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

At the Kumtor mine, gold production was 236,544 ounces in the fourth quarter of 2008 representing a 220% increase from the same quarter in 2007, due to higher ore grades and increased recovery. The ore grade in the fourth quarter averaged 5.60 g/t with a recovery of 83.2% compared to 2.57 g/t with a recovery of 72.2% in the same quarter of 2007. The gold production was 77% higher in fourth quarter of 2008 than in the third quarter of 2008, as the high-grade SB Zone was mined for the quarter.

Total cash cost per ounce, a non-GAAP measure of production efficiency, decreased to $361 in the fourth quarter compared to $769 a year earlier due to a 220% increase in production ($475 per ounce reduction) as a result of greater throughput, higher grades and recoveries partially offset by higher costs ($67 per ounce increase ($46 per ounce - mining, $14 per ounce - milling, $7 per ounce - administration)). Operating costs increased to $85.4 million in the fourth quarter compared to $56.9 million in the fourth quarter of 2007. The cost increases year-over-year were due to higher costs of labour, diesel fuel and consumables.

Exploration expenditures totaled $3.4 million for the fourth quarter of 2008, an increase from $2.8 million in the fourth quarter 2007, primarily as a result of increased drilling activity.

During the fourth quarter of 2008 capital expenditures were $20.3 million, which included $12.7 million sustaining capital spent mainly on the till dewatering program, a replacement excavator, loader and bulldozer and the CAT 785 haul trucks major overhaul program. In addition $7.6 million was invested in growth capital mainly for the SB Zone underground development ($5.7 million).

The SB Zone underground decline has advanced 195 metres and development continues to advance in the hanging wall. The ground conditions have been improving in the last quarter which has allowed the development to improve the advancement rate. At year-end the development was approximately 240 meters from the planned turn that will allow the decline to be developed parallel to the Kumtor fault zone and SB Zone structure. At the current rate of advancement, the Company expects underground exploration drilling to commence in the third quarter of 2009.

At Kumtor, a new 30-month collective agreement was ratified by the membership in November 2008. The new contract is retroactive to July 1, 2008. The settlement provides a stable work environment with wage increases and production bonuses for the work force up to January 1, 2011.

The Kumtor pit high wall has been studied extensively since the SB Zone was developed in 2007. During 2008, vertical and horizontal drilling established dewatering and depressurization of the till lithography. The dewatering program was established, in consultation with a third-party consultant, to extract perched water and melt waters from the pit. The resulting higher strengths in the unfrozen till structure and the dewatered rock structures will improve the geotechnical characteristics in the pit walls as the mine is further developed.