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corresp

    June 28, 2005

    O. KIM GOHEEN

    Senior Vice-President,

    and Chief Financial Officer

    VIA FACSIMILE AND COURIER (202) 772-9220

    CAMECO CORPORATION

    Ms. Jill Davis

    Corporate Office

    Branch Chief

    2121 – 11th Street West

    Securities and Exchange Commission

    Saskatoon, Saskatchewan

    Division of Corporate Finance

    Canada S7M 1J3

    450 Fifth Street N.W.

    Washington, D.C.

    Tel: 306.956.6256

    20549-0405

    Fax: 206.956.6312

    www.cameco.com

Dear Ms. Davis:

Cameco Corporation

Form 40-F for the Year Ended December 31, 2004

File Number 001-14228

Supplemental Response dated May 27, 2005

I am writing to provide Cameco’s response to your June 15, 2005 letter. Our response, attached as
Schedule A, was prepared in consultation with KPMG LLP, Cameco’s external auditors. The numbering
and headings in Schedule A refer to the numbering and headings in your June 15, 2005 letter.

Please contact the undersigned at (306) 956-6256 to discuss any questions you may have regarding
the attached response.

Yours truly,

“O. Kim Goheen”

O. Kim Goheen

    c:

    Yong Choi, Securities and Exchange Commission

Gerald W. Grandey, President and Chief Executive Officer, Cameco

KPMG LLP

SCHEDULE A

Investment in Bruce Power L.P. (Bruce Power), Page 16.

    2.

    We note your response to our prior comment 2. We understand that you have assigned the
excess purchase price of the acquisition to the Bruce Power lease with no amounts allocated to
goodwill. Please explain in greater detail how you determined the fair value of the assets
and liabilities acquired. We note your statement regarding the fact that the reasonableness
of the allocation was supported using discounted cash flow measures, which indicated expected
rates of return in excess of Cameco’s cost of capital. However, it is unclear how this
complies with paragraphs 37 (d)(1) and (e) of SFAS 141 for US GAAP. Also explain in greater
detail the extent to which you considered the finite term of the lease when forming your
conclusion that the excess price on the acquisition was assigned to the lease. Refer also to
paragraph 6 of EITF Issue 04-04 for US GAAP.

    Response

    The purchase price for the 2003 acquisition of a 16.6% interest in the Bruce Power Limited
Partnership was $204 million. The purchase price was allocated to assets acquired and
liabilities assumed in accordance with SFAS 141, as follows:

    Working Capital

Working capital was comprised mainly of cash, receivables, supplies, fuel and trade
payables. Due to the short-term nature of these items, their book values were deemed to
reflect their fair values.

    Financial Liabilities

Financial liabilities are comprised of the capital lease obligation owing by Bruce Power to
the Ontario government and a pension obligation. The capital lease was negotiated by Bruce
Power in 2001 and economic and interest rate conditions had not changed significantly from
the time the lease was signed. Therefore, we concluded that the book value of the lease
obligation was a good proxy for its fair value at the time of the acquisition. A valuation
of the pension obligation at the date of acquisition was prepared by an independent third
party. Accordingly, we recorded the obligation at its fair value based upon this valuation.

    Fair Value of Off Balance Sheet Obligations

At the time of acquisition, Bruce Power had signed fixed price power purchase agreements
(PPA) which were significantly below market values. These PPA’s were valued based on the
forward price curve that existed in the Ontario electricity market at the date of
acquisition. Cameco’s share of the deficiency was reflected in its purchase price
allocation by recognizing a liability of $69 million relating to the PPA’s.

    Cameco also recognized an income tax liability for the first 45 days of 2003
(pre-acquisition) for which Cameco would be responsible for tax on

    partnership income.
This liability was based on a calculation of the partnership’s taxable income prepared by
Bruce Power at the date of acquisition.

    Finite-Lived Intangible Assets

Cameco obtained an option in the 2003 acquisition agreement that would allow it to receive
a higher price on fuel sold to Bruce Power in exchange for giving up certain rights it had
obtained as a prior partner in the Bruce Power Limited Partnership. This option was valued
based on a discounted cash flow analysis of the potential incremental cash flow Cameco
could have obtained by exercising this option. Cameco assigned a value of $10 million to
this asset. These cash flows were based on third party projections of the long-term price
of uranium.

    Tangible Assets

Under SFAS 141 (37) (d) (1), plant and equipment is to be valued considering the current
replacement cost for similar capacity assets. In the case of our 2003 acquisition, the
plant and equipment acquired was comprised mainly of six operating reactors with total
electricity generating capacity of approximately 5,000 megawatts. Based on our knowledge
of the cost to construct a nuclear reactor, the current replacement cost would have
significantly exceeded our purchase price plus the estimated costs to refurbish the two
non-operating Bruce A reactors. As a result, following the additional guidance in SFAS 141
(37) (d) (1), we determined the benefit to Cameco of the expected future use of the assets
by assessing discounted cash flows expected from the assets. As a result, we assigned a
fair value of $365 million to these assets.

    The discounted cash flows resulted in a value in excess of the residual purchase price and
therefore no goodwill arose on this acquisition. Since no goodwill arises on this
transaction, EITF 04-04 is not applicable.

    Excess of Fair Value of Acquired Net Assets Over Cost

In accordance with SFAS 141 (44), the fair values of the assets acquired and liabilities
assumed exceeded the cost of the acquisition. As a result, the excess was allocated to the
tangible plant and equipment referred to in “Tangible Assets” above.

    Amortization

The excess purchase price attributable to plant and equipment is being amortized based on
the expected output projected from each reactor on a monthly basis, not exceeding the term
of the lease. The denominator to calculate monthly amortization expense was termed
“reactor months” and the monthly expense is dictated by the number of reactors in
operation.

    The value assigned to the finite-lived intangible asset is being amortized over the term of
the lease.

Revenue Recognition, Page 40

    4.

    We have reviewed your response to prior comment 6 regarding your gold sales. We note that
you sell dore subject to final assay results. Please tell us whether or not there are
significant differences between the preliminary assay and the final assay and whether or not
this has resulted in significant changes in the amount recorded as revenue. Also, please
clarify whether you enter into any provisionally priced contracts along with their significant
characteristics such as average price swing and the average term these contracts remain
outstanding. Refer to Topic VII of the September 25, 2002 AICPA SEC Regulations Committee
meeting highlights (http://www.aicpa.org/download/belt/2002_09_25 highlights.pdf) for
US GAAP.

    Response

    In respect of differences between the preliminary assay and the final assay results, there
have been no significant differences. The average difference between the preliminary and
final assay amounted to about 0.3% in 2004. The greatest difference for any single shipment
was about 1.0%. The preliminary assay results are highly reliable and no significant
adjustments to revenue have been required. We do not enter into any provisionally priced
contracts. The selling price for the gold is fixed at the date of delivery.

Accounting Change, Page 55

    5.

    We note your response to our prior comment 7. Please clarify your disclosure regarding the
revision to your financial statements that you have described as an accounting change, which
led to a restatement of previously issued interim financial statements, as a correction of an
error. In US GAAP the term accounting change is defined in paragraph 6 of APB No. 20 as a
change in an accounting principle, an accounting estimate, or the reporting entity. The
correction of an error in previously issued financial statements is not deemed to be an
accounting change. This revision should be made throughout the document where applicable.

    Response

    Under Canadian GAAP, Cameco’s decision to move from one basis of accounting for the
restructuring transactions to a more appropriate basis can be described as an accounting
change, as we have done in our MD&A. Based upon APB No. 20, as noted by the SEC, under US
GAAP Cameco’s decision could be considered a correction of an error.

    To address the different treatment under Canadian and US GAAP, Cameco proposes two
amendments to its 40-F:

    1)

    A new section would be added called “Supplement to MD&A for US Readers.” This
new section would state that the “Accounting Change” described in Cameco’s MD&A, would
be described as a “Correction of an Error” under US generally accepted accounting
principles.

    2)

    At the end of the section called “Additional Disclosure Regarding Disclosure
Controls and Procedures and Internal Control over Financial Reporting”, a new sentence
would be added, indicating that under US generally accepted accounting principles the
change to the accounting for the restructuring transactions would be considered a
correction of an error.

    We believe this is the correct approach to address this difference, as the SEC’s general
instruction B(3) to the Form 40-F requires Cameco to file under the cover of the Form 40-F
its annual information form, annual audited financial statements and accompanying
management discussion and analysis prepared in accordance with Canadian requirements, with
Cameco’s audited financial statements containing a reconciliation of material differences
between Canadian and US GAAP. Given that Cameco’s MD&A, which has been filed with the
Canadian regulatory authorities, complies with Canadian GAAP, it would be inappropriate
under the MJDS to require Cameco to amend its MD&A or any of its other Canadian disclosure
documents.