Centerra Gold Reports Second Quarter Earnings (Before Unusual Items) of $0.06 Per Share

Market Wire, July, 2008

(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 11. All figures are in United States dollars.)

Centerra Gold Inc. (TSX: CG) today reported second quarter earnings before unusual items of $13.8 million or $0.06 per common share based on revenues of $142.6 million compared to net earnings of $18.6 million or $0.09 per common share on revenues of $103.7 million in the same quarter of last year.

Centerra's consolidated gold production for the second quarter of 2008 totaled 158,303 ounces at a total cash cost of $553 per ounce compared to 153,414 ounces at a total cash cost of $349 per ounce in the corresponding quarter of 2007. Cash provided by operations, net of working capital changes and other operating items was $10.6 million compared to $7.4 million in the second 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 second quarter of 2008 the Company recorded an unusual item of $42.2 million resulting in net earnings of $56.0 million or $0.26 per share. The unusual item of $42.2 million is a non-cash gain representing an adjustment to the value of treasury shares which the Company believes are likely to be issuable in connection with any future potential settlement of outstanding issues with the Government of the Kyrgyz Republic. The gain represents the difference between the market value of 10 million treasury shares at March 31, 2008 ($131.3 million) and the value at May 30, 2008 ($89.1 million), immediately prior to the expiry on June 1, 2008 of the August 2007 Agreement on New Terms between the Company and the Government.

As disclosed in the Company's news release of June 2, 2008, Centerra has resumed the international arbitration previously initiated by the Company in accordance with its Investment Agreement, which provides that all disputes with respect to the Kumtor project are subject to international arbitration. However, Centerra continues to hold discussions with the Government working group responsible for Kumtor. To allow for such discussions, the parties have agreed to a limited postponement of the arbitration proceedings to September 29, 2008. See "Other Corporate Developments - Kyrgyz Republic".

Second Quarter Events

- Gold production guidance for 2008 remains unchanged.

- Initial access achieved to the SB Zone at Kumtor.

- Framework agreements entered into between the Company and Cameco Corporation and the Kyrgyz Government in August 2007 were not ratified by the Kyrgyz Parliament and expired.

- Management reorganization, Stephen A. Lang appointed CEO and Jeffrey S. Parr appointed CFO.

- Bruce Walter appointed Vice Chair to assist the Company in its growth initiatives.

Commentary

Stephen Lang, President and CEO of Centerra Gold commented, "I am pleased to report that we are right on our plan for both gold production and costs other than reflecting the change to total cash cost relative to the adjustment for the inclusion of revenue-based taxes and royalties. The second half of the year we are on track to increase gold production significantly, with 70% of Kumtor's annual gold production forecast for the second half of 2008. While the expiration of the agreement with the Kyrgyz Government in June was a setback, we are continuing discussions with the government and its working group to advance the negotiations to reach a fair and acceptable agreement for all parties. We are confident that in time we will achieve this, but in the meantime the Company continues to operate and produce gold at Kumtor uninterrupted."

Financial and Operating Summary

Revenues for the second quarter of 2008 were $142.6 million compared to $103.7 million during the same period one year ago. Second quarter 2008 revenue reflects a 33% increase in realized gold price ($889 per ounce in the second quarter of 2008 versus $667 per ounce in the second quarter of 2007).

The Company produced a total of 158,303 ounces of gold in the second quarter of 2008, compared to 153,414 ounces of gold produced in the second quarter of 2007.

Centerra's total cash cost per ounce of gold was $553 in the second quarter compared to $349 in the second quarter of 2007. The year-over-year increase in unit cash costs was primarily due to a $164 per ounce increase in operating costs, which included increased maintenance costs, higher fuel costs and higher costs for other consumables, labour and royalties. Second quarter total cash cost decreased $57 per ounce compared to the first quarter 2008 total cash cost of $610 per ounce due primarily to the higher 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 June 30, 2008, issued in conjunction with this news release.)