on performance	Cameco shares purchased on the market, or in cash	Motivates executives to create shareholder value that can be sustained over a longer period on both an absolute and relative basis Non-dilutive
RSUs (page 79)	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 Non-dilutive
Stock options (page 79)	No longer part of LTI program starting in 2020	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

LTI grants are awarded 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. PSUs and RSUs earn dividend equivalents in the form of additional units. The dividends vest in proportion to the underlying security and are paid out when the award is settled.

Performance share unit plan

Each PSU granted under the PSU plan represents an opportunity for an executive to receive a Cameco common share purchased on the open market at the end of the three-year performance period (or the cash equivalent of those common shares, at the named executive’s election, once share ownership requirements have been met).

Setting PSU performance measures

PSUs are based on absolute and relative performance so management maintains a balanced, longer-term focus on delivering shareholder value. The human resources and compensation committee reviews the PSU performance measures and multipliers every year and recommends them to the board for approval. The performance measures and multipliers are challenging and determined at the time PSU grants are awarded.

As disclosed under 2020 Program changes of our 2020 proxy circular, we eliminated TSR as one of the performance criteria under the plan. For PSU awards starting in 2020, we use two equally weighted measures for absolute and relative performance to ensure that management maintains a balanced focus on delivering shareholder value over the long term.

The table on the next page shows the measures and weightings for our 2020 PSU grants for the 2020 to 2022 performance period.

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Measure	Weighting			Description	What it measures
Average relative realized uranium price 0 to 150%		50	%	Achieve an average realized price for uranium sales for a three-year period that exceeds the weighted average price for sales in two independent industry benchmarks for the same period: •   EIA (US energy information administration) price for sales in the US •   ESA (Euratom supply agency) price for sales in Europe. The payout at the end of the three-year period is based on 2019, 2020 and 2021 sales due to timing of when pricing information is available.	Measures performance relative to our competitors. Consistently achieving higher prices than our competitors 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. We use these pricing indicators because they are publicly available and set by independent third parties.
All-in sustaining cash cost (AISCC)1 0 to 150%		50	%	Achieve three-year cumulative cost reductions while safely achieving steady production at the Saskatchewan tier-one operations in the three-year period from 2020 to 2022.	Measures absolute performance and ties directly to our strategic plan.
PERFORMANCE MULTIPLIER Maximum of 150%				The overall performance factor is the sum of the two equally weighted measures above.
INITIAL PSU GRANT				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, multiplied by the PSU performance multiplier, exchanged for the equivalent number of Cameco common shares or the cash equivalent of those 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 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.

Measuring performance and determining the performance multiplier

The formula below shows how the final number of PSUs are calculated when the units vest to arrive at a payout for executives. The performance multiplier for each measure depends on our performance against that measure and is the sum of the two equally weighted measures.

We must achieve threshold performance on either measure in order to achieve the minimum performance multiplier of 50%. For performance between threshold and maximum, the performance multiplier for that measure is based on a straight-line interpolation. Performance is capped at 150% for maximum performance.

* Number of PSUs granted means the number granted plus the earned dividend equivalents.

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Restricted share unit plan

RSUs align with our share price over a longer-term horizon, are a common form of LTI in our comparator group, and provide retention value. Each RSU represents one notional common share and the opportunity to receive a Cameco common share purchased on the open market at the end of the three-year vesting period based on our share price, or the cash equivalent of those common shares.

We started awarding RSUs as part of the LTI mix in 2020. Prior to 2020, the board awarded RSUs from time to time to senior management, mainly as a targeted retention tool. RSUs are granted annually on March 1^st (or the first business/trading date following March 1^st) and vest three years from the grant date.

Stock option plan

As disclosed in our 2020 proxy circular under 2020 Program changes, the board discontinued awarding stock options as part of the LTI compensation mix starting with the 2020 LTI awards.

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, which was $27,830 in 2020.

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 the Pension benefits section on page 97 for more information).

Benefits

Group benefits – 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.

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2020 Performance and decisions

Cameco’s performance in 2020 was solid despite unprecedented volatility due to COVID-19. Despite the global pandemic and market challenges, Cameco was able to meet or exceed four of our six STI measures for corporate performance. Cameco’s performance was also strong on all three PSU measures that measured performance from 2018 through 2020. Cameco achieved a solid relative realized uranium sales price, lower AISCC from the three Saskatchewan tier-one operations and a strong three-year TSR (69^th percentile) relative to the TSX 60.

Challenges created by the COVID-19 pandemic affected every aspect of the company, and Cameco’s management team took proactive measures to protect the health and well-being of Cameco’s workers, their families and their communities. Deliberate decisions were made to protect Cameco’s workers and to help slow down the spread of the COVID-19 virus. Management also implemented several strategic initiatives to strengthen the company for the future, including investing in Cameco’s digital transition program at McArthur River and Key Lake as well as other key areas of the company. This investment in digital technologies is expected to lower operating costs and provide operational flexibility in the future. Consistent with its conservative financial management, Cameco also took advantage of favourable debt capital markets and further strengthened its balance sheet by accelerating the redemption of $400 million in debt bearing interest of 3.75% per annum and maturing in 2022, and issuing debentures for an equivalent amount, securing a record-low coupon rate for Cameco of 2.95% per annum and resetting the maturity date to 2027.

Market context¹

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 saw over the past decade, 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 for several years now, security of supply tends to overtake price concerns, 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. 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.

1 This discussion of market context contains forward-looking information and is based upon the assumptions and subject to the material risks described at pages 2 through 4 of our 2020 MD&A. Actual outcomes for future periods may be significantly different.

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The demand gap left by forced and premature nuclear reactor shutdowns since March of 2011 was filled in 2018. According to the International Atomic Energy Agency there are currently 443 reactors operating globally and 52 reactors 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. In addition, the COVID-19 pandemic is expected to have a negative impact on global energy demand in the near term. However, there is growing focus on electrification and an increasing recognition of the role nuclear power must play in providing safe, reliable, affordable carbon-free baseload electricity and achieving a low-carbon economy. Momentum is also building for non-traditional commercial uses of nuclear power such as development of small modular reactors and advanced reactors, with numerous companies and countries pursuing projects.

In 2020, low uranium prices, government-driven trade policies, and the COVID-19 pandemic impacted the security of supply in our industry. In addition to the decisions many producers, including the lowest-cost producers, have made to preserve long-term value by leaving uranium in the ground, there were a number of unplanned supply disruptions related to the impact of the COVID-19 pandemic on uranium mining and processing activities. The duration and extent of these disruptions are still not fully known. As a result, there was significant demand from producers – including Cameco – in the spot market to cover both the planned and unplanned reductions in primary supply. The uranium spot price increased by more than 35% following announcement of the initial supply disruptions due to the COVID-19 pandemic in March and April, reaching a high of about $34 (US) per pound in 2020. The average uranium spot price ended the year at $30.20 per pound (US) more than 20% higher than the average uranium spot price at the end of 2019.

In contrast, long-term contracting was significantly reduced compared to 2019 as utilities focused on ensuring the safety of their employees and keeping their nuclear plants running to support the critical infrastructure needed throughout the pandemic. In addition, market access and trade policy issues continued to affect the market in 2020. These issues created uncertainty and consumed a significant amount of time and focus from utilities during the year. The volume of uranium executed under long-term contracts was well below annual

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consumption levels, accelerating the inventory destocking that was already underway in the industry and adding to the growing wedge of uncovered requirement that we believe will need to be filled at a time when the availability of sufficient supply is not guaranteed.

In the current environment, we believe the risk to uranium supply is greater than the risk to uranium demand and expect it will create a renewed focus on ensuring availability of long-term supply to fuel nuclear reactors. Over time, we expect a renewed focus on security of supply will provide the market signals producers need and we have growing confidence that the uranium market will undergo the same transition that is occurring in the conversion and enrichment markets. Until this transition occurs, we are taking the steps and incurring the costs that we believe will allow us to restart our tier-one assets with more flexibility in the production rate, to eliminate the care and maintenance costs incurred while our tier-one production is suspended and to benefit from the favourable life-of-mine economics our assets provide. Throughout, we will continue to focus on delivering our products responsibly and addressing the ESG risks and opportunities that we believe will make our business sustainable and will build long-term value.

At the end of 2020, our share price was up about 48% compared to the end of 2019. We believe this increase reflects the improvement in the uranium price during 2020, the improving long-term fundamentals for nuclear power, the recognition that the availability of future uranium supply to meet growing demand is uncertain, and the reallocation of capital that is creating opportunities for those companies who can assist with the transition to a low-carbon economy sustainably and profitably. Since 100% of our products go to producing clean, carbon-free electricity, we are a growing part of the solution to the clean-air and climate change crisis.

Share performance and executive compensation

The graph below compares our TSR to the return of the S&P/TSX Composite Total Return Index for the past five years, assuming an initial $100 investment at the end of 2015 and reinvestment of dividends over the period.

The graph also compares our TSR to the total compensation of our named executives. 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. See the lookback table in the CEO compensation summary section on page 90 for information about how the CEO’s realized and realizable compensation relates to shareholder return.

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Base salary

The CEO, upon his request, did not receive a salary increase in 2020.The chief operating officer received a 5% salary increase and the other named executives received 3% salary increases for 2020 to position their pay around the market median.

Short-term incentive (STI) results and scorecard

Corporate performance was assessed at 100% for 2020, reflecting solid company performance. Proactive decisions made in 2020 resulted in unplanned costs related to COVID-19, including costs associated with placing operations in care and maintenance, enhancing safety measures and purchasing safety equipment, purchasing additional pounds of uranium to cover the temporary supply curtailments and accelerating the redemption of $400 million in debt maturing in 2022 and issuing debentures for an equivalent amount, securing a record-low coupon rate for Cameco and extending the maturity to 2027. In measuring performance, the board considered the treatment of these unplanned COVID-19 related costs in determining the level of achievement of the adjusted net earnings and cash flow from operations for purposes of the STI results and capped financial performance results below target by not allowing all these additional costs to be excluded. At the same time, the board excluded the benefits received from the Canadian emergency wage subsidy (CEWS) and savings achieved through reduced travel and project costs to ensure that the specific and direct impacts of COVID-19 were adjusted from our financial results in a fair, balanced and symmetrical way. These adjustments supported a short-term incentive payout at target, which the board believes is reasonable considering the challenges faced in the business and community in this extraordinary year.

Despite the disruption of the COVID-19 pandemic on the company’s operations, Cameco continued to improve its safety performance, recorded the best safety performance in its history for the third consecutive year, and recorded no lost-time injuries in 2020. The company also met all environmental performance targets which were focused on mitigating specific risks in each area of Cameco’s operations.

As part of Cameco’s strategic initiative to move towards digital transition and to ensure that we have the digitally skilled workforce to meet our future operational needs, we targeted programs to enhance digital skills development for Residents of Saskatchewan’s North (RSNs). The target was exceeded in 2020, setting the foundation for further skills development work and supporting Cameco’s ongoing efforts to maintain its strong Indigenous employment record and important relationships with Northern and Indigenous communities in Saskatchewan.

Detailed STI performance results and weightings are reported in the STI scorecard below. 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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2020 STI scorecard										Actual performance	Performance				Weighting				Multiplier
Measure	Threshold			Target			Maximum
OUTSTANDING FINANCIAL PERFORMANCE (50% weighting)
Achieve targeted adjusted net earnings.	($	73	)	($	61	)	$	0		Adjusted net earnings were a loss of $62.8 million1, resulting in a payout of 92.5%.		92.5	%	×		25	%	=
Achieve targeted cash flow from operations (before working capital changes).	$	219		$	274		$	329		Cash flow from operations (before working capital changes) was $265.8 million1.		92.5	%	×		25	%	=
($ millions)
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% to 105%			120.0	%	The completion rate of job task observations was 101% and corrective actions were completed on time 91% of the time. This combined target was within target range performance.		100.0	%	×		10	%	=
Strive for no injuries at all Cameco-operated sites and maintain a long-term downward trend in combined employee and contractor radiation doses, and injury frequency and severity (measured by TRIR2).		2.0			1.27 (.78 to 1.76 target range	)		0.54		We achieved our target performance for safety with TRIR2 of 1.67, which was 3% better than 2019. There were no significant safety incidents in 2020.		100.0	%	×		10	%	=

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2020 STI scorecard

Measure

Threshold

Target

Maximum

Actual performance

Performance

Weighting

Multiplier

SUPPORTIVE COMMUNITIES (15% weighting)

Develop the skillset of our RSN workforce in 2020 for future operational needs in the digital landscape with threshold, target and maximum markers.

Identifying, understanding and prioritizing the skillset and competencies required

Fully developing a recruitment / training program for a prioritized digital skillset with support from northern stakeholders

Identifying RSN candidates from northern communities to enter a digital skillset training program

Target performance was met, and recruitment began for candidates to enter the skillset training program.

125.0

%

×

15

%

=

CLEAN ENVIRONMENT (15% weighting)

If an incident occurs that results in moderate or significant environmental impacts or current and future 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.

80%

95% to 105%

120%

Environmental performance was within the target performance range. There were no significant environmental incidents in 2020.

100.0

%

×

15

%

=

2020 CORPORATE PERFORMANCE MULTIPLIER

1. We use adjusted net earnings and cash flow provided by operations (before working capital changes) as a more 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 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 2020 STI scorecard above are different than what are reported in our 2020 annual management discussion and analysis (2020 MD&A). As reported in further detail on page 35 of our 2020 MD&A, adjusted net earnings starts with reported net earnings attributable to equity holders and is then decreased by a net $13 million to exclude the effect of adjustments on derivatives, reclamation provision adjustments, and income tax adjustments. For compensation purposes, adjusted net earnings as reported in our 2020 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 continuing operations as reported on page 34 of our 2020 MD&A and remove the impact of working capital changes of $193 million, then we further adjust for variances in foreign exchange rates as compared to budget. For 2020, both adjusted net earnings and cash flow from operations (before working capital changes) were further adjusted for certain unexpected costs related to the protection of our workforce during the COVID-19 pandemic and to exclude the benefits received from CEWS and savings achieved through reduced travel and project costs.

2. The total recordable incident rate (TRIR) is an Occupational Safety and Health Administration (OSHA) safety metric that 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 aid), restricted work, lost-time and other specific injuries such as 10 decibel hearing loss, loss of consciousness and broken bone.

Individual performance results

CEO individual performance was assessed against the following core measures set for 2020, similar to those set in previous years:

Key operating results Strategic change initiatives 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 independent compensation consultant, feedback from board members, and the CEO’s own self-assessment.

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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 2020 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 achieved during 2020.

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 2020 and approved the CEO’s recommended performance assessments for each of the senior vice-presidents, including the named executives.

STI awards for all named executives are reported in the Summary compensation table on page 92.

PSU results and scorecard

The PSU portion of the long-term incentive plan is performance based. For the 2018 PSU grants, corporate performance was assessed at 143.6% for the 2018 to 2020 performance period using the formula below.

* Number of PSUs granted means the number granted plus the earned dividend equivalents.

The PSU scorecard on the next page shows PSU performance multipliers, as well as 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. 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 excessive risk-taking.

Due to the COVID-19 pandemic, Cigar Lake was in care and maintenance for a significant portion of 2020. As a result, the costs for 2020 were lower than anticipated and not readily comparable to the three-year AISCC measure. Actual 2020 AISCC were much lower than budgeted 2020 AISCC, which would have resulted in performance at the maximum level for this measure. Instead of applying this above target factor, we analyzed the actual production volume and costs achieved and added these to the budget plan for the months that the site was in care and maintenance. This estimate, combined with the actual care and maintenance costs at McArthur River and Key Lake, resulted in an AISCC result for 2020 that was about 4% better than target. The board and the human resources and compensation committee subsequently decided to cap the 2020 AISCC performance at target (100%) to reduce the incentive while Cigar Lake was in care and maintenance.

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2018 PSU scorecard

							Actual performance	Performance multiplier
Measure	Threshold		Target		Maximum							Weighting
Average realized uranium price Achieve an average realized price for uranium sales for a three-year period that exceeds the weighted average price for sales in two industry benchmarks for the same period – the EIA price for sales in the US and the ESA price for sales in Europe. The 2018 grant is based on 2017, 2018 and 2019 sales due to timing of when pricing information is available.		80% of targeted price		100% of targeted price		At or above 120% of targeted price	Achieved an average realized price for uranium sales of $35.70 (US), which is nearly at target of the weighted average price for sales in two industry benchmarks for the same period.
	$	28.78	$	35.84	$	43.01	$35.70 achievement		99	%	×		30	%	=
All-in sustaining cash cost Achieve all-in sustaining cash cost of $605 million in the three-year period 2018 to 2020 from our Saskatchewan tier one operations. ($ millions)	$	666	$	605	$	545	Achieved all-in sustaining cash cost of $555.1 million from the identified operations for the three-year period 2018 to 2020. The board used its discretion to cap 2020 performance at 100%.
	$	666	$	605	$	545	$555.1 achievement		145	%	×		30	%	=
Three-year average total shareholder return (TSR) Achieve three-year average TSR that is the median of the three-year average TSR achieved by companies in the TSX 60 in effect at the time. 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 2018 to 2020.		At the 25th percentile		At the 50th percentile		At or above the 75th percentile	Three-year average TSR was at the 69th percentile of the TSX 60 for the three-year vesting period from 2018 to 2020.
		P25		P50		P75	P69 achievement		176	%	×		40	%	=
PSU PERFORMANCE MULTIPLIER Sum of the three weighted multipliers

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Set out below is a table that provides additional detail about formula for arriving at the performance multiplier for the 2018 PSU grants.

Performance measures (and weighting)	Threshold performance	If we achieve:	Then the performance multiplier is:
Average realized uranium price (30%)	80% of our target of 100%	Less than 80% of the corresponding target price	0%
		80 to 120% of the corresponding target price	50 to 150% (in a straight-line interpolation)
		More than 120% of the corresponding target price	150%
All-in sustaining cash cost (30%)	$666 million over a three-year period (target is $605 million)	More than $666 million	0%
		$545 million to $666 million	50 to 150% (in a straight-line interpolation)
		Less than $545 million	150%
Our three-year average TSR (40%)	25th percentile (target is the 50th percentile)	Below the 25th percentile of TSX 60	0%
		From the 25th to the 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%

2018 PSU payouts

The 2018 PSU payout amount includes the initial number of PSUs granted in 2018, plus the earned dividend equivalents on those granted PSUs, multiplied by the PSU performance multiplier of 143.6%.

The table below shows the calculation of the payout of the 2018 PSUs. Payouts will be made to each named executive on or about March 1, 2021 based on $20.2680, the actual average purchase price of our common shares purchased on the TSX on behalf of the named executives on or about March 1, 2021.

Name	(Multiplier x Weighting)
	2018 PSU award plus dividend equivalents (# of units1)			Average realized uranium price				All-in sustaining cash cost				Our three-year average TSR				Value of total 2018 PSU payout ($)
Tim Gitzel		196,003															5,704,631
Grant Isaac		74,092															2,156,434
Brian Reilly		53,460	×		(99% x 30	%	+		145% x 30	%	+		176% x 40%	)	=		1,555,954
Alice Wong		47,921															1,394,742
Sean Quinn		46,345															1,348,896

1. Rounded to the nearest whole number. Actual payouts are calculated using the precise fractional number.

By comparison, the 2016 and 2017 PSU grants awarded to the named executives vested below target as shown below, highlighting the at-risk nature of this LTI component and link between pay and performance.

PSUs awarded in	Vested as a % of target			Paid out (in shares or cash), after deducting withholding taxes
2018		143.6	%		March 2021
2017		71.6	%		March 2020
2016		61.1	%		March 2019

88     CAMECO CORPORATION

  Tim Gitzel, President and CEO   CEO compensation summary   Tim Gitzel is responsible for our overall leadership, vision, and strategic direction. This includes overall responsibility for operating our business while managing risk to create long-term sustainable value for our shareholders.     2020 Key results   •   Provided strong, visible and transparent leadership as the COVID-19 pandemic evolved and took actions to continually address the changes needed throughout the company.   •   Executed on initiatives to preserve the value of 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 organization including investing in a digital transition program that will improve efficiency, lower operating costs and provide operational flexibility across Cameco.   •   Maintained a strong cash position and further strengthened Cameco’s balance sheet accelerating the redemption of $400 million in debt maturing in 2022 and issuing debentures for an equivalent amount, securing a record-low coupon rate for Cameco of 2.95% per annum and resetting the maturity date to 2027.   •   Delivered the best safety performance in the history of the company.   •   Maintained strong community relationships in northern Saskatchewan by finding new ways to support people and businesses there to ensure that Cameco will continue to be a leading industrial employer of Indigenous people.     CEO compensation   •   Tim’s target short-term incentive award for 2020 is 120% of his base salary and is based 80% on corporate performance and 20% on individual performance. Our corporate performance score of 100% of target resulted in a short-term incentive award that amounts to 132% of Tim’s base salary.   •   Tim received a long-term incentive award at target (valued at 355% of his 2020 base salary).   •   Both incentive awards are at-risk compensation – the long-term incentive award is based on both performance and share price.

Compensation (as at December 31)	Three-year average		2020		2019		2018
Fixed
Base salary	$	1,048,933	$	1,060,900	$	1,060,900	$	1,025,000
At-risk compensation
Short term incentive	$	1,630,000	$	1,400,000	$	1,706,000	$	1,784,000
Long term incentive
PSUs	$	2,234,303	$	2,259,887	$	2,259,960	$	2,183,062
RSUs/Options	$	1,489,430	$	1,506,398	$	1,506,438	$	1,455,454
Total direct compensation	$	6,402,666	$	6,227,185	$	6,533,298	$	6,447,516

2021 MANAGEMENT PROXY CIRCULAR     89

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 the performance of Cameco shares among other things. 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 exceeds the current value of $100 in compensation awarded to Cameco’s CEO.

	Total direct compensation		Realized pay1		Realizable pay2		Current value (realized pay + realizable pay)		Performance period		Value of $100
									From	To	CEO		Shareholder
2016	$	5,514,934	$	3,121,306	$	270,881	$	3,392,187	Dec 31, 2015		$	62	$	108
2017	$	5,955,525	$	3,518,774	$	1,021,075	$	4,539,849	Dec 31, 2016		$	76	$	128
2018	$	6,447,516	$	6,729,631	$	902,572	$	7,632,203	Dec 31, 2017	Dec 31, 2020	$	118	$	150
2019	$	6,533,298	$	2,766,900	$	3,042,154	$	5,809,054	Dec 31, 2018		$	89	$	111
2020	$	6,227,185	$	2,460,900	$	5,557,107	$	8,018,007	Dec 31, 2019		$	129	$	148

1. Includes salary, short-term incentive payout, PSU payout, if any, and value realized from exercised stock options, if any.

2. Includes realizable value of stock options that are in-the-money and, where applicable, the market value of unvested PSUs including earned dividend equivalents (assuming PSUs vest at target).

Lookback

The chart to the right shows the impact of at-risk pay and the effect that performance and share price 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 risk.

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 over 9x his base salary. The table below shows Tim’s share ownership as of December 31, 2020. The value of share ownership is based on the year-end closing price of Cameco common shares on the TSX of $17.05 or the acquisition price (grant date value) of his shares or PSUs, whichever is higher. For additional details about share ownership see the Share ownership requirements section on page 71.

Base salary	Multiple required			Target value of share ownership ($)		Cameco shares			Qualifying PSUs and RSUs			Market value of share ownership (shares, RSUs and qualifying PSUs) ($)
						Number held (#)	Value ($)		Number held (#)	Value ($)
1,060,900		4	×		4,243,600	370,035		6,309,097	203,278		3,465,890	9,774,987

90     CAMECO CORPORATION

2021 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. The CEO recommended that the named executives not receive salary increases for 2021.

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)

LTI grants awarded to executives in early 2021 were benchmarked at the median of the comparator group and were based on a percentage of base salary (see page 76 for details about each position). For 2021, the board increased the LTI target for the CEO from 355% to 365% to recognize his experience and high performance.

LTI awards consisting of 60% PSUs and 40% RSUs were granted to the named executives on March 1, 2021 as follows:

• PSUs vest at the end of a three-year period based on our performance against the following criteria: our average realized uranium price relative to industry benchmarks (50%) and an operational target that includes all-in sustaining cash costs and the advancement of our critical projects (50%)

• RSUs vest at the end of a three-year period.

Name	PSUs						RSUs
	Number granted1		Value of grant1 ($)		Date when performance period ends		Number granted		Value of grant2 ($)		Vesting date
Tim Gitzel		116,350		2,323,510		12/31/2023		77,550		1,548,674		03/01/2024
Grant Isaac		44,050		879,679		12/31/2023		29,350		586,120		03/01/2024
Brian Reilly		33,950		677,982		12/31/2023		22,650		452,321		03/01/2024
Alice Wong		28,500		569,145		12/31/2023		19,000		379,430		03/01/2024
Sean Quinn		27,550		550,174		12/31/2023		18,350		366,450		03/01/2024

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 150% 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 $19.97, the closing price of Cameco shares on the TSX on the trading day immediately before the grant.

2021 MANAGEMENT PROXY CIRCULAR     91

2020 Compensation details

Summary compensation table

The table below shows the compensation awarded to the named executives in 2020 and the previous two years.

Name and principal position	Year		Salary1		Share- based awards2		Option based awards3		Annual incentive plans4		Pension value5			All other compensation6		Total compensation
Tim Gitzel President and Chief Executive Officer		2020 2019 2018	$ $ $	1,060,900 1,060,900 1,025,000	$ $ $	3,766,285 2,259,960 2,183,062	$ $ $	—   1,506,438 1,455,454	$ $ $	1,400,000 1,706,000 1,784,000	$ $ $	315,000 491,500 318,300			—   —   —	$ $ $	6,542,185 7,024,798 6,765,816
Grant Isaac Senior Vice-President and Chief Financial Officer		2020 2019 2018	$ $ $	586,400 569,300 550,000	$ $ $	1,465,763 853,593 825,228	$ $ $	—   569,427 549,934	$ $ $	511,000 606,000 598,000	$ $ $	297,900 247,500 186,300			—   —   —	$ $ $	2,861,063 2,845,820 2,709,462
Brian Reilly Senior Vice-President and Chief Operating Officer		2020 2019 2018	$ $ $	502,400 478,500 441,000	$ $ $	1,103,234 645,921 595,432	$ $ $	—   430,763 396,858	$ $ $	409,000 476,000 448,000	$ $ $	311,200 311,000 509,400			—   —   —	$ $ $	2,325,834 2,342,184 2,390,690
Alice Wong Senior Vice-President and Chief Corporate Officer		2020 2019 2018	$ $ $	474,100 460,300 444,700	$ $ $	947,957 552,011 533,738	$ $ $	—   368,131 355,740	$ $ $	336,000 398,000 387,000	$ $ $	216,800 218,700 (1,200	)		—   —   —	$ $ $	1,974,857 1,997,142 1,719,978
Sean Quinn Senior Vice-President. Chief Legal Officer and Corporate Secretary		2020 2019 2018	$ $ $	458,500 445,100 430,000	$ $ $	917,190 684,096 516,192	$ $ $	—   456,198 344,036	$ $ $	324,000 384,000 374,000	$ $ $	218,800 215,000 38,900			—   —   —	$ $ $	1,918,490 2,184,394 1,703,128

1. Base salary

Each amount reflects actual pay for the year. The CEO did not receive a salary increase in 2020.

2. Share-based awards

The 2020 amount reflects the grant date value of both the number PSUs and RSUs awarded with 60% allotted to PSUs and 40% allotted to RSUs (exact values for each were disclosed under 2020 Compensation decisions in our 2020 proxy circular).

The 2018 and 2019 amounts reflect the grant date value of the number of PSUs granted, as 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 PSUs granted (plus earned dividend equivalents), depending on performance. The grant date value of Sean Quinn’s 2019 PSUs was increased by $150,000 to recognize his significant leadership role in Cameco’s legal dispute with the CRA.

PSUs	March 2, 2020		March 1, 2019		March 1, 2018
Tim Gitzel		194,650		148,000		192,850
Grant Isaac		75,750		55,900		72,900
Brian Reilly		58,400		42,300		52,600
Alice Wong		49,000		36,150		47,150
Sean Quinn		47,400		44,800		45,600
Grant value	$	11.61	$	15.27	$	11.32

For purposes of financial statement disclosure, the PSUs were valued at $11.45 per unit for 2020, $15.33 per unit for 2019, and $11.43 per unit for 2018, 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 all-in sustaining cash costs measures 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 2020		—		—		—		3.0		12.0
March 2019		—		37.8		1.8		3.0		12.0
March 2018		—		37.1		1.9		3.0		8.8

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.

PSU grant date	Grant date value for compensation purposes ($)		Grant date fair value for financial statement disclosure ($)		Difference per unit ($)
March 2, 2020		11.61		11.45		0.16
March 1, 2019		15.27		15.33		(0.06	)
March 1, 2018		11.32		11.43		(0.11	)

92     CAMECO CORPORATION

We awarded the following RSUs to the named executives in 2020.

RSUs	March 2, 2020		Vesting date
Tim Gitzel		129,750		March 2, 2023
Grant Isaac		50,500		March 2, 2023
Brian Reilly		38,950		March 2, 2023
Alice Wong		32,650		March 2, 2023
Sean Quinn		31,600		March 2, 2023
Grant date value (per unit)	$	11.61

For purposes of financial statement disclosure, the RSUs were valued at $11.45 per unit using the closing price of Cameco shares on the TSX on March 2, 2020.

3. Option-based awards

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. No options were granted in 2020. The grant date value of Sean Quinn’s 2019 option award was increased by $100,000 to recognize his significant leadership role in Cameco’s legal dispute with the CRA.

	March 2, 2020		March 1, 2019		March 1, 2018
Tim Gitzel		—		275,400		472,550
Grant Isaac		—		104,100		178,550
Brian Reilly		—		78,750		128,850
Alice Wong		—		67,300		115,500
Sean Quinn		—		83,400		111,700
Grant date valuation (per option)	$	—	$	5.47	$	3.08

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 and March 2018). It then recommended to the board the number of options to grant, which the board approved. The Black-Scholes option-pricing model and the following key assumptions were used:

	Dividend yield (%)		Volatility (%)		Risk-free rate (%)		Expected life (years)		Exercise price ($)
March 2019		0.60		38.3		1.9		5.5		15.27
March 2018		2.90		37.2		1.9		5.5		11.32

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) and $3.48 (awarded in March 2018) 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		15.27
March 2018		0.71		34.8		2.0		4.8		11.32

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 for compensation purposes ($)		Grant date fair value for financial statement disclosure ($)		Difference per unit ($)
March 1, 2019		5.47		4.92		0.55
March 1, 2018		3.08		3.48		(0.40	)

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 98.

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.

2021 MANAGEMENT PROXY CIRCULAR     93

Incentive plan awards

The table below shows the total unexercised option and share awards granted to the named executives as of December 31, 2020. There were no option-based awards granted in 2020.

			Option-based awards								Share-based awards
Name	Grant date		Number of securities underlying unexercised options		Option exercise price		Option expiry date		Value of unexercised in-the-money options		Number of shares or units of shares that have not vested		Market or payout value of share-based awards that have not vested1		Market or payout value of vested share-based awards not paid out or distributed
Tim Gitzel		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	$	270,881
		03/01/2017		434,500	$	14.70		02/28/2025	$	1,021,075
		03/01/2018		157,517	$	11.32		02/28/2026	$	902,572				—	$	5,704,631
		03/01/2019		275,400	$	15.27		02/28/2027	$	490,212		149,674		—
		03/02/2020		—		—		—				325,930		2,222,672
Total				1,623,517					$	2,194,528		475,604	$	2,222,672	$	5,704,631
Grant Isaac		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	$	102,376
		03/01/2017		164,200	$	14.70		02/28/2025	$	385,870
		03/01/2018		178,550	$	11.32		02/28/2026	$	1,023,092				—	$	2,156,434
		03/01/2019		104,100	$	15.27		02/28/2027	$	185,298		56,532		—
		03/02/2020		—		—		—				126,846		865,083
Total				799,050					$	1,696,636		183,378	$	865,083	$	2,156,434
Brian Reilly		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	$	16,958
		03/01/2017		25,790	$	14.70		02/28/2025	$	60,607
		03/01/2018		128,850	$	11.32		02/28/2026	$	738,311				—	$	1,555,954
		03/01/2019		78,750	$	15.27		02/28/2027	$	140,175		42,778		—
		03/02/2020		—		—		—				97,809		667,235
Total				301,397					$	956,051		140,588	$	667,235	$	1,555,954
Alice Wong		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	$	66,196
		03/01/2017		106,200	$	14.70		02/28/2025	$	249,570
		03/01/2018		115,500	$	11.32		02/28/2026	$	661,815				—	$	1,394,742
		03/01/2019		67,300	$	15.27		02/28/2027	$	119,794		36,559		—
		03/02/2020		—		—		—				82,035		559,308
Total				520,800					$	1,097,375		118,594	$	559,308	$	1,394,742
Sean Quinn		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	$	64,019
		03/01/2017		102,700	$	14.70		02/28/2025	$	241,345
		03/01/2018		111,700	$	11.32		02/28/2026	$	640,041				—	$	1,348,896
		03/01/2019		83,400	$	15.27		02/28/2027	$	148,452		45,307		—
		03/02/2020		—		—		—				79,373		541,320
Total				477,007					$	1,093,857		124,679	$	541,320	$	1,348,896

1. The PSU grants are subject to performance conditions and valued at the minimum possible payout of zero.

2. The PSU grants are subject to performance conditions and valued at the minimum possible payout of zero. The March 2, 2020 RSU grants are not subject to performance conditions so they are valued at $17.05, the closing price of Cameco shares on the TSX on December 31, 2020.

94     CAMECO CORPORATION

The next table shows:

• Option-based awards – value vested during the year is the total value of the named executive’s options when they vested during 2020.

• Share-based awards – value vested during the year are share-based awards that vested at the end of 2020 and were paid out in 2021.

• Non-equity incentive plan compensation – value earned during the year is the short-term incentive award earned in 2020 and paid in 2021.

	Value vested during the year				Non-equity incentive plan compensation – value  earned during the year3
Name	Option-based awards1		Share-based awards2
Tim Gitzel	$	20,477	$	5,704,631	$	1,400,000
Grant Isaac	$	7,737	$	2,156,434	$	511,000
Brian Reilly	$	5,584	$	1,555,954	$	409,000
Alice Wong	$	5,005	$	1,394,742	$	336,000
Sean Quinn	$	4,840	$	1,348,896	$	324,000

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 2020, 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 2018, vested at December 31, 2020 and paid out to the named executives on or about March 1, 2021 at $20.2680 (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 257% of the grant date value of the PSUs that were granted as part of their total compensation for 2018.

3. Non-equity incentive plan compensation

The amounts are the STI payments for 2020 that were paid in 2021.

Options exercised and value realized during the year

None of the named executives exercised options between 2012 and 2019. During that period nearly all options awarded to the executives had an exercise price that was greater than the price of Cameco shares on the TSX at the time and therefore were out-of-the-money.

In 2020 Tim Gitzel exercised 315,033 stock options with an exercise price of $11.32. The net proceeds from this transaction were used to purchase Cameco shares. This transaction resulted in a share ownership increase for Tim Gitzel of 70,441 shares as of December 31, 2020. None of the other named executives exercised options in 2020.

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 2020)

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issue under equity compensation  plans (excluding securities reflected in column a) (c)
Equity compensation plans approved by security holders		6,158,539	$	16.98		8,518,361
Equity compensation plans not approved by security holders		—		—		—
Total		6,158,539	$	16.98		8,518,361

Of the 6,158,539 options outstanding at December 31, 2020, 5,076,226 were exercisable and 1,082,313 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, 2021).

2021 MANAGEMENT PROXY CIRCULAR     95

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	2020			2019			2018
Number of options issued		—			886,740			1,473,430
Weighted average number of shares outstanding		395,829,380			395,796,677			395,792,732
Burn rate		0.00	%		0.22	%		0.37	%

Additional plan details

At the time of any stock option grants, the exercise price of an option is fixed 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 the Termination and change of control benefits section starting on page 99 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).

Information about changes to the stock option plan that must be approved by shareholders are set out in Appendix C. 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. No changes were made to the stock option plan in 2021.

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.

The next two tables provide additional details about the stock option plan at the end of 2020 and as of March 10, 2021.

	As of December 31, 2020
Number of options available for issue under the option plan and other compensation arrangements		6,158,539
Number of options issued in 2020 under the option plan and other compensation arrangements		—

	As of December 31, 2020			As of March 10, 2021
Number (%) of our shares issued and outstanding to be issued when outstanding options under the option plan are exercised		6,158,539 (1.55	%)		9,400,984 (2.37	%)
Number (%) of our issued and outstanding shares still available for issue under the option plan		8,518,361 (2.15	%)		4,338,301 (1.09	%)
Total dilution rate		3.70	%		3.46	%

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 on March 10, 2021)	29,277,913
Total shares issued under the plan / total shares issued and outstanding (as at business open on March 10, 2021)	7.0	%
Total shares issued and outstanding (as at the opening of business on March 10, 2021)	397,200,356

96     CAMECO CORPORATION

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, 2020.

Under the Income Tax Act (Canada), the plan had a contribution limit of $27,830 in 2020. This works out to a threshold salary of approximately $214,077, based on the contribution rate of 13% which has been the rate 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, 2020, 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 $54,100,000 ($28,618,000 for the named executives) as of December 31, 2020. 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 2020 was $49,400,000. 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).

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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 of years of credited service (#)		Annual benefits payable1				Pension obligation at start of year2,3 ($)		Compensatory change3 ($)		Non-compensatory change4 ($)		Pension obligation at year end5 ($)
			At year end		At age 65
Tim Gitzel		13.98		439,900		638,200		7,231,300		315,000		1,097,000		8,643,300
Grant Isaac		11.47		195,600		468,500		3,217,100		297,900		711,100		4,226,100
Brian Reilly		10.00		142,200		226,100		2,164,700		311,200		346,600		2,822,500
Alice Wong		33.93		407,600		465,600		7,428,500		216,800		1,022,800		8,668,100
Sean Quinn		27.25		340,700		398,100		6,068,700		218,800		847,200		7,134,700

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, 2020.

2. Pension obligation at start of year is based on December 31, 2019 accounting assumptions.

3. Pension obligation at start of year and the Compensatory change are estimated totals 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 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 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.

See note 25 to our audited 2020 financial statements (in our 2020 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, 2020 to December 31, 2020 for our registered defined contribution pension plan and supplemental executive pension program.

4. Non-compensatory change includes changes such as 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 earned for service up to December 31, 2020 under our registered defined contribution pension plan and supplemental executive pension program. It is based on December 31, 2020 accounting assumptions and includes RRSP balances included in 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 retirement age of 63 is management’s best estimate for determining the accrued benefit obligation as at December 31, 2020, as reported in our financial statements

• salary increases of 3.0% each year

• a discount rate of 2.5% 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, 2021, we and our subsidiaries had no loans outstanding to our current or former named executives, except routine indebtedness as defined under Canadian securities laws.

98     CAMECO CORPORATION

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 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 them for 12 months (18 months for the CEO) after leaving the organization.

The summary on page 101 shows the incremental compensation that would be paid to the named executives if their employment had been terminated without cause on December 31, 2020, 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 notice 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 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 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 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 termination	Severance	STI bonus	Options	PSUs	RSUs	Benefits	Pension
Retirement1	•  none	•  none, unless the executive retires on or near the last day of the year	•  three years to vest •  must be exercised within three years or the original term, whichever is earlier	•  performance is measured to the end of the year of retirement •  awards are pro-rated to completed months of service	•  awards are pro-rated to completed months of service	•  post-retirement benefits continue until age 65 •  once the executive turns 65, life insurance, health and dental benefits are reduced and are provided until death	•  credited service no longer earned

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Type of termination	Severance	STI bonus	Options	PSUs	RSUs	Benefits	Pension
Resignation2	•  executive must give three months’ notice, except for CEO who must give six months’ notice •  if we waive the notice, we must pay his or her base salary for the three or six month notice period	•  none	•  vesting continues for 90 days •  must be exercised within 90 days or the original term, whichever is earlier	•  all outstanding PSUs are cancelled	•  all outstanding RSUs are cancelled	•  none	•  credited service no longer earned
Termination without cause3	•  lump sum equal to base salary and target bonus for the notice period	•  none, unless committee exercises discretion, usually when executive has worked most of the year	•  options continue to vest for the notice period •  must be exercised within the notice period or by the original expiry date, whichever is earlier	•  performance is measured to the end of the year of termination •  awards are pro-rated to completed months of service	•  awards are pro-rated to completed months of service	•  employer contributions for health, dental and life insurance benefits continue for the notice period or until executive obtains other employment, whichever is earlier	•  coverage continues and credited service continues to be earned for the notice period
Termination without cause or for good reason within 24 months of a change of control4	•  same as for termination without cause	•  same as for termination without cause	•  all options vest immediately and may be exercised until the original term or within 24 months, whichever is earlier	•  all PSUs vest and are paid at target within 30 days	•  all RSUs vest immediately and are payable in cash within 30 days	•  same as for termination without cause	•  same as for termination without cause
Termination with cause	•  none	•  all entitlement to the bonus is lost	•  vesting continues for 30 days or the original term, whichever is earlier •  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 •  must be exercised within three years or original term, whichever is earlier	•  performance is measured to end of year of death •  awards are pro-rated to the completed months of service as of date of death	•  awards are pro-rated to the completed months of service as of date of death	•  life insurance is paid on death	•  credited service no longer earned •  value of vested pension benefit is paid to the 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.

100     CAMECO CORPORATION

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, 2020, 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 100.

		Estimated incremental payment at December 31, 20201
Name	Compensation element	Termination without cause2 ($)		Termination without cause with a change of control3 ($)
Tim Gitzel	Cash		4,667,960		4,667,960
	Deferred compensation vesting		—		9,175,025
	Benefits		27,500		27,500
	Total incremental amount		4,695,460		13,870,485
	Annual pension increment		1,199,900		1,199,900
Grant Isaac	Cash		1,583,280		1,583,280
	Deferred compensation vesting		—		3,591,159
	Benefits		19,800		19,800
	Total incremental amount		1,603,080		5,194,239
	Annual pension increment		530,600		530,600
Brian Reilly	Cash		1,318,800		1,318,800
	Deferred compensation vesting		—		2,736,562
	Benefits		17,100		17,100
	Total incremental amount		1,335,900		4,072,462
	Annual pension increment		447,700		447,700
Alice Wong	Cash		1,173,398		1,173,398
	Deferred compensation vesting		—		2,322,496
	Benefits		18,600		18,600
	Total incremental amount		1,191,998		3,514,493
	Annual pension increment		363,200		363,200
Sean Quinn	Cash		1,134,788		1,134,788
	Deferred compensation vesting		—		2,438,107
	Benefits		18,500		18,500
	Total incremental amount		1,153,288		3,591,395
	Annual pension increment		365,800		365,800

1. The table below shows the commuted values for resignation (retirement in the case of Tim Gitzel, Brian Reilly, Alice Wong and Sean Quinn). We estimated these values using the Canadian Institute of Actuaries’ Standard Practice for Determining Pension Commuted Values, effective April 2009, and assumed:

• 100% vesting

• pension commencement at the executive’s age or age 55, whichever is later

• no salary increase after December 31, 2020

• a discount rate of 1.4% each of the next 10 years and 2.5% each year thereafter for Canadian and US liabilities

• benefits are pre-tax.

Commuted value	For retirement	On December 31, 2020
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 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 our figures may not be directly comparable with those of other companies.	Tim Gitzel Brian Reilly Alice Wong Sean Quinn	$ $ $ $	8,804,700 2,811,700 9,470,500 7,963,400
	For-resignation
	Grant Isaac	$	3,244,800

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 and RSU grants 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 2.5% at December 31, 2020. 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 represent incremental values of up to $127,800 and $152,900, respectively.

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, 2020 accounting assumptions (same as the key assumptions set out in note 3 on page 98).

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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, RSUs and options. The incremental benefit for PSUs and RSUs represent all outstanding PSUs and RSUs that would vest immediately at target and be paid out in the first quarter of 2021. The incremental benefit for options represent unvested in-the-money options that would vest immediately. The calculation of the PSUs, RSUs and options in this situation is based on a share price of $17.05, 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.

102     CAMECO CORPORATION

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;

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

vii. both are at the same time associates, within the meaning of any of (i) to (vi) above, of the same person;

provided that:

viii. if a resident associated with a non-resident submits to the board of directors 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 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 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 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 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, 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 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.

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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 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;

b. satisfying itself as to the integrity of the senior executives of the corporation and as to the culture of integrity throughout the corporation;

c. succession planning, including appointing, counselling and monitoring the performance of executive officers;

d. oversight of the human resources policies of the corporation and while taking into account the views and recommendations 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;

f. approval of periodic capital and operating plans and monitoring corporate performance against those plans;

104     CAMECO CORPORATION

g. oversight of the policies and processes to manage risks of the corporation, and oversight of management’s mitigation of the material risks;

h. policies to require ethical behaviour of the corporation and its directors and employees, and compliance with laws and regulations;

i. oversight of the policies and processes for the implementation and integrity of the corporation’s internal control 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 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;

m. definition of the duties and the limits of authority of senior management, including approving a position statement for the chief executive officer;

n. policies for disclosure of corporate information to facilitate effective communications with shareholders, other stakeholders and the public;

o. health and safety and environmental policies and oversight of systems to enable compliance with these policies and all relevant laws and regulations;

p. oversight of the policies and processes for estimating and disclosing the corporation’s mineral reserves;

q. corporate governance including the relationship of the board of directors to management and shareholders, oversight of 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 responsibilities;

r. calling meetings of shareholders and submission to the shareholders of any question or matter requiring approval of the shareholders;

s. recommendation of the auditors to be appointed at shareholders’ meetings, and filling a vacancy in the office of 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 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 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 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 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.

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 regulations of stock exchanges, as the board deems necessary or appropriate.

2021 MANAGEMENT PROXY CIRCULAR     105

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 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 trading blackout period

• any change that requires shareholder approval under applicable law such as those described in 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 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 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 (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 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 actual cash payment

• any change that allows adding a cashless exercise feature, unless it reduces the number of underlying shares in the stock option plan reserve.

106     CAMECO CORPORATION

EX-99.4

Exhibit 99.4

5 Submit your proxy form — We must receive your completed form before 8:30 a.m. CST on Tuesday, May 4, 2021.   If the meeting is postponed or adjourned, we must receive the form at least 48 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 notice.

Internet	Mobile device	Telephone	Mail	Fax
www.astvotemyproxy.com	Scan this QR code	1-888-489-5760 (English only)	Use the envelope provided or mail to:	Toll free inside North America: 1-866-781-3111	Outside North America: 1-416-368-2502
Follow the instructions on screen. You will need your control number referenced below.			AST TRUST COMPANY (CANADA) ATTN: PROXY DEPARTMENT P.O. BOX 721 AGINCOURT, ON M1S 0A1	Remember to fax both pages of this form.

Cameco Corporation Use this proxy form to vote by proxy at our 2021 annual meeting of shareholders When: Thursday May 6, 2021 8:30 a.m. CST Via live audio webcast at: https://web.lumiagm.com/169464941

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: Virtually 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 virtually

Attend the meeting via live audio webcast at https://web.lumiagm.com/169464941 and use the meeting password cameco2021 (case sensitive) 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.

Registered Shareholders who appoint a proxy other than the management designees MUST submit this instrument of proxy appointing that other proxyholder no later than 8:30 a.m. CST on Tuesday, May 4, 2021 AND register that proxyholder by contacting AST Trust Company (Canada) by:

• going to AST’s website at https://lp.astfinancial.com/control-number-request-en.html to complete and submit the electronic form, or

• calling 1-866-751-6315 (in North America) or 1-212-235-5754 (outside North America), and

To be valid, your vote by proxy MUST be received by no later than 8:30 a.m. CST on Tuesday May 4, 2021 or, if the meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and statutory holidays) before the time and date of the adjourned or postponed Meeting.

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

1	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. If you do not check one of the boxes, we will assume you have appointed Tim Gitzel, or in his absence, Sean Quinn, as your proxyholder.	☐   You appoint the following person or company to attend the meeting and vote on your behalf (see registration steps on the reverse of this form):

2	Tell us your voting instructions — 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 FOR these items.
	If you do not specify how you want to vote your shares:
	•  the Cameco officer you appointed as your proxyholder in section 1 will vote FOR each of the items below.	•  the other 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 amendment or contested item of business.

	Elect the directors (see page 7 of the management proxy circular)
			FOR	WITHHOLD			FOR	WITHHOLD
	1.	Leontine Atkins	☐	☐	6.	Tim Gitzel	☐	☐
	2.	Ian Bruce	☐	☐	7.	Jim Gowans	☐	☐
	3.	Daniel Camus	☐	☐	8.	Kathryn Jackson	☐	☐
	4.	Donald Deranger	☐	☐	9.	Don Kayne	☐	☐
	5.	Catherine Gignac	☐	☐

		Appoint the auditors (see page 7 of the management proxy circular)	FOR	WITHHOLD
		Appoint KPMG LLP as auditors	☐	☐
		Have a say on our approach to executive compensation (see page 8 of the management proxy 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 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 2021 annual meeting of shareholders.	FOR ☐	AGAINST ☐
3	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 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 more people, you declare that all of these people are residents of Canada. When you sign this form, you are certifying that you have done whatever is reasonably possible to confirm residential status.		YES ☐	NO ☐

What do we mean by residency?

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 10 of the accompanying management proxy circular.

The definitions here are summaries only. The complete definitions are in the Eldorado Nuclear Limited Reorganization and Divestiture Act (Canada) and our articles.

A non-resident is:

• an individual, other than a Canadian citizen, who is not ordinarily resident in Canada

• a corporation

• that was incorporated, formed or otherwise organized outside of Canada,

• that is controlled by non-residents, either directly or indirectly

• a trust

• that was established 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

• where non-residents have more than 50% of the beneficial interest

• a foreign government or foreign government agency

Anyone not included in the above description of non-resident is considered a resident. Residents can be individuals, corporations, trusts and governments or government agencies.

4	Sign and date — When you sign here, you are:
	•  authorizing your proxyholder to vote according to your voting instructions at Cameco’s 2021 annual meeting of shareholders, or any meeting that is reconvened if it was postponed or adjourned •  revoking any proxy that you previously gave for this meeting.
	For shares registered in the name of a corporation, estate, trust or minor, an 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. If the shares are registered in the name of more than one owner (for example, joint owners, trustees, executors, etc.) then all of those registered should sign this form.

Signature	Date	Position
(if your shares are held in more than one name, either person can complete and sign this form)	(if you leave this blank, we will consider the date to be the day this form was received by or on behalf of us)	(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

CAMECO
Energizing a clean-air world
2020 Annual Report

The nuclear fuel cycle Mining 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 where the uranium is recovered.    Milling 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. Refining Refining removes the impurities from the uranium concentrate and changes its chemical form to uranium trioxide (UO3). Conversion For light water reactors, the UO3 is converted to uranium hexafluoride (UF6) gas to prepare it for enrichment. For heavy water reactors like the Candu reactor, the UO3 is converted into powdered uranium dioxide (UO2).    Enrichment 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. Fuel 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. Generation 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 10, 2021

8	2020 PERFORMANCE HIGHLIGHTS
13	MARKET OVERVIEW AND DEVELOPMENTS
18	OUR STRATEGY
25	OUR APPROACH TO ESG MATTERS
31	MEASURING OUR RESULTS
33	FINANCIAL RESULTS
62	OPERATIONS AND PROJECTS
86	MINERAL RESERVES AND RESOURCES
91	ADDITIONAL INFORMATION
93	2020 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, 2020. The information is based on what we knew as of February 9, 2021.

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, 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 pages 3 and 4, which may prove to be incorrect.

• Actual results and events may be significantly different from what we currently expect, due to the risks associated with our business. We list a number of these material risks on page 3. We recommend you also review our most recent annual information form, which includes a discussion of other material risks that could cause actual 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 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

• our view that we have the strengths to take advantage of the world’s rising demand for safe, reliable, affordable and carbon-free energy

• we will continue to focus on delivering our products responsibly and addressing the environmental, social and governance (ESG) risks and opportunities that we believe will make our business sustainable and will build long-term value

• our expectations about 2021 and future global uranium supply, consumption, contracting, demand and the market including the discussion under the heading Market overview and developments

• our expectations for the future of the nuclear industry, including that nuclear power must be a central part of the solution to the world’s shift to a low-carbon climate-resilient economy

• our views on our ability to self-manage risk

• the discussion under the heading Our strategy

• our expectations for the restart of the Cigar Lake mine

• our confidence that we can add acceptable new long-term contracts to support the restart of our McArthur River/Key Lake operation

• the discussion under the heading Our approach to ESG matters, including our belief there is a significant opportunity for us to be part of the solution to combat climate change and that we are well positioned to deliver significant long-term business value

• 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 our expectations regarding the outcome of the appeal to the Supreme Court of Canada (Supreme Court) if leave to appeal is granted, our expectations regarding reassessments for other tax years, and our expectation that we will recover all or substantially all of the amounts paid or otherwise secured to date, including disbursements

• our estimate of the amount and timing of expected cash taxes and transfer pricing penalties

• the discussion under the heading Outlook for 2021, including our 2021 financial outlook, expectations for 2021 cash balances, and our price sensitivity analysis for our uranium segment

• the outlook for our uranium and fuel services segments for 2021

• our expectation that the uranium contract portfolio we have built will continue to provide a solid revenue stream

• our expectation that our cash balances and operating cash flows will meet our anticipated 2021 capital requirements

• our expectations for 2021, 2022 and 2023 capital expenditures

• our expectation that in 2021 we will be able to comply with all the covenants in our unsecured revolving credit facility

• 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, including production levels and suspension of production at certain properties

• our expectations related to care and maintenance costs

• our mineral reserve and resource estimates

• our decommissioning estimates

2     CAMECO CORPORATION

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, trade restrictions or the impact of the COVID-19 pandemic

• 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

• changing views of governments regarding the pursuit of carbon reduction strategies or our view may prove to be inaccurate on the role of nuclear power in pursuit of those strategies

• our estimates and forecasts prove to be inaccurate, including production, purchases, deliveries, cash flow, revenue, costs, decommissioning, reclamation expenses or receipt of future dividends from JV 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 ultimately gives rise to material tax liabilities and payment obligations that would have a material adverse effect on us

• the possibility of a materially different outcome in disputes with CRA for other tax years

• the possibility that it will take longer to receive a decision if the Supreme Court agrees to hear an appeal, whether reassessed on the same or a different methodology

• 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

• 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 workforce health and safety or increased regulatory burdens or delays resulting from the COVID-19 pandemic or other causes

• 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, outbreak of illness (such as a pandemic like COVID-19), accident or a deterioration in political support for, or demand for, nuclear energy

• we may be unable to successfully manage the current environment resulting from the COVID-19 pandemic and its related operational, safety, marketing or financial risks successfully, including the risk of significant disruptions to our operations, workforce, required supply or services and ability to produce, transport and deliver uranium

• 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 uranium

• government laws, regulations, policies or decisions that adversely affect us, including tax and trade laws and sanctions on nuclear fuel imports

• our uranium suppliers or purchasers fail to fulfil their commitments

• our Cigar Lake development, mining or production plans are delayed or do not succeed for any reason

• the McClean Lake’s mill production plan is delayed or does not succeed for any reason

• water quality and environmental concerns could result in a potential deferral of production and additional capital and operating expenses required 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

• 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 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 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 for the nuclear industry, including its growth profile, market conditions and the demand for and supply of uranium

• the continuing pursuit of carbon reduction strategies by governments and the role of nuclear in the pursuit of those strategies

• our expectations regarding spot prices and realized prices for uranium and other factors discussed under the heading Price sensitivity analysis: uranium segment

MANAGEMENT’S DISCUSSION AND ANALYSIS     3

• 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 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 JV Inkai and our fuel services operating sites

• our cost expectations, including production costs, operating costs, capital costs and the success of our cost reduction strategies

• our expectations regarding tax payments, royalty rates, currency exchange rates and interest rates

• our expectations about the outcome of our dispute with CRA, including that the lower court decisions will be upheld by the Supreme Court if leave is granted to appeal

• our assumptions regarding the methodology to be used by CRA in any subsequent year reassessments and our expectation that the lower court decisions will apply in principle to subsequent years not covered by the decisions that are reassessed using the same methodology

• the time it would take to receive a decision if the Supreme Court agrees to hear an appeal

• our expectation that we will recover all or substantially all of the amounts paid or secured in respect of the CRA dispute to date, including disbursements

• 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, outbreak of illness (such as a pandemic like COVID-19), governmental or political actions, 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, 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 operating risks

4     CAMECO CORPORATION

[This page is intentionally left blank.]

MANAGEMENT’S DISCUSSION AND ANALYSIS     5

6     CAMECO CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS     7

2020 performance highlights

In 2020, the world experienced unprecedented and challenging times due to the impact of the Coronavirus (COVID-19) pandemic. Consistent with our values, the health and safety of our workers, their families and their communities was our priority in 2020. Following the precautions and restrictions enacted by all levels of government where we operate, and considering the unique circumstances at each of our operating sites, we proactively implemented a number of measures and made a number of decisions to ensure a safe working environment for all our workers and to help slow down the spread of the virus. In addition to all of the safety protocols we put in place, we:

• suspended production at Cigar Lake, twice. The first suspension ran approximately five months from late March through the end of August. The second suspension was announced in mid-December and continues into 2021.

• suspended production at the Port Hope UF₆ conversion plant and at the Blind River refinery in April for approximately four weeks

• withdrew our 2020 outlook

• continued to pay all our employees

• set up and awarded COVID-19 Relief Funds totaling $1.25 million to support our northern Saskatchewan and Ontario communities impacted by the virus

• delivered 1,200 care packages containing essential supplies that residents of remote northern communities were having difficulty obtaining and provided significant numbers of personal protective equipment (masks, gloves and hand sanitizer) to these same communities

• provided personal protective equipment (PPE) to Port Hope and Blind River hospitals and police services in Ontario

Through all of the disruptions to our business, we continued to do what we said we would do, executing on all strategic fronts; operational, marketing and financial. Demand for our products remained strong and we delivered 30.6 million pounds of uranium to our customers. We generated $57 million in cash from operations, with higher average realized prices in our uranium and fuel services segments than in 2019. However, as a result of the precautionary production suspensions at our operations due to the COVID-19 pandemic, we produced only 5 million pounds in our uranium segment, well below our committed sales. To manage risk we purchased 11.5 million pounds more uranium than the top end of the 2020 outlook disclosed in our 2019 annual MD&A at an average annual cost of $40.41 per pound, totalling about $465 million, compared to the Cigar Lake expected life-of-mine cash operating costs of between $15 to $16 per pound. Additionally, due to the temporary suspensions we incurred $55 million more in care and maintenance costs than those we had planned for. Even while production was suspended, we kept and continued to pay all our employees. Partially off-setting these additional costs was the receipt of about $37 million under the Canada Emergency Wage Subsidy program and volatility in foreign exchange rates that resulted in foreign exchange gains.

On the contracting front, long-term contracting was delayed in 2020 due to ongoing market-access and trade policy issues and the impact of the COVID-19 pandemic on our customers’ operations. However, in our uranium segment, we were successful in adding 12.5 million pounds to our portolio of long-term uranium contracts. Market signals will take time to impact contracting in our business as we have seen with the transition in our fuel services segment. With our pipeline of uranium business continuing to grow and being larger than we have seen since 2011, we are being patient to capture as much value as possible in our contract portfolio. We continue to see off-market interest, which we believe tends to be a leading indicator of broader demand for long-term contracting. In our fuel services segment, we had a very successful year, replacing the volumes we delivered under contract and adding another 17.1 million kilograms of UF₆ to our long-term contract portfolio that reflect the price transition that began in 2017 in the conversion market, and that we expect will allow us to continue to profitably operate and consistently support the long-term fuel services needs of our customers.

8     CAMECO CORPORATION

Thanks to the disciplined execution of our strategy, our balance sheet is strong and we expect it will enable us to see out our strategy as well as self-manage risk. As of December 31, 2020, we had $943 million in cash and short-term investments and $1.0 billion in long-term debt. During the year, the impacts of the COVID-19 pandemic caused disruptions to global financial markets, and incented government stimulus packages and significant interest rate reductions. On October 21, 2020, consistent with our conservative financial management, and to take advantage of the low interest rate environment resulting from the COVID-19 pandemic, we issued debentures in the amount of $400 million, at an interest rate of 2.95% per annum and used the proceeds to redeem our outstanding $400 million debenture bearing interest of 3.75%, resetting the maturity from 2022 to 2027 and extending our maturity profile. The early redemption resulted in a cost of $24 million. Our next maturity is in 2024. In addition, we have a $1.0 billion undrawn credit facility.

We also received a unanimous decision in our favour from the Federal Court of Appeal (Court of Appeal) in our dispute with Canada Revenue Agency (CRA). The decision upholds the September 26, 2018 decision of the Tax Court of Canada (Tax Court), which was unequivocally in our favour for the 2003, 2005 and 2006 tax years and it sustains the corresponding decision on the cost award. We believe the principles in the decision apply to all tax years subsequent to 2006. CRA has made an application to the Supreme Court of Canada (Supreme Court) to seek leave to appeal the decision of the Court of Appeal. The Supreme Court will decide whether to hear the appeal or decline CRA’s request for leave. If the appeal is heard, we estimate that it could take until the second half of 2022 before a decision is rendered by the Supreme Court.

The COVID-19 pandemic has disrupted global uranium production, adding to the supply curtailments that have occurred in the industry for many years. The duration and extent of these disruptions are still not fully known. The uranium spot price increased by more than 35% following announcement of the initial supply disruptions due to the COVID-19 pandemic in March and April, reaching a high of about $34 (US) per pound in 2020. The average uranium spot price ended the year at $30.20 per pound (US) more than 20% higher than the average uranium spot price at the end of 2019.

Around the globe there is an increasing focus on electrification for various reasons. There are countries looking to install baseload power, while others are looking for a reliable replacement to fossil fuel sources, and finally, there is new demand for things such as the electrification of transportation. This is occurring at precisely the same time that countries and companies around the world are committing to net-zero carbon targets. This has led to the recognition, from a policy point of view, that nuclear will be needed in the toolbox to sustainably achieve electrification and decarbonization goals.

In the current environment, we believe the risk to uranium supply is greater than the risk to uranium demand and expect it will create a renewed focus on ensuring availability of long-term supply to fuel nuclear reactors. Over time, we expect this renewed focus on security of supply will provide the market signals producers need. We are taking the steps today and incurring the costs that we believe will allow us to restart our tier-one assets with more flexibility in the production rate, eliminate the care and maintenance costs incurred while our tier-one production is suspended and to benefit from the favourable life-of-mine economics our assets provide. Throughout, we will continue to focus on delivering our products responsibly and addressing the environmental, social and governance (ESG) risks and opportunities that we believe will make our business sustainable and will build long-term value.

Financial performance

HIGHLIGHTS
DECEMBER 31 ($ MILLIONS EXCEPT WHERE INDICATED)	2020		2019		CHANGE
Revenue		1,800		1,863		(3)	%
Gross profit		106		242		(56)	%
Net earnings (loss) attributable to equity holders		(53)		74		>(100	%)
$ per common share (diluted)		(0.13)		0.19		>(100	%)
Adjusted net earnings (loss) (non-IFRS, see page 35)		(66)		41		>(100	%)
$ per common share (adjusted and diluted)		(0.17)		0.10		>(100	%)
Cash provided by operations (after working capital changes)		57		527		(89)	%

Net earnings attributable to equity holders (net earnings) and adjusted net earnings were lower in 2020 compared to 2019. See 2020 consolidated financial results beginning on page 34 for more information. Of note:

• generated $57 million in cash from operations

MANAGEMENT’S DISCUSSION AND ANALYSIS     9

• incurred $196 million in care and maintenance costs as a result of our strategic decisions, including $55 million due to the precautionary operational decisions made to deal with the risks posed by the COVID-19 pandemic

• received $37 million under the Canada Emergency Wage Subsidy program

• issued debentures in the amount of $400 million, at an interest rate of 2.95% per annum and used the proceeds to redeem our outstanding $400 million debenture bearing interest of 3.75%, resetting the maturity from 2022 to 2027 and resulting in an early redemption fee of $24 million

• received a unanimous decision in our favour from the Federal Court of Appeal in our dispute with CRA. See Transfer pricing dispute on page 39 for more information.

Our segment updates

In our uranium segment, we continue to execute our strategy. In addition, we have made a number of proactive decisions in response to the risks posed by the COVID-19 pandemic and to ensure a safe working environment for all our workers which has had an impact on our operations. Of note:

• continued the production suspension at McArthur River/Key Lake, removing 18 million pounds per year (100% basis) from the market

• suspended production at Cigar Lake, twice. The first suspension ran approximately five months from late March through the end of August. The second suspension was announced in mid-December and continues into 2021.

• annual production of 5.0 million pounds was 44% lower than in 2019, and below the outlook provided in our 2019 annual MD&A due to the impacts of the COVID-19 pandemic on our operations

• purchased 33.5 million pounds of uranium, including our spot purchases, committed purchase volumes, JV Inkai purchases and the purchase of our NUKEM subsidiary’s excess inventory

• delivered on our sales commitments of 30.6 million pounds

Production in 2020 from our fuel services segment was 12% lower than in 2019, as a result of production disruptions due to the COVID-19 pandemic. We suspended production at the Port Hope UF₆ conversion plant and at the Blind River refinery in April for approximately four weeks.

See Operations and projects beginning on page 62 for more information.

HIGHLIGHTS			2020		2019		CHANGE
Uranium	Production volume (million lbs)			5.0		9.0		(44	)%
	Sales volume (million lbs)			30.6		31.5		(3	)%
	Average realized price	($US/lb)		34.39		33.77		2	%
		($Cdn/lb)		46.14		44.85		3	%
	Revenue ($ millions)			1,412		1,414		—
	Gross profit ($ millions)			13		153		(92	)%
Fuel services	Production volume (million kgU)			11.7		13.3		(12	)%
	Sales volume (million kgU)			13.5		14.1		(4	)%
	Average realized price	($Cdn/kgU)		27.89		26.21		6	%
	Revenue ($ millions)			377		370		2	%
	Gross profit ($ millions)			96		90		7	%

10     CAMECO CORPORATION

Industry prices

	2020		2019		CHANGE
Uranium ($US/lb U3O8)1
Average annual spot market price		29.96		25.64		17	%
Average annual long-term price		34.63		31.75		9	%
Fuel services ($US/kgU as UF6)1
Average annual spot market price
North America		21.94		18.27		20	%
Europe		21.09		18.12		16	%
Average annual long-term price
North America		18.27		16.73		9	%
Europe		18.18		16.63		9	%

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 2020 was approximately 92.2 million pounds U₃O₈ equivalent, compared to 64.3 million pounds U₃O₈ equivalent in 2019. The 2020 total surpassed the previous annual record of 88.7 million pounds U₃O₈ equivalent in 2018. Non-utility purchases made up a significant portion of the 2020 spot market activity. Spot market volumes were significant in the second quarter of the year due to unplanned uranium supply disruptions resulting from the COVID-19 pandemic, then slowed through the balance of 2020. At the end of 2020, the average reported spot price was $30.20 (US) per pound, up $5.27 (US) per pound from the end of 2019. During the year, the uranium spot price ranged from a high of $33.93 (US) per pound to a low of $24.63 (US) per pound, averaging $29.96 (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. While 2020 saw resolution to a number of geopolitical issues, including recommendations from the Nuclear Fuel Working Group and the extension of the Russian Suspension Agreement, term volumes were the lowest since 2013. The volume of long-term contracting reported by UxC for 2020 was about 53 million pounds U₃O₈ equivalent, down from about 95.8 million pounds U₃O₈ equivalent in 2019. Lower volumes can be attributed in part to utilities focusing on operational safety amidst the COVID-19 pandemic. The average reported long-term price at the end of the year was $35.00 (US) per pound, up $2.50 (US) from 2019.

With continued uncertainty related to the COVID-19 pandemic and ongoing trade matters, we expect contracting in 2021 could remain largely discretionary.

While the average reported spot price for North American delivery at the end of 2020 was $21.75 (US) per kilogram uranium as UF₆ (US/kgU as UF₆), down $0.38 (US) from the end of 2019, spot UF₆ conversion prices reached record highs in both the North American and European markets during the year. Long-term UF₆ conversion prices finished 2020 at $19.00 (US/kgU as UF₆), up $0.87 (US) from the end of 2019.

MANAGEMENT’S DISCUSSION AND ANALYSIS     11

SHARES AND STOCK OPTIONS OUTSTANDING

At February 8, 2021, we had:

• 396,862,440 common shares and one Class B share outstanding

• 5,556,110 stock options outstanding, with exercise prices ranging from $11.32 to $26.81

DIVIDEND

In 2020, our board of directors declared a dividend of $0.08 per common share, which was paid December 15, 2020. 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.

12     CAMECO CORPORATION

Market overview and developments

Growing confidence

In 2020, the COVID-19 pandemic disrupted global uranium production which added to the planned supply curtailments that have occurred in the industry for several years. The duration and extent of these disruptions are still not fully known. As a result, there was significant demand from producers – including Cameco – in the spot market to cover both the planned and unplanned reductions in primary supply. In contrast, long-term contracting was significantly reduced compared to 2019 as utilities focused on ensuring the safety of their employees and keeping their nuclear plants running to support the critical infrastructure needed throughout the pandemic. In addition, market access and trade policy issues continued to top the list of factors affecting the market in 2020. These issues created uncertainty and consumed a significant amount of time and focus from utilities during the year. The volume of uranium executed under long-term contracts was well below annual consumption levels, accelerating the inventory destocking that was already underway in the industry and adding to the growing wedge of uncovered requirement that we believe will need to be filled at a time when the availability of sufficient supply is not guaranteed. We expect a renewed focus on security of supply will provide the market signals producers need and we have growing confidence that the uranium market will undergo the same transition that is occurring in the conversion and enrichment markets.

Supply is not guaranteed

Low uranium prices, government-driven trade policies, and the COVID-19 pandemic continued to have an impact on the security of supply in our industry. In addition to the decisions many producers, including the lowest-cost producers, have made to preserve long-term value by leaving uranium in the ground, there have been a number of unplanned supply disruptions related to the impact of the COVID-19 pandemic on uranium mining and processing activities. Uranium is a highly trade-dependent commodity, and adding to security of supply concerns is the role of commercial and state-owned entities in the uranium market, and trade policies that highlight the disconnect between where uranium is produced and where it is consumed. About 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, about 80% of primary production comes from countries that consume little-to-no uranium, and nearly 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 and trade policy developments in 2020 and to-date are:

• Unplanned production disruptions at various production facilities due to the COVID-19 pandemic, including at the Cigar Lake mine and the McClean Lake mill, and across all uranium mines in Kazakhstan resulted in 2020 global uranium production being down about 15% compared to 2019 and led to an increase in spot market purchases by producers. Production in 2020 represented the lowest annual production since 2008, accounting for only 77% of reactor requirements.

• Kazatomprom (KAP) reaffirmed its intention to maintain its aggregate production reduction of 20% compared to planned levels under subsoil use contracts in 2021, with no additional production planned to replace the volumes lost in 2020 resulting from measures taken to combat COVID-19. It also announced its plan to extend the 20% reduction through 2022. KAP said full implementation of its decision would remove up to 14.3 million pounds U₃O₈ from 2022 expected global primary supply.

• During the year, KAP offered a secondary placement of its shares, increasing publicly-traded share capital from 15% to 18.8%.

• China General Nuclear Power Group is expected to acquire a 49% stake in Ortalyk LLP. This KAP subsidiary holds the Central Mynkuduk in situ recovery (ISR) mine with a capacity of about 5.2 million pounds U₃O₈ per year and the planned Zhalpak ISR mine with expected capacity of 1.95 million pounds U₃O₈ per year, subject to obtaining regulatory and government approvals.

• In December, the US Congress approved an omnibus spending bill for fiscal 2021, which will provide nearly $1.5 billion (US) in spending for nuclear programs. Notably it includes initial funding of $75 million (US) for the creation of a national uranium reserve. This funding, which was a primary recommendation in a strategy report released in April by the US Nuclear Fuel Working Group, opens the door for the US government to purchase domestically produced uranium and UF₆ to guard against potential commercial and national security risks as a result of the country’s near-total reliance on foreign imports.

MANAGEMENT’S DISCUSSION AND ANALYSIS     13

• The American Nuclear Infrastructure Act, a bipartisan U.S. Senate bill, was approved in December, though full review is not expected until the next US Congress in 2021. The bill addresses national security, economic, and climate change elements related to the nuclear sector.

• An amendment to the Russian Suspension Agreement (RSA) was signed that extends the agreement from January 1, 2021 through December 31, 2040 and provides a clear set of rules around access to the US nuclear energy sector by Russian nuclear fuel suppliers. Since 1992, the importation of Russian uranium products in the US has been subject to a quota under the US-Russia Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation (the Russian Suspension Agreement). The amendment reduces the average overall quota and introduces caps, which will reduce the amount of Russian uranium, conversion and enrichment supplied to the US over the long-term. The amendment also includes important new provisions to ensure that all Russian origin uranium must be counted against the quota even if it is imported after further processing in other countries.

• BHP indicated that the economics for its expansion plans at the Olympic Dam mine (ODM) were challenging, and that it has decided not to proceed with the expansion at this time. ODM currently produces approximately 8 million pounds U₃O₈ per year and the expansion was projected to increase its annual uranium production up to as much as 14 million pounds.

• Energy Resources of Australia Ltd. announced on January 8, 2021 that processing operations have officially been discontinued at the Ranger uranium mine in the Northern Territory of Australia. The mine had averaged about 4 million pounds U₃O₈ in recent years and this shutdown concludes over 35 years of production.

• The board of directors of Orano’s Cominak mine announced that the mine will shut down in March 2021 due to depletion of reserves. The mine had been producing about 3 million pounds U₃O₈ in recent years.

Demand has recovered and is growing

The demand gap left by forced and premature nuclear reactor shutdowns since March of 2011 was filled in 2018. According to the International Atomic Energy Agency there are currently 443 reactors operating globally and 52 reactors 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. In addition, the COVID-19 pandemic is expected to have a negative impact on global energy demand in the near term. For 2020, the International Energy Agency (IEA) expects global electricity demand to fall by 5% over 2019 with nuclear declining by 2.5% due to lower demand and delays for planned maintenance and construction of several projects. However, there is growing focus on electrification and an increasing recognition of the role nuclear power must play in providing safe, reliable, affordable carbon-free baseload electricity and achieving a low-carbon economy. Momentum is also building for non-traditional commercial uses of nuclear power such as development of small modular reactors and advanced reactors, with numerous companies and countries pursuing projects. With the ongoing challenges posed by the COVID-19 pandemic, many governments will continue to rely on nuclear plants as part of the critical infrastructure needed to guarantee the availability of 24-hour power. Some of the more significant demand developments in 2020 and to-date are:

• Many countries, US states, and utilities announced net-zero carbon targets in 2020. While most of these targets are further out in the future, many of the plans include an important role for nuclear. For example, a study suggests that for China to achieve its net-zero target by 2060, will require a 382% increase in nuclear power from 2025 levels.

• In the US, President Biden’s campaign included positive statements about the need to maintain the existing nuclear power fleet and to build advanced reactors as part of an overall shift to non-emitting carbon power sources.

• Exelon announced plans to close its Byron and Dresden nuclear plants in Illinois in 2021, pointing to economics challenged by declining energy prices and market rules.

• Energy Harbor is facing challenges as a state law providing subsidies to its two nuclear plants in Ohio, Davis Besse and Perry, is now in question due to a lobbying and bribery scandal.

• In China, one new reactor began commercial operations in 2020 and two new reactor construction starts were recorded. A fourth power company, China Huaneng Group, was licensed to operate nuclear reactors in China.

• China’s 14^th Five-Year Plan and related policy documents covering the 2021-2025 period is ongoing, and publication of the plan is expected in March 2021.

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• In Japan, many of the nine restarted reactors were off-line for a period of time for maintenance outages and antiterrorism upgrades. However, Kyushu’s Genkai 3 and Sendai 1 and 2, and Kansai’s Ohi 4 have restarted and are operating after meeting the new standards. Following the completion of upgrades and local approvals, three additional units are expected to restart in 2021, including Kansai’s Takahama 1 and 2, and Mihama 3.

• Japan’s Prime Minister, Yoshihide Suga, announced that the country aims to become carbon neutral by 2050. Regarding nuclear, he indicated Japan will continue to develop its nuclear energy supply with “maximum priority on safety”. Japan’s current energy plan calls for 20% to 22% nuclear by 2030.

• In France, President Macron stated in December that nuclear will remain a pillar of the French energy mix for decades to come and pressed for preparatory studies on new next-generation EPR reactors to be wrapped up in the coming months.

• Two countries had their first nuclear power plants connected to the grid in 2020: United Arab Emirates with Barakah 1, and Belarus with Ostrovets 1. These are the first two countries to begin new nuclear power production since 2013.

• In Eastern Europe, important steps were made to advance nuclear power in several countries including Hungary, Poland, Bulgaria, Romania, Ukraine and Slovenia.

• Belgium confirmed its 2025 nuclear phase-out policy, but left the door open for two to three reactors to stay online longer.

• The Netherlands announced they will begin a process that considers building up to 10 nuclear power plants.

• India’s first domestically designed 700 MWe pressurized heavy water reactor was launched at Kakrapar, an important milestone for the country. Three more units of this design are expected to come online in the next few years.

• In South Korea, according to current government plans, no new nuclear power plants will be built in the country, except those already under construction. Existing nuclear power facilities will continue to operate but will not be granted operating extensions.

MANAGEMENT’S DISCUSSION AND ANALYSIS     15

OPPORTUNITIES FOR THOSE WHO CAN WAIT

UxC reports that over the last five years only approximately 390 million pounds U₃O₈ equivalent have been locked-up in the long-term market, while approximately 815 million pounds U₃O₈ equivalent 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 number of 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.

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.

16     CAMECO CORPORATION

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 a finished fuel bundle arrives at the power plant. 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 1.4 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 other intermediaries 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 future 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.

Global population is on the rise, and there is a growing focus on electrification and decarbonization. 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 increasing due to restarts and new reactors, and supply becoming less certain as a result of low prices, production curtailments, lack of investment, end of reserve life, unplanned production disruptions, shrinking secondary supplies 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 place into a strengthening market.

MANAGEMENT’S DISCUSSION AND ANALYSIS     17

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 a growing focus on electrification and decarbonization. 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 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, which we began doing in 2016. As conditions improve, we expect to meet rising demand with production from our best margin operations.

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 2020, these actions resulted in:

• generation of $57 million in cash from operations

• issuing debentures in the amount of $400 million, bearing interest of 2.95% per annum and redeeming our outstanding $400 million debenture bearing interest of 3.75%, resetting the maturity from 2022 to 2027

• a year-end balance of $943 million in cash on our balance sheet

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. In addition, due to the risks posed by the COVID-19 pandemic, we start 2021 with production at the Cigar Lake mine temporarily suspended. The restart of the Cigar Lake mine is dependent on our ability to maintain safe and stable operating protocols along with a number of other factors, including how the COVID-19 pandemic is impacting the availability of the required workforce, how cases are trending in Saskatchewan, in particular in northern communities, and the views of public health authorities. 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 roughly quadrupled and the industry average North American term price increase by nearly 50% 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.

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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.

In January 2021, we increased our interest in Global Laser Enrichment LLC (GLE) from 24% to 49%. We are the commercial lead for the project and have an option to attain a majority interest of up to 75% ownership. GLE is testing a third-generation enrichment technology that, if successful, will use lasers to commercially enrich uranium.

Capital allocation – focus on value

Delivering returns to our long-term shareholders is a top priority. While we navigate by our investment-grade rating, 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

• allow us to execute on our strategy and mitigate risk

• allow us to execute on our dividend while ensuring it is appropriately aligned with the cyclical nature of our 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.

With the continued market uncertainty we are facing, our tier-one assets on care and maintenance 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, we have taken steps to improve margin and cash flow by:

• responsibly managing our sources of supply thereby preserving the value of our tier-one assets

• restructuring our activities to reduce our operating, capital, and general and administrative spending

• retiring our $500 million 2019 debenture on maturity to reduce our total debt to $1 billion

• issuing debentures in the amount of $400 million, bearing interest of 2.95% per annum and redeeming our outstanding $400 million debenture bearing interest of 3.75%, resetting the maturity from 2022 to 2027

• 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 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     19

We have not yet seen the market transition needed to restart our idled production capacity. Therefore, until we see that transition, our capital expenditures 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 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 may focus on the debt portion of our ratings metrics. This may mean 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 long-term contracts with acceptable pricing mechanisms, 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 and to return excess cash to shareholders.

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.

Share buyback: 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 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.

• Second, we do not intend to build an inventory of excess uranium. Excess inventory serves to contribute to the 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 end-user demand in the market where we think we can obtain 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 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 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 that material will be more than offset by the leverage to market prices in our sales portfolio over the long-term.

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.

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Ultimately, our goal is to protect and extend the value of our contract portfolio on terms that recognize the value of our assets and pricing mechanisms that 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. 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 providing some certainty for our future earnings and cash flow

• focus on meeting the nuclear industry’s growing annual uncovered requirements with our tier-one production

• establish and grow market share with strategic customers

We target a portfolio of long-term contracts that have a ratio of 40% fixed-pricing and 60% market-related pricing mechanisms, including provisions 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 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: typically use a pricing mechanism based on a term-price indicator at the time the contract is accepted and escalated over the term of the contract.

Market-related contracts for uranium: are different from fixed-price contracts in that the pricing mechanism 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.

Fuel services contracts: the majority of our fuel services contracts use a fixed price mechanism per kgU, escalated over the term of the contract, and reflect the market at the time the contract is accepted.

MANAGEMENT’S DISCUSSION AND ANALYSIS     21

OPTIMIZING OUR CONTRACT PORTFOLIO

We work with our customers to optimize the value of our contract portfolio. With respect to new contracting activity, as we have seen in our fuel services segment, there is often a lag from when contracting discussions begin and when contracts are executed. With our pipeline of business under negotiation in our uranium segment being larger than we have seen since 2011, and a value driven strategy, we are being strategically patient in considering the commercial terms we are willing to accept. Much of our pending business is off-market and, in the past, off-market activity has been a leading indicator of a contracting cycle. We remain confident that we can add acceptable new sales commitments to our portfolio of long-term contracts to support the restart of our McArthur River/Key Lake operation. Given our view that uranium prices need to rise to ensure the availability of long-term supply to fuel growing demand for safe, clean, reliable, carbon-free nuclear energy, our preference today is to sign long-term contracts with market-related pricing mechanisms. Unsurprisingly, we believe our customers too expect prices to rise and prefer to lock-in today’s low prices, with a fixed-price mechanism. Our goal is to balance all these factors, along with our desire for regional diversification, with product form, and logistical factors 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 low-cost supply to deliver into a strengthening market.

With respect to our existing contracts, at times we may also look for opportunities to optimize the value of our portfolio. In cases where a customer is seeking relief under an existing contract due to a challenging policy, operating, or economic environment, or we deem the customer’s long-term demand to be at risk, we may consider options that are beneficial to us and allow us to maintain our customer relationships.

CONTRACT PORTFOLIO STATUS

We have commitments to sell over 113 million pounds of U₃O₈ with 32 customers worldwide in our uranium segment, and over 53 million kilograms as UF₆ conversion with 31 customers worldwide in our fuel services segment. The annual average sales commitments over the next five years in our uranium segment is around 16 million pounds, with commitment levels in 2021 and 2022 higher than in 2023 through 2025.

Customers – U₃O₈:

Five largest customers account for 60% of commitments

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Customers – UF₆ conversion:

Five largest customers account for 54% 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, under long-term agreements and in the spot market

• 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

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     23

Given the current market dynamics and the risks posed by the COVID-19 pandemic, we start 2021 with all our uranium mining operations on care and maintenance. We expect to restart Cigar Lake, but the timing and the production rate will be dependent on how the COVID-19 pandemic is impacting the availability of the required workforce at Cigar Lake, how cases are trending in Saskatchewan, in particular in northern communities, and the views of public health authorities. In general, while McArthur River and Key Lake are shut down, our annual 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. However, our cash production costs in 2021 may be impacted by the timing of the restart and the production rate of Cigar Lake.

Operating costs in our fuel services segment are mainly fixed. In 2020, labour accounted for about 51% 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 2021, 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. In addition, we expect to incur care and maintenance costs of between $8 million to $10 million per month while production at Cigar Lake is suspended due to the risks posed by the COVID-19 pandemic.

As noted above, the restart of Cigar Lake is dependent on the risks posed by the COVID-19 pandemic. At McArthur River/Key Lake, the restart of the mine and mill is a commercial decision that will be based on our ability to commit our share of production from this operation under acceptable long-term contracts and to benefit from the favourable life-of-mine economics it provides. Therefore, while on care and maintenance we are focused on improving operational effectiveness, including the use of digital and automation technologies. Our goal is to streamline our processes and leverage digital and automation technologies to reduce our future operating costs and increase the degree of operating flexibility we have when we restart this tier-one asset and eliminate the costs associated with care and maintenance. As a result, care and maintenance costs are expected to be higher for McArthur River/Key Lake compared to Rabbit Lake and in the US. Upon its restart, care and maintenance costs at McArthur River/Key Lake will be eliminated. 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.

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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 2021, 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 inventory, we expect the cost of sales may be impacted.

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 and purchase costs higher than our production costs, but we believe 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.

Our approach to ESG matters

OUR VISION

Our vision – “Energizing a clean-air world” – recognizes that we have an important role to play in enabling the vast reductions in global greenhouse gas emissions required to achieve a resilient net-zero carbon economy. The uranium we produce is used around the world in the generation of safe, carbon-free, affordable, base-load nuclear power. As we seek to achieve our vision, we will do so in a manner that reflects our values. We believe we have the right strategy to achieve our vision and 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.

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 our work. All of us share in the responsibility of continually improving the safety of our workplace and the quality of our environment.

MANAGEMENT’S DISCUSSION AND ANALYSIS     25

We are committed to keeping people safe and conducting our business with respect and care for both the local and global environment.

People

We value the contribution of every employee and we treat people fairly by demonstrating our respect for individual dignity, creativity and cultural diversity. By being open and honest, we achieve the strong relationships we seek.

We are committed to developing and supporting a flexible, skilled, stable and diverse workforce, in an environment that:

• attracts and retains talented people and inspires them to be fully productive and engaged

• encourages relationships that build the trust, credibility and support we need to grow our business

Integrity

Through personal and professional integrity, we lead by example, earn trust, honour our commitments and conduct our business ethically.

We are committed to acting with integrity in every area of our business, wherever we operate.

Excellence

We pursue excellence in all that we do. Through leadership, collaboration and innovation, we strive to achieve our full potential and inspire others to reach theirs.

SUSTAINABILITY: A KEY PART OF OUR STRATEGY, REFLECTING OUR VALUES

We are committed to delivering our products responsibly. This is why we integrate sustainability principles and practices into all stages of our activities, from exploration to decommissioning. We factor them into every aspect of our business, from our objectives and approach to compensation, to our overall corporate strategy and 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.

Environment

We employ an integrated management system that applies to all phases and aspects of our business. The system is governed by our integrated Safety, Health, Environment and Quality (SHEQ) policy, which 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 operations. The policy is supported by multiple corporate SHEQ management programs. We maintain ISO 14001 certification of our environmental management program 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

We believe 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 needed to fuel nuclear reactors, we believe there is a significant opportunity for us to be part of the solution to combat climate change and that we are well positioned to deliver significant long-term business value, while actively working to reduce our emission profile.

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There is growing recognition of the role nuclear power must play in ensuring safe, reliable and affordable carbon-free electricity generation. This 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 is important because it acknowledges that nuclear power is needed to credibly achieve commitments under the Paris Agreement or transition to a net-zero carbon future. Indeed, in 2019, 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.

Uranium is, in our view, the world’s most significant zero emission fuel. Uranium’s heat value is thousands to tens of thousands of times greater than any other available fuel meaning that a tiny amount of uranium can generate a huge amount of emission-free electricity as nuclear power. The uranium we supply plays a significant role in contributing to GHG mitigation efforts in Canada and abroad. Within Canada, this uranium fuel provides greater than 30% of the province of Ontario’s power every year, avoiding more than 5,000,000 tonnes of carbon dioxide from being emitted into the atmosphere. It enables the province of Ontario to maintain the massive carbon reduction that was fully realized in 2014 when the proportion of electricity produced by nuclear power was increased in that province. Considering only the domestic emissions avoided resulting from the use of nuclear power in Ontario, we could claim to be one of Canada’s first net-zero carbon companies.

We have tracked and reported GHG emissions for more than two decades before it was a regulatory requirement to do so. In the past few years, the emissions of our Canadian operations have become regulated through Canadian output-based performance standard programs. These programs are intended to ensure business competitiveness and prevent carbon leakage. As an organization, 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.

Social

Our response to the COVID-19 pandemic

We continue to closely monitor and adapt to the developments related to the outbreak of COVID-19. Throughout the pandemic our priority has been to protect the health and well-being of our workers, including employees and contractors, their families, and their communities. Early in 2020, we activated our Corporate Crisis Management Plan, which includes our Pandemic Plan, and our various Local and Corporate Business Continuity Plans. Our Pandemic Plan and Local and Corporate Business Continuity Plans continue to be in effect across our global operations.

Following the precautions and restrictions enacted by all levels of government where we operate, and, considering the unique circumstances at each of our operating sites, we proactively implemented a number of measures and made a number of decisions to ensure a safe working environment for all our workers. We:

• asked employees at corporate office to work remotely from home

• asked that all meetings be conducted by phone or videoconference where possible

• suspended all business travel

• restricted non-essential contractors, visitors and deliveries at all locations

• put in place screening protocols for access to our facilities that align with the guidance of government and public health authorities

• implemented a number of additional protective measures in the workplace, including increased sanitization, physical barriers and physical distancing as well as enhancing use of personal protective equipment

• suspended work on the VIM project in Port Hope

MANAGEMENT’S DISCUSSION AND ANALYSIS     27

• suspended production at Cigar Lake in late March through August – production was suspended again in December and currently remains suspended

• suspended production, at the Port Hope UF₆ conversion facility and at the Blind River refinery in April for about four weeks

• set up and awarded COVID-19 Relief Funds totaling $1.25 million to support our northern Saskatchewan and Ontario communities impacted by the virus

• donated significant volumes of personal protective equipment, including masks, gloves, hand sanitizer, respirators and cartridges, respirator wipes, and safety eyewear

The proactive decisions we have made, and continue to make, to protect our workers and to help slow down the spread of the COVID-19 virus are necessary decisions that are consistent with our values. We continue to actively monitor the pandemic, and our screening and safety measures will remain in place for the foreseeable future. We will continue to work closely with the relevant health authorities to ensure our protocols align with their guidance.

Safety

The safety and health of our workers and the public is the highest priority during all stages of our activities.

We employ an integrated management system that applies to all phases and aspects of our business. The system is governed by our integrated SHEQ policy and is supported by multiple corporate SHEQ management programs.

Our operations have a strong safety record. We employ systematic programs to identify, evaluate and mitigate risks and engage all workers and managers in development of a strong safety culture. These programs follow the international OHSAS 18001 model and have delivered increasingly noteworthy and recognized safety performance.

Inclusion and Diversity

We have made a formal commitment to inclusion and diversity that is communicated company-wide through our value statements. We understand the value of a diverse workforce and we embrace, encourage and support workplace inclusion and diversity. Members of a diverse workplace bring new ideas, perspective, experiences and expertise to the company. Our diversity vision is to create a work environment where inclusion is the goal, and a diverse and representative workforce is our measure of success. We have a people policy that describes our commitment to developing and supporting a flexible, skilled, stable and diverse workforce, and acting to eliminate racism wherever it exists. 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.

We want a culture where each of our workers feel welcome, valued and an integral part of the team and we recognize that in order to successfully progress towards this culture, we must engage members of the workforce throughout the journey. In 2021, this work will be championed through the establishment of an Inclusion and Diversity committee. Members of the committee will be drawn from across the organization and will help us engage the workforce through open and respectful communication, will advocate, lead and support change and provide awareness and understanding of the benefits of inclusion and diversity. The committee will report to the President and CEO, and the Senior Vice-President and Chief Corporate Officer.

Diversity is an important element of executive and board leadership. We have commitments in our diversity and inclusion plan to ensure leadership is at the forefront of our diversity agenda. We strive for a complement of female officers that, at a minimum, reflect 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 within the company. Our board has a diversity policy that was put in place to ensure that the members of the board have the necessary range of perspectives, experience and expertise required to achieve our objectives. The board has also set specific diversity objectives (which they currently meet or exceed) for gender diversity as well as the inclusion of Indigenous directors on the board.

For more information about diversity and inclusion at Cameco, see our most recent management proxy circular.

Stakeholder relations

The long-term sustainability of our business is dependent upon our ability to effectively build relationships with, work with, and add value for our stakeholders.

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From community liaison groups and industry associations, to registered charities, regulators, customers, suppliers, contractors, the investment community and our employees, we recognize the value of maintaining many long-term relationships that help us succeed together. All are important but none more so than the relationships we hold with our workers and Indigenous people working and living near our operations.

Informed by best practices, we set standards for the ways we meaningfully engage with and are involved with our stakeholders to ensure we fulfil our obligations to them.

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 in Saskatchewan and Ontario and partnerships in northern Saskatchewan and northern Ontario, 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. We achieve success at our sites when we involve, train, and engage local people. This global strategy is flexible and is implemented locally to reflect the needs of the Indigenous and other local communities. The bulk of the strategy has evolved from the commercial benefits we see from building and maintaining 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 in local communities.

• Business development: designed to promote involvement of locally-owned businesses in contracting opportunities at our operations, to provide additional jobs, revenue streams and capacity building at the local community level.

• Community engagement: designed with the objective to ensure that we secure support for our 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 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 programming and give communities a voice in both the formal environmental assessment regulatory process, as well as ongoing monitoring activities.

Wherever we operate, it is our goal to ensure local people are aware of and understand our activities and have opportunities to provide input. Engaging communities and keeping them informed throughout all phases of our operations is a priority for us. We set standards for the measures that we will conform to in maintaining ongoing and meaningful engagement within the communities where we operate.

Ethics and Business Integrity

We have a reputation for maintaining the highest standards of ethical behaviour, which has helped us to grow into the global business we are today. Our Code of Conduct and Ethics guides us in ethical conduct as we fulfil our roles, and our Supplier Code of Conduct and Ethics sets out our expectations for suppliers to ensure a sustainable and ethical supply chain. Our Global Anti-Corruption Program also guides employees to ensure that the integrity of our relationships is maintained. You can access our Code of Conduct and Ethics and Supplier Code of Conduct and Ethics at cameco.com/about/sustainability/our-approach-to-esg-reporting/governance.

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, including the integration of ESG principles throughout the company. The board’s goal is to ensure we operate as a sustainable 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     29

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

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.

HOW WE ARE DOING

Given the evolving nature of the ESG landscape, we have established a multi-disciplinary working group to review our current approach to sustainability and ESG governance and reporting. We are planning to issue a ESG report later in 2021 that reflects Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) principles. The working group is chaired by our Senior Vice-President and Chief Corporate Officer and has been reporting to our board and its committees.

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Since 2012, we have reported on 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 have used 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. You can find our most recent performance results at cameco.com/about/sustainability.

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.

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: outstanding financial performance, safe, healthy and rewarding workplace, clean environment and supportive communities. 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.

2020 OBJECTIVES1	TARGET	RESULTS
OUTSTANDING FINANCIAL PERFORMANCE
Earnings measure	Achieve targeted adjusted net earnings.	•   adjusted net earnings was below target largely due to the costs associated with the proactive measures taken to protect the health and safety of our workforce from the risks posed by the COVID-19 pandemic
Cash flow measure	Achieve cash flow from operations (after working capital changes).	•   cash flow from operations was below target largely due to the costs associated with the proactive measures taken to protect the health and safety of our workforce from the risks posed by the COVID-19 pandemic
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 the 2020 improvement target •   completion of corrective actions and job task observations was within the targeted range •   average radiation doses remained low and stable
CLEAN ENVIRONMENT
Environmental performance measures	Achieve divisional environmental aspect improvement targets.	•   performance was within the targeted range •   there were no significant environmental incidents in 2020
SUPPORTIVE COMMUNITIES
Stakeholder support measure	Develop the skill set of residents of Saskatchewan’s north in conjunction with our initiative to accelerate the adoption of advanced digital and automation technologies at our northern Saskatchewan operations.	•   Performance was above target

¹  Detailed results for our 2020 corporate objectives and the related targets will be provided in our 2021 management proxy circular prior to our Annual Meeting of Shareholders on May 6, 2021.

MANAGEMENT’S DISCUSSION AND ANALYSIS     31

2021 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.

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Financial results

This section of our MD&A discusses our performance, financial condition and outlook for the future.

34	2020 CONSOLIDATED FINANCIAL RESULTS
45	OUTLOOK FOR 2021
47	LIQUIDITY AND CAPITAL RESOURCES
53	2020 FINANCIAL RESULTS BY SEGMENT
53	URANIUM
55	FUEL SERVICES
56	FOURTH QUARTER FINANCIAL RESULTS
56	CONSOLIDATED RESULTS
59	URANIUM
61	FUEL SERVICES

MANAGEMENT’S DISCUSSION AND ANALYSIS     33

2020 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)	2020			2019		2018		2019 TO 2020
Revenue		1,800			1,863		2,092		(3	)%
Gross profit		106			242		296		(56	)%
Net earnings (loss) attributable to equity holders		(53	)		74		166		>100	%
$ per common share (basic)		(0.13	)		0.19		0.42		>100	%
$ per common share (diluted)		(0.13	)		0.19		0.42		>100	%
Adjusted net earnings (loss) (non-IFRS, see page 35)		(66	)		41		211		>100	%
$ per common share (adjusted and diluted)		(0.17	)		0.10		0.53		>100	%
Cash provided by operations (after working capital changes)		57			527		668		(89	)%

Net earnings

The following table shows what contributed to the change in net earnings in 2020 compared to 2019 and 2018.

($ MILLIONS)		2020			2019			2018
Net earnings (losses) - previous year			74			166			(205	)
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	Higher (lower) sales volume		(4	)		(27	)		18
	Higher (lower) realized prices ($US)		25			(133	)		40
	Foreign exchange impact on realized prices		14			35			1
	Lower (higher) costs		(175	)		10			(186	)
	change – uranium		(140	)		(115	)		(127	)
Fuel services	Higher (lower) sales volume		(4	)		13			1
	Higher (lower) realized prices ($Cdn)		21			(11	)		(5	)
	Lower (higher) costs		(11	)		29			(1	)
	change – fuel services		6			31			(5	)
Other changes
Lower (higher) administration expenditures			(20	)		17			21
Lower impairment charges			—			—			358
Lower exploration expenditures			3			6			10
Change in reclamation provisions			(21	)		57			(60	)
Change in gains or losses on derivatives			5			113			(137	)
Change in foreign exchange gains or losses			33			(45	)		49
Change in earnings from equity-accounted investments			(9	)		13			32
Redemption of Series E debentures in 2020			(24	)		—			—
Canadian Emergency Wage Subsidy in 2020			37			—			—
Arbitration award in 2019 related to TEPCO contract			(52	)		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
Reversal of tax provision in 2018 related to CRA dispute			—			(61	)		61
Change in income tax recovery or expense			47			(126	)		62
Other			8			45			28
Net earnings (losses) - current year			(53	)		74			166

34     CAMECO CORPORATION

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 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 2020, 2019 and 2018.

($ MILLIONS)	2020			2019			2018
Net earnings (loss) attributable to equity holders		(53	)		74			166
Adjustments
Adjustments on derivatives		(45	)		(49	)		65
Reclamation provision adjustments		24			3			60
Gain on restructuring of JV Inkai		—			—			(49	)
Income taxes on adjustments		8			13			(31	)
Adjusted net earnings (loss)		(66	)		41			211

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     35

The following table shows what contributed to the change in adjusted net earnings (non-IFRS measure, see above) in 2020 compared to the same period in 2019 and 2018.

($ MILLIONS)		2020			2019			2018
Adjusted net earnings - previous year			41			211			59
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	Higher (lower) sales volume		(4	)		(27	)		18
	Higher (lower) realized prices ($US)		25			(133	)		40
	Foreign exchange impact on realized prices		14			35			1
	Lower (higher) costs		(175	)		10			(186	)
	change – uranium		(140	)		(115	)		(127	)
Fuel services	Higher (lower) sales volume		(4	)		13			1
	Higher (lower) realized prices ($Cdn)		21			(11	)		(5	)
	Lower (higher) costs		(11	)		29			(1	)
	change – fuel services		6			31			(5	)
Other changes
Lower (higher) administration expenditures			(20	)		17			21
Lower (higher) exploration expenditures			3			6			10
Change in gains or losses on derivatives			9			(1	)		36
Change in foreign exchange gains or losses			33			(45	)		49
Change in earnings from equity-accounted investments			(9	)		13			32
Redemption of Series E debentures in 2020			(24	)		—			—
Canadian Emergency Wage Subsidy in 2020			37			—			—
Arbitration award in 2019 related to TEPCO contract			(52	)		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
Reversal of tax provision in 2018 related to CRA dispute			—			(61	)		61
Change in income tax recovery or expense			42			(82	)		17
Other			8			45			28
Adjusted net earnings (losses) - current year			(66	)		41			211

Average realized prices

								CHANGE FROM
		2020		2019		2018		2019 TO 2020
Uranium1	$US/lb		34.39		33.77		37.01		2	%
	$Cdn/lb		46.14		44.85		47.96		3	%
Fuel services	$Cdn/kgU		27.89		26.21		26.78		6	%

¹  Average realized foreign exchange rate ($US/$Cdn): 2020 – 1.34, 2019 – 1.33 and 2018 – 1.30.

36     CAMECO CORPORATION

Revenue

The following table shows what contributed to the change in revenue for 2020.

($ MILLIONS)
Revenue – 2019	1,863
Uranium
Lower sales volume	(42	)
Higher realized prices ($Cdn)	40
Fuel services
Lower sales volume	(16	)
Higher realized prices ($Cdn)	23
Other	(68	)
Revenue – 2020	1,800

See 2020 Financial results by segment on page 53 for more detailed discussion.

THREE-YEAR TREND

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.

In 2020, revenue decreased by 3% compared to 2019 due to a decrease in sales volume in the uranium segment that was partially offset by an increase in the Canadian dollar average realized price. In our fuel services segment, revenue increased by 2% as a result of the increase in average realized price partially offset by a decrease in sales volume. In addition, our subsidiary NUKEM had a decrease in sales volume. See notes 17 and 28 in our annual financial statements for more information.

SALES DELIVERY OUTLOOK FOR 2021

For 2021 we have committed sales volumes in our uranium segment of between 23 to 25 million pounds. We will continue to be active buying and selling uranium in the spot market if it makes sense for us.

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 2021 to be fairly evenly distributed 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     37

Corporate expenses    

ADMINISTRATION    

($ MILLIONS)	2020		2019		CHANGE
Direct administration		113		114		(1	)%
Stock-based compensation		32		11		191	%
Total administration		145		125		16	%

Direct administration costs in 2020 were $1 million lower than 2019.

We recorded $32 million in stock-based compensation expenses in 2020 under our stock option, restricted share unit, deferred share unit, performance share unit and phantom stock option plans, $21 million higher than in 2019 due to the increase in our share price compared to the same period in 2019. See note 24 to the financial statements.

Administration outlook for 2021

We expect direct administration costs to be between $110 million to $120 million, similar to 2020.

EXPLORATION

Our 2020 exploration activities were focused primarily on Canada. Our spending decreased from $14 million in 2019 to $11 million in 2020 due to a reduction in expenditures as a result of restrictions related to the COVID-19 pandemic.

Exploration outlook for 2021

We expect exploration expenses to be about $9 million in 2021. The focus for 2021 will be on our core projects in Saskatchewan.

FINANCE COSTS

Finance costs were $96 million, a decrease from $99 million in 2019 due to a reduction in our outstanding debt during 2019, as we retired our Series D debentures debenture that matured in September of that year and lower accretion expense as a result of decreases in both reclamation estimates and discount rates. These decreases were partially offset by the cost associated with the early redemption of our Series E debentures. See note 19 to the financial statements.

FINANCE INCOME

Finance income was $11 million compared to $30 million in 2019 mainly due to lower interest rates during 2020. In addition, during 2019 our loan to JV Inkai was fully repaid, decreasing the amount of interest received in the current year.

GAINS AND LOSSES ON DERIVATIVES

In 2020, we recorded $37 million in gains on our derivatives compared to $32 million in gains in 2019. The increase reflects the strength in the Canadian dollar compared to the US dollar at the end of 2020 compared to 2019. See Foreign exchange on page 43 and note 26 to the financial statements.

INCOME TAXES

We recorded an income tax expense of $14 million in 2020 compared to an expense of $61 million in 2019. The decrease in expense was primarily due to a change in the distribution of earnings among jurisdictions compared to 2019.

In 2020, we recorded earnings of $73 million in Canada compared to earnings of $229 million in 2019, while in foreign jurisdictions, we recorded a loss of $112 million compared to a loss of $94 million in 2019. 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 $6 million in 2020 compared to an expense of $48 million in 2019. The table below presents our adjusted earnings and adjusted income tax expenses attributable to Canadian and foreign jurisdictions.

38     CAMECO CORPORATION

($ MILLIONS)	2020			2019
Pre-tax adjusted earnings1
Canada		52			183
Foreign		(112	)		(94	)
Total pre-tax adjusted earnings		(60	)		89
Adjusted income taxes1
Canada		1			55
Foreign		5			(7	)
Adjusted income tax expense		6			48

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 35).

TRANSFER PRICING DISPUTE

Federal Court of Appeal decision

On June 26, 2020, the Court of Appeal decided unanimously in our favour in our dispute with CRA. The decision upholds the September 26, 2018 decision of the Tax Court of Canada (Tax Court), which was unequivocally in our favour for the 2003, 2005 and 2006 tax years and it sustains the corresponding decision on the cost award. We also believe the principles in the decision apply to all tax years subsequent to 2006.

The Court of Appeal decision is further confirmation 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 years in question.

The total tax reassessed for the three tax years was $11 million, and we remitted 50%. Therefore, we expect to receive refunds totaling about $5.5 million plus interest. The matter has been referred to the Minister of National Revenue in order to issue new reassessments for the 2003, 2005 and 2006 tax years in accordance with the decision.

In addition, on April 30, 2019, the Tax Court awarded us $10.25 million for legal fees incurred, plus an amount for disbursement of up to $17.9 million. 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. In addition, we will be receiving a nominal cost award related to the Court of Appeal hearing.

The timing of any payments as a result of the Court of Appeal decision is uncertain.

Appeal process

On October 30, 2020, we received notice that CRA made an application to the Supreme Court to seek leave to appeal the decision of the Court of Appeal. The Supreme Court will decide whether to hear the appeal or decline CRA’s request for leave. If the appeal is heard, we estimate that it could take until the second half of 2022 before a decision is rendered by the Supreme Court.

We remain confident in our position, and that we would succeed on appeal, if leave to appeal is granted. If leave to appeal is not granted, then the dispute over the three tax years in question is fully and finally resolved in our favour.

We expect to incur additional costs if leave to appeal is granted by the Supreme Court, 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 2014 tax years. Both the Court of Appeal and the Tax Court have ruled unequivocally in our favour for the 2003, 2005 and 2006 tax years, and we believe there is nothing in the lower court decisions that would warrant a materially different outcome if the Supreme Court decides to hear the appeal. Although not technically binding, there is nothing in the reasoning of the lower court decisions that should result in a different outcome for those subsequent tax years. However, we expect these disputes with CRA may continue to tie up our financial capacity until the dispute is finally resolved for all years.

MANAGEMENT’S DISCUSSION AND ANALYSIS     39

For the years 2003 to 2014, 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. CRA has advised that it has deferred consideration of whether to impose a transfer pricing penalty for 2012 through 2014. Taxes of approximately $326 million for the 2003 to 2020 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 2014 reassessment late in 2020. 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 2003, 2005 and 2006. The timing of the refund may be delayed pending the outcome of the decision of the Supreme Court to hear 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
2020		—		2		—		2		—		2
Total		377		223		185		785		303		482

If leave to appeal is granted by the Supreme Court, we expect the prior court decisions to be upheld and believe they should also apply in principle to subsequent years. We expect any further actions regarding the tax years 2007 through 2014 will be suspended until the three years covered under the decision are finally resolved. For 2014, CRA has recently reassessed us on the same basis as previous tax years, but has also proposed an alternative reassessing position that, if applied, would result in a less adverse, albeit still material, adjustment to our income taxable in Canada. This proposed new basis of reassessment is inconsistent with the methodology CRA has pursued for prior years and is being assessed. Our initial view is that this alternative methodology will not result in a materially different outcome for 2014. Until such time as all appeals are exhausted and a resolution is reached for each of the tax years in question, we will not be in a position to determine the definitive outcome of this dispute for that tax year.

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 2014 tax years. In that scenario, and including the $6.6 billion already reassessed, we would expect to receive notices of reassessment for a total of up to approximately $8.7 billion of additional income taxable in Canada for the years 2003 through 2020, which would result in a related tax expense of up to 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 $223 million in interest and instalment penalties. CRA may also advance alternative reassessment methodologies for years other than 2003, 2005 and 2006, such as the alternative reassessing position advanced for 2014.

40     CAMECO CORPORATION

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 2020 along with estimated post-2020 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 application for leave to appeal. We plan to update this table annually to include the estimated impact of reassessments expected for completed years subsequent to 2020.

$ MILLIONS	2003-2020		Post-2020		TOTAL
50% of cash taxes and transfer pricing penalties paid, secured or potentially owing in the period
Cash payments		226		185 -  235		410 - 460
Secured by letters of credit		336		225 - 275		560 - 610
Total paid or potentially owing1		562		410 - 510		970 - 1070

¹ These amounts do not include interest and instalment penalties, which totaled approximately $223 million to December 31, 2020.

Based on the Court of Appeal and Tax Court decisions as described above and our view of the likely outcome if the Supreme Court decides to hear the appeal, and the dispute for subsequent years, we expect to recover all or substantially all of the $785 million already paid or otherwise secured to date.

MANAGEMENT’S DISCUSSION AND ANALYSIS     41

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 2015 through 2020 using an expected methodology, 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 Court of Appeal’s decision or any decisions regarding other tax years, and we will not incur any significant tax liability 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

• the time it would take to receive a decision if the Supreme Court agrees to hear an appeal

• the principles in the lower court decisions should apply to all subsequent tax years

Material risks that could cause actual results to differ materially

• CRA reassesses us for years 2015 through 2020 using a different methodology than expected, or we are unable to utilize elective deductions or letters of credit to the extent anticipated, resulting in 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

• if heard by the Supreme Court, we may be unsuccessful in an appeal of the Court of Appeal’s decision which could result in us owing the full amounts that were originally claimed against us by CRA for the 2003, 2005 and 2006 tax years and losing our entitlement to cost awards, and could ultimately result in a negotiated settlement or an adverse determination against us for the other tax years for which we have been reassessed under the same methodology or a different methodology, giving rise to material tax liabilities and payment obligations which would have a material adverse effect on us

• the possibility of a materially different outcome in disputes for other tax years

• cash tax payable increases due to unanticipated adjustments by CRA not related to transfer pricing

• we are unable to effectively eliminate all double taxation

• the risk that for some reason we may be unable to recover all or substantially all of the amounts we have paid or otherwise secured to date, or payment of the full amount of cost awards

• an unfavorable determination of the officer of the Tax Court of the amount of our disbursements award

Tax outlook for 2021

Given the ongoing uncertainty about the impact of the COVID-19 pandemic on production at the Cigar Lake mine, and on production at the Inkai operation, we do not have enough certainty to provide tax outlook.

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.

42     CAMECO CORPORATION

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

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 2021 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 35.

The table below provides a summary of our hedge portfolio at December 31, 2020. You can use this information to estimate the expected gains or losses on derivatives for 2021 on an ANE basis. However, if we add contracts to the portfolio that are designated for use in 2021 or if there are changes in the US/Cdn exchange rates in the year, those expected gains or losses could change.

MANAGEMENT’S DISCUSSION AND ANALYSIS     43

HEDGE PORTFOLIO SUMMARY

DECEMBER 31, 2020					AFTER
($ MILLIONS)		2021			2021			TOTAL
US dollar forward contracts	($ millions)		190			220			410
Average contract rate 1	(US/Cdn dollar)		1.33			1.35			1.34
US dollar option contracts	($ millions)		125			160			285
Average contract rate range1	(US/Cdn dollar)		1.30 to 1.34			1.33 to 1.37			1.32 to 1.36
Total US dollar hedge contracts	($ millions)		315			380			695
Effective hedge rate range2	(US/Cdn dollar)		1.32 to 1.33			1.34 to 1.36			1.33 to 1.35
Hedge ratio3			41	%		9	%		14	%

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 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 estimated future net exposures.

At December 31, 2020:

• The value of the US dollar relative to the Canadian dollar was $1.00 (US) for $1.27 (Cdn), down from $1.00 (US) for $1.30 (Cdn) at December 31, 2019. The exchange rate averaged $1.00 (US) for $1.34 (Cdn) over the year.

• The mark-to-market position on all foreign exchange contracts was a $41 million gain compared to a $4 million loss at December 31, 2019.

We manage counterparty risk associated with hedging by dealing with highly rated counterparties and limiting our exposure. At December 31, 2020, 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.

44     CAMECO CORPORATION

Outlook for 2021

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 value, and to do that with a focus on safety, people and the environment.

Our outlook for 2021 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 in prior years, care and maintenance costs for the ongoing outage of McArthur River and Key Lake operations and our tier-two assets 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 value. In addition, we expect to incur care and maintenance costs of between $8 million to $10 million per month while production at Cigar Lake is suspended due to the risks posed by the COVID-19 pandemic.

Given the ongoing uncertainty about the impact of the COVID-19 pandemic on production at the Cigar Lake mine, and on production at the Inkai operation, we do not have enough certainty to provide full outlook information for the uranium segment.

We expect our business to be resilient. We have provided outlook for our sales commitments, which we do not expect to be materially impacted by the disruptions to our business as a result of the COVID-19 pandemic. We expect, given the current production disruptions at Cigar Lake, that we will continue to purchase material on the spot market to meet our delivery commitments and maintain our desired level of inventory. Combined with additional care and maintenance costs associated with the temporary closure of Cigar Lake, we expect these items will again negatively impact our uranium gross margin. The exact magnitude of this impact is uncertain and will be dependent on the length of the temporary closure and our ability to safely return to production.

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.

See 2020 Financial results by segment on page 53 for details.

2020 outlook compared to actual

In April of 2020 we withdrew our outlook due to the uncertainty created by the COVID-19 pandemic. Based on the restart of the Cigar Lake mine in September after the first production suspension, in the second quarter we set a production target for Cigar Lake of up to 5.3 million pounds (our share). We achieved 5.0 million pounds prior to a second suspension of production at Cigar Lake. The second suspension was a result of the workforce uncertainty caused by the COVID-19 pandemic.

Our results were in-line with the updated production outlook we provided for fuel services in the second quarter MD&A.

MANAGEMENT’S DISCUSSION AND ANALYSIS     45

2021 FINANCIAL OUTLOOK    

	CONSOLIDATED		URANIUM		FUEL SERVICES
Production (owned and operated properties)		—		—		12.5 to 13.5 million kgU
Purchases		—		8 to 10 million lbs		—
Sales/delivery volume		—		23 to 25 million lbs		12 to 13 million kgU
Revenue		—		—	$	360-390 million
Average unit cost of sales (including D&A)		—		—	$	20.50-21.50/kgU
Direct administration costs	$	110-120 million		—		—
Exploration costs		—	$	9 million		—
Expected gain on derivatives - ANE basis	$	5-15 million		—		—
Capital expenditures	$	130-155 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 2021, including our JV Inkai purchases, in order to meet the sales/delivery commitments we have under contract in 2021 and maintain a working inventory. It does not include any purchasing required as a result of the impact of the pandemic on our production rate at Cigar Lake.

• Our 2021 outlook for sales/delivery volume does not include sales between our uranium and fuel services segments.

• Sales/delivery volume is based on the volumes we currently have commitments to deliver under contract in 2021.

• Direct administration costs do not include stock-based compensation expenses. See page 38 for more information.

Our 2021 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 pages 77 and 78 for more details.

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, 2020 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, 2020, 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.

46     CAMECO CORPORATION

Expected realized uranium price 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		28		38		49		56		62		66		70
2022		27		39		52		60		64		68		71
2023		28		40		53		62		66		70		73
2024		30		41		52		60		63		64		66
2025		30		41		55		64		69		72		75

The table illustrates the mix of long-term contracts in our December 31, 2020 portfolio, and is consistent with our marketing strategy. It has been updated to reflect contracts entered into up to December 31, 2020.

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 16 million pounds per year, with commitment levels in 2021 and 2022 higher than in 2023 through 2025

• 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 20% higher than the spot price. This differential has varied significantly. Assuming the long-term price is at a premium to spot, the prices in the table may be higher.

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 in order to execute our strategy and to allow us to self-manage risk. 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, we have continued to have positive cash from operations and as a result, we have significant cash balances.

At the end of 2020, we had cash and short-term investments of $943 million, while our total debt amounted to $1.0 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 2021 through 2025, we have commitments to deliver an average of 16 million pounds per year, with commitment levels in 2021 and 2022 higher than in 2023 through 2025.

Strategically our focus is on preserving the value of our tier-one assets and reducing our operating, capital and general and administrative spending. In the current environment, the health and safety of our employees, their families and their communities is our priority as the COVID-19 pandemic continues to bring uncertainty. In 2020, we took measures to enhance our health and safety protocols as well we proactively suspended production. As a result of these measures, and a negative trend in the pandemic in Saskatchewan in December, currently production at our Cigar Lake mine is temporarily suspended. See Operations and projects beginning on page 62 for more information. Cash flow from operations will be dependent on how long production at Cigar Lake remains suspended and the timing and magnitude of our purchasing activity, therefore cash balances may fluctuate throughout the year. However, we expect our cash balances and operating cash flows to meet our capital requirements during 2021.

MANAGEMENT’S DISCUSSION AND ANALYSIS     47

We have now received two favourable rulings in our case with CRA for the 2003, 2005 and 2006 tax years. We continue to believe the rulings should apply in principle to subsequent tax years. However, CRA has submitted a request to seek leave to appeal to the Supreme Court. The Supreme Court will decide whether to hear the appeal or decline CRA’s request for leave. If the appeal is heard, we estimate that it could take until the second half of 2022 before a decision is rendered. Until we know whether an appeal to the Supreme Court will be heard, 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 39 for more information. In the above scenario, the table on page 41 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 2014 tax years. The timing of these amounts is uncertain.

FINANCIAL CONDITION

	2020			2019
Cash position ($ millions)		943			1,062
(cash and cash equivalents and short-term investments)
Cash provided by operations ($ millions)		57			527
(net cash flow generated by our operating activities after changes in working capital)
Cash provided by operations/net debt1		109	%		n/a
(net debt is total consolidated debt, less cash position)
Net debt/total capitalization1		1	%		n/a
(total capitalization is net debt and equity)

¹  As at December 31, 2019, Cameco’s net debt was negligible due to our strong cash position.

CREDIT RATINGS

The credit ratings assigned by external ratings agencies are important as they impact our ability to raise capital at competitive pricing to support our business operations and execute our strategy.

Third-party ratings for our commercial paper and senior debt as of February 9, 2021:

SECURITY	DBRS			S&P
Commercial paper		R-2 (middle)			A-3
Senior unsecured debentures		BBB			BBB-
Rating trend / rating outlook		Stable	1		Negative	2

¹  On May 28, 2020, DBRS changed Cameco’s rating outlook to stable.

²  On March 11, 2020 S&P changed Cameco’s rating outlook to negative.

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.

48     CAMECO CORPORATION

Liquidity

($ MILLIONS)	2020			2019
Cash and cash equivalents at beginning of year		1,062			1,103
Cash from operations		57			527
Investment activities
Additions to property, plant and equipment and acquisitions		(77	)		(75	)
Other investing activities		1			121
Financing activities
Change in debt		(2	)		(500	)
Interest paid		(66	)		(72	)
Other financing activities		(3	)		(3	)
Issue of shares		5			—
Dividends		(32	)		(32	)
Exchange rate on changes on foreign currency cash balances		(2	)		(7	)
Cash and cash equivalents and short-term investments at end of year		943			1,062

CASH FROM OPERATIONS

Cash from operations was 89% lower than in 2019 due largely to the additional purchase activity and care and maintenance costs related to the unplanned suspensions of production due to the COVID-19 pandemic. Working capital provided $289 million less in 2020. Not including working capital requirements, our operating cash flows in the year were down $181 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.

Outlook for investing activities

CAMECO’S SHARE ($ MILLIONS)	2021 PLAN		2022 PLAN		2023 PLAN
Total uranium & fuel services		130-155		100-150		100-150
Sustaining capital		105-120		85-110		90-115
Capacity replacement capital		25-35		15-40		10-35
Growth capital		—		—		—

As a result of the uncertain impact of the COVID-19 pandemic on our operations, we are unable to more accurately provide an outlook by operation for capital spending. As a result, the ranges above represent our best estimate of total capital spend for 2021 and may be affected by the timing and length of temporary shutdowns at our operations.

We have assumed that the impact of the COVID-19 pandemic on our operations will be reduced for 2022 and 2023. Our 2021, 2022 and 2023 capital spending estimates also assume that market conditions remain such that McArthur River and Key Lake remain in care and maintenance. We expect total 2021 capital expenditures for uranium and fuel services to be between 70% and 100% higher than in 2020 due to the ongoing investment in the initiative intended to provide a greater focus on technology and its applications to improve efficiency and reduce costs including the use digital and automation technologies and the rescheduling of some expenditures planned in 2020 to 2021.

Our estimate for capital spending in 2022 has been increased to between $100 million and $150 million (previously between $50 million and $100 million) due to our continued investment in digital and automation technologies, along with the timing of expenditures on our Vision in Motion project.    

Capital expenditures for JV Inkai are expected to be covered by JV Inkai cash flows in 2021 and are included in our overall equity investment.

MANAGEMENT’S DISCUSSION AND ANALYSIS     49

Major sustaining and capacity replacement expenditures in 2021 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

• Our investment in digital and automation technologies

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 3 and 4. Our actual capital expenditures for future periods may be significantly different.

FINANCING ACTIVITIES

Cash from financing includes borrowing and repaying debt, and other financial transactions including paying dividends and providing financial assurance.

Long-term contractual obligations

			2022 AND		2024 AND		2026 AND
DECEMBER 31 ($ MILLIONS)	2021		2023		2025		BEYOND		TOTAL
Long-term debt		—		—		500		500		1,000
Interest on long-term debt		38		76		44		110		268
Provision for reclamation		41		64		74		951		1,130
Provision for waste disposal		2		3		2		1		8
Other liabilities		7		9		3		86		105
Capital commitments		47		—		—		—		47
Total		135		152		623		1,648		2,558

We have contractual capital commitments of approximately $47 million at December 31, 2020. 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 sufficient borrowing capacity with available unsecured lines of credit totalling about $2.7 billion, which include the following:

• A $1.0 billion unsecured revolving credit facility that matures November 1, 2023. Each year on the anniversary date, and upon mutual agreement, the facility can be extended for an additional year. We may increase the 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, 2020, there were no amounts outstanding under this facility and we do not expect to draw on this facility in 2021.

• At December 31, 2020, we had approximately $1.6 billion outstanding in financial assurances provided by 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.

In total we have $1.0 billion in senior unsecured debentures outstanding:

• $500 million bearing interest at 4.19% per year, maturing on June 24, 2024

• $400 million bearing interest at 2.95% per year, maturing on October 21, 2027

• $100 million bearing interest at 5.09% per year, maturing on November 14, 2042

On October 21, 2020, we issued debentures in the amount of $400 million, at an interest rate of 2.95% per annum and the proceeds were used to redeem our outstanding $400 million debenture bearing interest of 3.75%, resetting the maturity from 2022 to 2027 and resulting in an early redemption fee of $24 million.

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

50     CAMECO CORPORATION

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, 2020, we complied with all covenants, and we expect to continue to comply in 2021.

OFF-BALANCE SHEET ARRANGEMENTS

We had three kinds of off-balance sheet arrangements at the end of 2020:

• 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 our subsidiary NUKEM, at December 31, 2020² 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.

			2022 AND		2024 AND		2026 AND
DECEMBER 31, 2020 ($ MILLIONS)	2021		2023		2025		BEYOND		TOTAL
Purchase commitments1,2		217		156		130		411		914

¹ Denominated in US dollars and Japanese yen, converted from US dollars to Canadian dollars at the rate of 1.30 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 December 31, 2020 but does not include deliveries taken under contract since December 31, 2020.

We have commitments of $914 million (Cdn) for the following:

• approximately 20 million pounds of U₃O₈ equivalent from 2021 to 2028

• about 0.1 million Separative Work Units (SWU) of enrichment services to meet existing forward sales 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

We use standby letters of credit and surety bonds mainly to 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, 2020 our financial assurances totaled $1.6 billion, up from $1.5 billion at December 31, 2019. The increase in 2020 was mainly due to some short-term requirements.

Other arrangements

We have arranged for standby product loan facilities with various counterparties. The arrangements allow us to borrow up to 2.0 million kgU of UF₆ conversion services and 2.6 million pounds of U₃O₈ over the period 2020 to 2023 with repayment in kind up to December 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%. During the year, we drew 0.5 million kgU of UF₆ conversion services and 1.2 million pounds of U₃O₈ on the loans. At December 31, 2020, only the conversion services loan was outstanding.

MANAGEMENT’S DISCUSSION AND ANALYSIS     51

BALANCE SHEET

DECEMBER 31, 2020							CHANGE
($ MILLIONS EXCEPT PER SHARE AMOUNTS)	2020		2019		2018		2019 TO 2020
Inventory		680		321		468		112	%
Total assets		7,581		7,427		8,019		2	%
Long-term financial liabilities		2,253		2,099		2,102		7	%
Dividends per common share		0.08		0.08		0.08		—

Total product inventories increased by 112% to $680 million this year due to lower sales volumes than the quantities produced and purchased during the year. There has been an increase in purchased inventory due to production suspensions. At December 31, 2020, our average cost for uranium was $38.09 per pound, up from $33.41 per pound at December 31, 2019. As of December 31, 2020, we held an inventory of 15.3 million pounds of U₃O₈ equivalent (excluding broken ore).

At the end of 2020, our total assets amounted to $7.6 billion, an increase of $0.2 billion compared to 2019, due mainly to higher inventories. In 2019, the total asset balance decreased by $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.

The major components of long-term financial liabilities are long-term debt, the provision for reclamation, deferred sales and financial derivatives.

52     CAMECO CORPORATION

2020 financial results by segment

Uranium

HIGHLIGHTS				2020		2019		CHANGE
Production volume (million lbs)					5.0		9.0		(44	)%
Sales volume (million lbs)					30.6		31.5		(3	)%
Average spot price	($	US/lb	)		29.96		25.64		17	%
Average long-term price	($	US/lb	)		34.63		31.75		9	%
Average realized price	($	US/lb	)		34.39		33.77		2	%
	($	Cdn/lb	)		46.14		44.85		3	%
Average unit cost of sales (including D&A)	($	Cdn/lb	)		45.71		39.99		14	%
Revenue ($ millions)					1,412		1,414		—
Gross profit ($ millions)					13		153		(92	)%
Gross profit (%)					1		11		(91	)%

Production volumes in 2020 decreased by 44% compared to 2019. See Uranium – production overview on page 66 for more information.

Uranium revenues this year were unchanged compared to 2019 due to a decrease in sales volumes of 3% offset by an increase of 3% in the Canadian dollar average realized price. Although the spot price for uranium averaged $29.96 (US) per pound in 2020, an increase of 17% compared to the 2019 average price of $25.64 (US) per pound, the average realized price was only 3% higher compared to the same period in 2019 primarily due to lower prices on fixed-price contracts and less sensitivity to price changes due to floor prices in the market-related contracts delivered into in 2019.

Total cost of sales (including D&A) increased by 11% ($1.40 billion compared to $1.26 billion in 2019) due to a 14% increase in unit cost of sales partially offset by a decrease in sales volume of 3%. Unit cost of sales is higher than in the same period in 2019 due to the higher cost of purchased material and additional care and maintenance costs of $46 million resulting from our proactive decision to suspend production at the Cigar Lake mine in response to the threat posed by the COVID-19 pandemic.

The net effect was a $140 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)	2020		2019		CHANGE
Produced
Cash cost		16.24		15.70		3	%
Non-cash cost		15.10		16.09		(6	)%
Total production cost 1		31.34		31.79		(1	)%
Quantity produced (million lbs)1		5.0		9.0		(44	)%
Purchased
Cash cost1		40.41		35.26		15	%
Quantity purchased (million lbs)1		33.5		19.0		76	%
Totals
Produced and purchased costs		39.23		34.14		15	%
Quantities produced and purchased (million lbs)		38.5		28.0		38	%

¹  Due to equity accounting for JV Inkai, 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 2020 we purchased 4.0 million pounds at a purchase price per pound of $36.63 ($27.66 (US)) (2019 - 3.5 million pounds at a purchase price per pound of $32.43 ($24.37 (US))).

MANAGEMENT’S DISCUSSION AND ANALYSIS     53

The average cash cost of production was 3% higher in the year than in 2019 as a result of lower production. Due to the impacts of the COVID-19 pandemic and the suspension of production at Cigar Lake, our cost of production was higher than in 2019. While McArthur River and Key Lake are shut down, our annual 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. However, our cash production costs in 2021 may be impacted by the timing of the restart and the production rate of Cigar Lake and 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 year, the average cash cost of purchased material was $40.41 (Cdn), or $29.69 (US) per pound, compared to $35.26 (Cdn), or $26.49 (US) per pound in the same period in 2019.

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 2020 and 2019 as reported in our financial statements.

CASH AND TOTAL COST PER POUND RECONCILIATION

($ MILLIONS)	2020			2019
Cost of product sold		1,244.0			1,041.9
Add / (subtract)
Royalties		(15.5	)		(32.5	)
Other selling costs		(12.1	)		(10.5	)
Care and maintenance and severance costs		(138.5	)		(109.5	)
Change in inventories		357.0			(78.2	)
Cash operating costs (a)		1,434.9			811.2
Add / (subtract)
Depreciation and amortization		154.6			218.8
Care and maintenance costs		(57.5	)		(44.4	)
Change in inventories		(21.6	)		(29.6	)
Total operating costs (b)		1,510.4			956.0
Uranium produced & purchased (million lbs) (c)		38.5			28.0
Cash costs per pound (a ÷ c)		37.27			28.97
Total costs per pound (b ÷ c)		39.23			34.14

54     CAMECO CORPORATION

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%.

• Profit royalty: a 10% royalty is charged on profit up to and including $24.22/kg U₃O₈ ($10.99/lb) and a 15% royalty is charged on profit in excess of $24.22/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.

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 mid-December 2020, we announced a second suspension of production at Cigar Lake as a result of the impacts of the COVID-19 pandemic. This suspension continues into 2021 and due to the uncertainty this creates we are unable to provide a full outlook for the uranium segment.

Based on the contracts we have in place, and not including sales between our segments, we expect to deliver between 23 million and 25 million pounds of U₃O₈ in 2021.

In addition, we expect to purchase between 8 million and 10 million pounds in 2021 to meet our sales commitments and maintain a working inventory. This includes our spot market purchases and other purchase commitments, including from JV Inkai, but It does not include any purchasing required as a result of the impact of the pandemic on our production rate at Cigar Lake.

Fuel services

(includes results for UF6, UO2, UO3 and fuel fabrication)
HIGHLIGHTS				2020		2019		CHANGE
Production volume (million kgU)					11.7		13.3		(12	)%
Sales volume (million kgU)					13.5		14.1		(4	)%
Average realized price	($	Cdn/kgU	)		27.89		26.21		6	%
Average unit cost of sales (including D&A)	($	Cdn/kgU	)		20.76		19.84		5	%
Revenue ($ millions)					377		370		2	%
Gross profit ($ millions)					96		90		7	%
Gross profit (%)					25		24		4	%

Total revenue increased by 2% from 2019 due to a 6% increase in the realized price that was partially offset by a 4% decrease in sales volume. The increase in realized price was mainly the result of increased prices on the sale of UF₆ due to market conditions.

Total cost of products and services sold (including D&A) remained relatively unchanged ($281 million compared to $280 million in 2019), due to the 4% decrease in sales volume being offset by a 5% increase in average unit cost of sales compared to 2019. The unit cost of sales was impacted by lower production volumes and the $9 million in care and maintenance costs incurred as a result of our proactive decision to suspend production for four weeks at the Blind River refinery and Port Hope UF₆ conversion plant in response to the threat posed by the COVID-19 pandemic.

The net effect was a $6 million increase in gross profit.

FUEL SERVICES SEGMENT OUTLOOK

In 2021, we plan to produce 12.5 million to 13.5 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 $360 million and $390 million, slightly lower than 2020 due to lower committed sales volumes. We expect the average unit cost of sales (including D&A) to be between $20.50/kgU and $21.50/kgU.

MANAGEMENT’S DISCUSSION AND ANALYSIS     55

Fourth quarter financial results

Consolidated results

	THREE MONTHS ENDED
HIGHLIGHTS	DECEMBER 31
($ MILLIONS EXCEPT WHERE INDICATED)	2020		2019		CHANGE
Revenue		550		874		(37	)%
Gross profit		109		184		(41	)%
Net earnings attributable to equity holders		80		128		(38	)%
$ per common share (basic)		0.20		0.32		(38	)%
$ per common share (diluted)		0.20		0.32		(38	)%
Adjusted net earnings (non-IFRS, see page 35)		48		94		(49	)%
$ per common share (adjusted and diluted)		0.12		0.24		(50	)%
Cash provided by operations (after working capital changes)		257		274		(6	)%

NET EARNINGS

The following table shows what contributed to the change in net earnings and adjusted net earnings (non-IFRS measure, see page 35) in the fourth quarter of 2020 compared to the same period in 2019.

($ MILLIONS)		IFRS			ADJUSTED
Net earnings - 2019			128			94
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	Lower sales volume		(52	)		(52	)
	Higher realized prices ($US)		29			29
	Foreign exchange impact on realized prices		(4	)		(4	)
	Higher costs		(33	)		(33	)
	change – uranium		(60	)		(60	)
Fuel services	Lower sales volume		(14	)		(14	)
	Higher realized prices ($Cdn)		7			7
	Higher costs		(8	)		(8	)
	change – fuel services		(15	)		(15	)
Other changes
Higher administration expenditures			(11	)		(11	)
Higher exploration expenditures			(1	)		(1	)
Change in reclamation provisions			(26	)		—
Change in gains or losses on derivatives			28			3
Change in foreign exchange gains or losses			6			6
Redemption of Series E debentures in 2020			(24	)		(24	)
Canadian Emergency Wage Subsidy in 2020			37			37
Change in income tax recovery or expense			22			23
Other			(4	)		(4	)
Net earnings - 2020			80			48

56     CAMECO CORPORATION

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 35 for more information. The following table reconciles adjusted net earnings with our net earnings.

	THREE MONTHS ENDED DECEMBER 31
($ MILLIONS)	2020			2019
Net earnings attributable to equity holders		80			128
Adjustments
Adjustments on derivatives		(43	)		(18	)
Reclamation provision adjustments		—			(26	)
Income taxes on adjustments		11			10
Adjusted net earnings		48			94

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)	2020		2019		CHANGE
Direct administration		31		32		(3	)%
Stock-based compensation		14		2		600	%
Total administration		45		34		32	%

Direct administration costs were $31 million in the quarter, $1 million lower than the same period last year. Stock-based compensation expenses were $12 million higher from the fourth quarter of 2019 due to the increase in our share price compared to the same period in 2019. See note 24 to the financial statements.

Quarterly trends

HIGHLIGHTS	2020											2019
($ MILLIONS EXCEPT PER SHARE AMOUNTS)	Q4		Q3			Q2			Q1			Q4		Q3			Q2			Q1
Revenue		550		379			525			346			874		303			388			298
Net earnings (loss) attributable to equity holders		80		(61	)		(53	)		(19	)		128		(13	)		(23	)		(18	)
$ per common share (basic)		0.20		(0.15	)		(0.13	)		(0.05	)		0.32		(0.03	)		(0.06	)		(0.05	)
$ per common share (diluted)		0.20		(0.15	)		(0.13	)		(0.05	)		0.32		(0.03	)		(0.06	)		(0.05	)
Adjusted net earnings (loss) (non-IFRS, see page 35)		48		(78	)		(65	)		29			94		(2	)		(18	)		(33	)
$ per common share (adjusted and diluted)		0.12		(0.20	)		(0.16	)		0.07			0.24		(0.01	)		(0.04	)		(0.08	)
Cash provided by (used in) operations (after working capital changes)		257		(66	)		(316	)		182			274		232			(59	)		80

Key things to note:

• Our financial results are strongly influenced by the performance of our uranium segment, which accounted for 79% of consolidated revenues in the fourth quarter of 2020 and 76% of consolidated revenues in the fourth quarter of 2019.

• The timing of customer requirements, which tends to vary from quarter to quarter, drives revenue in the uranium and fuel services segments.

• Net earnings do not trend directly with revenue due to unusual items and transactions that occur from time to 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 35 for more information).

MANAGEMENT’S DISCUSSION AND ANALYSIS     57

• Cash from operations tends to fluctuate as a result of the timing of deliveries and product purchases in our uranium and fuel services segments.

• Quarterly results are not necessarily a good indication of annual results due to the variability in customer requirements noted above.

The table that follows presents the differences between net earnings and adjusted net earnings for the previous seven quarters.

HIGHLIGHTS	2020												2019
($ MILLIONS EXCEPT PER SHARE AMOUNTS)	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Net earnings (loss) attributable to equity holders		80			(61	)		(53	)		(19	)		128			(13	)		(23	)		(18	)
Adjustments
Adjustments on derivatives		(43	)		(31	)		(41	)		70			(18	)		9			(17	)		(23	)
Reclamation provision adjustments		—			7			23			(6	)		(26	)		3			24			2
Income taxes on adjustments		11			7			6			(16	)		10			(1	)		(2	)		6
Adjusted net earnings (losses) (non-IFRS, see page 35)		48			(78	)		(65	)		29			94			(2	)		(18	)		(33	)

58     CAMECO CORPORATION

Fourth quarter financial results by segment    

Uranium

		THREE MONTHS ENDED
		DECEMBER 31
HIGHLIGHTS		2020		2019		CHANGE
Production volume (million lbs)			2.8		2.7		4	%
Sales volume (million lbs)			8.6		14.0		(39	)%
Average spot price	($US/lb)		29.86		25.08		19	%
Average long-term price	($US/lb)		35.00		32.17		9	%
Average realized price	($US/lb)		38.43		35.92		7	%
	($Cdn/lb)		50.40		47.50		6	%
Average unit cost of sales (including D&A)	($Cdn/lb)		41.57		37.80		10	%
Revenue ($ millions)			436		666		(35	)%
Gross profit ($ millions)			76		136		(44	)%
Gross profit (%)			17		20		(15	)%

Production volumes this quarter were 4% higher compared to the fourth quarter of 2019. See Uranium – production overview on page 66 for more information.

Uranium revenues were down 35% due mainly to a 39% decrease in sales volume slightly offset by a 6% increase in the Canadian dollar average realized price. While the average spot price for uranium increased by 19% compared to the same period in 2019, our average realized price only increased by 6% as a result of lower prices on fixed-price contracts and less sensitivity to price changes due to floor prices in the market-related contracts delivered into. In addition, the Canadian dollar was slightly stronger compared to the same period last year, $1.00 (US) for $1.31 (Cdn) compared to $1.00 (US) for $1.32 (Cdn) in the fourth quarter of 2019.

Total cost of sales (including D&A) decreased by 33% ($348 million compared to $519 million in 2019). This was primarily the result of the 39% decrease in sales volume as the average unit cost of sales increased by 10% due to the higher cost of purchased material.

The net effect was a $60 million decrease in gross profit for the quarter. While the increase in the uranium price compared to 2019 has had a positive effect on our average realized price, the increase has also impacted the cost of our spot market purchases.

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     59

	THREE MONTHS ENDED
	DECEMBER 31
($CDN/LB)	2020		2019		CHANGE
Produced
Cash cost		13.48		17.21		(22	)%
Non-cash cost		14.62		15.54		(6	)%
Total production cost 1		28.10		32.75		(14	)%
Quantity produced (million lbs)1		2.8		2.7		4	%
Purchased
Cash cost1		37.63		34.17		10	%
Quantity purchased (million lbs)1		7.3		4.3		70	%
Totals
Produced and purchased costs		34.99		33.62		4	%
Quantities produced and purchased (million lbs)		10.1		7.0		44	%

¹  Due to equity accounting for JV Inkai, 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 purchased 2.7 million pounds at a purchase price per pound of $37.14 ($28.17 (US)) (Q4 2019 - 1.4 million pounds at a purchase price per pound of $32.18 ($24.40 (US))).

The average cash cost of production was 22% lower for the quarter than in the comparable period in 2019 due to the timing of costs in 2019. While McArthur River and Key Lake are shut down, our annual 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 $37.63 (Cdn) per pound, or $28.58 (US) per pound in US dollar terms, compared to $34.17 (Cdn) per pound, or $25.87 (US) per pound in the fourth quarter of 2019.

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 2020 and 2019.

60     CAMECO CORPORATION

CASH AND TOTAL COST PER POUND RECONCILIATION

	THREE MONTHS ENDED
	DECEMBER 31
($ MILLIONS)	2020			2019
Cost of product sold		300.8			442.8
Add / (subtract)
Royalties		(7.8	)		(14.3	)
Other selling costs		(1.3	)		(4.4	)
Care and maintenance and severance costs		(29.5	)		(29.7	)
Change in inventories		50.2			(201.0	)
Cash operating costs (a)		312.4			193.4
Add / (subtract)
Depreciation and amortization		58.6			87.4
Care and maintenance costs		(11.4	)		(11.5	)
Change in inventories		(6.2	)		(33.9	)
Total operating costs (b)		353.4			235.4
Uranium produced & purchased (million lbs) (c)		10.1			7.0
Cash costs per pound (a ÷ c)		30.93			27.63
Total costs per pound (b ÷ c)		34.99			33.63

Fuel services

(includes results for UF₆, UO₂, UO₃ and fuel fabrication)

		THREE MONTHS ENDED
		DECEMBER 31
HIGHLIGHTS		2020		2019		CHANGE
Production volume (million kgU)			3.3		4.0		(18	)%
Sales volume (million kgU)			4.4		6.2		(29	)%
Average realized price	($Cdn/kgU)		26.29		24.61		7	%
Average unit cost of sales (including D&A)	($Cdn/kgU)		19.12		17.11		12	%
Revenue ($ millions)			115		152		(24	)%
Gross profit ($ millions)			32		47		(32	)%
Gross profit (%)			28		31		(10	)%

Total revenue decreased by 24% due to a 29% decrease in sales volumes partially offset by a 7% increase in average realized price. The increase in average realized price was due primarily to increased prices on the sale of UF₆ due to market conditions.

Total cost of sales (including D&A) decreased by 22% to $83 million compared to the fourth quarter of 2019 due to the 29% decrease in sales volumes partially offset by an increase of 12% in the average unit cost of sales, due to the mix of product sold.

The net effect was a $15 million decrease in gross profit.

MANAGEMENT’S DISCUSSION AND ANALYSIS     61

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.

63	MANAGING THE RISKS
66	URANIUM – PRODUCTION OVERVIEW
66	PRODUCTION OUTLOOK
67	URANIUM – TIER-ONE OPERATIONS
67	MCARTHUR RIVER MINE / KEY LAKE MILL
71	CIGAR LAKE
76	INKAI
79	URANIUM – TIER-TWO OPERATIONS
79	RABBIT LAKE
80	US ISR
81	URANIUM – ADVANCED PROJECTS
81	MILLENNIUM
81	YEELIRRIE
81	KINTYRE
82	URANIUM – EXPLORATION AND CORPORATE DEVELOPMENT
83	FUEL SERVICES
83	BLIND RIVER REFINERY
84	PORT HOPE CONVERSION SERVICES
84	CAMECO FUEL MANUFACTURING INC. (CFM)

62     CAMECO CORPORATION

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. These risks, however, are not a complete list of the potential risks our operations and advanced projects face. There may be others we are not aware of or risks we feel are not material today that could become material in the future.

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 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 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 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 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 significant change to our operations

• we may need regulatory approval to make changes to our operational processes, which can take a significant amount 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 Act along with significant revisions to the federal Fisheries Act. This new legislation will impact the scope, timeliness and cost of approvals for projects and the revisions could impact existing operations.

• Environment and Climate Change Canada (ECCC) has published an amended national recovery strategy for woodland caribou 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 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 ECCC into the amended national recovery strategy; 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     63

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.

We have 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 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 our letters of credit have been updated for McArthur River, Cigar Lake and Key Lake. The revised PDP for Rabbit Lake is still under review by CNSC staff.

At the end of 2020, our estimate of total decommissioning and reclamation costs was $1.14 billion. This is the undiscounted value of the obligation and is based on our current operations. We had accounting provisions of $1.20 billion at the end of 2020 (the present value of the $1.14 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 $1.02 billion in financial assurances supporting our reclamation liabilities at the end of 2020. 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 SHEQ risks, including the use of our enterprise risk management program.

A key cornerstone of our SHEQ management system is the continual improvement of process and physical infrastructure supporting the management system. Proposed projects are evaluated and, if beneficial, included in our site’s life of asset plan. Noteworthy projects expected to reduce SHEQ risks that were advanced in 2020 included:

• the Vision in Motion project at the Port Hope conversion facility

• the program to advance the assessment of innovation opportunities at the McArthur River mine and Key Lake mill

• energy management improvements at our Saskatchewan operations

• progressive decommissioning activities on historical components of our Rabbit Lake and Key Lake operations as well as at our in-situ recovery operations in the United States

• containment system upgrades and remediation of the groundwater issue discovered in 2018 at our Key Lake operation.

Most of these projects are multi-year projects that are expected to continue into 2021 and beyond.

64     CAMECO CORPORATION

Operational risks

Other risks and hazards generally applicable to our operations and advanced projects 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, or interruptions in the supply of, required materials, supplies and equipment

• transportation and delivery disruptions

• interruptions in the supply of electricity, water, and other utilities

• equipment failures

• cyberattacks

• joint venture disputes or litigation

• non-compliance with laws and licences

• increased workforce health and safety or increased regulatory burdens resulting from the COVID-19 pandemic or other causes

• uncertain environment resulting from the COVID-19 pandemic and its related operational and safety risks

• catastrophic accidents

• fires

• blockades or other acts of social or political activism

• natural phenomena, such as inclement weather conditions, floods and earthquakes

• outbreak of illness (such as a pandemic like COVID-19)

• 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     65

Uranium – production overview

Production in our uranium segment in the fourth quarter was 2.8 million pounds, 4% higher compared to the same period in 2019, while production for the year was 5.0 million pounds, 44% lower than in 2019. The McArthur River/Key Lake and Rabbit Lake operations are in a safe and sustainable state of care and maintenance, and we are no longer developing new wellfields at Crow Butte and Smith Ranch-Highland. See Uranium – Tier-one operations starting on page 67 and Uranium – Tier-two operations beginning on page 79 for more information.

Uranium production

	THREE MONTHS ENDED				YEAR ENDED
CAMECO SHARE	DECEMBER 31				DECEMBER 31
(MILLION LBS)	2020		2019		2020		2019		2020 TARGET1
Cigar Lake		2.8		2.7		5.0		9.0		up to 5.3
Total		2.8		2.7		5.0		9.0		up to 5.3

¹  In April 2020 we withdrew our production outlook for the Cigar Lake mine due to the first precautionary suspension of production to manage the risks posed by the COVID-19 pandemic. With the restart of the mine in September after the first production suspension, a production target of up to 5.3 million pounds (our share) was set.

Production Outlook

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 value, and to do that with an emphasis on safety, people and the environment.

Given the uncertainty due to the COVID-19 pandemic and to mitigate risk, we plan to:

• prioritize the health and safety of our workers, their families and communities

• return Cigar Lake to production when it is safe to do so after the second production suspension

• evaluate the optimal mix of production, inventory and purchases in order to retain the flexibility to deliver long-term value

• focus on technology and its applications to improve efficiency, reduce costs and improve operational effectiveness across our operations, including the use of digital and automation technologies

We expect total production from Inkai to be 8.3 million pounds in 2021 on a 100% basis, assuming no production disruptions due to the COVID-19 pandemic or other causes. Due to equity accounting, our share of production is shown as a purchase. An adjustment to the production purchase entitlement allows us to purchase 4.9 million pounds in 2021.

66     CAMECO CORPORATION

Uranium – Tier-one operations

McArthur River mine / Key Lake mill

2020 Production (our share)   0.0M lbs   2021 Production Outlook (our share)   0.0M lbs   Estimated Reserves (our share)   273.6M lbs   Estimated Mine Life¹   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 200 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. The restart of the mine and mill is a commercial decision that will be based on our ability to commit our share of production from this operation under acceptable long-term contracts and to benefit from the favourable life-of-mine economics it provides.

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: 6.89%
Estimated resources		7.2 million pounds (measured and indicated), average grade U3O8: 2.45%
		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 2020	325.4 million pounds (McArthur River/Key Lake) (100% basis)
	1983 to 2002	209.8 million pounds (Key Lake) (100% basis)
2020 production		0.0 million pounds (0.0 million pounds on 100% basis)
2021 production outlook		0.0 million pounds (0.0 million pounds on 100% basis)
Estimated decommissioning cost		$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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     67

BACKGROUND

Mine description

The mineral reserves at McArthur River 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 pounds 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

Blasthole stoping began in 2011 and was the main extraction method prior to our production suspension. 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.

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Initial processing

McArthur River produces two product streams, high grade slurry and low-grade mineralized rock. Both product streams are shipped to Key Lake mill to produce uranium ore concentrate.

The high-grade material is ground and thickened into a slurry paste underground and then pumped to surface. The material is then thickened and blended for grade control and shipped to Key Lake in slurry totes using haul trucks.

The low-grade mineralized material is hoisted to surface and shipped as a dry product to Key Lake using covered haul trucks. Once at Key Lake, the material is ground, thickened and blended with the high-grade slurry to a nominal 5% U₃O₈ mill feed grade. It is then processed into uranium ore concentrate and packaged in drums for further processing offsite.

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.

2020 UPDATE

Production suspension

The facilities remained in a state of safe and sustainable care and maintenance throughout 2020.

Approximately 185 Cameco employees remain employed 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 2020.

PLANNING FOR THE FUTURE

Production

Due to continued uranium price weakness, we have suspended production for an indeterminate duration. The restart of the mine and mill is a commercial decision that will be based on our ability to commit our share of production from this operation under acceptable long-term contracts and to benefit from the favourable life-of-mine economics it provides. 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 2021. 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.

Innovation

In 2020, we began a program to advance the assessment of innovation opportunities at the McArthur River mine and Key Lake mill. We established a team of internal experts who have been tasked with assessing, designing and implementing opportunities to improve operating efficiency. During the year, the team advanced a portfolio of 43 projects focused on improvement of the mine and mill through application of automation, digitization and optimization. The initial assessment of the majority of the projects was completed, which will allow us to complete the pre-feasibility work and to define the business case. We expect projects that meet our investment criteria will be advanced to implementation in 2021.

MANAGEMENT’S DISCUSSION AND ANALYSIS     69

Optimizing production

The technical report dated March of 2019 is based on a production rate of 18 million pounds (100% basis) per year, however, once a restart decision is made, we plan to optimize the production rate to respond to market signals. We expect that this paced approach will allow us to extract maximum value from the operation as the market transitions.

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 63 to 65.

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Uranium – Tier-one operations

Cigar Lake

2020 Production (our share)   5.0M lbs   2021 Production Outlook (our share)   Production temporarily suspended   Estimated Reserves (our share)   82.8M lbs   Estimated Mine Life   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	82.8 million pounds (proven and probable), average grade U3O8: 15.92%
Estimated resources	52.4 million pounds (measured and indicated), average grade U3O8: 13.88%
	11.4 million pounds (inferred), average grade U3O8: 5.55%
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 2020	93.0 million pounds (100% basis)
2020 production	5.0 million pounds (10.1 million pounds on 100% basis)
2021 production outlook	Production temporarily suspended
Estimated decommissioning cost	$62 million (100% basis)
All values shown, including reserves and resources, represent our share only, unless otherwise indicated.

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     71

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 ground freezing

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 the frozen ore

• collecting the ore and water mixture (slurry) from the cavity and pumping it to storage (sump storage), allowing it to settle

• using a clamshell, transporting the ore from sump storage to an underground grinding and processing circuit

• 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

• it is blended and thickened, removing excess water

• the final slurry, at an average grade of approximately 16% U₃O₈, is pumped into transport truck containers and shipped to McClean Lake mill on a 69 kilometre all-weather road

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Water from this process, including water from underground operations, is treated on the surface. Any excess treated water is released into the environment.

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 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.

The CNSC licence is set to expire in June 2021. The CNSC has set an April date for the licence renewal hearing and it will be held virtually. At this time, we have submitted all of the relevant supporting program documents and we, along with the CNSC, are preparing the Commission Member Documents that the CNSC will review as part of this proceeding. The CNSC has yet to finalize intervener funding for this hearing.

2020 UPDATE

Production

Total packaged production from Cigar Lake was 10.1 million pounds U₃O₈; our share was 5.0 million pounds. Production was temporarily suspended twice in 2020 due to precautionary measures taken with the increasing risks posed by the COVID-19 pandemic.

An initial suspension was announced in March 2020 with the operations moving to care and maintenance in April. In September we safely restarted the Cigar Lake mine. As planned, it took about two weeks to achieve initial production once the mine was restarted.

As announced in December 2020, production at the Cigar Lake mine was temporarily suspended again as a precautionary measure with a negative trend in the pandemic in Saskatchewan which created increased uncertainty for the continuous operation of the mine due to access to qualified operational personnel.

During the year, we:

• substantially completed the extension of the underground electrical distribution system and commenced the extension of the underground piping infrastructure to support mining the west portion of the orebody

• executed planned annual maintenance activities during the first two weeks of September, prior to the safe restart of production following the five-month precautionary suspension of production due to the COVID-19 pandemic

• executed production activities from three production tunnels in the eastern part of the orebody

• expanded our ground freezing program ensuring continued frozen ore inventory growth in alignment with our long-term production plans

• completed a project looking at alternative mining methods that have potential to be utilized as alternatives to the underground jet boring system at Cigar Lake

MANAGEMENT’S DISCUSSION AND ANALYSIS     73

Underground development

In alignment with our production plans, underground mine development continued in 2020 between January to March and September to December. Development included focus on two new production panels in the eastern portion of the orebody along with initial access development towards the western portion. Development of the two production panels in the east were completed in 2020. Development in the western portion of the orebody is planned for 2021, along with further development in the eastern portion of the orebody to ensure new production panels are available in alignment with long-term production plans.

PLANNING FOR THE FUTURE

Production

Our production and development plans for 2021 are uncertain as the Cigar Lake mine remains suspended and a restart of the operation and the production rate will be dependent on our ability to maintain safe and stable operating protocols along with a number of other factors, including how the COVID-19 pandemic is impacting the availability of the required workforce, how cases are trending in Saskatchewan, in particular in northern communities, and the views of the public health authorities.

As a result of the suspensions in production, we have also experienced delays and deferrals in project work, including lower capital expenditures, which introduces potential risk to the production rate in 2022.

While Cigar Lake is on care and maintenance, we expect to incur costs of between $8 million and $10 million per month, which will be expensed directly to cost of sales. We may also incur additional costs related to the purchase of uranium, which comes at a higher cost than our production.

In 2021, we plan to:

• continue surface freeze drilling and complete construction and commissioning of freeze distribution infrastructure expansion in support of future production

• continue underground mine development on two new production tunnels as well as expand ventilation and access drifts in alignment with the long-term mine plan

• substantially complete the expansion of the underground piping and infrastructure towards new production panels required to sustain production

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.

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 orebody, 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.

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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. 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 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 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 63 to 65.

MANAGEMENT’S DISCUSSION AND ANALYSIS     75

Uranium – Tier-one operations

Inkai

2020 Production (100% basis)   7.0M lbs   2021 Production Outlook (100% basis)   8.3M lbs   Estimated Reserves (our share)   97.5M lbs   Estimated Mine Life   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	97.5 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 2020	64.5 million pounds (100% basis)
2020 production	7.0 million pounds (100% basis)1
2021 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  Our ownership interest in the joint venture is 40% and we equity account for our investment. As such, our share of production is shown as a purchase.

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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.

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 the host formation

• recover it from solution with ion exchange resin (takes place at both main and satellite processing plants)

• precipitate the uranium with hydrogen peroxide

• thicken, dewater, and dry it

• package the uranium peroxide product in drums

Production

Total 2020 production from Inkai was 7.0 million pounds (100% basis), a decrease of 16% from 2019. The decrease in production is due to the impact of the reduction in operational activities introduced to manage the risks posed by the COVID-19 pandemic.

On April 7, 2020, Kazatomprom announced a reduction to operational activities across all uranium mines in Kazakhstan for an expected period of three months due to the risks posed by the COVID-19 pandemic. It indicated that its decision would result in a lower level of wellfield development activity and, as a result, an estimated reduction of up to 17.5% in total planned uranium production in Kazakhstan in 2020. On July 6, 2020, Kazatomprom announced a one-month extension of the period of reduced operational activities with the impact on its revised production plan for 2020 expected to be immaterial. In August 2020, the previously reduced operational activities, including wellfield development resumed at JV Inkai.

Production purchase entitlements

Under the terms of a restructuring agreement signed with our partner Kazatomprom in 2016, our ownership interest in JV Inkai is 40% and Kazatomprom’s share is 60%. However, during production rampup to the licensed limit of 10.4 million pounds, 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 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.

Cash distribution

Excess cash, net of working capital requirements, will be distributed to the partners as dividends. In 2020, we received dividend payments from JV Inkai totaling $40.6 million (US). Our share of dividends follows our production purchase entitlements as described above.

PLANNING FOR THE FUTURE

Production

Based on an adjustment to the production purchase entitlement under the 2016 JV Inkai restructuring agreement described above, we are entitled to purchase 4.9 million pounds, or 59.4% of JV Inkai’s planned 2021 production of 8.3 million pounds, assuming no production disruptions due to the COVID-19 pandemic or other causes. 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS     77

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.

MANAGING OUR RISKS

2021 production forecast risk

Achievement of JV Inkai’s 2021 production forecast requires it to successfully manage its operating and other risks including the current uncertain environment resulting from the COVID-19 pandemic and its related operational risks, including the risk of significant disruption to JV Inkai’s operations, workforce, required supplies or services, and its ability to produce uranium.

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 63 to 65.

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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 2020	202.2 million pounds
2020 production	0 million pounds
2021 production outlook	0 million pounds
Estimated decommissioning cost1	$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 2020.

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 $27 million and $32 million annually.

MANAGING OUR RISKS

We also manage the risks listed on pages 63 to 65.

MANAGEMENT’S DISCUSSION AND ANALYSIS     79

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 2020		33.0 million pounds
2020 production		0 million pounds
2021 production outlook		0 million pounds
Estimated decommissioning cost		Smith Ranch-Highland: $219 million (US), including North Butte
		Crow Butte: $52 million (US)

¹  Including Highland mill

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 $17 million (US) and $19 million (US) for 2021.

FUTURE PRODUCTION

We do not expect any production in 2021.

MANAGING OUR RISKS

We manage the risks listed on pages 63 to 65.

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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.

2020 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

2021 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 63 to 65.

MANAGEMENT’S DISCUSSION AND ANALYSIS     81

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 (2.0 million acres). In northern Saskatchewan alone, we have direct interests in about 0.7 million hectares (1.8 million acres) of land covering many of the most prospective exploration areas of the Athabasca Basin.

2020 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 2020, 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 $8 million on regional exploration programs (including support costs), primarily in Saskatchewan’s Athabasca Basin.

PLANNING FOR THE FUTURE

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.

INVESTMENT 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 investment 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 make an investment decision 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 investment opportunity is never assessed in isolation. Investments 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 18.

82     CAMECO CORPORATION

Fuel services

Refining, conversion and fuel manufacturing

We have about 24% 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   24.0M kgU as UO₃   Licence renewal in   February, 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 conditions)
Licence term	Through February, 2022
Estimated decommissioning cost	$58 million

MANAGEMENT’S DISCUSSION AND ANALYSIS     83

Port Hope Conversion Services

Licensed Capacity   12.5M kgU as UF₆   2.8M kgU as UO₂   Licence renewal in   February, 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 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   1.2M kgU as UO₂ fuel pellets   Licence renewal in   February, 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

84     CAMECO CORPORATION

2020 UPDATE

Production

Fuel services produced 11.7 million kgU, 12% lower than 2019. This was a result of the temporary suspension of production in April resulting from the precautionary measures taken for the COVID-19 pandemic.

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. While there was progress earlier in the year, work on the Vision in Motion project in 2020 was suspended due to actions taken by the Ontario government to limit all non-essential construction activity.

PLANNING FOR THE FUTURE

Production

We plan to produce between 12.5 million and 13.5 million kgU in 2021, assuming no production disruptions due to the COVID-19 pandemic or other causes.

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

2021 production forecast risk

Achievement of our 2021 forecast for fuel services production requires us to successfully manage our operating and other risks, including the current uncertain environment resulting from the COVID-19 pandemic and its related operational risks, including the risk of significant disruption to our fuel services operations, workforce, required supplies or services, and our ability to produce product.

Labour relations

The current collective bargaining agreement with the unionized employees at CFM expires on June 1, 2021. There is a risk to our production if we are unable to reach an agreement and there is a labour disruption.

Licensing

The current operating licence from the CNSC for both the Blind River refinery and CFM expire in February 2022. The relicensing process is underway for both sites and will continue throughout 2021. We do not expect any interruption or significant risks from this process.

We also manage the risks listed on pages 63 to 65.

MANAGEMENT’S DISCUSSION AND ANALYSIS     85

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, 2020.

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 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

• indicated resources: we can reasonably assume geological and grade continuity to support mine planning

• Inferred mineral resources are estimated using limited geological evidence and sampling information. We do 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 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. Reported mineral resources have not 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 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 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 $45 (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.

86     CAMECO CORPORATION

Changes this year

Our share of proven and probable mineral reserves decreased from 461 million pounds U₃O₈ at the end of 2019, to 455 million pounds at the end of 2020. The change was primarily the result of:

• production at Cigar Lake and Inkai, which removed 8.3 million pounds from our mineral inventory

• application of a revised mining recovery factor at Cigar Lake from 90% to 86% which removed 3.8 million pounds of proven and probable reserves

partially offset by:

• a mineral resource and reserve estimate update at Cigar Lake, which added 7.4 million pounds of proven and probable reserves

Our share of measured and indicated mineral resources slightly increased from 424 million pounds U₃O₈ at the end of 2019, to 426 million pounds at the end of 2020. Our share of inferred mineral resources is 174 million pounds U₃O₈, a slight decrease of 1 million pounds from the end of 2019. 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     87

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, chief geologist, technical services, Cameco

• Biman Bharadwaj, principal metallurgist, technical services, Cameco

CIGAR LAKE    

• Lloyd Rowson, general manager, Cigar Lake, Cameco

• Scott Bishop, director, technical services, Cameco

• Alain D. Renaud, chief geologist, technical services, Cameco

• Biman Bharadwaj, principal metallurgist, technical services, Cameco

INKAI

• Alain D. Renaud, chief geologist, technical services, Cameco

• Scott Bishop, director, technical services, Cameco

• Biman Bharadwaj, principal metallurgist, technical services, Cameco

Important information about mineral reserve 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 most recent 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 US investors

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.

88     CAMECO CORPORATION

Mineral reserves

As of December 31, 2020 (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		268.7		17.53		103.8		203.2		13.78		61.7		471.9		15.92		165.6		82.8		98.5
Key Lake		OP		61.1		0.52		0.7		—		—		—		61.1		0.52		0.7		0.6		99
McArthur River		UG		2,041.0		7.12		320.2		540.0		6.02		71.7		2,581.0		6.89		391.9		273.6		99
Inkai		ISR		202,780.4		0.03		156.0		149,442.2		0.03		87.8		352,222.7		0.03		243.8		97.5		85
Total				205,151.3		—		580.7		150,185.4		—		221.2		355,336.7		—		802.0		454.5		—

(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 $45 (US) per pound U₃O₈

• are based on exchange rates of $1.00 US=$1.26 Cdn and 460 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 67.

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     89

Mineral resources

As of December 31, 2020 (100% – only the shaded columns show our share)

MEASURED, INDICATED AND INFERRED

(tonnes in thousands; pounds in millions)

															OUR SHARE								OUR 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		32.9		7.61		5.5		309.4		14.55		99.3		104.8		52.4		186.3		5.55		22.8		11.4
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		92.4		2.32		4.7		10.3		7.2		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		1,558.1		0.19		6.7		939.3		0.35		7.3		13.9		13.9		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		3,710.6		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		70,650.9		—		146.0		69,394.6		—		385.2		531.2		426.1		132,003.2		—		255.4		174.3

Note that mineral resources:

• do not include amounts that have been identified as mineral reserves

• do not have demonstrated economic viability

• totals may not add due to rounding

90     CAMECO CORPORATION

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, 2020, as required by the rules of the US Securities and Exchange Commission and the Canadian Securities Administrators.

MANAGEMENT’S DISCUSSION AND ANALYSIS     91

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, 2020.

There have been no 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

A number of amendments to existing standards became effective January 1, 2020 but they did not have an effect on the Company’s financial statements.

92     CAMECO CORPORATION

Cameco Corporation

2020 consolidated financial statements

February 9, 2021

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     93

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, 2020.

KPMG LLP has audited the consolidated financial statements in accordance with 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 9, 2021	February 9, 2021

94     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, 2020 and 2019, 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, 2020 and 2019, and its financial performance 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, 2020, 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 9, 2021 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) relates 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 the 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 of the consolidated financial statements, as at December 31, 2020 the Company recorded deferred tax assets of $936,678,000 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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     95

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 following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s assessment of the recoverability of the deferred tax asset, including controls related to 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 recoverable. 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 9, 2021

96     CAMECO CORPORATION

Consolidated statements of earnings

For the years ended December 31
($Cdn thousands, except per share amounts)	Note		2020			2019
Revenue from products and services		17	$	1,800,073		$	1,862,925
Cost of products and services sold				1,484,962			1,345,551
Depreciation and amortization				208,662			275,749
Cost of sales				1,693,624			1,621,300
Gross profit				106,449			241,625
Administration				145,344			124,869
Exploration				10,873			13,686
Research and development				3,965			6,058
Other operating expense		15		23,921			2,732
Loss on disposal of assets				1,072			1,869
Earnings (loss) from operations				(78,726	)		92,411
Finance costs		19		(96,133	)		(98,622	)
Gain on derivatives		26		36,577			32,269
Finance income				10,835			29,760
Share of earnings from equity-accounted investee		11		36,476			45,360
Other income		20		51,440			33,840
Earnings (loss) before income taxes				(39,531	)		135,018
Income tax expense		21		13,666			61,077
Net earnings (loss)			$	(53,197	)	$	73,941
Net earnings (loss) attributable to:
Equity holders				(53,169	)		74,000
Non-controlling interest				(28	)		(59	)
Net earnings (loss)			$	(53,197	)	$	73,941
Earnings (loss) per common share attributable to equity holders:
Basic		22	$	(0.13	)	$	0.19
Diluted		22	$	(0.13	)	$	0.19

See accompanying notes to consolidated financial statements.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     97

Consolidated statements of comprehensive income

For the years ended December 31
($Cdn thousands)	Note		2020			2019
Net earnings (loss)			$	(53,197	)	$	73,941
Other comprehensive income (loss), net of taxes:
Items that will not be reclassified to net earnings:
Remeasurements of defined benefit liability1		25		(4,959	)		(8,112	)
Equity investments at FVOCI - net change in fair value2				16,986			(4,044	)
Equity investments at FVOCI - net change in fair value - equity-accounted investee				(39	)		(709	)
Items that are or may be reclassified to net earnings:
Exchange differences on translation of foreign operations				26,807			(27,888	)
Other comprehensive income (loss), net of taxes				38,795			(40,753	)
Total comprehensive income (loss)			$	(14,402	)	$	33,188
Other comprehensive income (loss) attributable to:
Equity holders			$	38,799		$	(40,740	)
Non-controlling interest				(4	)		(13	)
Other comprehensive income (loss) for the year			$	38,795		$	(40,753	)
Total comprehensive income (loss) attributable to:
Equity holders			$	(14,370	)	$	33,260
Non-controlling interest				(32	)		(72	)
Total comprehensive income (loss) for the year			$	(14,402	)	$	33,188

¹  Net of tax (2020 - $1,463; 2019 - $2,301)

²  Net of tax (2020 - $(2,469); 2019 - $453)

See accompanying notes to consolidated financial statements.

98     CAMECO CORPORATION

Consolidated statements of financial position

As at December 31
($Cdn thousands)	Note		2020		2019
Assets
Current assets
Cash and cash equivalents			$	918,382	$	1,062,431
Short-term investments				24,985		—
Accounts receivable		6		204,980		328,044
Current tax assets				8,184		3,667
Inventories		7		680,369		320,770
Supplies and prepaid expenses				89,428		85,502
Current portion of long-term receivables, investments and other		10		18,716		6,564
Total current assets				1,945,044		1,806,978
Property, plant and equipment		8		3,771,557		3,720,672
Intangible assets		9		55,822		60,410
Long-term receivables, investments and other		10		652,042		630,131
Investment in equity-accounted investee		11		219,688		252,681
Deferred tax assets		21		936,678		956,376
Total non-current assets				5,635,787		5,620,270
Total assets			$	7,580,831	$	7,427,248
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities		12	$	233,649	$	181,799
Current tax liabilities				1,480		6,290
Current portion of other liabilities		14		26,119		33,073
Current portion of provisions		15		42,535		56,248
Total current liabilities				303,783		277,410
Long-term debt		13		995,541		996,718
Other liabilities		14		166,559		153,927
Provisions		15		1,156,387		1,004,230
Total non-current liabilities				2,318,487		2,154,875
Shareholders’ equity
Share capital				1,869,710		1,862,749
Contributed surplus				237,358		234,681
Retained earnings				2,735,830		2,825,596
Other components of equity				115,457		71,699
Total shareholders’ equity attributable to equity holders				4,958,355		4,994,725
Non-controlling interest				206		238
Total shareholders’ equity				4,958,561		4,994,963
Total liabilities and shareholders’ equity			$	7,580,831	$	7,427,248

Commitments and contingencies [notes 8, 15, 21]

See accompanying notes to consolidated financial statements.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     99

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, 2020	$	1,862,749	$	234,681		$	2,825,596		$	77,114		$	(5,415	)	$	4,994,725		$	238		$	4,994,963
Net loss		—		—			(53,169	)		—			—			(53,169	)		(28	)		(53,197	)
Other comprehensive income (loss)		—		—			(4,959	)		26,811			16,947			38,799			(4	)		38,795
Total comprehensive income (loss)		—		—			(58,128	)		26,811			16,947			(14,370	)		(32	)		(14,402	)
Share-based compensation		—		6,564			—			—			—			6,564			—			6,564
Stock options exercised		6,961		(1,586	)		—			—			—			5,375			—			5,375
Restricted and performance share units released		—		(2,301	)		—			—			—			(2,301	)		—			(2,301	)
Dividends		—		—			(31,638	)		—			—			(31,638	)		—			(31,638	)
Balance at December 31, 2020	$	1,869,710	$	237,358		$	2,735,830		$	103,925		$	11,532		$	4,958,355		$	206		$	4,958,561
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

See accompanying notes to consolidated financial statements.

100     CAMECO CORPORATION

Consolidated statements of cash flows

For the years ended December 31
($Cdn thousands)	Note		2020			2019
Operating activities
Net earnings (loss)			$	(53,197	)	$	73,941
Adjustments for:
Depreciation and amortization				208,662			275,749
Deferred charges				(2,945	)		(13,013	)
Unrealized gain on derivatives				(42,892	)		(55,048	)
Share-based compensation		24		6,564			14,342
Loss on disposal of assets				1,072			1,869
Finance costs		19		96,133			98,622
Finance income				(10,835	)		(29,760	)
Share of earnings from equity-accounted investee		11		(36,476	)		(45,360	)
Other expense (income)		20		(13,891	)		18,961
Other operating expense		15		23,921			2,732
Income tax expense		21		13,666			61,077
Interest received				9,994			30,944
Income taxes paid				(4,374	)		(18,589	)
Dividends from equity-accounted investee		31		54,404			14,079
Other operating items		23		(192,917	)		96,478
Net cash provided by operations				56,889			527,024
Investing activities
Additions to property, plant and equipment				(77,462	)		(75,211	)
Decrease (increase) in short-term investments				(24,985	)		391,025
Decrease in long-term receivables, investments and other				907			120,913
Proceeds from sale of property, plant and equipment				511			679
Net cash provided by (used in) investing				(101,029	)		437,406
Financing activities
Increase in long-term debt				397,539			—
Decrease in long-term debt				(400,000	)		(500,000	)
Interest paid				(65,547	)		(72,484	)
Proceeds from issuance of shares, stock option plan				5,375			81
Lease principal payments				(3,716	)		(2,904	)
Dividends paid				(31,638	)		(31,613	)
Net cash used in financing				(97,987	)		(606,920	)
Increase (decrease) in cash and cash equivalents, during the year				(142,127	)		357,510
Exchange rate changes on foreign currency cash balances				(1,922	)		(6,607	)
Cash and cash equivalents, beginning of year				1,062,431			711,528
Cash and cash equivalents, end of year			$	918,382		$	1,062,431
Cash and cash equivalents is comprised of:
Cash			$	503,496		$	427,986
Cash equivalents				414,886			634,445
Cash and cash equivalents			$	918,382		$	1,062,431

See accompanying notes to consolidated financial statements.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     101

Notes to consolidated financial statements

For the years ended December 31, 2020 and 2019

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, 2020 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 has mines in northern Saskatchewan and the United States, 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).

Cameco’s Cigar Lake mine was placed in a temporary state of care and maintenance in March of 2020 due to the global COVID-19 pandemic. While production resumed in September, the mine returned to a temporary state of care and maintenance in January 2021 as a result of the pandemic. Cameco also has two other 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. 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. See note 28 for the financial statement impact.

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 24% 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. Also a result of the COVID-19 pandemic, production was temporarily suspended at the Port Hope UF₆ conversion plant and at the Blind River refinery for approximately four weeks in the second quarter of 2020. See note 28 for the financial statement impact.

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 9, 2021.

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:

102     CAMECO CORPORATION

Derivative financial instruments Equity investments	Fair value through profit or loss (FVTPL) 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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     103

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.

104     CAMECO CORPORATION

i. Foreign currency transactions

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 measured 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 measured 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

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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     105

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.

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I. Goodwill and intangible assets

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

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.

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L. Research and development costs

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

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.

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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.

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i. Environmental restoration

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

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.

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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.

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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.

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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.

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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.

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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, 2020 and 2019.

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.

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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.

W. Government assistance

Government grants are recognized when there is reasonable assurance that the Company has complied with the relevant conditions of the grant and that the grant will be received. Grants that compensate the Company for expenses incurred are recognized in profit or loss as other income on a systematic basis in the periods in which the expenses have been recognized.

3. Accounting standards

A. Changes in accounting policy

A number of amendments to existing standards became effective January 1, 2020 but they did not have an effect on the Company’s financial statements.

B. New standards and interpretations not yet adopted

A number of amendments to existing standards are not yet effective for the year ended December 31, 2020 and have not been applied in preparing these consolidated financial statements. Cameco does not intend to early adopt any of the amendments and does not expect them to have a material impact on its 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.

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.

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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. 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.

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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     117

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.

6. Accounts receivable

	2020		2019
Trade receivables	$	166,054	$	321,638
GST/VAT receivables		38,192		4,614
Other receivables		734		1,792
Total	$	204,980	$	328,044

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.

7. Inventories

	2020		2019
Uranium
Concentrate	$	579,653	$	204,123
Broken ore		45,387		51,094
		625,040		255,217
Fuel services		52,273		62,701
Other		3,056		2,852
Total	$	680,369	$	320,770

Cameco expensed $1,435,000,000 of inventory as cost of sales during 2020 (2019 - $1,398,000,000).

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8. Property, plant and equipment

At December 31, 2020

	Land			Plant			Furniture						Exploration
	and			and			and			Under			and
	buildings			equipment			fixtures			construction			evaluation			Total
Cost
Beginning of year	$	5,050,115		$	2,678,165		$	80,869		$	132,457		$	1,071,840		$	9,013,446
Additions		2,030			7,097			855			67,477			3			77,462
Transfers		37,971			21,405			2,554			(60,391	)		—			1,539
Change in reclamation provision [note 15]		151,558			—			—			—			—			151,558
Disposals		(1,678	)		(3,385	)		(5,299	)		(492	)		(99	)		(10,953	)
Effect of movements in exchange rates		(15,663	)		(3,438	)		(68	)		—			53,739			34,570
End of year		5,224,333			2,699,844			78,911			139,051			1,125,483			9,267,622
Accumulated depreciation and impairment
Beginning of year		2,936,088			1,793,049			76,601			36,799			458,386			5,300,923
Depreciation charge		84,261			89,550			3,010			—			—			176,821
Change in reclamation provision [note 15](a)		23,921			—			—			—			—			23,921
Disposals		(903	)		(2,997	)		(5,299	)		(1	)		(150	)		(9,350	)
Effect of movements in exchange rates		(12,075	)		(3,266	)		(66	)		—			25,427			10,020
End of year		3,031,292			1,876,336			74,246			36,798			483,663			5,502,335
Right-of-use assets
Beginning of year		2,646			5,084			419			—			—			8,149
Additions		75			22			2,124			—			—			2,221
Disposals		(40	)		(747	)		—			—			—			(787	)
Depreciation charge		(875	)		(498	)		(401	)		—			—			(1,774	)
Transfers		—			(1,539	)		—			—			—			(1,539	)
End of year		1,806			2,322			2,142			—			—			6,270
Net book value at December 31, 2020	$	2,194,847		$	825,830		$	6,807		$	102,253		$	641,820		$	3,771,557

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     119

At December 31, 2019

	Land			Plant			Furniture						Exploration
	and			and			and			Under			and
	buildings			equipment			fixtures			construction			evaluation			Total
Cost
Beginning of year	$	5,039,313		$	2,654,944		$	80,083		$	114,060		$	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		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		5,050,115			2,678,165			80,869			132,457			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(a)		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	$	2,116,673		$	890,200		$	4,687		$	95,658		$	613,454		$	3,720,672

Cameco has contractual capital commitments of approximately $47,000,000 at December 31, 2020. 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 2021.

(a) Asset retirement obligation assets are adjusted when the Company updates its reclamation provisions due to new cash flow estimates or changes in discount and inflation rates. When the assets of an operation have been written off due to an impairment, as is the case with our Rabbit Lake operation and some of our operations in the United States, the adjustment is recorded directly to the statement of earnings as other operating expense or income.

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9. Intangible assets

A. Reconciliation of carrying amount

At December 31, 2020

				Intellectual
	Contracts			property		Total
Cost
Beginning of year	$	113,707		$	118,819	$	232,526
Effect of movements in exchange rates		(2,319	)		—		(2,319	)
End of year		111,388			118,819		230,207
Accumulated amortization and impairment
Beginning of year		111,094			61,022		172,116
Amortization charge		1,008			3,700		4,708
Effect of movements in exchange rates		(2,439	)		—		(2,439	)
End of year		109,663			64,722		174,385
Net book value at December 31, 2020	$	1,725		$	54,097	$	55,822

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

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     121

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 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

	2020			2019
Investments in equity securities [note 26](a)	$	43,873		$	24,408
Derivatives [note 26]		45,605			10,504
Investment tax credits		95,642			95,474
Amounts receivable related to tax dispute [note 21](b)		303,222			303,222
Product loan(c)		176,904			176,904
Other		5,512			26,183
		670,758			636,695
Less current portion		(18,716	)		(6,564	)
Net	$	652,042		$	630,131

(a) At January 1, 2018, Cameco designated the investments shown below as equity securities at FVOCI because 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.

	2020		2019
Investment in Denison Mines Corp.	$	20,677	$	13,292
Investment in UEX Corporation		13,005		7,253
Investment in ISO Energy Ltd.		6,923		1,481
Investment in GoviEx		2,875		2,000
Other		393		382
	$	43,873	$	24,408

(b) Cameco was required to remit or otherwise secure 50% of the cash taxes and transfer pricing penalties, plus related interest and instalment penalties assessed, in relation to its dispute with Canada Revenue Agency (CRA) (see note 21). In light of our view of the likely outcome of the case, Cameco expects to recover the amounts remitted to CRA, including cash taxes, interest and penalties totalling $303,222,000 already paid as at December 31, 2020 (December 31, 2019 - $303,222,000) (note 21).

(c) During 2018, as a result of the decision to temporarily suspend production at the McArthur River mine, Cameco 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 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.

122     CAMECO CORPORATION

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.

The following tables summarize the financial information of JV Inkai (100%):

	2020			2019
Cash and cash equivalents	$	47,539		$	16,699
Other current assets		115,647			139,324
Non-current assets		343,767			398,721
Current liabilities		(26,397	)		(71,162	)
Non-current liabilities		(39,991	)		(41,508	)
Net assets	$	440,565		$	442,074
	2020			2019
Revenue from products and services	$	252,764		$	261,860
Cost of products and services sold		(57,358	)		(64,199	)
Depreciation and amortization		(24,081	)		(27,740	)
Finance income		367			651
Finance costs		(825	)		(2,939	)
Other expense		(12,305	)		(23,767	)
Income tax expense		(44,804	)		(30,999	)
Net earnings		113,758			112,867
Other comprehensive loss		(97	)		(1,773	)
Total comprehensive income	$	113,661		$	111,094

The following table reconciles the summarized financial information to the carrying amount of Cameco’s interest in JV Inkai:

	2020			2019
Opening net assets	$	442,074		$	416,843
Total comprehensive income		113,661			111,094
Dividends declared		(64,456	)		(66,369	)
Impact of foreign exchange		(50,714	)		(19,494	)
Closing net assets		440,565			442,074
Cameco’s share of net assets		176,226			176,830
Consolidating adjustments(a)		(38,975	)		(30,633	)
Fair value increment(b)		89,184			91,697
Dividends declared but not received		—			13,859
Dividends in excess of ownership percentage(c)		(9,669	)		—
Impact of foreign exchange		2,922			928
Carrying amount in the statement of financial position at December 31, 2020	$	219,688		$	252,681

(a) Cameco records certain consolidating adjustments to eliminate unrealized profit and amortize historical differences in accounting policies. This amount is amortized to earnings over units of production.

(b) Upon restructuring, Cameco assigned fair values to the assets and liabilities of JV Inkai. This increment is amortized to earnings over units of production.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     123

(c) Cameco’s share of dividends follows its production purchase entitlements which is currently higher than its ownership interest.

12. Accounts payable and accrued liabilities

	2020		2019
Trade payables	$	137,190	$	100,407
Non-trade payables		58,105		66,815
Payables due to related parties [note 24]		38,354		14,577
Total	$	233,649	$	181,799

The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 26.

13. Long-term debt

	2020		2019
Unsecured debentures
Series E - 3.75% debentures due November 14, 2022		—		399,152
Series F - 5.09% debentures due November 14, 2042		99,319		99,302
Series G - 4.19% debentures due June 24, 2024		498,630		498,264
Series H - 2.95% debentures due October 21, 2027		397,592		—
Total	$	995,541	$	996,718

On October 21, 2020, Cameco issued $400,000,000 of Series H debentures which bear interest at a rate of 2.95% per annum. The net proceeds of the issue after deducting expenses were approximately $397,500,000. The debentures mature on October 21, 2027 and are being amortized at an effective interest rate of 3.05%. In conjunction with the issuance of the Series H debentures, on November 20, 2020, the $400,000,000 principal amount of the Series E debentures was redeemed. Cameco recognized $24,439,000 of finance costs in relation to the early redemption of these debentures (note 19).

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, 2020 and 2019, there were no amounts outstanding under this facility.

Cameco has $1,698,340,000 (2019 - $1,719,120,000) in letter of credit facilities. Outstanding and committed letters of credit at December 31, 2020 amounted to $1,596,488,000 (2019 - $1,528,603,000), 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, 2020, Cameco was in compliance with the covenant and does not expect its operating and investing activities in 2021 to be constrained by it.

124     CAMECO CORPORATION

The table below represents currently scheduled maturities of long-term debt:

2021	2022		2023		2024		2025		Thereafter		Total
$            —		—		—		498,630		—		496,911	$	995,541

14. Other liabilities

	2020			2019
Deferred sales [note 17]	$	14,382		$	17,418
Derivatives [note 26]		4,733			12,524
Accrued pension and post-retirement benefit liability [note 25]		91,729			80,737
Lease obligation		7,951			12,869
Product loan(a)		6,045			—
Other		67,838			63,452
		192,678			187,000
Less: current portion		(26,119	)		(33,073	)
Net	$	166,559		$	153,927

Expenses related to short-term leases and leases of low-value assets were insignificant during 2020.

(a) The Company has standby product loan facilities with various counterparties. The arrangements allow it to borrow up to 2.0 million kgU of UF₆ conversion services and 2.6 million pounds of U₃O₈ over the period 2020 to 2023 with repayment in kind up to December 31, 2023. Under the 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%. During the year, Cameco borrowed 1,213,800 pounds of U₃O₈ and 464,600 kgU of UF₆ conversion services. The U₃O₈ loan was repaid during the year while repayment on the UF₆ loan is due no later than December 31, 2022. The loan is recorded at Cameco’s weighted average cost of inventory.

15. Provisions

	Reclamation			Waste disposal			Total
Beginning of year	$	1,050,675		$	9,803		$	1,060,478
Changes in estimates and discount rates [note 8]
Capitalized in property, plant and equipment		127,637			—			127,637
Recognized in earnings [note 8]		23,921			(150	)		23,771
Provisions used during the period		(17,272	)		(368	)		(17,640	)
Unwinding of discount [note 19]		14,366			37			14,403
Effect of movements in exchange rates		(9,727	)		—			(9,727	)
End of period	$	1,189,600		$	9,322		$	1,198,922
Current	$	40,760		$	1,775		$	42,535
Non-current		1,148,840			7,547			1,156,387
	$	1,189,600		$	9,322		$	1,198,922

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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     125

Cameco estimates total undiscounted future decommissioning and reclamation costs for its existing operating assets to be $1,130,495,000 (2019 - $1,127,487,000). The expected timing of these outflows is based on life-of-mine plans with the majority of expenditures expected to occur after 2026. 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 $1,021,142,000 (2019 - $994,129,000) in the form of letters of credit to satisfy current regulatory requirements.

The reclamation provision relates to the following segments:

	2020		2019
Uranium	$	937,992	$	831,352
Fuel services		251,608		219,323
Total	$	1,189,600	$	1,050,675

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 $8,044,000 (2019 - $8,451,000). 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

• One Class B share

A. Common Shares

Number issued (number of shares)	2020		2019
Beginning of year		395,797,732		395,792,732
Issued:
Stock option plan [note 24]		465,009		5,000
End of year		396,262,741		395,797,732

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.

126     CAMECO CORPORATION

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, 2020, the dividend declared per share was $0.08 (December 31, 2019 - $0.08).

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, 2020

	Uranium		Fuel services		Other		Total
Customer geographical region
Americas	$	588,827	$	206,011	$	7,676	$	802,514
Europe		323,565		123,864		3,331		450,760
Asia		499,378		47,421		—		546,799
	$	1,411,770	$	377,296	$	11,007	$	1,800,073
Contract type
Fixed-price	$	406,021	$	355,552	$	7,686	$	769,259
Market-related		1,005,749		21,744		3,321		1,030,814
	$	1,411,770	$	377,296	$	11,007	$	1,800,073

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

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     127

Deferred sales

The following table provides information about contract liabilities (note 14) from contracts with customers:

	2020			2019
Beginning of year	$	17,418		$	30,727
Additions		6,994			9,783
Recognized in revenue		(10,026	)		(23,067	)
Effect of movements in exchange rates		(4	)		(25	)
End of year	$	14,382		$	17,418

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 2021 and 2027.

Cameco recognized a reduction of revenue of $268,000 (2019 - revenue of $78,000) during 2020 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:

	2021		2022		2023		2024		2025		Thereafter		Total
Uranium	$	243,069	$	189,351	$	179,212	$	166,581	$	129,450	$	416,947	$	1,324,610
Fuel services		319,851		272,920		212,655		215,729		216,250		677,611		1,915,016
Other		4,212		—		—		—		—		—		4,212
Total	$	567,132	$	462,271	$	391,867	$	382,310	$	345,700	$	1,094,558	$	3,243,838

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.

128     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:

	2020		2019
Wages and salaries	$	226,725	$	238,000
Statutory and company benefits		41,299		41,972
Expenses related to defined benefit plans [note 25]		5,256		4,790
Expenses related to defined contribution plans [note 25]		12,410		11,767
Equity-settled share-based compensation [note 24]		9,738		17,469
Cash-settled share-based compensation [note 24]		27,241		(1,437	)
Total	$	322,669	$	312,561

19. Finance costs

	2020		2019
Interest on long-term debt	$	43,340	$	63,136
Unwinding of discount on provisions [note 15]		14,403		20,789
Redemption of Series E debentures [note 13]		24,439		—
Other charges		13,951		14,697
Total	$	96,133	$	98,622

No borrowing costs were determined to be eligible for capitalization during the year.

20. Other income (expense)

	2020		2019
Arbitration award(a)	$	—	$	52,801
Foreign exchange gains (losses)		13,891		(18,961	)
Government assistance(b)		37,347		—
Other		202		—
Total	$	51,440	$	33,840

(a) In the third quarter of 2019, Cameco received an award from the tribunal of international arbitrators (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 (US). Damages were based on the Tribunal’s interpretation of losses under this supply agreement.

(b) In response to the negative economic impact of COVID-19, the Government of Canada announced the Canada Emergency Wage Subsidy program (CEWS). CEWS provides a subsidy on eligible remuneration based on certain criteria. During the year, the Company qualified for the subsidy for the periods April through December. There are no unfulfilled conditions and other contingencies attached to this government assistance. Cameco intends to apply for the CEWS in subsequent application periods, subject to continuing to meet the applicable qualification criteria.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     129

21. Income taxes

A. Significant components of deferred tax assets and liabilities

	Recognized in earnings						As at December 31
	2020			2019			2020		2019
Assets
Property, plant and equipment	$	(38,389	)	$	74,039		$	280,798	$	319,185
Provision for reclamation		28,628			2,325			222,142		193,514
Inventories		4,071			(2,163	)		4,071		—
Foreign exploration and development		2			(14	)		5,269		5,267
Income tax losses (gains)		(7,629	)		(108,839	)		382,712		390,341
Defined benefit plan actuarial losses		—			—			9,410		7,947
Long-term investments and other		(5,678	)		(17,377	)		32,276		40,423
Deferred tax assets		(18,995	)		(52,029	)		936,678		956,677
Liabilities
Inventories		(301	)		301			—		301
Deferred tax liabilities		(301	)		301			—		301
Net deferred tax asset (liability)	$	(18,694	)	$	(52,330	)	$	936,678	$	956,376

Deferred tax allocated as	2020		2019
Deferred tax assets	$	936,678	$	956,376
Deferred tax liabilities		—		—
Net deferred tax asset	$	936,678	$	956,376

Cameco has recorded a deferred tax asset of $936,678,000 (2019 - $956,376,000). 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.

130     CAMECO CORPORATION

B. Movement in net deferred tax assets and liabilities

	2020			2019
Deferred tax asset at beginning of year	$	956,376		$	1,006,012
Expense for the year in net earnings		(18,694	)		(52,330	)
Recovery (expense) for the year in other comprehensive income		(1,006	)		2,754
Effect of movements in exchange rates		2			(60	)
End of year	$	936,678		$	956,376

C. Significant components of unrecognized deferred tax assets

	2020		2019
Income tax losses	$	271,163	$	280,330
Property, plant and equipment		2,204		2,321
Provision for reclamation		75,219		75,082
Long-term investments and other		60,223		70,380
Total	$	408,809	$	428,113

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:

	2020			2019
Earnings (loss) before income taxes and non-controlling interest	$	(39,531	)	$	135,018
Combined federal and provincial tax rate		26.9	%		26.9	%
Computed income tax expense (recovery)		(10,634	)		36,320
Increase (decrease) in taxes resulting from:
Difference between Canadian rates and rates applicable to subsidiaries in other countries		42,028			5,558
Change in unrecognized deferred tax assets		(7,766	)		19,646
Share-based compensation plans		398			1,146
Change in legislation		(1,978	)		—
Income in equity-accounted investee		(12,155	)		(12,074	)
Change in uncertain tax positions		2,455			2,572
Other permanent differences		1,318			7,909
Income tax expense	$	13,666		$	61,077

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     131

E. Earnings and income taxes by jurisdiction

	2020			2019
Earnings (loss) before income taxes
Canada	$	72,809		$	229,429
Foreign		(112,340	)		(94,411	)
	$	(39,531	)	$	135,018
Current income taxes (recovery)
Canada	$	(394	)	$	7,969
Foreign		(4,634	)		778
	$	(5,028	)	$	8,747
Deferred income taxes (recovery)
Canada	$	9,122		$	60,010
Foreign		9,572			(7,680	)
	$	18,694		$	52,330
Income tax expense	$	13,666		$	61,077

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 2014, which in aggregate have increased Cameco’s income for Canadian tax purposes by approximately $6,600,000,000. CRA has also issued notices of reassessment for transfer pricing penalties for the years 2007 through 2011 in the amount of $371,000,000.

On June 26, 2020, the Federal Court of Appeal (Court of Appeal) released its decision in the Company’s dispute with CRA. The Court of Appeal decision upholds the September 26, 2018 decision of the Tax Court of Canada (Tax Court) which ruled in Cameco’s favour for the 2003, 2005 and 2006 tax years.

The Court of Appeal decision upheld the Tax Court ruling 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. Management believes the principles in the decision apply to all subsequent tax years.

On October 30, 2020, Cameco received notice that CRA made an application to the Supreme Court of Canada (Supreme Court) to seek leave to appeal the decision of the Court of Appeal. The Supreme Court will decide whether to hear the appeal or decline CRA’s request for leave. If the appeal proceeds, Cameco estimates that it could take until the second half of 2022 before a decision is rendered by the Supreme Court.

132     CAMECO CORPORATION

Despite the fact that Cameco believes there is no basis to do so, and it is not the Company’s view of the likely outcome, CRA may continue to reassess Cameco using the methodology it reassessed the 2003 through 2014 tax years. In that scenario, and including the $6,600,000,000 already reassessed, the Company could receive notices of reassessment for a total of approximately $8,700,000,000 for the years 2003 through 2020, which would increase Cameco’s related tax expense by approximately $2,600,000,000. In addition to penalties already imposed, CRA may continue to apply penalties to taxation years subsequent to 2011. In that case, Cameco estimates that cash taxes and transfer pricing penalties would be between $1,950,000,000 and $2,150,000,000. In addition, CRA may seek to apply interest and instalment penalties that would be material to Cameco. While in dispute, Cameco would be required to remit or otherwise secure 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 the Company. Cameco expects further actions regarding the tax years 2007 through 2014 will be suspended until the three years covered in the decision are finally resolved.

CRA has recently proposed an alternative reassessing position for the 2014 tax year but has not reassessed on this basis.

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. However, 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.

If CRA continues to pursue reassessments for tax years subsequent to 2006, Cameco will continue to utilize its appeal rights under Canadian federal and provincial tax rules.

G. Income tax losses

At December 31, 2020, income tax losses carried forward of $2,399,647,000 (2019 - $2,509,669,000) are available to reduce taxable income. These losses expire as follows:

Date of expiry	Canada		US		Other		Total
2026	$	—	$	—	$	13,819	$	13,819
2027		—		—		2,841		2,841
2030		47		—		—		47
2031		—		20,436		—		20,436
2032		272		22,010		—		22,282
2033		7,037		37,520		—		44,557
2034		365,039		20,697		4,850		390,586
2035		372,376		14,401		7,752		394,529
2036		211,299		43,769		6,106		261,174
2037		143		32,785		298		33,226
2038		5,581		35,357		—		40,938
2039		6,424		27,348		—		33,772
2040		3,669		21,798		—		25,467
No expiry		—		—		1,115,973		1,115,973
	$	971,887	$	276,121	$	1,151,639	$	2,399,647

Included in the table above is $1,013,730,000 (2019 - $1,048,264,000) of temporary differences related to loss carry forwards where no future benefit has been recognized.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     133

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 2020 was 395,829,380 (2019 - 395,796,677).

	2020			2019
Basic earnings (loss) per share computation
Net earnings (loss) attributable to equity holders	$	(53,169	)	$	74,000
Weighted average common shares outstanding		395,829			395,797
Basic earnings (loss) per common share	$	(0.13	)	$	0.19
Diluted earnings (loss) per share computation
Net earnings (loss) attributable to equity holders	$	(53,169	)	$	74,000
Weighted average common shares outstanding		395,829			395,797
Dilutive effect of stock options		214			258
Weighted average common shares outstanding, assuming dilution		396,043			396,055
Diluted earnings (loss) per common share	$	(0.13	)	$	0.19

23. Supplemental cash flow information

Other operating items included in the statements of cash flows are as follows:

	2020			2019
Changes in non-cash working capital:
Accounts receivable	$	143,717		$	58,488
Inventories		(376,908	)		113,388
Supplies and prepaid expenses		(3,999	)		3,612
Accounts payable and accrued liabilities		36,514			(53,477	)
Reclamation payments		(17,640	)		(32,390	)
Other		25,399			6,857
Total	$	(192,917	)	$	96,478

134     CAMECO CORPORATION

The changes arising from financing activities were as follows:

	Long-term debt			Interest payable			Lease obligation			Dividends payable			Share capital		Total
Balance at January 1, 2020	$	996,718		$	3,030		$	12,869		$	—		$	1,862,749	$	2,875,366
Changes from financing cash flows:
Dividends paid		—			—			—			(31,638	)		—		(31,638	)
Interest paid		—			(65,280	)		(267	)		—			—		(65,547	)
Lease principal payments		—			—			(3,716	)		—			—		(3,716	)
Shares issued, stock option plan		—			—			—			—			5,375		5,375
Repayment of long-term debt		(400,000	)		—			—			—			—		(400,000	)
Proceeds of long-term debt		397,539			—			—			—			—		397,539
Total cash changes		(2,461	)		(65,280	)		(3,983	)		(31,638	)		5,375		(97,987	)
Non-cash changes:
Amortization of issue costs		1,284			—			—			—			—		1,284
Dividends declared		—			—			—			31,638			—		31,638
Interest expense		—			66,228			267			—			—		66,495
Right-of-use asset additions		—			—			2,221			—			—		2,221
Right-of-use asset cancellations		—			—			(2,165	)		—			—		(2,165	)
Joint operation lease obligations		—			—			(1,361	)		—			—		(1,361	)
Shares issued, stock option plan		—			—			—			—			1,586		1,586
Foreign exchange		—			—			103			—			—		103
Total non-cash changes		1,284			66,228			(935	)		31,638			1,586		99,801
Balance at December 31, 2020	$	995,541		$	3,978		$	7,951		$	—		$	1,869,710	$	2,877,180

24. Share-based compensation plans

The Company has the following 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 28,340,298 shares have been issued.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     135

Stock option transactions for the respective years were as follows:

(Number of options)	2020			2019
Beginning of year		8,617,097			8,820,805
Options granted		—			886,740
Options forfeited		(81,991	)		(270,025	)
Options expired		(1,911,558	)		(815,423	)
Options exercised [note 16]		(465,009	)		(5,000	)
End of year		6,158,539			8,617,097
Exercisable		5,076,226			6,290,380

Weighted average exercise prices were as follows:

	2020		2019
Beginning of year	$	17.44	$	19.75
Options granted		—		15.27
Options forfeited		22.22		22.59
Options expired		20.14		38.43
Options exercised		11.56		16.38
End of year	$	16.98	$	17.44
Exercisable	$	17.73	$	18.90

Total options outstanding and exercisable at December 31, 2020 were as follows:

				Options outstanding				Options exercisable
Option price per share		Number		Weighted average remaining life		Weighted average exercisable price		Number		Weighted average exercisable price
$	11.32 - 15.83		3,060,721		5.0	$	13.72		1,978,408	$	13.85
$	15.84 - 26.81		3,097,818		1.8	$	20.21		3,097,818	$	20.21
			6,158,539						5,076,226

The foregoing options have expiry dates ranging from February 28, 2021 to February 28, 2027.

136     CAMECO CORPORATION

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 provided they have met their ownership requirements, 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 is based on 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. Prior to 2020, total shareholder return over three years was also a vesting condition. 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, 2020, the total number of PSUs held by the participants, after adjusting for forfeitures on retirement, was 1,720,636 (2019 - 1,465,618).

C. 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. In addition, certain eligible participants have a single vesting date on the third anniversary of the date of the grant. These same participants, if they have met or are not subject to share ownership requirements, may elect to have their award paid as a lump sum cash amount. 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, 2020, the total number of RSUs held by the participants was 927,462, (2019 - 443,274).

D. 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, 2020, the number of options held by participating employees was 422,291 (2019 - 406,270) with exercise prices ranging from $11.32 to $26.81 per share (2019 - $11.32 to $26.81) and a weighted average exercise price of $15.66 (2019 - $16.48).

E. 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, 2020, there were 2,257 participants in the plan (2019 - 2,253). The total number of shares purchased in 2020 with Company contributions was 248,837 (2019 - 235,915). In 2020, the Company’s contributions totaled $3,174,000 (2019 - $3,127,000).

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     137

F. 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, 2020, the total number of DSUs held by participating directors was 541,827 (2019 - 474,266).

Equity-settled plans

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:

	2020		2019
Stock option plan	$	1,011	$	4,418
Performance share unit plan(a)		2,650		7,245
Restricted share unit plan		2,903		2,679
Employee share ownership plan		3,174		3,127
Total	$	9,738	$	17,469

(a) In the fourth quarter of 2019, the performance share unit plan was amended to allow eligible participants to elect 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 for new grants. Expenses related to PSUs granted in previous years will continue to appear as equity-settled if certain assumptions related to the calculation of fair value are met.

Fair value measurement of equity-settled plans

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.

138     CAMECO CORPORATION

The inputs used in the measurement of the fair values at grant date of the equity-settled RSU plan were as follows:

	Grant date Mar 1/20
Number of options granted		283,426
Average strike price	$	11.45
Expected forfeitures		13	%
Weighted average grant date fair values	$	11.45

Cash-settled plans

Cameco has recognized the following expenses (recoveries) under its cash-settled plans:

	2020		2019
Deferred share unit plan	$	3,765	$	(1,001	)
Performance share unit plan		20,287		—
Phantom stock option plan		1,340		(436	)
Restricted share unit plan(a)		1,849		—
Total	$	27,241	$	(1,437	)

(a) Due to the inclusion of a new group of participants in the RSU plan that are able to elect cash settlement, grants to this group will appear as an expense of a cash-settled plan. Grants to the original group of participants are still disclosed as an expense of an equity-settled plan.

At December 31, 2020, a liability of $38,354,000 (2019 - $14,577,000) was included in the consolidated statements of financial position to recognize accrued but unpaid expenses for cash-settled plans.

Fair value measurement of cash-settled plans

The fair value of the units granted through the PSU plan was determined based on Monte Carlo simulation and the fair value of RSUs granted was determined based on their intrinsic value on the date of grant. 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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     139

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:

	PSU						RSU						Phantom stock options
	Grant date			Reporting date			Grant date			Reporting date			Grant date			Reporting date
	Mar 1/20			Dec 31/20			Mar 1/20			Dec 31/20			Mar 1/20			Dec 31/20
Number of units		636,570			1,720,636			423,180			425,176			112,140			422,291
Expected vesting		102	%		129	%		—			—			—			—
Average strike price		—			—			—			—		$	11.61		$	15.66
Expected dividend		—			—			—			—		$	0.08		$	0.08
Expected volatility(a)		—			22	%		—			—			39	%		41	%
Risk-free interest rate(a)		—			0.1	%		—			—			0.6	%		0.3	%
Expected life of option		3.0 years			1 year			3.0 years			2.2 years			4 years			3.4 years
Expected forfeitures		12	%		11	%		12	%		12	%		8	%		7	%
Weighted average measurement date fair values	$	11.45		$	22.01		$	11.45		$	17.05		$	2.85		$	5.43

(a) During the first quarter of 2020, the vesting conditions of the PSU plan were amended such that total shareholder return is no longer included for new grants. Due to this change, expected volatility and the risk-free interest rate will no longer be considered in calculating the fair value of new grants.

In addition to these inputs, other features of the PSU grant were incorporated into the measurement of fair value. 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 $1,785,000 in contributions and letter of credit fees to its defined benefit plans in 2021.

140     CAMECO CORPORATION

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.

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
	2020			2019			2020			2019
Fair value of plan assets, beginning of year	$	6,806		$	7,177		$	—		$	—
Interest income on plan assets		197			262			—			—
Return on assets excluding interest income		130			280			—			—
Benefits paid		(915	)		(912	)		—			—
Administrative costs paid		(1	)		(1	)		—			—
Fair value of plan assets, end of year	$	6,217		$	6,806		$	—		$	—
Defined benefit obligation, beginning of year	$	62,588		$	54,271		$	24,955		$	21,161
Current service cost		1,977			1,586			1,010			817
Interest cost		1,673			1,807			792			841
Actuarial loss (gain) arising from:
- demographic assumptions		—			—			102			—
- financial assumptions		6,323			6,925			2,013			2,877
- experience adjustment		350			777			(2,236	)		114
Benefits paid		(1,765	)		(1,705	)		(809	)		(855	)
Foreign exchange		973			(1,073	)		—			—
Defined benefit obligation, end of year	$	72,119		$	62,588		$	25,827		$	24,955
Defined benefit liability [note 14]	$	(65,902	)	$	(55,782	)	$	(25,827	)	$	(24,955	)

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
	2020			2019
Asset category(a)
Canadian equity securities		8	%		9	%
U.S. equity securities		12	%		12	%
Global equity securities		8	%		9	%
Canadian fixed income		31	%		30	%
Other(b)		41	%		40	%
Total		100	%		100	%

(a) The defined benefit plan assets contain no material amounts of related party assets at December 31, 2020 and 2019 respectively.

(b) Relates mainly to the value of the refundable tax account held by the Canada Revenue Agency. The refundable total is approximately equal to half of the sum of the realized investment income plus employer contributions less half of the benefits paid by the plan.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     141

The following represents the components of net pension and other benefit expense included primarily as part of administration:

	Pension benefit plans				Other benefit plans
	2020		2019		2020		2019
Current service cost	$	1,977	$	1,586	$	1,010	$	817
Net interest cost		1,476		1,545		792		841
Administration cost		1		1		—		—
Defined benefit expense [note 18]		3,454		3,132		1,802		1,658
Defined contribution pension expense [note 18]		12,410		11,767		—		—
Net pension and other benefit expense	$	15,864	$	14,899	$	1,802	$	1,658

The total amount of actuarial losses (gains) recognized in other comprehensive income is:

	Pension benefit plans						Other benefit plans
	2020			2019			2020			2019
Actuarial loss (gain)	$	6,673		$	7,702		$	(121	)	$	2,991
Return on plan assets excluding interest income		(130	)		(280	)		—			—
	$	6,543		$	7,422		$	(121	)	$	2,991

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
	2020			2019			2020			2019
Discount rate - obligation		2.4	%		3.0	%		2.5	%		3.1	%
Discount rate - expense		3.0	%		3.7	%		3.1	%		3.9	%
Rate of compensation increase		2.9	%		3.0	%		—			—
Initial health care cost trend rate		—			—			5.0	%		6.0	%
Cost trend rate declines to		—			—			5.0	%		5.0	%
Year the rate reaches its final level		—			—			2021			2022
Dental care cost trend rate		—			—			4.5	%		5.0	%

At December 31, 2020, the weighted average duration of the defined benefit obligation for the pension plans was 20.5 years (2019 - 20.0 years) and for the other benefit plans was 14.2 years (2019 - 15.2 years).

142     CAMECO CORPORATION

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	$	(9,778	)	$	12,766		$	(3,270	)	$	4,138
Rate of compensation increase		3,009			(2,772	)		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, 2020. 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 $2,030,000.

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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     143

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:

			Carrying value
	Currency		(Cdn).			Gain (loss)
Cash and cash equivalents		USD	$	86,985		$	4,349
Accounts receivable		USD		136,894			6,845
Accounts payable and accrued liabilities		USD		(72,576	)		(3,629	)
Net foreign currency derivatives		USD		40,872			(38,811	)

A 5% strengthening of the Canadian dollar against the currencies above at December 31, 2020 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, 2020, the proportion of Cameco’s outstanding debt that carries fixed interest rates is 100% (2019 - 85%).

Cameco was exposed to interest rate risk during the year 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 were set to terminate on November 14, 2022 however with the early retirement of these debentures, the swaps terminated on November 16, 2020 (see note 13). Under the terms of the swaps, Cameco made interest payments based on the three-month Canada Dealer Offered Rate plus an average margin of 1.2% and received fixed interest payments of 3.75%. At the time of the termination of the Series E swaps, the fair value of the interest rate swap net asset was $7,330,000. The Series D swaps terminated on September 2, 2019. At December 31, 2020, the fair value of Cameco’s interest rate swap net asset was nil (2019 - $2,313,000).

144     CAMECO CORPORATION

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:

	2020		2019
Cash and cash equivalents	$	918,382	$	1,062,431
Short-term investments		24,985		—
Accounts receivable [note 6]		166,788		323,430
Derivative assets [note 10]		45,605		10,504

Cash and cash equivalents

Cameco held cash and cash equivalents of $918,000,000 at December 31, 2020 (2019 - $1,062,000,000). 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 value
Investment grade credit rating	$	160,093
Non-investment grade credit rating		5,961
Total gross carrying amount	$	166,054
Loss allowance		—
Net	$	166,054

At December 31, 2020, 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.

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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     145

The following table provides information about Cameco’s aged trade receivables as at December 31, 2020:

	Corporate customers		Other customers		Total
Current (not past due)	$	159,280	$	3,649		162,929
1-30 days past due		133		434		567
More than 30 days past due		2,043		515		2,558
Total	$	161,456	$	4,598		166,054

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, 2020:

			Outstanding and
	Total amount		committed		Amount available
Unsecured revolving credit facility	$	1,000,000	$	—	$	1,000,000
Letter of credit facilities [note 13]		1,698,340		1,596,488		101,852

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 amount		Contractual cash flows		Due in less than 1 year		Due in 1-3 years		Due in 3-5 years		Due after 5 years
Accounts payable and accrued liabilities	$	233,649	$	233,649	$	233,649	$	—	$	—	$	—
Long-term debt		995,541		1,000,000		—		—		500,000		500,000
Foreign currency contracts		4,733		4,733		1,658		3,075		—		—
Lease obligation [note 14]		7,951		8,525		3,657		3,896		972		—
Total contractual repayments	$	1,241,874	$	1,246,907	$	238,964	$	6,971	$	500,972	$	500,000
			Total		Due in less than 1 year		Due in 1-3 years		Due in 3-5 years		Due after 5 years
Total interest payments on long-term debt			$	267,905	$	37,840	$	75,680	$	44,255	$	110,130

146     CAMECO CORPORATION

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, 2020

	FVTPL		Amortized cost			FVOCI - designated		Total
Financial assets
Cash and cash equivalents	$	—	$	918,382		$	—	$	918,382
Short-term investments		—		24,985			—		24,985
Accounts receivable [note 6]		—		204,980			—		204,980
Derivative assets [note 10]
Foreign currency contracts		45,605		—			—		45,605
Investments in equity securities [note 10]		—		—			43,873		43,873
	$	45,605	$	1,148,347		$	43,873	$	1,237,825
Financial liabilities
Accounts payable and accrued liabilities [note 12]	$	—	$	233,649		$	—	$	233,649
Lease obligation [note 14]		—		7,951			—		7,951
Derivative liabilities [note 14]
Foreign currency contracts		4,733		—			—		4,733
Long-term debt [note 13]		—		995,541			—		995,541
		4,733		1,237,141			—		1,241,874
Net	$	40,872	$	(88,794	)	$	43,873	$	(4,049	)

At December 31, 2019

	FVTPL			Amortized cost		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		—			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

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     147

Cameco has pledged $190,140,000 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, 2020

				Fair value
	Carrying value			Level 1		Level 2			Total
Derivative assets [note 10]
Foreign currency contracts	$	45,605		$	—	$	45,605		$	45,605
Investments in equity securities [note 10]		43,873			43,873		—			43,873
Derivative liabilities [note 14]
Foreign currency contracts		(4,733	)		—		(4,733	)		(4,733	)
Long-term debt [note 13]		(995,541	)		—		(1,173,280	)		(1,173,280	)
Net	$	(910,796	)	$	43,873	$	(1,132,408	)	$	(1,088,535	)

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	)

The preceding tables exclude fair value information for financial instruments whose carrying amounts are a reasonable approximation of fair value. The carrying values of Cameco’s cash and cash equivalents, short-term investments, accounts receivable, and accounts payable and accrued liabilities approximate their fair values as a result of the short-term nature of the instruments.

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.

148     CAMECO CORPORATION

B. Financial instruments measured at fair value

Cameco measures its derivative financial instruments, material investments in equity securities 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 0.3% to 1.1% (2019 - 1.7% to 1.8%).

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 2019.

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.

Derivatives

The following table summarizes the fair value of derivatives and classification on the consolidated statements of financial position:

	2020			2019
Non-hedge derivatives:
Foreign currency contracts	$	40,872		$	(4,333	)
Interest rate contracts		—			2,313
Net	$	40,872		$	(2,020	)
Classification:
Current portion of long-term receivables, investments and other [note 10]	$	16,466		$	4,144
Long-term receivables, investments and other [note 10]		29,139			6,360
Current portion of other liabilities [note 14]		(1,658	)		(7,505	)
Other liabilities [note 14]		(3,075	)		(5,019	)
Net	$	40,872		$	(2,020	)

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     149

The following table summarizes the different components of the gains (losses) on derivatives included in net earnings:

	2020		2019
Non-hedge derivatives:
Foreign currency contracts	$	30,600	$	31,863
Interest rate contracts		5,977		2,068
Uranium contracts		—		(1,662	)
Net	$	36,577	$	32,269

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.

Despite the impacts of COVID-19 on the global economy, Cameco’s approach to capital management has remained consistent. 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 2020 reflect the environment that the Company is operating in, similar to the prior comparative period.

The capital structure at December 31 was as follows:

	2020			2019
Long-term debt [note 13]		995,541			996,718
Cash and cash equivalents		(918,382	)		(1,062,431	)
Short-term investments		(24,985	)		—
Net debt		52,174			(65,713	)
Non-controlling interest		206			238
Shareholders’ equity		4,958,355			4,994,725
Total equity		4,958,561			4,994,963
Total capital	$	5,010,735		$	4,929,250

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, 2020, 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 $195,972,000 (2019 - $153,924,000) of care and maintenance costs during the year. Included in this amount in 2020 is $45,988,000 relating to care and maintenance costs for operations suspended as a result of COVID-19. Also included in cost of sales, because of the Cigar Lake production suspension, is the impact of increased purchasing activity at a higher cost than produced pounds. This had a negative impact on gross profit in the uranium segment.

150     CAMECO CORPORATION

Cost of sales in the fuel services segment also includes care and maintenance costs for our operations that have had production suspensions as a result of COVID-19. Cameco expensed $8,992,000 in 2020 due to the suspension.

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.

A. Business segments - 2020

For the year ended December 31, 2020

	Uranium			Fuel services		Other			Total
Revenue	$	1,411,770		$	377,296	$	11,007		$	1,800,073
Expenses
Cost of products and services sold		1,244,049			237,656		3,257			1,484,962
Depreciation and amortization		154,560			43,190		10,912			208,662
Cost of sales		1,398,609			280,846		14,169			1,693,624
Gross profit (loss)		13,161			96,450		(3,162	)		106,449
Administration		—			—		145,344			145,344
Exploration		10,873			—		—			10,873
Research and development		—			—		3,965			3,965
Other operating expense		23,921			—		—			23,921
Loss on disposal of assets		667			405		—			1,072
Finance costs		—			—		96,133			96,133
Gain on derivatives		—			—		(36,577	)		(36,577	)
Finance income		—			—		(10,835	)		(10,835	)
Share of earnings from equity-accounted investee		(36,476	)		—		—			(36,476	)
Other income		(202	)		—		(51,238	)		(51,440	)
Earnings (loss) before income taxes		14,378			96,045		(149,954	)		(39,531	)
Income tax expense										13,666
Net loss										(53,197	)
Capital expenditures for the year	$	46,697		$	30,760	$	5		$	77,462

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     151

For the year ended December 31, 2019

	Uranium			Fuel services		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

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:

	2020		2019
United States	$	1,177,756	$	1,295,195
Canada		622,317		567,730
	$	1,800,073	$	1,862,925

The Company’s non-current assets, excluding deferred tax assets and financial instruments, by geographic location are as follows:

	2020		2019
Canada	$	3,260,144	$	3,267,376
Australia		421,836		392,500
United States		145,328		121,102
Kazakhstan		55		80
Germany		16		24
	$	3,827,379	$	3,781,082

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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 2020, revenues from two customers of Cameco’s uranium and fuel services segments represented approximately $457,560,000 (2019 - $422,740,000), approximately 25% (2019 - 24%) 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		2020			2019
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.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     153

Cameco reflects its proportionate interest in these assets and liabilities as follows:

	Principal place
	of business		Ownership			2020		2019
Total assets
McArthur River		Canada		69.81	%	$	1,027,617	$	1,046,556
Key Lake		Canada		83.33	%		560,845		524,324
Cigar Lake		Canada		50.03	%		1,327,956		1,354,399
						$	2,916,418	$	2,925,279
Total liabilities
McArthur River				69.81	%	$	34,597	$	32,132
Key Lake				83.33	%		278,331		227,562
Cigar Lake				50.03	%		46,604		47,396
						$	359,532	$	307,090

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:

	2020		2019
Short-term employee benefits	$	21,676	$	21,225
Share-based compensation(a)		26,230		12,034
Post-employment benefits		6,041		5,542
Termination benefits		430		272
Total	$	54,377	$	39,073

(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 was $175,000,000 (US) and advances under the facility bore interest at a rate of LIBOR plus 2%. At December 31, 2020, there was no balance outstanding as the loan was fully repaid in 2019. For the year ended December 31, 2019, Cameco recorded interest income of $1,878,000 relating to this balance.

Cameco purchases uranium concentrates from JV Inkai. For the year ended December 31, 2020, Cameco had purchases of $148,169,000 ($111,886,000 (US)) (2019 - $112,861,000 ($84,827,000 (US))). Cameco received a cash dividend from JV Inkai of $54,404,000 ($40,621,000 (US)) (2019 - $14,079,000 ($10,635,000 (US))).

154     CAMECO CORPORATION

32. Comparative Figures

Certain prior year balances have been reclassified to conform to the current financial statement presentation.

2020 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES     155

Investor Information Common Shares Toronto (CCO) I 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 AST Trust Company (Canada) P.O. Box 700, Station B Montreal, Quebec H3B 3K3 USA American Stock Transfer & Trust Company, LLC 6201 15th Avenue Brooklyn, NY 11219 Telephone 1-800-387-0825 or 1-416-682-3860 (outside of North America) www.astfinancial.com/ca-en Inquiries Cameco Corporation 2121 - 11th Street West Saskatoon, Saskatchewan S7m 1J3 Phone: 306-956-6200 Fax: 306-956-6201 For comprehensive financial information, visit: Cameco.com Annual Meeting The annual meeting of shareholders of Cameco Corporation is scheduled to be held on May 6, 2021 at Cameco’s head office in Saskatoon, Saskatchewan. Dividends In 2020, our board of directors declared a dividend of $0.08 per common share, which was paid December 15, 2020. 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 earings.