thanks to U308worker who posted the following article on another site.

also not in this article but something to mull over is Cameco construction permit that expires Dec 31/09 for Cigar Lake and Cameco is applying for a 4 year extension. The water problem has not been resolved to-date and I personally beleive it may never be solved which may make this article more interesting to read.

Uranium miner Cameco raises guidance, hints at possible acquisition
SASKATOON
BY KRISTINE OWRAM
THE CANADIAN PRESS

Uranium giant Cameco Corp. (TSX:CCO) raised its 2009 financial guidance Wednesday as its CEO hinted that an acquisition may be in the works.

Gerry Grandey, president and chief executive of the world's biggest uranium miner, said Cameco intends to file a shelf prospectus that will allow the company to take on up to $1 billion in long-term debt “if we so desire.”

“Cameco watchers may see this filing as a sign that we have identified a specific acquisition target,” Grandey acknowledged in aconference call.

“Let me merely restate that Cameco intends to maintain the financial flexibility to take advantage of opportunities when they might emerge, but as we have stated consistently, Cameco is not going to overpay for an acquisition.”

Grandey said Cameco already has the potential to double its production to 40 million pounds annually through organic growth.

“Acquisitions must compete against these existing portfolio assets,” he added.

Blackmont Capital analyst George Topping said Cameco's most obvious acquisition target would be Paladin Energy Ltd. (TSX:PDN), but the company's valuation may prevent that.

“Only about 55 per cent of (Cameco's) earnings were actually related to uranium mining in the quarter, and other companies such as Paladin garner better valuations,” Topping said.

Because Cameco tends to focus on long-term contracts when selling uranium, it is actually less well-positioned than a company like Paladin to take advantage of an increase in the price of the fuel, which is bound to happen as demand increases from developing countries like China, Topping said.

“Paladin is three times more sensitive to the uranium price than Cameco,” he said. “As an investor, if you don't believe uranium pricesare going higher, then you shouldn't own any uranium stocks. If you think uranium's going higher, than you want to be the one that's most sensitive to that increase, with reasonable risk, of course.”

Earlier Wednesday, Cameco reported an improvement in both earnings and revenues on the strength of the company's fuel services and electricity businesses, as well as a favourable exchange rate.

The Saskatoon-based company reported net earnings of $247 million or 63 cents per share for the quarter ended June 30. The results marked a 65 per cent increase from year-earlier profits of $150 million or 42 cents per share.

Excluding one-time items, Cameco reported earnings of $140 millionor 36 cents per share, one per cent higher than adjusted net earnings of $139 million or 39 cents per share a year ago.

These were boosted by higher realized prices for electricity from the Bruce Power nuclear power plant in southwestern Ontario, of which Cameco owns nearly a third.

Quarterly revenue surged to $774 million from $620 million a year ago on a 26-per-cent boost in uranium revenue and a 35-per-cent surgein sales volumes.

Cameco said it now expects 2009 consolidated revenue to increase five to 10 per cent over 2008 on uranium sales volumes of between 34 million and 36 million pounds.

Revenue from uranium is also expected to increase five to 10 percent over 2008 as dozens of new reactors come online around the world.

Grandey said he expects four to eight new reactors to come online inthe United States over the next decade, while an unofficial count found that 13 new reactors are currently under construction in China.

“There is no reason to doubt that a country with the intellectualbase, educated workforce, population and energy appetite of China cando what the West did during the first nuclear building program,” he said.

George Assie, Cameco's senior vice-president of marketing and business development, said China has so far been the largest single buyer in the uranium spot market this year, purchasing approximatelyeight million pounds to date.

In addition, India, Korea, Japan, the United Arab Emirates, Jordan, Egypt and Turkey are all expected to contribute to demand for the nuclear fuel.

“All this activity means that global uranium supply will need toincrease over the next decade. Be assured Cameco is taking the steps necessary to remain among the world's top suppliers,” Grandey said.

Shares in Cameco lost 38 cents to $29 in Wednesday trading on the Toronto Stock Exchange.