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corresp

    O. KIM GOHEEN

    July 11, 2005

    Senior Vice-President,

and Chief Financial Officer

    VIA FACSIMILE & COURIER (202) 772-9220

    CAMECO CORPORATION

    Ms. Jill Davis

    Corporate Office

    Branch Chief

    2121 – 11th Street West

    United States Securities and Exchange Commission

    Saskatoon, Saskatchewan

    Division of Corporation Finance

    Canada S7M 1J3

    Mail Stop 70-10

    100 “F” Street, NE.

    Washington, DC 20549

    Tel: 306.956.6256

    Fax: 306.956.6312

    Dear Ms. Davis:

    www.cameco.com

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 respond to your June 21, 2005 letter, where you provide a list of additional
questions relating to the application of Cameco’s revenue recognition policy to its uranium
business. Our responses to your questions are below. We have reproduced each question and have
assigned it a number. Our responses were prepared in consultation with KPMG LLP, Cameco’s external
auditors.

As requested in SEC Question 15, attached as Exhibits A, B, and C are sample contracts for each
type of revenue transaction described in our revenue recognition policy. Each of these contracts is
representative of its respective type of uranium sale arrangement. To comply with Cameco’s
confidentiality commitments to its customers, any information related to the customers who signed
these contracts has been redacted. In addition, pursuant to the SEC’s Rule 83, confidential
treatment is being requested of the entire contracts, which have been redacted from the EDGAR
filing. In our responses below, we refer to the provisions of these sample contracts to assist you
to understand our business. These sample contracts are:

    1)
    Exhibit A is a uranium concentrates purchase agreement that was signed in 2004. Uranium
concentrates is also called yellowcake. This is an example of the first type of uranium sale
arrangement in our business, where Cameco sells and delivers yellowcake to the customer.
From now on in this letter, I will refer to this contract as a “Concentrates Purchase
Agreement.”

    2)
    Exhibit B is a UF6 Conversion Services Agreement that was signed in 2004. This is
a toll conversion contract, representing an example of the second type of uranium sale
arrangement in our business, where Cameco toll converts customer-owned yellowcake into
UF6 and delivers the UF6 to the customer. From now on in this letter, I
will refer to this contract as a “Conversion Services Agreement”.

    3)
    Exhibit C is a UF6 Supply Agreement that was signed in 2004. This represents the
third type of uranium sale arrangement in our business, where Cameco converts Cameco-owned
yellowcake into UF6 and delivers the UF6 to the customer. From now on in
this letter, I will refer to this contract as a “UF6 Supply Agreement”.

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

2004 Consolidated Financial Statements

Revenue Recognition, Page 40

SEC Question No. 1

Tell us whether there is provisional pricing in yellowcake sales. Explain to us what the “firm”
price is based upon, and whether it is based upon the quantity of yellowcake processed or whether
it considers the quality of and quantity of converted uranium produced.

Cameco Response

There is no provisional pricing in yellowcake sales. For yellowcake sales, the price is firm in
that:

    •
    The price per pound of yellowcake is fixed by either being
specified exactly in the contract or derived by a uranium spot
price related formula specified in the contract (see section 3.01
of the Concentrates Purchase Agreement and our response to
question 2 for more information on uranium spot related pricing in
our yellowcake sales contracts).

    •
    There are no adjustment clauses in our yellowcake sale contracts
to adjust the price per pound, after invoicing, based upon
quantity and quality of yellowcake sold to the customer.

    •
    The amount payable by the customer equals the product of the number of pounds of yellowcake
(in other words quantity) book transferred into the customer’s account and the price per
pound provided in the contract. (See sections 3.02 and 5.01 of the Concentrates Purchase
Agreement.)

    •
    The quality of yellowcake is not a factor in determining the
price. Cameco warrants to its customer all yellowcake supplied
conforms to stipulated quality specifications. (See section
2.03(b) of the Concentrates Purchase Agreement as well as our
response below to SEC Question No 8 which indicates we have not
received a warranty claim for non-conformance with specifications
over the past 10 years.)

    •
    The quantity of yellowcake to be delivered is determined by the
contract. The price charged to a customer does not vary based upon
quantities delivered to that customer.

We also confirm there is no provisional pricing for toll conversion services and UF6
supply arrangements.

SEC Question No. 2

Tell us whether there is an active market for uranium in yellowcake form.

Cameco Response

There is an active market for uranium supply in yellowcake form. This active market is reflected by
the following:

    •
    Independent third party agencies report the price of yellowcake sold in the “spot market”
and contracted to be sold under long term contracts. Often these third party agency reports
are used to determine the price of yellowcake sold by Cameco to a customer. For example, see
the definition of Concentrates Price in section 3.01 of the Concentrates Purchase Agreement.
More information on these third party agencies can be found on their websites
(www.uxc.com and www.uranium.info).

SEC Question No. 3

Confirm that you sell uranium in yellowcake form on a standalone basis without providing conversion
services.

Cameco Response

Yes, we do. For an example, please see the Concentrates Purchase Agreement.

SEC Question No. 4

Confirm that you perform conversion services on yellowcake of which you are not the supplier.

Cameco Response

Yes, we do. For an example, please see the Conversion Services Agreement.

SEC Question No. 5

Arrangements for which you are both the supplier and the converter, tell us what happens if you
sell yellowcake and deliver it to your conversion facilities but conversion is never completed.

Cameco Response

In the case of a UF6 supply agreement, where Cameco supplies yellowcake as well as
performs conversion services, delivery of the yellowcake and conversion services to the customer
occurs simultaneously (See UF6 Supply Agreement).

In addition, there are situations where Cameco sells yellowcake to its customer under the first
type of uranium sale arrangement (see the Concentrates Purchase Agreement) and also has a contract
with the same customer to provide toll conversion services (see Conversion Services Agreement). In
these situations, Cameco recognizes revenue separately under the individual contracts.

We have considered the possibility that these separate contracts could be viewed as multiple
deliverable arrangements. In so doing, we have reviewed and considered the implications of applying
the EITF 00-21, Revenue Arrangements with Multiple Deliverables, and concluded that the accounting
would not change as the uranium and toll conversion components of the arrangement would be
considered separate units of accounting. The first criterion for separation is met for both
uranium and conversion because each is sold separately by other suppliers. The second criterion is
also met, as there is objective evidence of the fair value for both uranium and conversion. The
pricing in Cameco’s sales contracts is either based upon or refers to market values (i.e. spot
prices) for uranium or conversion. The third criterion is met because there are no general rights
of return.

Cameco has never experienced the situation described in your question. Under a uranium sales
contract, if Cameco sold and book transferred yellowcake to a customer’s account at its facilities,
Cameco’s experience is that the yellowcake will ultimately be toll converted by Cameco into
UF6 and book transferred to the customer’s account at an Enricher under a toll
conversion contract.

SEC Question No. 6

Explain the terms of the sale/transfer of converted uranium to the enricher or fuel fabricator.

Cameco Response

Cameco does not sell converted uranium (UF6) to fuel fabricators. However, Cameco does
sell a very small quantity of UF6 to Enrichers. They are just another customer for
Cameco’s UF6. Enrichers, in turn, will enrich the UF6 bought from Cameco and
sell this enriched product to their customers.

These UF6 sales take place by way of the third type of uranium sale arrangement (see
UF6 Supply Agreement) and on the same terms as UF6 sales to Cameco’s utility
customers.

Also see our response to your question 7.

SEC Question No. 7

We note once the enricher analyzes the content of the converted uranium it receives from you, it is
transferred from your account to the customer’s account (book transfer). Please explain how the
book transfer occurs again from company’s account to customer’s account when you have stated that
such transfer occurred at the beginning of the conversion process.

Cameco Response

Our response is based upon your question relating to a book transfer at an Enricher under the
second type of uranium sale arrangement (see Conversion Services Agreement) and under the third
type of uranium sale arrangement (see UF6 Supply Agreement).

Physical Inventory Transfer

Cameco stores inventory of UF6 at enrichment facilities in the United States and the EU.
To maintain inventory at each Enricher:

    •
    Cameco physically delivers UF6 to an Enricher’s
facility. Based upon Cameco’s shipping documents, the Enricher
credits Cameco’s account with the volume of delivered
UF6.

    •
    The Enricher will analyze the delivered UF6 to ensure
that it meets the UF6 ASTM standard (an industry
standard specification.) and to confirm that Cameco’s declared
volume of delivered UF6 is correct. Based upon its
analysis, if necessary, the Enricher will adjust Cameco’s account
and this adjustment will be reflected in Cameco’s carrying value
of its inventory.

    •
    Cameco maintains this transferred UF6 as inventory
until it is sold and book transferred to the customer.

Sale / Book Transfer Process

For the second type of uranium sale arrangement (see Conversion Services Agreement) and the third
type of uranium sale arrangement (see UF6 Supply Agreement), the steps in the book
transfer process at the Enricher is as follows:

    •
    Cameco’s customer will request delivery of a certain volume of
UF6 at the Enricher’s facility on a specified date.
This notice is given several months prior to the requested
delivery date. (See section 3.2 of the Conversion Services
Agreement. The sample UF6 Supply Agreement is
different than most Cameco UF6 supply arrangements in
that the delivery date at the Enricher is specified in the
agreement (see Section 2.02 of the UF6 Supply
Agreement)).

    •
    Cameco will direct the Enricher to transfer the requested volume
of UF6 by book transfer to the customer’s account at
the Enricher’s facility on a specified delivery date. Once this
book transfer occurs, this is the point at which Cameco invoices
the customer and records revenue. (See sections 3.6, 5.2 and 5.3
of the Conversion Services Agreement and sections 2.04 and 3.03 of
the UF6 Supply Agreement).

SEC Question No. 8

Tell us who bears the risk if uranium sold and transferred to the converter does not meet the
minimum operating specifications, or if the converted uranium transferred to the enricher does not
meet the UF6 ASTM standard.

Cameco Response

In both cases, Cameco bears this risk, as it provides a contractual warranty that the product
supplied will conform to the specifications. (See section 2.03(b) of the Concentrates Purchase
Agreement; see section 3.4(c) of the Conversion Services Agreement; and see section of 2.05 (b) of
the UF6 Supply Agreement).

Cameco has examined its past 10 years of uranium sales activity and confirms there has not been a
warranty claim against it over that period for non-conformance with specifications.

SEC Question No. 9

We note you refer to a fixed schedule for delivery in the contracts. Tell us if you are referring
to the date of book transfer to the customer’s account prior to conversion or prior to enrichment,
or the date of physical delivery of uranium in its final form for which you are responsible to the
enricher, fuel fabricator or the customer.

Cameco Response

The fixed schedule for the delivery in the contracts refers to the date for delivery to the
customer by book transfer. Under a yellowcake sales contract, the book transfer of yellowcake takes
place prior to conversion. Under a toll conversion services contract and a UF6 supply
contract, book transfer of UF6 takes place prior to enrichment.

Cameco physically delivers yellowcake to a converter and converted uranium to an enricher. Based
Cameco’s shipping documents, each facility credits Cameco’s account with the volume of delivered
product. This physical delivery of product, in the final form for which Cameco is responsible,
takes place before a sale (and book transfer) to a customer and enables Cameco to maintain an
inventory of product and subsequently make the book transfer to the customer.

Below are details on how this fixed schedule for the date of delivery is determined under each form
of uranium sale arrangement, referring to each of sample contracts sent to you.

Under the sample Concentrates Purchase Agreement (first type of uranium sale arrangement):

    •

    the customer has committed to take two deliveries of yellowcake
(see section 2.01 and the definitions of Contract Quantity,
Delivery Quantity 1, Delivery Quantity 2, Delivery Date, Delivery
Date 1 and Delivery Date 2 contained in section 1.01 of the
Concentrates Purchase Agreement); and

    •

    the date Cameco completes the book transfer from its account at
the Converter to the customer’s account is the date of delivery
(see section 5.01 of the Concentrates Purchase Agreement). This is
the point that Cameco invoices the customer and records revenue.
(See section 3.02 of the Concentrates Purchase Agreement.)

Under the sample Conversion Services Agreement (the second type of uranium sale arrangement):

    •

    the customer commits to take delivery of an annual quantity of
conversion services (see section 3.3 of the Conversion Services
Agreement);

    •

    the customer gives a notice to fix a delivery date to take
delivery of a quantity of UF6 by book transfer at a
location its selects (see section 3.2 of the Conversion Services
Agreement);

    •

    the customer then is required to deliver to Cameco a sufficient quantity of yellowcake for
conversion in order for Cameco to complete the conversion process and deliver the requested
quantity of UF6. (See section 3.2, the last sentence of section 2.2 (b) and the
definitions of Accepted Concentrates and Preparation Period in section 1.1 of the Conversion
Services Agreement.) All conversion contracts are the same in this regard, whether the
yellowcake was purchased from Cameco or another supplier; and

    •

    the date Cameco completes the book transfer requested in the customer’s notice is the
point that Cameco invoices the customer and records revenue. (See sections 3.6 and 5.2 of
the Conversion Services Agreement.)

Under the sample UF6 Supply Agreement (the third type of uranium sale arrangement-
delivery of converted uranium in the form of UF6):

    •

    the customer commits to take delivery of a quantity of
UF6 (see Section 2.02 of the UF6 Supply
Agreement);

    •

    the delivery date at the Enricher is specified (see 2.02 of the
UF6 Supply Agreement)); and

    •

    the date Cameco completes the book transfer at the Enri