Centerra Gold Reports Third Quarter Earnings of $0.08 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 12. All figures are in United States dollars.)

Centerra Gold Inc. (TSX: CG) today reported third quarter net earnings of $16.9 million or $0.08 per common share based on revenues of $139.4 million compared to net earnings before unusual items of $4.8 million or $0.02 per common share on revenues of $98.0 million in the same quarter of last year. In the third quarter of 2007 after reflecting unusual items, the Company recorded a loss of $90.4 million or $0.42 per common shares.

Centerra's consolidated gold production for the third quarter of 2008 totaled 186,145 ounces at a total cash cost of $498 per ounce compared to 136,461 ounces at a total cash cost of $440 per ounce in the corresponding quarter of 2007. Cash provided by operations, net of working capital changes and other operating items was $24.4 million compared to $29.3 million in the third 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).

As disclosed in the Company's news release of September 25, 2008, Centerra agreed to suspend the international arbitration proceedings initiated by the Company, which had been previously postponed to September 29, 2008. The Company continues to hold discussions with Cameco Corporation and the Government working group responsible for Kumtor and the parties have agreed that this suspension will allow for these discussions to continue and for the parties to concentrate on resolving outstanding issues relating to the project. See "Other Corporate Developments - Kyrgyz Republic".

Third Quarter Events

- Suspended international arbitration proceedings, as negotiations continue.

- Gold production and operations continue uninterrupted at Kumtor and the heap leach facility at Boroo has commenced gold production.

- Higher grade material being accessed in the SB Zone at Kumtor.

- Exploration joint ventures signed in Russia (Tyva Republic) and Turkey.

- Surface mapping and sampling continued on the Tonopah Divide project in Nevada.

Commentary

Stephen Lang, President and CEO of Centerra Gold commented, "The operations during the quarter provided strong cash flow, contributing $63 million year-to-date. I can report that our discussions are continuing with the Kyrgyz Government and the suspension of the international arbitration indicates that those discussions are continuing. The higher grade portion of the SB Zone at Kumtor was reached in September, but head grades at the early stage of the high-grade development were lower than expected. While we are starting to see much better grades at Kumtor, as we get deeper into the SB Zone, we have revised our guidance to reflect the lower than anticipated gold production for the third quarter. There will be a significant increase in gold production in the fourth quarter at Kumtor as we mine the higher-grades in the SB Zone."

Financial and Operating Summary

Revenues for the third quarter of 2008 were $139.4 million compared to $98.0 million during the same period one year ago. Third quarter 2008 revenue reflects a 26% increase in realized gold price ($860 per ounce in the third quarter of 2008 versus $680 per ounce in the third quarter of 2007).

The Company produced a total of 186,145 ounces in the third quarter of 2008, up from 158,303 ounces of gold in the second quarter of 2008 and the 136,461 ounces of gold produced in the third quarter of 2007.

Centerra's total cash cost per ounce of gold was $498 in the third quarter compared to $440 in the third quarter of 2007. The year-over-year increase in unit cash costs was primarily due to a $61 per ounce increase in operating costs resulting from reduced deferred stripping in 2008, an $18 per ounce increase in consumable costs, partially offset by the impact of higher grades and recoveries at Kumtor. (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 September 30, 2008, issued in conjunction with this news release.)

Cash provided by operations was $24.4 million for the third quarter of 2008 compared to $29.3 million for the prior year third quarter. The decrease reflects the higher working capital levels partially offset by increased gold sales and higher average gold price received.

Capital expenditures in the third quarter of 2008 amounted to $29.3 million of which $14.5 million was spent on sustaining capital projects and $14.8 million invested in growth capital, the major components are related to the SB Zone underground development at Kumtor ($3.1 million), completion of the heap leach facility at Boroo ($2.5 million) and Pit 3 pre-stripping at Boroo ($5.0 million).

During the third quarter of 2008, the Company paid down a $10 million revolving credit facility taken out in 2007. The facility remains available for future use. After repaying the $10 million revolving credit facility, Centerra's cash position at the end of September 2008 was $91.8 million, compared to $105.5 million at December 31, 2007.