Centerra Gold Inc.
TSX : CG

Centerra Gold Inc.

March 29, 2006 08:30 ET

Centerra Gold Continues to Expand Kumtor SB Zone and Adds 1 Million Ounces of Reserves at the Gatsuurt Project

TORONTO, ONTARIO--(CCNMatthews - March 29, 2006) -

(All figures are in United States dollars)

Centerra Gold Inc. (TSX:CG) today issued updates on:

1. Exploration results at the Kumtor Mine

2. Estimates on the reserves and resources at its operating mines and advanced projects adding one million ounces of reserves at the Gatsuurt Project in Mongolia, and

3. The Gatsuurt Project, including the optimization of its 2005 feasibility study.

During February and March 2006 the Company completed a further five drill holes to test the SB Zone at the south end of the Kumtor mine. The recent drilling has extended the SB Zone a further 40 metres along strike to the south. The SB Zone has now been delineated over a 320 metre strike length and remains open along strike to the south and in the down dip direction. The zone has been confirmed in the down dip direction over intervals ranging from 70 to 520 metres on various drill sections. In addition to these five holes, four infill holes were completed in the central area of the Kumtor pit which returned results similar to the surrounding drill holes.

At Gatsuurt, based on the positive results of Centerra's feasibility study on the Gatsuurt Central Zone completed in December 2005 and the new resource estimates for the Central Zone and Main Zone announced in January 2006, work continued to optimize the project. An updated feasibility study was completed for the Gatsuurt project in the first quarter of 2006 that added an economic open pit in the Main Zone in addition to the Central Zone open pit identified in the December study. Incorporating these results, the probable reserves at Gatsuurt, for the Central and Main Zones combined, are estimated at 986,000 ounces of contained gold at an average grade of 3.4 g/t gold. Measured and indicated resources are estimated at 565,000 ounces of contained gold at an average grade of 3.1 g/t gold and inferred resources are estimated at 305,000 ounces of contained gold at an average grade of 3.5 g/t gold.

Incorporating the updated feasibility results:

As of December 31, 2005, on a 100% project basis, Centerra's proven and probable reserves totaled 7.2 million ounces of contained gold (Centerra's share is 7.1 million ounces).

As of December 31, 2005, on a 100% project basis, Centerra's measured and indicated resources totaled 5.0 million ounces of contained gold (Centerra's share is 4.5 million ounces). These resources are in addition to the mineral reserves.



Reserve and Resource Summary
(as of December 31, 2005)

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Reserves(1) (Tonnes and ounces in thousands)(9)
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Proven Probable
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Contained Contained
Grade Gold Grade Gold
Property Tonnes (g/t) (oz) Tonnes (g/t) (oz)
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Kumtor 17,600 3.7 2,099 22,562 3.9 2,854
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Boroo 8,810 2.8 774 4,580 3.0 444
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Gatsuurt 8,959 3.4 986
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Total 26,410 3.4 2,873 36,101 3.7 4,284
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Reserves(1) (Tonnes and ounces in thousands)(9)
--------------------------------------------------------
Total Proven and Probable Reserves
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Contained Centerra
Grade Gold Share Mining
Property Tonnes (g/t) (oz) (oz)(2) Method(3)
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Kumtor 40,162 3.8 4,953 4,953 OP
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Boroo 13,390 2.8 1,218 1,157 OP
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Gatsuurt 8,959 3.4 986 986 OP
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Total 62,511 3.1 7,157 7,096
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Measure and
Indicated
Resources (Tonnes and ounces in thousands)(9)
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Measured Indicated
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Contained Contained
Grade Gold Grade Gold
Property Tonnes (g/t) (oz) Tonnes (g/t) (oz)
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Kumtor(4)(5) 13,406 3.8 1,634 10,601 4.1 1,387
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Boroo(4)(6) 1,870 2.4 147 782 2.2 54
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Gatsuurt(7)(4) 5,584 3.1 565
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REN(8) 2,753 13.6 1,201
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Total 15,276 3.6 1,781 19,720 5.1 3,207
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Measure and
Indicated
Resources (Tonnes and ounces in thousands)(9)
--------------------------------------------------------
Total Measured and Indicated Resources
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Contained Centerra
Grade Gold Share Mining
Property Tonnes (g/t) (oz) (oz)(2) Method(3)
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Kumtor(4)(5) 24,007 3.9 3,021 3,021 OP + UG
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Boroo(4)(6) 2,652 2.4 201 191 OP
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Gatsuurt(7)(4) 5,584 3.1 565 565 OP
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REN(8) 2,753 13.6 1,201 746 UG
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Total 34,996 4.4 4,988 4,523
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Inferred Resources (Tonnes and ounces in thousands)(9)
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Inferred
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Contained Centerra
Grade Gold Share Mining
Property Tonnes (g/t) (oz) (oz)(2) Method(3)
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Kumtor(4)(5) 5,475 4.6 803 803 OP & UG
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Boroo(4)(6) 2,563 2.0 167 159 OP
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Gatsuurt(7)(4) 2,749 3.5 305 305 OP
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REN(8) 301 13.2 128 80 UG
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Total 11,088 3.9 1,403 1,347
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Centerra reports reserves and resources separately. The amount of reported resources does not include those amounts identified as reserves.

(1) The reserves have been estimated based on a gold price of $400 per ounce.

(2) Centerra's equity interests are: Kumtor 100%, Gatsuurt 100%, Boroo 95% and REN 62%.

(3) "OP" means open pit and "UG" means underground.

(4) Open pit resources occur beneath the current ultimate pit designs using a gold price of $400 per ounce.

(5) The open pit resources at Kumtor are estimated based on a cutoff grade of 1.3 grams of gold per tonne. Underground resources occur below the main Kumtor pit shell and are estimated based on a cutoff grade of 5.0 grams of gold per tonne.

(6) The resources at Boroo are estimated based on a variable cutoff grade depending on the type of material and the associated mill recovery. The cutoff grades range from 0.9 grams per tonne to 1.1 grams of gold per tonne.

(7) The resources at Gatsuurt are estimated using either a 0.9 or 2.0 grams of gold per tonne cutoff grade depending on the type of material and the associated recovery. High grade values were also cut using variable limits ranging from 20 to 45 g/t Au depending on the mineralized zone.

(8) The resources at REN are estimated based on a cutoff grade of 8.0 grams of gold per tonne.

(9) A conversion factor of 31.10348 grams per ounce of gold is used in the reserve and resource estimates

Kumtor Drilling Update

SB Zone

The Company completed a further five drill holes during February and March 2006 to test the SB Zone at the south end of the Kumtor pit. One hole was drilled to infill between existing holes and four holes tested the dip extensions from existing holes. The highlights of the results are shown in the table below. All five of the holes intersected significant mineralization with the holes returning intercepts from 3.9 to 11.2 g/t Au over down hole core lengths ranging from 13.7 to 50.2 metres. True widths for the mineralized zones are typically from 70% to 95% of the stated intercepts. The SB Zone has now been delineated over a 320 metre strike length and remains open along strike to the south and in the down dip direction.

Central Zone

In the central area of the Kumtor pit results from four infill holes that were completed returned similar results to the surrounding drill holes.

Sarytor

Three infill drill holes have also been completed on the Sarytor deposit returning intercepts from 1.8 to 14.8 g/t Au over down hole core lengths from 5.9 to 28 metres. True widths for the mineralized zones are typically from 70% to 95% of the stated intercepts.



Kumtor Pit - Drilling Highlights for January to March 2006

Core
Drill From To Length Au
Hole Location Zone (m) (m) (m) (g/t)

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D1034B South End SB zone 385.4 403.4 18.0 6.89
Strike Extension incl. 386.0 392.4 6.4 10.31
incl. 398.4 401.8 3.4 12.06
409.4 412.4 3.0 1.30
420.4 426.75 6.35 1.48
434.5 441.9 7.4 4.09
482.2 495.6 13.4 2.03

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D1054 South end SB zone 177.0 178.0 1.0 21.45
Up Dip Extension 184.0 215.0 31.0 11.19
incl. 197.6 202.2 4.6 28.98
221.8 225.8 4.0 2.71
235.6 238.6 3.0 1.95
282.6 285.5 2.9 2.17
319.9 328.9 9.0 1.29

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D1055 South end SB zone 128.3 142.0 13.7 4.87
Up Dip Extension incl. 135.5 138.0 2.5 13.28
175.2 182.0 6.8 12.03
incl. 180.0 182.0 2.0 36.50

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D1056 South end SB zone 369.0 387.4 18.4 6.54
Down Dip SB zone incl. 379.0 384.0 5.0 14.48

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D1056A South end SB zone 371.5 421.7 50.2 3.92
Down Dip SB zone incl. 376.8 383.3 6.5 8.69
SB zone incl. 388.4 396.3 7.9 6.94



Sarytor Project- Drilling Results for January to March 2006

Drill Core
Drill Hole Section From (m) To (m) Length (m) Au (g/t)

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SR-06-67A 156 130.0 158.0 28.0 2.86

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SR-06-68 216 62.3 76.8 14.5 14.76
incl. 62.3 74.4 12.1 17.04

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SR-06-69 208 123.7 132.6 8.9 5.24
incl. 128.2 129.6 1.4 13.36
138.6 144.5 5.9 1.80


A complete listing of all exploration drill results referred to in this release, and supporting maps have been filed on SEDAR and are available at the company's website at: www.centerragold.com/properties/exploration_update_March_2006/

Where applicable, drilling results discussed and shown in this release and on the company's website have been compiled using similar criteria to those used in estimating the company's resources for Kumtor. Pertinent criteria are provided with the drilling results on the company's website.

Gatsuurt Project

The Gatsuurt deposit is located 35 kilometers east of the Boroo Mine. The Gatsuurt reserves and resources include the Central Zone and the Main Zone deposits. The updated reserve and resource estimates were based on resource block models current as of December 31, 2005.

An updated feasibility was completed for the Gatsuurt project during the first quarter of 2006 that added an economic open pit in the Main Zone in addition to the Central Zone open pit identified in the December study. Based on the recent studies and subject to all necessary approvals, oxide ore from Gatsuurt will begin to be hauled to the Boroo facility for processing in late 2006. In 2008, a bio-oxidation circuit will be constructed at the Boroo facility to process the refractory ore from Gatsuurt, which will begin to be hauled and processed at the Boroo facility in the second quarter of 2009.

The reserve and resource estimates for Gatsuurt were prepared by Centerra and reviewed and approved by Roscoe Postle Associates Inc. ("RPA") under the supervision of Dr. William E. Roscoe, P. Eng. and James W. Hendry, P. Eng., who are independent of Centerra and qualified persons under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") for the purposes of reserve and resource estimates. RPA will be preparing an updated technical report on the Gatsuurt project that will be filed on the System for Electronic Document and Retrieval ("SEDAR") before April 28, 2006.

The Gatsuurt deposit is open at depth. Exploration drilling will continue in 2006 to further evaluate the high grade mineralization beneath the Gatsuurt Central Zone.

Life of Mine Plans

The following tables set out the Boroo and Gatsuurt segmented life of mine plans on a stand-alone basis, as well as a consolidated Boroo and Gatsuurt life of mine plan, each as at December 31, 2005. Mill production has been optimized by processing the higher grade oxide ore from Boroo and Gatsuurt, followed by the Gatsuurt sulphide ore and finally the lower grade Boroo oxide ore. This optimized schedule results in no mining or processing of Boroo ore in 2010 - 2012. Total cash costs for Boroo and Gatsuurt for 2006 can be found in Centerra's management's discussion and analysis for the year ended December 31, 2005 filed on SEDAR at www.SEDAR.com.



Boroo Life of Mine Plan 2006 - 2016

2006 2007 2008 2009 2010 2011
Mining
Ore Mined (000s of
tonnes) 2,678 3,298 2,584 3,889 - -
Waste Mined (000s of
tonnes 16,033 15,862 16,116 9,105 - -
Total Mined (000s of
tonnes) 18,711 19,160 18,700 12,995 - -
Strip Ratio 6.0 4.8 6.2 2.3 - -
Milling
Ore fed to mill (000s
of tonnes) 2,285 1,965 1,454 414
Grade (g/t AU) 3.95 4.06 3.97 5.92
Recovery (%) 91.6 88.9 91.1 92.0
Gold Poured (000s of
ounces) (100%) 266 228 170 73
Gold Poured(1) (000s
of ounces) 253 217 161 69


Total
2012 2013 2014 2015 2016 LOM
Mining
Ore Mined (000s of
tonnes) - - - - - 12,449
Waste Mined (000s of
tonnes - - - - - 57,116
Total Mined (000s of
tonnes) - - - - - 69,565
Strip Ratio - - - - - 4.6
Milling
Ore fed to mill (000s
of tonnes) 1,200 2,347 2,347 1,378 13,390
Grade (g/t AU) 2.35 2.08 1.42 1.18 2.83
Recovery (%) 85.7 86.7 86.5 80.0 89.0
Gold Poured (000s of
ounces) (100%) 78 135 92 42 1,084
Gold Poured(1) (000s
of ounces) 74 129 88 40 1,030

(1) Reflects Centerra's 95% interest in the Boroo mine.



Gatsuurt Life of Mine Plan 2006 - 2016

2006 2007 2008 2009 2010 2011
Mining
Ore Mined (000s of
tonnes) 70 792 1,596 1,469 2,100 1,480
Waste Mined (000s of
tonnes) 933 11,243 10,434 10,562 9,952 5,171
Total Mined (000s of
tonnes) 1,003 12,035 12,030 12,031 12,052 6,651
Strip Ratio 13.3 14.2 6.5 7.2 4.7 3.5
Milling
Ore fed to mill (000s
of tonnes) 70 382 893 1,267 1,750 1,750
Grade (g/t AU) 2.59 2.02 2.50 3.67 4.22 3.98
Recovery (%) 92.0 92.0 92.0 87.9 87.6 87.6
Gold Poured (000s
of ounces) 5 23 66 131 208 196


Total
2012 2013 2014 2015 2016 LOM
Mining
Ore Mined (000s of
tonnes) 1,452 8,959
Waste Mined (000s of
tonnes) 2,969 51,264
Total Mined (000s of
tonnes) 4,421 60,223
Strip Ratio 2.0 5.7
Milling
Ore fed to mill (000s
of tonnes) 1,750 797 300 8,959
Grade (g/t AU) 3.29 2.66 2.02 3.42
Recovery (%) 87.6 87.6 92.0 88.2
Gold Poured (000s
of ounces) 162 60 18 870



Combined Boroo and Gatsuurt Life of Mine Plan 2006 - 2016

2006 2007 2008 2009 2010 2011
Mining
Ore Mined (000s of
tonnes) 2,748 4,090 4,180 5,358 2,100 1,480
Waste Mined (000s of
tonnes) 16,966 27,105 26,550 19,667 9,952 5,171
Total Mined (000s of
tonnes) 19,714 31,195 30,730 25,025 12,052 6,651
Strip Ratio 6.2 6.6 6.4 3.7 4.7 3.5
Milling
Ore fed to mill (000s
of tonnes) 2,355 2,347 2,347 1,681 1,750 1,750
Grade (g/t AU) 3.93 3.73 3.41 4.22 4.22 3.98
Recovery (%) 91.6 89.2 91.4 89.3 87.6 87.6
Gold Poured(000s of
ounces) (100%) 271 251 236 204 208 196
Gold Poured(1) (000s
of ounces) 258 239 227 200 208 196


Total
2012 2013 2014 2015 2016 LOM
Mining
Ore Mined (000s of
tonnes) 1,452 21,408
Waste Mined (000s of
tonnes) 2,969 108,380
Total Mined (000s of
tonnes) 4,421 129,788
Strip Ratio 2.0 5.1
Milling
Ore fed to mill (000s
of tonnes) 1,750 1,997 2,347 2,347 1,678 22,349
Grade (g/t AU) 3.29 2.47 2.08 1.42 1.30 3.07
Recovery (%) 87.6 86.5 86.7 86.5 88.3 88.6
Gold Poured(000s of
ounces) (100%) 162 138 135 92 60 1,953
Gold Poured(1) (000s
of ounces) 162 134 129 88 58 1,899

(1) Reflects Centerra's 95% interest in the Boroo mine.


The foregoing life-of-mine information is forward-looking information that involves risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking information. See cautionary note regarding "Forward-Looking Statements" and the risk factors in Centerra's 2005 annual information form filed on SEDAR for a further discussion of the factors that could cause actual results to differ materially from the forecast. The Boroo and Gatsuurt life of mine information is based on the 2005 year-end reserves estimates, which were estimated using a gold price of US$400.

The reserves and resources, estimated as at December 31, 2005, were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum.

The technical information and reserve and resource estimates provided for Kumtor, Boroo, and REN in this news release and on the company's website were prepared under the supervision of Robert S. Chapman, M. Sc., P. Geo., Centerra's Director, Mergers & Acquisitions, who is the qualified person for the purpose of National Instrument 43-101. The new drilling results for Kumtor were reviewed, verified and compiled by Centerra's geological and mining staff and have been approved by Mr. Chapman. Strathcona Mineral Services Limited ("Strathcona") has reviewed the reserve and resource estimates for the Kumtor Mine. A new NI 43-101 technical report prepared by Strathcona in respect of Kumtor dated March 9, 2006 has been filed on SEDAR.

Mineral resources are not mineral reserves, and do not have demonstrated economic viability, but do have reasonable prospects for economic extraction. Measured and indicated resources are sufficiently well defined to allow geological and grade continuity to be reasonably assumed and permit the application of technical and economic parameters in assessing the economic viability of the resource. Inferred resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral reserves. There is no certainty that mineral resources can be upgraded to mineral reserves through continued exploration. Centerra Gold reports its reserves and resources separately.

About Centerra

Centerra is a growth-oriented, gold company focused on acquiring, exploring, developing and operating gold properties primarily in Central Asia, the former Soviet Union and other emerging markets. Centerra is a leading North American gold producer and the largest Western-based gold producer in Central Asia and the former Soviet Union. Centerra's shares trade on The Toronto Stock Exchange ("TSX") under the symbol CG. The Company is based in Toronto, Canada.

Cautionary Note Regarding Forward-looking Statements

Statements contained in this news release which are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things: volatility and sensitivity to market prices for gold; replacement of reserves; equipment failure; unexpected geological or hydrological conditions; political risks arising from operating in certain developing countries; defects in title; imprecision in reserve estimates; success of future exploration and development initiatives; competition; operating performance of the facilities; environmental and safety risks including increased regulatory burdens; seismic activity, weather and other natural phenomena; failure to obtain necessary permits and approvals from government authorities; changes in government regulations and policies, including trade and tax laws and policies; ability to maintain and further improve positive labour relations; and other development and operating risks.

Reserve and resource figures included are estimates and no assurances can be given that the indicated levels of gold will be produced or that Centerra will receive the gold price assumed in determining its reserves. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While Centerra believes that the reserve and resource estimates included are well established and the best estimates of Centerra's management, by their nature reserve and resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. Furthermore, market price fluctuations in gold, as well as increased capital or production costs or reduced recovery rates may render ore reserves containing lower grades of mineralization uneconomic and may ultimately result in a restatement of reserves. The extent to which resources may ultimately be reclassified as proven or probable reserves is dependent upon the demonstration of their profitable recovery. The evaluation of reserves or resources is always influenced by economic and technological factors, which may change over time.

Resources figures included herein have not been adjusted in consideration of these risks and, therefore, no assurances can be given that any resource estimate will ultimately be reclassified as proven or probable reserves.

If Centerra's reserve or resource estimates for its gold properties are inaccurate or are reduced in the future, this could have an adverse impact on Centerra's future cash flows, earnings, results of operations and financial condition.

Centerra estimates the future mine life of its operations. No assurance can be given that mine life estimates will be achieved. Failure to achieve these estimates could have an adverse impact on Centerra's future cash flows, earnings, results of operations and financial condition.

Although Centerra believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this report. Centerra disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Additional information on Centerra is available on the Company's web site at www.centerragold.com and at SEDAR at www.SEDAR.com.

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