Centerra Gold Reports Record Fourth Quarter Production at Kumtor; Fourth Quarter Earnings of $0.20 per Share

Market Wire, February, 2009

Centerra Gold Inc. (TSX: CG) -

(This news release contains forward-looking information that is subject to the risk factors and assumptions set out on pages 16 and 17 and in our Cautionary Note Regarding Forward-looking Information on page 19. All figures are in United States dollars.)

Centerra Gold Inc. (TSX: CG) today reported its financial and operating results for the fourth quarter and year ended December 31, 2008 and provided an outlook for 2009.

2008 Fourth Quarter and Full Year Highlights

- Record fourth quarter gold production at Kumtor of 236,544 ounces bringing full year gold production at Kumtor to 556,251 ounces. Centerra's consolidated 2008 gold production increased 35% to 748,888 ounces compared to 555,410 ounces a year earlier.

- Fourth quarter gold sales of $241.3 million, an increase of 73% over the third quarter.

- Annual gold sales of $636.0 million, an increase of 70% over the prior year.

- Cash provided by operations of $103.3 million for the fourth quarter. For the year, cash provided by operations of $166.3 million representing $0.77 per share.

- Net earnings were $42.6 million ($0.20 per common share) for the fourth quarter, an increase of 152% over the third quarter, after reflecting an $18.8 million write-down of goodwill. For the year, net earnings of $134.8 million ($0.62 per common share), an increase of $227.3 million over the prior years loss of $92.5 million.

- Cash and short-term investments of $167.4 million as at December 31, 2008 compared to $105.5 million a year earlier and the Company has no debt.

- Earnings before unusual items for the year were $97.1 million compared to $39.1 million in the prior year.

- Discussions continued with the government working group in the Kyrgyz Republic and Cameco Corporation to resolve outstanding issues.

- Exploration joint ventures advanced in Russia (Tyva Republic), Turkey and the United States (Nevada).

Centerra's consolidated gold production for the fourth quarter of 2008 totaled 284,045 ounces at a total cash cost of $379 per ounce compared to 132,530 ounces at a total cash cost of $585 per ounce in the corresponding quarter of 2007. Cash provided by operations, net of working capital changes and other operating items was $103.3 million compared to a use of cash of $3.2 million in the fourth quarter of 2007. (Total cash cost is a non-GAAP measure and is discussed under "Non-GAAP Measures" in this news release.)

In the fourth quarter of 2008, the Company recorded net earnings of $42.6 million or $0.20 per common share based on revenues of $241.3 million and including a charge to earnings of $18.8 million to write-down the goodwill in the Mongolian operating unit to fair value. This compares to net earnings before unusual items of $9.7 million or $0.05 per common share on revenues of $89.4 million in the same quarter of last year. In the fourth quarter of 2007 after reflecting unusual items, related to the preliminary framework agreement with the Kyrgyz Government announced on August 30, 2007 (subsequently expired), the Company recorded a net loss of $26.7 million or $0.12 per common share.

Consolidated 2008 gold production increased 35% to 748,888 ounces in line with the Company's third quarter outlook, at a total cash cost of $483 per ounce compared with consolidated gold production of 555,410 ounces at a total cash cost of $442 per ounce for the prior year. Cash provided by operations, net of working capital changes and other operating items was $166.3 million compared to $41.3 million in 2007. (Total cash cost is a non-GAAP measure and is discussed under "Non-GAAP Measures" in this news release.)

For the full year of 2008, net earnings before unusual items and after the write-down to goodwill of $18.8 million were $97.1 million or $0.45 per common share on revenues of $636.0 million compared to net earnings before unusual items of $39.1 million or $0.18 per common share on revenues of $373.5 million in 2007. Net earnings for 2008 were $134.8 million or $0.62 per share, after reflecting unusual items of $37.7 million (gain) relating to the reduction to fair value recorded in the second quarter of 2008 of the contingent share obligation under the expired preliminary framework agreement. During 2007, the Company recorded unusual items of $131.6 million (loss) related to the preliminary framework agreement with the Kyrgyz Government announced on August 30, 2007 (subsequently expired), resulting in a net loss of $92.5 million or $0.43 per share.

Commentary

Stephen Lang, President and CEO of Centerra Gold commented, "During the fourth quarter Kumtor set records for mill throughput, material moved and gold produced and sold. Kumtor generated its highest ever quarterly revenue in its 11-year operating history. Our operations generated strong cash flow during the quarter of $103.3 million. For 2008, cash flow from the operations totalled $166.3 million. Centerra ended the year with a balance sheet that includes $167.4 million in cash and short-term investments and has no debt. Our discussions with the Kyrgyz Government and Cameco are continuing and all parties are working towards an acceptable resolution of outstanding issues."