Centerra Gold Reports Second Quarter Results, Net Earnings of $30 Million or 13 Cents Per Share and Declares Inaugural Annual Dividend (This news release contains forward-looking information that is subject to the risk factors and assumptions set out

TORONTO, ONTARIO -- (Marketwire) -- 07/30/10 -- Centerra Gold Inc. (TSX: CG) today reported net earnings of $29.8 million or $0.13 per common share on revenues of $152.2 million compared to a net loss of $79.6 million or $0.36 per common share based on revenues of $104.3 million in the same quarter last year. In the second quarter of 2009 the Company's, loss before unusual items totaling $49.3 million, was $30.3 million or $0.14 per common share.

In addition, Centerra announced that its Board of Directors declared a dividend of Cdn$0.06 per common share payable on September 8, 2010 to shareholders of record on August 18, 2010. The ex-dividend date for the dividend will be August 16, 2010.

Consolidated gold production for the second quarter of 2010 totaled 121,728 ounces at a total cash cost of $616 per ounce produced compared to 110,457 ounces at a total cash cost of $667 per ounce produced in the corresponding quarter of 2009. The 10% increase in gold production in the second quarter of 2010 is a result of higher production at both of the Company's operations. Cash provided by operations, net of working capital changes, was $76.5 million compared to cash used by operations of $17.3 million in the second quarter of 2009. (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.)

The civil and political unrest in the Kyrgyz Republic during the quarter did not cause any interruption in operations at the Kumtor mine. A national referendum was successfully held in the Kyrgyz Republic on June 27, 2010, which approved a new constitution and the appointment of Mrs. Roza Otunbayeva as President of the Kyrgyz Republic for a transition period until December 31, 2011. Parliamentary elections are expected to take place in October 2010.

Second Quarter Highlights

--  Consolidated gold production of 121,728 ounces
--  Cash provided by operations of $76.5 million or $0.33 per share
--  Maintain consolidated gold production guidance for 2010
--  Strong cash balances and no debt

Commentary

'It appears that stability has returned to the Kyrgyz Republic after the referendum held in June, and we continue to monitor the political situation in the country. We are pleased with the performance of both operations during the quarter as we produced more gold than expected. However due to the expectation that we will be processing lower grades at Kumtor, the third quarter will be our weakest quarter from a production standpoint. In view of the continuing unresolved regulatory issues in Mongolia, we are removing from our 2010 gold production guidance any 2010 production from the Boroo heap leach operation and the Gatsuurt project. Even with this change, because of the strong operational performance at Kumtor and Boroo, our consolidated production guidance remains unchanged,' said Steve Lang, President and CEO of Centerra Gold.

'I am also pleased to announce that the Board of Directors has declared an inaugural annual dividend, which is part of the Company's long-term strategy to increase shareholder value. The Company intends to provide a dividend yield which is consistent with the yield of comparable companies' dividend rates. The dividend will be evaluated annually by the Board in relation to the Company's cash balances, operating cash flows and capital investment requirements,' he concluded.

Financial and Operating Summary

Revenues for the second quarter of 2010 were $152.2 million compared to $104.3 million during the same period one year ago. Second quarter 2010 revenue reflects a 10% increase in ounces sold (126,797 ounces versus 115,308 ounces) and a 33% increase in realized gold price ($1,200 per ounce in the second quarter of 2010 versus $905 per ounce in the second quarter of 2009) in the period.

Gold production for the second quarter of 2010 was 121,728 ounces compared to 110,457 ounces reported in the second quarter of 2009. This increase reflects higher gold production at both of the Company's mines for the period. At Kumtor, higher production was the result of processing higher grade material and higher associated recoveries. Production at Boroo was higher in the second quarter 2010 due to increased recoveries in the mill partially offset by lower average mill head grades. The 2009 comparative period at Boroo reflects the operational shutdowns from the labor strike and the suspension of the main operating licenses for six weeks in 2009. The heap leach operation at Boroo remained idle during the quarter.

Centerra's total cash cost per ounce of gold produced was $616 in the second quarter compared to $667 in the second quarter of 2009. The year-over-year decrease in unit cash costs was primarily due to higher gold production (see 'Operations Update'). (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, 2010, issued in conjunction with this news release.)

Cash provided by operations was $76.5 million for the second quarter of 2010 compared to a use of cash by operations of $17.3 million for the prior year second quarter. The increase reflects increased earnings as a result of higher gold sales volumes as well as the positive impact of reduced working capital levels.

Capital expenditures spent and accrued in the second quarter of 2010 amounted to $54.7 million of which $12.9 million was spent on sustaining capital projects. Growth capital totaled $41.8 million which related mainly the purchase of haul trucks at Kumtor ($17.8 million), the SB Zone underground development at Kumtor ($8.6 million) and spending on site development and road construction for the Gatsuurt project ($11.9 million). Capital expenditures in the comparative quarter of 2009 totalled $17.7 million, consisting of $11.1 million of sustaining capital and $6.6 million of growth capital.

Exploration expenditures for the second quarter were $6.9 million dollars compared to $4.1 million in the second quarter of 2009 reflecting increased activity at Kumtor, Gatsuurt and on the Company's exploration joint ventures.

Centerra's cash and cash equivalents and short-term investments at the end of June 2010 increased to $399.8 million, compared to cash and short-term investments of $322.9 million at December 31, 2009.

Other Corporate Developments

Inaugural Annual Dividend

As part of the Company's long-term strategy to maximize shareholder value, the Company's Board of Directors has authorized a dividend of Cdn$0.06 per common share, payable on September 8, 2010 to shareholders of record at the close of business on August 18, 2010. The ex-dividend date for the dividend will be August 16, 2010. It is the intention of the Board of Directors to review the amount of the dividend on an annual basis depending upon the Company's cash balances, operating cash flows, anticipated capital requirements for future growth and the yields of comparable companies' dividend rates.

Kyrgyz Republic

In early April 2010, civil unrest in the Kyrgyz Republic resulted in the ousting of President Kurmanbek Bakiyev and the formation of an interim government by opposition groups. In June further serious unrest occurred in southern Kyrgyzstan. Operations at the Kumtor mine were not affected by these events. A national referendum sponsored by the interim Government was held on June 27, 2010 to approve a new constitution and the appointment of Mrs. Roza Otunbayeva as President of the Kyrgyz Republic for a transition period until December 31, 2011. The referendum proposals received wide support in the Kyrgyz Republic. Following the referendum Mrs. Otunbayeva was inaugurated as President and a new cabinet council or transitional Government was formed. It is expected that this transitional Government will operate until Parliamentary elections are held and a new Government formed. The Government has indicated that these Parliamentary elections will take place in October 2010. While the political and civil conditions appear to have stabilized, the political situation in the Kyrgyz Republic continues to evolve and there can be no assurances that future political developments will not have an adverse impact on the Company's assets or operations.

Pursuant to a restated shareholders agreement dated as of June 6, 2009 between Kyrgyzaltyn and Centerra, so long as Kyrgyzaltyn and its affiliates continue to hold 10% or more of Centerra's outstanding shares, Centerra has agreed to include in Centerra's proposed slate of directors to be nominated for election at each annual or special meeting at which directors are to be elected, two board nominees designated by Kyrgyzaltyn, at least one of whom must be independent of the Kyrgyz Government, within the meaning of applicable securities laws in Canada. Should Kyrgyzaltyn and its affiliates own less than 10% but more than 5% of Centerra's outstanding shares, Centerra has agreed to include in the slate of directors one nominee of Kyrgyzaltyn who shall not be required to be independent. Kyrgyzaltyn currently owns approximately 33% of Centerra's outstanding shares and accordingly is entitled to two board nominees. As a result of the recent events in the Kyrgyz Republic, there was a delay in Kyrgyzaltyn communicating to Centerra's board the identity of its nominees. Kyrgyzaltyn has recently informed Centerra of its two proposed nominees and therefore the board of directors of Centerra expects to add those nominees to the board shortly.

Mongolia

Mongolian Regulatory Matters

The regulatory conditions in Mongolia have not changed substantially since Centerra's first quarter report. The following discussion summarizes the current status of Mongolian regulatory matters affecting Centerra.

On June 12, 2009, the main operating licenses at the Company's Boroo mine were suspended by the Minerals Resources Authority of Mongolia ('MRAM') following extensive inspections of the Boroo mine operation conducted by the Mongolian General Department of Specialized Inspection ('SSIA'). While the suspension was lifted on July 27, 2009, several issues arising from the inspection continue to be discussed by Centerra and the Mongolian regulatory authorities. On October 23, 2009, Centerra received a very significant claim for compensation from the SSIA in respect of certain mineral reserves, including state alluvial reserves covered by the Boroo mine licenses, that are recorded in the Mongolian state reserves registry, but for which there are no or incomplete records or reports of mining activity. Centerra disputes the claim. While Centerra cannot give assurances, it believes settlement will be concluded through negotiation and will not result in a material impact. In addition, the SSIA inspections raised a concern about the production and sale of gold from the Boroo heap leach facility. The heap leach facility was operated under a temporary permit from June 2008 until the expiry of the temporary permit in April 2009 and Boroo Gold Company Ltd. ('BGC') paid all relevant royalties and taxes with respect to gold produced from the heap leach facility during that period. BGC believes that it had all necessary permits to carry out its heap leach activities and that any regulatory concerns are unfounded. BGC is continuing its effort to obtain a final permit for the operation of its heap leach facility at the Boroo mine.

On November 2, 2009, Centerra received a letter from the Mongolian Ministry of Finance re-iterating some of the issues raised by the SSIA and indicating that the Boroo Stability Agreement would be terminated if such issues were not resolved within a period of 120 days from the date of the letter. The Company has held discussions with the Ministry of Finance regarding such concerns and has received no further notice from the Ministry of Finance with respect to the possible termination of the Boroo Stability Agreement. While the Company believes that the issues raised by the Ministry of Finance and the SSIA will be resolved through negotiations without a material impact on the Company, there can be no assurance that this will be the case.

Mongolian Legislation

The legislative conditions in Mongolia have not changed substantially since Centerra's first quarter report. The following discussion summarizes the current status of certain Mongolian legislation that may affect Centerra, including its Gatsuurt project and other Mongolian mineral licenses.

In July 2009, the Mongolian Parliament enacted legislation that would prohibit mineral prospecting, exploration and mining in water basins and forest areas in the territory of Mongolia and provides for the revocation of licenses affecting such areas (the 'Water and Forest Law'). The Company understands that, prior to the revocation of any licenses, the Mongolian government will undertake physical surveys and consult with local officials to determine which, if any, existing licenses will be subject to the new law. The legislation provides a specific exemption for 'mineral deposits of strategic importance', and accordingly, the main Boroo mining licenses will not be subject to the law. The Company's Gatsuurt licenses and its other exploration license holdings in Mongolia are currently not exempt. In March 2010, the Company received a letter from MRAM stating that certain of its mining and exploration licenses, including the Gatsuurt mining licenses, could be revoked under the Water and Forest Law. The letter requested that the Company submit an estimate of expenses incurred in relation to each license and the compensation that it would expect to receive if such licenses were to be revoked. The Company has provided a detailed estimate to MRAM for all potentially affected licenses. The Company has submitted a draft Investment Agreement for the Gatsuurt Project to the Ministry of Mineral Resources and Energy ('MMRE'). In April 2010, the Company received a letter from the MMRE indicating that the Gatsuurt licenses are within the area designated on a preliminary basis where minerals mining is prohibited under the Water and Forest Law. The letter also stated that the MMRE will communicate with the Company regarding the investment agreement when the MMRE has more clarity on the impact of the law. The Company is reasonably confident that the economic and development benefits resulting from its exploration and development activities will ultimately result in the law having a limited impact on the Company's Mongolian activities. While the Company has continued to receive permits and approvals in connection with the road construction to Gatsuurt and for construction of surface facilities at the project, there is a risk that further approvals or commissioning of the project could be delayed as a result of the Water and Forest Law.

In August 2009, the Government of Mongolia repealed its windfall profit tax of 68% in respect of gold sales at a price in excess of US$850 an ounce, with the repeal to take effect on January 1, 2011.

Other

On February 4, 2010, Centerra Gold (U.S.) Inc. ('Centerra U.S.'), a wholly-owned subsidiary of Centerra, signed a purchase agreement with Rye Patch Gold Corp. and its U.S. subsidiary, Rye Patch Gold US Inc. (collectively 'Rye Patch') for the sale of Centerra U.S.'s interest in the REN project in Nevada, subject to the joint venture project partner, Homestake Mining Company of California ('Homestake'), a subsidiary of Barrick Gold Corporation, waiving its pre-emptive right to acquire Centerra U.S.'s interest. On April 8, 2010, Homestake elected to exercise its pre-emptive right to acquire Centerra Gold U.S. Inc.'s 64% interest in the REN joint venture for $35.2 million. As a result of Homestake's election to purchase the Centerra U.S. interest, Rye Patch's agreement terminated. On July 2, 2010, the Company closed the sale of its REN interest to Homestake for cash proceeds of $35.2 million. In connection with the termination of the Rye Patch agreement, Centerra U.S. paid Rye Patch a break fee of $0.25 million.

As at June 30, 2010, the net book value of the REN property was nil (December 31, 2009- Nil) because all exploration activities on the property were expensed as incurred.

Operations Update

Kumtor

At the Kumtor mine, gold production was 90,050 ounces in the second quarter of 2010 representing an 11% increase from the same quarter in 2009. The increase in production is the result of higher grades and higher recoveries in the second quarter of 2010. The mill head grade averaged 2.74 g/t with a recovery of 77.5% in the second quarter of 2010, compared to 2.60 g/t with a recovery of 66.0% in the same quarter of 2009. During the quarter, ore tonnage mined increased 19% year-over-year as mining continued in the higher grade SB Zone in the Central Pit. Mill throughput of 1.4 million tonnes was essentially flat compared to the same period last year.

During the quarter, the planned removal of ice and waste from the southeast section of the high wall in the SB Zone continued. The rate of movement of waste and ice from this area slowed during the first quarter of 2010 as a result of the offloading, as well as cold weather causing the material to freeze. During the latter portion of the second quarter of 2010, as expected, the high movement area did begin to accelerate, however the offloading plan and the de-watering program carried out during the year has slowed the ice movement up to 40 % when compared to the same period last year.

Total cash cost per ounce, a non-GAAP measure of production efficiency, decreased to $639 in the second quarter of 2010 from $723 in the second quarter of 2009. The year-over-year decrease in unit cash costs was due to the higher gold production and lower operating costs in 2010. Mining costs decreased 6% to $30.6 million in the second quarter of 2010 due to due to lower expenditures on maintenance materials and supplies offset by higher diesel costs ($1.8 million or $0.55 per litre). Milling costs in 2010 increased 10% to $14.7 million due to increased maintenance materials and supplies; the scheduled mill maintenance shutdown and increased costs for electricity. This was partially offset by the lower cost and lower consumption of grinding media. Total cash cost per ounce produced 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.

Exploration expenditures totaled $2.7 million for the second quarter of 2010, a $0.4 million increase from the $2.3 million reported in the second quarter 2009. This is primarily a result of the increase in the amount of drilling completed in the second quarter.

Capital expenditures in the second quarter of 2010 totalled $39.5 million compared to $17.4 million for the same period in the prior year. This consisted of $11.2 million of sustaining capital, predominantly spent on the heavy duty equipment overhaul program ($4.7 million), replacement of four dozers ($2.1 million) and shear key, buttress and tailing dam construction ($2.0 million). Growth capital investment totalled $28.3 million spent mainly on the purchase of CAT 789 haul trucks ($17.8 million) and underground development of the declines for SB and Stockwork Zones ($8.5 million).

The SB Zone underground decline (Decline #1) has now advanced a total of 724 metres. During the quarter the decline advancement continued and drill and remuck bays were established and it is now expected that exploration drilling will commence in the later part of the third quarter while delineation drilling of the SB Zone is planned to commence in the fourth quarter of 2010.

The Stockwork Zone underground decline (Decline #2) has advanced a total of 312 metres. Decline #2 will facilitate the access to the Stockwork Zone and the SB Zone for further exploration and delineation drilling. The second heading in Decline #2 for the exploration and delineation drilling program for the Stockwork Zone has been established and is advancing toward the north. Drill bays will be established along the 400 meter access drift. Exploration and delineation drilling of the Stockwork Zone resource is expected to commence late in the third quarter of 2010 and continue into 2011.

Boroo/Gatsuurt

At the Boroo mine, gold production was 31,678 ounces in the second quarter of 2010 compared to 28,990 ounces in the second quarter of 2009. The higher gold production is the result of increased recoveries partially offset by lower average mill head grades, 2.05 g/t in second quarter 2010 versus 2.48 g/t in the second quarter 2009. Recoveries improved in the second quarter of 2010 to 74.9% compared to 68.7% for the same period last year due to less refractory ore. In the comparative 2009 quarter, gold production was impacted by the operational shutdown as a result of a strike commencing May 26th and a six week license suspension commencing June 12th, 2009.

Heap leach operations at Boroo remain under care and maintenance pending issuance of the final heap leach operating permit.

Total cash cost per ounce produced, a non-GAAP measure of production efficiency, was $549 in the second quarter of 2010 compared to $511 in the second quarter of 2009. The year-over-year increase in unit cash costs was due to the higher operating costs in 2010, partially offset by higher gold production. The increase in the unit cash cost of $38 per ounce results from increased costs ($81/ounce) partially offset by an increase in ounces produced ($43/ounce). Mining costs increased 44% to $5.5 million in the second quarter of 2010 due to higher diesel costs which increased costs $0.3 million ($0.86 per litre vs. $0.69 per litre in 2009); milling costs were 32% higher at $5.4 million primarily due to higher costs for electricity, reagents and grinding media; royalties increased by $0.9 million due to higher sales revenue achieved from both a higher gold price and higher volumes produced. Total cash cost per ounce produced 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 2010, exploration expenditures in Mongolia increased to $1.5 million from $0.5 million in the same period of 2009. Capital expenditures spent and accrued at Boroo in the second quarter of 2010 were $3.2 million compared to $0.1 million the same quarter of 2009. This consisted of $1.6 million of sustaining capital, predominantly spent on heavy equipment component change outs. Growth capital investment totalled $1.6 million spent on raising the tailings dam.

At the Gatsuurt project, $11.9 million of growth capital was spent and accrued in the quarter primarily related to completing the road construction ($6.6 million) to access the Gatsuurt project and connect it with the Boroo mill facilities and for the purchase of ore haul trucks ($2.3 million). A further $3.0 million was spent on the engineering and construction of the Boroo bio-oxidation facility for processing Gatsuurt and other sulphide ores. During the quarter the road construction to the Gatsuurt project was completed.

Exploration Update

To view the graphics, maps/drill sections and complete drill results discussed in this news release, please visit the following link: http://media3.marketwire.com/docs/CG730figures.pdf or visit the Company's web site at: www.centerragold.com.

Kyrgyz Republic

During the second quarter of 2010, exploration drilling programs continued in the Kumtor Central Pit and regional exploration drilling continued on the Kumtor concession area at the Northeast, Muzdusuu, Petrov areas and the Southwest Deposit.

A second exploration license covering the Koendy Project area was obtained on June 14, 2010, covering a 15 kilometre north-eastern extension of the same structure covered by the Karasay exploration license.

Kumtor Pit

In the second quarter of 2010, eight drill holes were completed and two holes were in progress at quarter-end. Four holes were completed to test the down dip extension of the Stockwork Zone. All holes intersected significant widths of low grade mineralization. Hole D1412 drilled on section 142 returned the best intercepts of 4.4 g/t Au over 5.3 metres, 3.4 g/t Au over 12.9 metres, 4.3 g/t Au over 14.8 metres including 7.5 g/t Au over 5.8 metres and 1.4 g/t Au over 5.0 metres. This drilling has defined the lower limits of the Stockwork Zone. No further drilling of the Stockwork Zone is planned from surface. Infill drilling from underground of the higher grade portion of the Stockwork Zone is planned for the fourth quarter of 2010.

Four holes were completed to test the Southwest Extension of the SB Zone with three of the holes returning significant results. Holes D1409 and D1416 returned significant intercepts that lie within the KS 10 pit design that will have a positive impact on the resource model. Hole D1409, drilled on section -18, intersected significant widths of mineralization including 6.2 g/t Au over 61.4 metres, which includes higher grade intercepts of 23.9 g/t Au over 5.0 metres and 15.5 g/t Au over 8.4 metres. Hole D1416, drilled 50 metres up-dip of D1409 on the same section -18, intersected 3.0 g/t Au over 5.2 metres, 2.0 g/t Au over 6.8 metres, 1.13 g/t Au over 10.2 metres, 3.4 g/t Au over 30.1 metres and 2.3 g/t Au over 3.3 metres.

Hole D1421 drilled on section -30 intersected high grade mineralization with an uncut intercept of 44.4 g/t Au over 21.7 metres including 124.1 g/t Au over 6.5 metres, 19.5 g/t Au over 5.8 metres and 8.3 g/t Au over 3.3 metres. With the higher grade gold values cut to 60g/t Au the high-grade intercept averages 23.6 g/t Au over 21.7 metres including 55.6 g/t Au over 6.5 metres, 18.3 g/t Au over 5.8 metres and 8.3 g/t Au over 3.3 metres.

This high grade intercept is located approximately 40 metres along strike and 90 metres up dip from the high-grade intercept reported in the third quarter of 2009 in hole D 1352 which returned an uncut intercept of 84.0 g/t Au over 26.4 metres, including 327.4 g/t Au over 6.2 metres, or with the higher gold values cut to 60 g/t Au, an intercept of 19.4g/t Au over 26.4 metres, including 52.2 g/t Au over 6.2 metres.

Additional drilling of the Southwest Extension of the SB Zone and the SB Zone will be completed in the third quarter should suitable access be available with mining activities in this area of the pit.

True widths for the mineralized zones are typically from 70% to 95% of the stated intercept.

Regional Exploration

Regional exploration drilling continued in the second quarter of 2010 at Northeast prospect, the Muzdusuu area and the Southwest Deposit.

Northeast Area

During the second quarter of 2010 four holes were completed at the Northeast prospect and a further two holes are in progress. All holes were designed to follow up on the mineralization intersected by prior drilling, which identified a near-surface zone of mineralization. Drilling was conducted at approximately 80 metre spacing in order to test the strike extent of near surface mineralization and continues to return encouraging results. The best results were in hole DN1422A, drilled on section 402 to test for mineralization down dip of DN1419 which intersected 9.2 g/t Au over 9.0 metres including 25.9 g/t Au over 2.8 metres.

Hole DN1396, drilled on section 382, designed to test the down dip extensions of previously reported mineralization, returned intercepts of 1.7 g/t Au over 4.0 metres, 2.7g/t Au over 4.1 metres, 3.7 g/t Au over 5.2 metres and 1.7 g/t Au over 3.7metres. Hole DN1420, drilled on section 430 to test for a near surface northeast extension of known high grade mineralization on section 426, intersected 3.1 g/t Au over 4.0 metres. Hole DN1419, drilled on section 402, was designed to test for near surface mineralization in between areas of known mineralization and the hole intersected a wide zone of alteration but no significant mineralization.

Drilling in the third quarter will focus on 40 metres spaced infill drilling to define the potential for a near surface open pit resource and as well as 80-160 metres spaced drilling to test for high-grade mineralization at depth.

Southwest Deposit

Five drill holes were completed during the second quarter and two holes were stopped due to technical difficulties and one hole is in progress.

The wide-spaced drilling in the second quarter was testing for zones of high-grade mineralization below the open pit. All holes intersected broad zones of alteration with relatively narrow zones of low to moderate grade mineralization.

Muzdusuu Area

Four holes were completed in the second quarter and one drill hole is in progress.

All holes were drilled to test strong geochemical and geophysical anomalies identified in 2009 which were interpreted to be associated with potentially mineralized structures and carbonate stratigraphy in the footwall of the main Kumtor structures. Of the four holes completed, only one hole intersected any significant mineralization, 3.9 g/t Au over 4.0 metres within the footwall limestone stratigraphy. The other holes intersected non-mineralized Neogene-Paleogene fragmental sediments in the structural footwall of the limestone.

Further drilling is planned in the third quarter to test the strongest geochemical anomaly and other geophysical targets.

A complete listing of the drill results and supporting maps for the Kumtor pit and Northeast area have been filed on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com and are available at the Company's web site at: www.centerragold.com.

Mongolia

Exploration work in the second quarter was conducted at the Gatsuurt, Ulaan Bulag, and Sumber properties in the Yeroogol trend and at the Altan Tsagaan Ovoo, Munhkahan and Tuvshinshire properties in Eastern Mongolia.

Gatsuurt Project

Following the success of the first quarter drilling program at the Central Zone deposit a second drill program was designed to test for the occurrence of gently dipping structures along strike to the southwest on the eastern side of the Central Zone deposit. The program was also designed to test for the continuity of the mineralization beyond the eastern wall of the proposed Central Zone pit.

A 30 x 30 metre drill program was completed in May and June. The program confirmed the presence of gently dipping structures and mineralized zones within the granitic package in the eastern wall of the Central Zone deposit over a strike length of 180 metres.

Additional drilling is planned in the third quarter to fill in the remaining gaps in the 30 x 30 metre grid and also test for further extensions of the newly identified mineralized zones.

Ulaan Bulag

A preliminary evaluation of the first quarter 2010 drill results was completed in April indicating that the Nuga Zone at the Ulaan Bulag prospect has a potential oxide open pit resource.

An additional nine holes were complete in June to define the southern and western extensions of the Nuga Zone. A preliminary economic analysis of the Nuga Zone will be completed to determine if a mineable resource can be developed for trucking to the Boroo processing facilities located 15 kilometres to the northwest.

To view the graphics, maps/drill sections and complete drill results discussed in this news release, please visit the following link: http://media3.marketwire.com/docs/CG730figures.pdf or visit the Company's web site at: www.centerragold.com.

Outlook for 2010

2010 Production

Centerra's 2010 consolidated gold production is forecast to be in the 640,000 to 700,000 ounce range, which is unchanged from the prior guidance disclosed in the Company's news release of April 28, 2010.

Gold production for the full year 2010 at the Kumtor mine in the Kyrgyz Republic is forecast to be between 530,000 to 570,000 ounces, which is unchanged from prior guidance. While it is expected that the higher than anticipated production realized at Kumtor in the first and second quarters may be partially offset by lower production in the third quarter of 2010. The Company continues to expect that during the fourth quarter Kumtor will produce approximately 40% of its 2010 production.

At Boroo/Gatsuurt, gold production is forecast to be 110,000 to 130,000 ounces, which is unchanged from prior guidance.

While the Company believes it has met all the regulatory pre-conditions for the issuance of the final heap leach operating permit, its issuance continues to be delayed. Due to these continued delays in obtaining the final permit, the Company has removed any heap leach production from this year's production guidance. If the final operating permit is received, resumption of heap leach operations at Boroo would add approximately 3,000 to 4,000 ounces per month to production.

Additionally, the current production guidance does not include any gold production from Gatsuurt. While the Company has continued to receive permits and approvals in connection with the road construction to Gatsuurt and for construction of surface facilities at the project, there is a risk that further approvals or commissioning of the project could be delayed as a result of the Water and Forest Law, see 'Other Corporate Developments, Mongolian Legislation'.

Due to the potential for delays in receiving the required approvals for the Gatsuurt project, Boroo has initiated an alternative plan that is expected to allow the Boroo operation to achieve the production within the forecasted range of ounces produced. The processing of remaining mine ores by the Boroo mill, in conjunction with, the processing of stockpiled lower grade ores will allow the operation to meet its production guidance. The mining of refractory ores from Pit 3 and Pit 6 will provide mill feed in the fourth quarter of 2010 and into first quarter of 2011. Mill recoveries of this material, though low, allow the ores to be mined and processed and remain profitable.

These production estimates are based on certain assumptions. See 'Material Assumptions' below.

2010 Total Cash Cost per Ounce

Total cash cost in 2010 is expected to be between $460 and $505 per ounce produced, which is unchanged from the prior guidance of April 28, 2010. 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.

Total cash cost for 2010 for Kumtor is expected to be in the range of $430 to $460 per ounce produced, which is unchanged from the prior guidance.

Boroo total cash cost for 2010 reflects no production from both the heap leach operation and Gatsuurt and is expected to be $590 to $690 per ounce produced, which is unchanged from the prior guidance.

Centerra's production and unit costs are forecast as follows:

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                          2010 Production Forecast  2010 Total Cash Cost(1)
                                  (ounces of gold)    ($ per ounce produced)
----------------------------------------------------------------------------
Kumtor                           530,000 - 570,000                 430 - 460
----------------------------------------------------------------------------
Boroo                            110,000 - 130,000                 590 - 690
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Consolidated                     640,000 - 700,000                 460 - 505
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(1) Total cash cost is a non-GAAP measure. See 'Non-GAAP Measures' in the
Management's Discussion and Analysis issued in conjunction with this news
release.

These cost estimates are based on certain assumptions. See 'Material Assumptions' below.

2010 Exploration Expenditures

Exploration expenditures of $30 million are planned for 2010, and the exploration plan is unchanged from the prior guidance. Generative programs will continue in Central Asia, Russia, China, Turkey and the U.S. to increase the pipeline of projects that are being developed to meet the longer term growth targets of Centerra.

2010 Capital Expenditures

The capital expenditures for 2010 are estimated to be $241.1 million, including $48.9 million of sustaining capital and $192.2 million of growth capital. This represents a decrease of $4.1 million from prior guidance primarily due to the timing of expenditures in growth capital at Gatsuurt.

Capital expenditures include:

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                              2010 Growth Capital    2010 Sustaining Capital
Projects                    (millions of dollars)      (millions of dollars)
----------------------------------------------------------------------------
Kumtor mine             $                   153.1  $                    43.6
----------------------------------------------------------------------------
Boroo mine              $                     0.5  $                     4.9
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Gatsuurt project        $                    38.6                          0
----------------------------------------------------------------------------
Other                                           0  $                     0.4
----------------------------------------------------------------------------
Consolidated Total      $                   192.2  $                    48.9
----------------------------------------------------------------------------

Kumtor Capital

At Kumtor, the largest growth capital expenditure will be for the North Wall Expansion project, estimated at $92.7 million primarily for purchases of mining and auxiliary support equipment to renew and expand the mining fleet. The equipment has been ordered and is expected to be delivered in the fourth quarter of 2010 and the first quarter of 2011. To increase haulage capacity to manage the ice/waste movement in the high movement area, Kumtor is acquiring seven new CAT 789 haul trucks for a total cost of $19.8 million. As of the end of June 2010, Kumtor had received five and commissioned four out of the seven trucks. It is expected that the remaining two trucks will be delivered in the third and fourth quarters of 2010. The underground growth capital for developing the SB Zone and Stockwork Zone, as well as for delineation drilling and capital purchases, is estimated to be $38.4 million in 2010.

Boroo & Gatsuurt Capital

At Boroo, 2010 sustaining capital expenditures are expected to be $4.9 million, primarily for the purchase of new ball and SAG mill gears ($2.1 million) and mobile equipment component change-outs ($1.9 million). These expenditures are based on operational needs and also assume the receipt of the required approvals for Gatsuurt.

At Gatsuurt, expected 2010 growth capital spending is forecasted at $38.6 million down from $42.0 million in the prior guidance. Pre-stripping of the sulphide ores initially planned to be carried out in 2010 for $9.2 million have now been partially deferred with only $2.9 million of the total being spent in 2010 as a result of the decision to delay the construction of the Boroo bio-oxidation facility for processing Gatsuurt and other sulphide ores. The previous estimate of the engineering costs of the Boroo bio-oxidation facility of $5.0 million has been increased to $8.0 million.

The Company has implemented a phased approach to the development of the Gatsuurt orebody consisting of an oxide project component followed by a sulphide project component. The Company expects that the capital for the development of the deeper sulphide ores at Gatsuurt will be invested following successful commissioning of the Gatsuurt oxide project and after the Company signs an acceptable investment agreement for Gatsuurt with the Government of Mongolia. Drilling results at Gatsuurt have identified additional oxide mineralization which is likely to extend the oxide operating life for the mine, further delaying the requirement for capital investment in the bio-oxidation plant.

Other growth capital spending at Gatsuurt includes completion of the Gatsuurt site infrastructure including the haul road between Gatsuurt and Boroo ($9.6 million), purchase of haul trucks to be used for hauling of ore from the Gatsuurt site to the Boroo mill ($5.3 million), and the expansion of the existing Boroo tailings facility to contain Gatsuurt oxide and sulphide tailings ($4.8 million).

Administration

Annual estimated corporate and administration expenses remains at $41 million.

Production, cost and capital forecasts for 2010 are forward-looking information and are based on key assumptions and subject to material risk factors that could cause actual results to differ materially and which are discussed under the heading 'Material Assumptions' and 'Cautionary Note Regarding Forward-looking Information'.

Sensitivities

Centerra's revenues, earnings and cash flows for the remaining six months of 2010 are sensitive to changes in certain variables and the Company has estimated their impact on revenues, net earnings and cash from operations.

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                                           Impact on ($ millions)
                               ---------------------------------------------
                                                             Earnings before
                         Change   Costs  Revenues  Cash flow      income tax
----------------------------------------------------------------------------
Gold Price               $50/oz     2.9      17.4       14.5            15.2
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Diesel Fuel (1)             10%     3.6         -        3.6             3.6
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Kyrgyz som                1 som     1.0         -        1.0             1.0
----------------------------------------------------------------------------
Mongolian tugrik      25 tugrik     0.2         -        0.2             0.2
----------------------------------------------------------------------------
Canadian dollar        10 cents     1.6         -        1.6             1.6
----------------------------------------------------------------------------
(1) 10% change in diesel fuel price equals $10/oz.

Material Assumptions

Material assumptions or factors used to forecast production and costs include the following:

--  a gold price of $1,100 per ounce,
--  exchange rates:
    --  $1USD:$1.02 CAD
    --  $1USD:45.50 Kyrgyz Som
    --  $1USD:1,380 Mongolian Tugrik
    --  $1USD:0.78 Euro
--  diesel fuel price assumption:
    --  $0.74/litre at Kumtor(i)
    --  $0.84/litre at Boroo

(i)The assumed diesel price of $0.74/litre at Kumtor includes a customs export duty imposed by the Russian authorities on the diesel fuel exported to the Kyrgyz Republic. Russia imposed a customs duty of $193.50 per tonne on gasoline and diesel fuel exports to the Kyrgyz Republic that went into effect on April 1, 2010. The Company estimates that the introduction of this new export duty will increase operating costs at Kumtor by approximately $7 million.

Diesel fuel is sourced from separate Russian suppliers for both sites and only loosely correlates with world oil prices. The diesel fuel price assumptions were made when the price of oil was approximately $76 per barrel.

Other important assumptions on which the Company's production, cost and capital guidance is based include the following:

--  Political and civil unrest in the Kyrgyz Republic does not impact
    operations, including movement of supplies, gold shipments and people to
    the Kumtor mine,
--  grades and recoveries at Kumtor will remain consistent with the life-of-
    mine plan to achieve the forecast gold production,
--  the dewatering and depressurization programs at Kumtor continue to
    produce the expected results and the water management system works as
    planned,
--  the remedial plan to deal with the Kumtor waste and ice movement is
    successful, see 'Kumtor Mine - Remedial Plan to Manage the High Movement
    Area' in the Company's December 7, 2009 news release,
--  the equipment to execute the Company's remedial plan to manage the high
    movement area at Kumtor is delivered on time,
--  no unplanned delays in or interruption of scheduled production from our
    mines, including due to civil unrest, natural phenomena, labour,
    regulatory or political disputes, equipment breakdown or other
    developmental and operational risks,
--  certain issues at Boroo raised by the General Department of Specialized
    Inspection ('SSIA') concerning state alluvial reserves, the production
    and sale of gold from the Boroo heap leach facility and other matters
    will be resolved through negotiation without material adverse impact on
    the Company, see 'Mongolian Regulatory Matters',
--  Boroo ore does not become more refractory in nature than anticipated,
    affecting mill recoveries,
--  no further suspension of Boroo's operating licenses, and
--  all necessary permits, licences and approvals are received in a timely
    manner.

Production and cost forecasts and capital estimates are forward-looking information and are based on key assumptions and subject to material risk factors. If any event arising from these risks occurs, the Company's business, prospects, financial condition, results of operations or cash flows could be adversely affected. Additional risks and uncertainties not currently known to the Company, or that are currently deemed immaterial, may also materially and adversely affect the Company's business operations, prospects, financial condition, and results of operations or cash flows. See the sections entitled 'Recent Developments' and 'Risk Factors' in the Company's most recently filed annual information form, available on SEDAR at www.sedar.com and see also the discussion below under the heading 'Cautionary Note Regarding Forward-looking Information'.

Qualified Person

The new drilling results in this news release and on Centerra's website and the other scientific and technical information in this news release were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101') and were reviewed, verified and compiled by Centerra's geological and mining staff under the supervision of Ian Atkinson, Certified Professional Geologist, Centerra's Vice-President, Exploration, who is the qualified person for the purpose of NI 43-101.

The Kumtor deposit is described in Centerra's most recently filed Annual Information Form (the 'AIF') and a technical report dated December 16, 2009 prepared in accordance with NI 43-101. The AIF and technical report have been filed on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Kumtor deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Kumtor site are described in the technical report.

The Gatsuurt deposit is described in the Company's most recently filed AIF and in a technical report dated May 9, 2006 prepared in accordance with NI 43-101. The AIF and technical report have been filed on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Gatsuurt deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Gatsuurt project are the same as, or similar to, those described in the technical report.

Cautionary Note Regarding Forward-looking Information

This news release and the documents referred to herein contain statements which are not statements of current or historical facts and are 'forward-looking information' within the meaning of applicable Canadian securities laws. Such forward-looking information involves 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 information. Wherever possible, words such as 'believe', 'expect', 'anticipate', 'contemplate', 'target', 'plan', 'intends', 'continue', 'budget', 'forecast', 'projections', 'estimate', 'may', 'will', 'schedule', 'potential', 'strategy' and other similar expressions have been used to identify forward-looking information. These forward-looking statements relate to, among other things, Centerra's expectations regarding future growth, results of operations (including, without limitation, future production and sales, and operating and capital expenditures), performance (both operational and financial), business and political environment and business prospects (including the timing and development of new deposits and the success of exploration activities) and opportunities.

Although the forward-looking information in this news release reflects Centerra's current beliefs as of the date of this news release based on information currently available to management and based upon what management believes to be reasonable assumptions, Centerra cannot be certain that actual results, performance, achievements, prospects and opportunities, either expressed or implied will be consistent with such forward-looking information. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by Centerra, are inherently subject to significant political, business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking information.

Factors that could cause actual results or events to differ materially from current expectations include, among other things: risks relating to the recent political and civil unrest in the Kyrgyz Republic, risks related to the creep of ice and waste movement into the Kumtor open-pit, the resolution of issues at the Boroo mine raised by the Mongolian SSIA concerning alluvial reserves and matters relating to the suspension of the Boroo licenses in June 2009, the potential impact of Mongolian legislation prohibiting mineral activity in water basins and forest areas on the Gatsuurt project, the threatened termination of the stability agreement with the Mongolian Government in relation to the Boroo mine, the receipt of a final permit to operate the heap leach operation at the Boroo mine, fluctuations in gold prices, replacement of mineral reserves, reduction in reserves related to geotechnical risks, ground movements, political risk, nationalization risk, changes in laws and regulations, political civil unrest, labour unrest, legal compliance costs, reserve and resource estimates, production estimates, exploration and development activities, competition, operational risks, environmental, health and safety risks, costs associated with reclamation and decommissioning, defects in title, seismic activity, cost and availability of labour, material and supplies, increases in production and capital costs, permitting and construction to raise the tailings dam height and increase the capacity of the existing Kumtor tailing dam, the ability to renew and obtain licenses, permits and other rights, illegal mining, enforcement of legal rights, decommissioning and reclamation cost estimates, future financing and personnel and the receipt of all permitting and commissioning requirements for the Gatsuurt mine. In addition, material assumptions used to forecast production and costs include those described above under the heading 'Material Assumptions'. There may be other factors that cause results, assumptions, performance, achievements, prospects or opportunities in future periods not to be as anticipated, estimated or intended. See 'Risk Factors' in the Company's most recently filed AIF and Annual Management's Discussion and Analysis available on SEDAR at www.sedar.com.

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. Economic and technological factors which may change over time always influence the evaluation of reserves or resources. Centerra has not adjusted mineral resource figures in consideration of these risks and, therefore, Centerra can give no assurances that any mineral resource estimate will ultimately be reclassified as proven and probable reserves.

Centerra's mineral reserve and mineral resource figures are estimates and Centerra can provide no assurances that the indicated levels of gold will be produced or that Centerra will receive the gold price assumed in determining its mineral 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 these mineral reserve and mineral resource estimates are well established and the best estimates of Centerra's management, by their nature mineral reserve and mineral resource estimates are imprecise and depend, to a certain extent, upon analysis of drilling results and statistical inferences which may ultimately prove unreliable. If Centerra's reserve or reserve estimates for its properties are inaccurate or are reduced in the future, this could have an adverse impact on Centerra's future cash flows, earnings, results or operations and financial condition.

Centerra estimates the future mine life of its operations. Centerra can give no assurance 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.

There can be no assurances that forward-looking information and statements will prove to be accurate, as many factors and future events, both known and unknown could cause actual results, performance or achievements to vary or differ materially from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this news release. Accordingly, all such factors should be considered carefully when making decisions with respect to Centerra, and prospective investors should not place undue reliance on forward-looking information. Forward-looking information is as of July 29, 2010. Centerra assumes no obligation to update or revise forward-looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward-looking information, except as required by applicable law.

About Centerra

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

Conference Call

Centerra invites you to join its 2010 second quarter conference call on Friday, July 30, 2010 at 11:00 am Eastern Time. The call is open to all investors and the media. To join the call, please dial toll-free in North America (800) 756-3565 or International participants dial +1 (212) 231-2901. Alternatively, an audio feed web cast will be available on www.centerragold.com. A recording of the call will be available on www.centerragold.com shortly after the call and via telephone until midnight on Friday August 6, 2010 by calling (416) 626-4100 or (800) 558-5253 and using passcode 21474193.

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

MDA and Financial Statements and Notes follow

                             Centerra Gold Inc.

                Management's Discussion and Analysis ('MD&A')

                     For the period ended June 30, 2010

The following discussion has been prepared as of July 29, 2010, and is intended to provide a review of the financial position and results of operations of Centerra Gold Inc. ('Centerra' or the 'Company') for the three and six month periods ended June 30, 2010 in comparison with those as at June 30, 2009. This discussion should be read in conjunction with the unaudited interim consolidated financial statements and the notes of the Company for the three and six month periods ended June 30, 2010. This MD&A should also be read in conjunction with the Company's audited annual consolidated financial statements for the three years ended December 31, 2009, the related MD&A included in the 2009 Annual Report, and the 2009 Annual Information Form. The financial statements of Centerra are prepared in accordance with Canadian generally accepted accounting principles ('GAAP') and, unless otherwise specified, all dollar amounts are in United States dollars. The Company's 2009 Annual Report and Annual Information Form are available at www.centerragold.com and on the System for Electronic Document Analysis and Retrieval ('SEDAR') at www.sedar.com.

TABLE OF CONTENTS
Consolidated Financial Results
Highlights
Three-Month Period Ended June 30, 2010 Compared with the Three-Month Period
 Ended June 30, 2009
Six-Month Period Ended June 30, 2010 Compared with the Six-Month Period
 Ended June 30, 2009
Mine Operations
Other Financial Information - Related Party Transactions
Quarterly Results - Last Eight Quarters
Other Corporate Developments
Critical Accounting Estimates
Changes in Accounting Policies
Status of Centerra's Transition to International Financial Reporting
 Standards ('IFRS')
Outlook for 2010
Non-GAAP Measures
Caution Regarding Forward-Looking Information

Consolidated Financial Results

Centerra's consolidated financial results for the three and six month periods ended June 30, 2010 reflect 100% interests in the Kumtor and Boroo mines, and the Gatsuurt project.

Highlights

----------------------------------------------------------------------------
                   Three Months Ended June 30    Six Months Ended June 30
----------------------------------------------------------------------------
Financial and
 Operating Summary     2010    2009  % Change       2010    2009  % Change
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue - $
 millions             152.2   104.3        46%     407.7   202.8       101%
----------------------------------------------------------------------------
Cost of sales - $
 millions (1)          63.0    82.0       (23%)    120.3   151.2       (20%)
----------------------------------------------------------------------------
Earnings (loss)
 before unusual
 items - $ millions
 (2)                   29.8   (30.3)     (198%)    151.9   (50.5)     (401%)
----------------------------------------------------------------------------
Unusual items - $
 millions                 -   (49.3)     (100%)        -   (49.3)     (100%)
----------------------------------------------------------------------------
Net earnings (loss)
 - $ millions          29.8   (79.6)     (137%)    151.9   (99.9)     (252%)
----------------------------------------------------------------------------
Earnings (loss) per
 common share - $
 basic and diluted     0.13   (0.36)     (136%)     0.65   (0.46)     (241%)
----------------------------------------------------------------------------
Cash provided by
 operations - $
 millions              76.5   (17.3)     (542%)    158.8    (6.4)    (2581%)
-------------------------------------------------