Centerra Gold Reports First Quarter Earnings (Before Unusual Items) of $0.11 Per Share

(This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 9 and in our Cautionary Note Regarding Forward-looking Information on page 10. All figures are in United States dollars.)

Centerra Gold Inc. (TSX: CG) today reported first quarter earnings before unusual items of $23.7 million or $0.11 per common share based on revenues of $112.7 million compared to net earnings of $5.9 million or $0.03 per common share on revenues of $82.3 million in the same quarter of last year.

Consolidated gold production for the first quarter of 2008 totaled 120,395 ounces at a total cash cost of $610 per ounce compared to 133,005 ounces at a total cash cost of $410 per ounce in the corresponding quarter of 2007. Cash provided by operations, net of working capital changes and other operating items was $28.0 million compared to $7.9 million in the first quarter of 2007. (Total cash cost is a non-GAAP measure and is discussed under "Non-GAAP Measures" in the Management's Discussion and Analysis issued in conjunction with this news release).

During the first quarter of 2008, the Company recorded an unusual item of $4.5 million resulting in net earnings of $19.3 million or $0.09 per share. The unusual item is a $4.5 million non-cash expense, which represents the incremental value (as of March 31, 2008) associated with the 10 million treasury shares contingently issuable upon closing, pursuant to the framework agreement with the Kyrgyz Government and the Agency Agreement with Cameco Corporation (Cameco) previously announced on August 30, 2007.

As disclosed in the Company's news release of April 28, 2008, the Government of the Kyrgyz Republic has requested, and Centerra and Cameco have agreed to extend from April 30 until June 1, 2008, the deadline for completion of the transactions contemplated by the framework agreements entered into on August 30, 2007 between Centerra and Cameco and the Government.

First Quarter Highlights

- Extended to June 1, 2008 the deadline for completion of the proposed Kumtor agreement.

- Gatsuurt Project feasibility study approved by Mongolian Government.

- Negotiations commenced with respect to the Gatsuurt Investment Agreement between the Government and the Company.

- Repaired Kumtor ball mill and returned to normal operations with no material impact. Production guidance for 2008 remains unchanged.

- On track to access the SB Zone at Kumtor.

- Temporary production permit received for Boroo heap leach operation, production expected in the second quarter.

Commentary

"After the Mongolian Government's approval of the feasibility study for the Gatsuurt Project, we commenced negotiations regarding an investment agreement for Gatsuurt. I am pleased to say that those negotiations are advancing and both sides have adopted a pragmatic and constructive approach. Additionally, during the quarter Kumtor did an excellent job successfully repairing its ball mill in a timely manner. The ball mill restarted earlier than expected and the mill is achieving its anticipated throughput. The Company's 2008 guidance on gold production and cash costs at Kumtor will not be affected by the ball mill ring gear repair and shell replacement and we are reaffirming our overall guidance for the year. The Kyrgyz Government working group continued their review related to Kumtor and met with management to discuss proposals with respect to the terms governing the project. We expect Parliament to convene on May 29, 2008 and to consider agreements with respect to Kumtor. While we expect discussions to continue, we have communicated to the Government our expectations that the transactions be completed on the terms of the existing framework agreements," said Len Homeniuk, President and CEO of Centerra Gold.

Financial and Operating Summary

Revenues for the first quarter of 2008 were $112.7 million compared to $82.3 million during the same period one year ago. First quarter 2008 revenue reflects a 41% increase in realized gold price ($909 per ounce in the first quarter of 2008 versus $645 per ounce in the first quarter of 2007) partially offset by 3,596 less ounces sold in the period.

The Company produced a total of 120,395 ounces of gold in the first quarter of 2008, less than the 133,005 ounces of gold produced in the first quarter of 2007. Lower gold production was mainly due to the reduced gold production at the Boroo mine, partially offset by higher production at the Kumtor mine. Lower gold production at Boroo was attributable to the milling of lower ore grades averaging 2.74 g/t in the first quarter of 2008 compared to 3.91 g/t milled in the same quarter of 2007.

Centerra's total cash cost per ounce of gold was $610 in the first quarter compared to $410 in the first quarter of 2007. The year-over-year increase in unit cash costs was primarily due to a $142 per ounce increase in operating costs and the impact of lower gold production which increased unit cash cost by $58 per ounce. First quarter total cash cost increased only $25 per ounce compared to the fourth quarter 2007 total cash cost of $585 per ounce due primarily to lower gold production. (Total cash cost is a non-GAAP measure and is discussed under "Non-GAAP Measures" in the Management's Discussion and Analysis for the three months ended March 31, 2008, issued in conjunction with this news release.)