The Board of Directors and management believe that sound and effective corporate governance is essential to Centerra's performance. Centerra has adopted certain practices and procedures to ensure that effective corporate governance practices are followed and that the Board functions independently of management. In addition, the Nominating and Corporate Governance Committee of the Board of Directors reviews Centerra's corporate governance practices and procedures on a regular basis to ensure that they address significant issues of corporate governance.

The following statement sets out a description of Centerra's corporate governance practices as approved by the Board of Directors taking into account the best practices set forth in National Instrument 58-101 - Corporate Governance Disclosure ("NI 58-101").

Board Mandate

The Board supervises the conduct of the affairs of the Corporation directly and through its committees. In so doing, the Board endeavours to act always in the best interests of the Corporation. In addition, the Board recognizes the importance of the enhancement of both short and longer term value for all shareholders. In carrying out its responsibilities, the Board appoints the senior executives of the Corporation and meets with them on a regular basis to receive and consider reports on the Corporation's business. The Board of Directors holds regularly scheduled meetings, with additional meetings being held as required to consider particular issues or conduct specific reviews between regularly scheduled meetings. Between January 1, 2005 and December 31, 2005, the Board of Directors held 8 meetings.

Along with those matters which must by law be approved by the Board, key strategic decisions are also submitted by management to the Board for approval. In addition to approving specific corporate actions, the Board reviews and approves the reports issued to shareholders, including annual and interim financial statements, as well as materials prepared for shareholders' meetings. The Board also approves the Corporation's overall business strategies and annual business plans for achieving its objectives.

The fundamental responsibility of the Board is to supervise the management of Centerra's business and affairs with a view to sustainable value creation for all shareholders. Centerra's Board promotes fair reporting, including financial reporting, to shareholders and other interested persons as well as ethical and legal corporate conduct through an appropriate system of corporate governance, internal controls and disclosure controls.

The Board is, among other matters, responsible for the following:

• selection, appointment, evaluation and, if necessary, termination of the Chief Executive Officer and senior management;
• adoption of a strategic planning process and approval of strategic plans;
• risk management policies and procedures;
• policies and procedures regarding the integrity of financial reporting and information management;
• oversight of estimates of Centerra's reserves by management;
• human resources policies;
• health, safety and environmental policies;
• disclosure policies and procedures;
• corporate governance; and
• certain other matters which may not be delegated by the Board under applicable corporate law.

The Board has adopted a formal written mandate which clarifies these responsibilities and complements the written mandates of each of the committees.

The Board has appointed a non-executive, independent director as Chair, which allows the Board to function independently of management. Mr. James has held this position since 2004. The Chair is principally responsible for overseeing the operations and affairs of the Board. His responsibilities include leading, managing and organizing the Board, consistent with the approach to corporate governance adopted by the Board from time to time; confirming that appropriate procedures are in place to allow the Board to work effectively and efficiently and to function independently from management; acting as a liaison between the Board and senior management, including acting as an advisor to and sounding board for the Chief Executive Officer; and working with the Chief Executive Officer, the chair of the Nominating and Corporate Governance Committee and the Corporate Secretary to further the creation of a healthy governance culture within Centerra. The Board has adopted a position description for the Chair of the Board, which sets out the duties and responsibilities of the Chair. This position description is reviewed by the Board from time to time. The position description for the Chair of the Board is contained in the Board's mandate. The Board's mandate also provides that the chair of each committee is responsible for determining the agenda, and the frequency and conduct of the meetings of that committee.

The Board has also adopted a position description for Centerra's Chief Executive Officer which sets out the duties and responsibilities of the Chief Executive Officer. This position description is reviewed by the Board from time to time.

The Board receives reports on Centerra's operating activities as well as timely reports on certain non-operational matters, including insurance, legal, corporate governance and financial matters.

Directors are provided an opportunity to meet individually in work sessions with senior management to obtain further insight into the operations of the Corporation and its subsidiaries, and are involved on a regular basis in discussions with management. Each Board committee may engage outside advisors at the expense of the Corporation. Individual directors are also free to consult with members of senior management whenever so required and to engage outside advisers, at the expense of the Corporation, with the authorization of the Nominating and Corporate Governance Committee. To ensure that the Board is able to discharge its responsibilities independently of management, independent directors may meet separately as requested by any independent director.

Board Mandate  (PDF 85 KB)

Composition of the Board

Centerra's Board is comprised of a majority of independent directors. Centerra's Board has assessed the independence of each director. In determining independence, the Board examined and relied on the definition of independence in NI 58-101. After considering a wide variety of factors and information disclosed by each director, the Board has determined that of the nine directors, five are independent.

• One of the directors, Mr. Homeniuk, is not independent or unrelated because he is a member of management of Centerra.
• Two of the directors, Mr. Grandey and Mr. Rogers, are not independent or unrelated because they are members of management of Cameco, the Corporation's indirect parent corporation.
• One of the directors, Mr. Djakypov, is the President of Krygyzaltyn, which has significant ongoing arrangements with Centerra as discussed under the heading "Interests of Management and Others in Material Transactions" in the AIF for the year ended December 31, 2005.
• Messrs. James, Austin, Auston, Spross and Webb are each independent.

Approximately 52.7% of the outstanding common shares are held by the Corporation's controlling shareholder, Cameco Gold, and approximately 15.7% of the outstanding common shares are held by Kyrgyzaltyn.

Under the terms of the Shareholders Agreement, so long as Kyrgyzaltyn continues to hold 5% or more of Centerra's outstanding Shares, Cameco Gold and its affiliates will vote their Shares for the election or appointment of one nominee designated by Kyrgyzaltyn to Centerra's Board of Directors and Centerra has agreed to include in Centerra's proposed slate of directors nominated for election at each annual or special meeting one Board nominee designated by Kyrgyzaltyn. In addition, so long as Cameco Gold and its affiliates hold 5% or more of Centerra's outstanding Shares, Kyrgyzaltyn will vote its Shares for the election or appointment of that number of nominees designated by Cameco Gold to Centerra's Board of Directors as is proportionate to Cameco Gold's common shareholding percentage.

Committees of the Board of Directors

Each Board committee operates under a written charter that sets out its responsibilities and duties, qualifications for membership, procedures for committee member removal and appointment and reporting to the Board. The charters are reviewed annually by the relevant committee and the Nominating and Corporate Governance Committee, which may make recommendations to the Board for changes. Below is a brief description of the responsibilities of each committee.

Audit Committee

The Audit Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to, among other things:

• financial reporting;
• the external auditor;
• the internal auditor;
• compliance with legal and regulatory requirements related to financial reporting and certain corporate policies;
• internal controls over financial reporting and disclosure controls; and
• any additional matters delegated to the Audit Committee by the Board.

The members of the Audit Committee are Messrs. Austin, Auston and James. The Board has determined that all of the Audit Committee members are independent and financially literate as required by applicable securities legislation. Between January 1, 2005 and December 31, 2005, the Audit Committee met 7 times.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to, among other things:

• Centerra's overall approach to corporate governance;
• the size, composition and structure of the Board and its committees;
• the identification and recommendation to the Board of qualified individuals for appointment to the Board and its committees;
• orientation and continuing education for directors;
• the limitation of director and officer liability, including indemnities under contract or by-law or pursuant to directors and officers insurance;
• matters involving conflicts of interest of directors; and
• any additional matters delegated to the Nominating and Corporate Governance Committee by the Board.

The members of the Nominating and Corporate Governance Committee are Messrs. Austin, Grandey, James and Webb. Other than Mr. Grandey, each of these directors is independent. Between January 1, 2005 and December 31, 2005, the Nominating and Corporate Governance Committee met 5 times.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to, among other things:

• the selection and retention of senior management;
• the compensation of senior management;
• senior management succession and development;
• human resources policies; and
• any additional matters delegated to the Human Resources and Compensation Committee by the Board.

The members of the Human Resources and Compensation Committee are Messrs. Austin, Spross and Webb, each of whom is independent. Between January 1, 2005 and December 31, 2005, the Human Resources and Compensation Committee met 5 times.

Safety, Health and Environmental Committee

The Safety, Health and Environmental Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to, among other things:

• the establishment and review of Centerra's safety, health and environmental policies;
• management of the implementation of compliance systems;
• monitoring the effectiveness of Centerra's safety, health and environmental policies, systems and monitoring processes;
• receiving audit results and updates from management with respect to Centerra's health, safety and environmental performance;
• reviewing the annual budget for safety, health and environmental operations; and
• any additional matters delegated to the Safety, Health and Environmental Committee by the Board.

The members of the Safety, Health and Environmental Committee are Messrs. James, Djakypov, Rogers and Spross. Two of these directors are independent. Between January 1, 2005 and December 31, 2005, the Safety, Health and Environmental Committee met 4 times.

Reserves Committee

The Reserves Committee is responsible for assisting the Board in fulfilling its oversight responsibilities in relation to:

• the estimation of reserves by management;
• the review of reserve information before publication; and
• any additional matters delegated to the Reserves Committee by the Board.

The members of the Reserves Committee are Messrs. Auston, Djakypov and Spross. Two of these directors are independent. Between January 1, 2005 and December 31, 2005, the Reserves Committee met 3 times.

Assessment Process

Annually, the Nominating and Corporate Governance Committee reviews the effectiveness of the Board, its Chair and committees and directors through the use of a confidential self-assessment questionnaire completed by each member. The results of the surveys are subsequently discussed by the Board.

The Nominating and Corporate Governance Committee, through the survey and interviews, assesses the operation of the Board and the committees, the adequacy of information given to directors, communication between the Board and management, the effectiveness of the processes of the Board and committees, and the effectiveness of the Board and directors. The committee recommends to the Board any changes needed to enhance performance based upon this assessment process.

Director Qualifications and Board Size

The Nominating and Corporate Governance Committee is responsible for assessing the need for new directors, and the preferred experience and qualifications of new directors. The Nominating and Corporate Governance Committee recommends candidates for initial Board membership and Board members for re-nomination. Recommendations are based on character, integrity, judgment, business experience, record of achievement and any other skills or talents that would enhance the Board and overall management of the business and affairs of the Corporation.

The Nominating and Corporate Governance Committee maintains an understanding of the anticipated tenure of current directors, and the needs of the Board as a whole. Particular candidates are considered in light of the Board's current and anticipated needs. Board members complete annual skills and experience self-assessments, which are reviewed by the Nominating and Corporate Governance Committee to assist in placing Board members on committees where their expertise can best be utilized and also to identify skills and experience gaps important in identifying any new nominees to the Board.

The Nominating and Corporate Governance Committee is aware of the opportunity for its independent members to meet separately as requested by any independent member of the Nominating and Corporate Governance Committee from time to time.

The Board is currently of the view that its optimal size for effective decision-making and committee work is 9 to 10 members.

Centerra provides new directors with orientation materials describing the business of the Corporation, its corporate governance structure and related policies and information. New directors also have meetings with Centerra's Chief Executive Officer, Chief Financial Officer and other senior executives.

Continuing education is provided by management through presentations to the Board and committees when any key business decisions are sought at strategic planning meetings. Board members are encouraged to attend conferences or seminars at Centerra's expense. The conference or seminar can deal with any subject matter that is applicable to the Board member's role on the Board or its committees or to increase the member's knowledge of the Corporation's business. The Corporate Secretary notifies Board members of conferences, seminars or other educational opportunities on pertinent topics.

Director Attendance

All directors are expected to attend Board and relevant committee meetings and the annual meeting of shareholders, except where non-attendance is unavoidable.

Compensation of Directors and Officers

The Board believes that compensation for directors should be competitive with the compensation paid to directors of comparable companies. The Human Resources and Compensation Committee reviews directors' compensation annually and makes recommendations to the Board. Directors who are employees of the corporation or any of its affiliates do not receive any compensation for service as directors.

Codes of Ethics

Centerra's Board expects all of Centerra's directors, officers and employees to conduct themselves in accordance with the highest ethical standards.

Centerra's Board has adopted a Code of Ethics for employees which addresses, among other things, avoidance of conflicts of interest, protection of confidential information, compliance with applicable laws, rules and regulations, adherence to good disclosure practices and procedures for employees and third parties to report concerns with respect to accounting and auditing matters. As set out in the Code of Ethics, an employee who, in good faith, reports a concern regarding accounting matters or a suspected breach of the Code of Ethics is protected from reprisal, such as dismissal, demotion, suspension, threats, harassment or discrimination.

The Board has also adopted a Code of Ethics for directors which sets out the ethical standards that apply to directors in the exercise of their duties.

Centerra Code of Ethics   (PDF 146 KB)

Board Code of Ethics   (PDF 54 KB)

Procedures for Reporting Employee Concerns Regarding Violations of the Code of Ethics, including Accounting and Auditing Matters

The audit committee of Centerra Gold Inc. has approved the following procedures for the confidential and anonymous submission of employee complaints regarding violations of Centerra's Code of Ethics, including concerns regarding accounting and auditing matters.

Centerra's Code of Ethics provides that any employee may submit a good faith complaint or concern regarding suspected violations of the Code of Ethics, including concerns regarding accounting or auditing matters, confidentially to Centerra's General Counsel without fear of dismissal or retaliation of any kind, who will in turn communicate the concerns to the audit committee.

Employees can contact the General Counsel by sending by regular mail (or other means of delivery) to the corporate headquarters address of Centerra (Suite 1500 – 1 University Ave., Toronto, Ontario, M5J 2P1 Canada) a sealed envelope marked "Private and Strictly Confidential - Attention: General Counsel". Every reasonable effort will be made to ensure the confidentiality of those furnishing information. If an employee prefers to report an allegation anonymously, he or she must provide enough information about the incident or situation to allow Centerra to investigate properly and effectively.

In addition, employees may report their concerns anonymously by using Centerra's Compliance Hotline, which has been established in connection with the Code of Ethics. The Compliance Hotline is a 24 hours-a-day service which is operated by an independent third-party service provider. Instructions for access to the Compliance Hotline are as follows:

Toll-Free number for North America: 1-866-841-8609

Outside North America: 1-514-333-8823

Via Internet:   www.clearviewconnects.com

Via mail at the following address:	ClearView Connects
	P.O. Box 90505
	Toronto, Ontario
	M1J 3N7
	Canada

Disclosure and Insider Trading Policy

Centerra's Board has adopted and periodically reviews and updates Centerra's written corporate disclosure and insider trading policy. This policy among other things:

• establishes a process for the disclosure of material information;
• establishes a process for reviewing news releases, corporate documents and public oral statements before they are issued;
• sets out the obligations of Centerra's directors, officers and other employees to preserve the confidentiality of undisclosed material information; and
• sets out the prohibitions applicable to Centerra's directors, officers and other employees with respect to illegal insider trading and tipping.

Shareholder/Investor Communications and Feedback

The Corporation has in place procedures to effectively communicate with its stakeholders, including its shareholders, employees and the general public. The fundamental objective of these procedures is to ensure an open, accessible and timely exchange of information with shareholders, employees and other stakeholders concerning the business, affairs and performance of the Corporation. This includes quarterly conference calls with industry analysts, investors and media representatives in conjunction with the release of the Corporation's financial results, as well as regular presentations to or meetings with industry analysts and with institutional shareholders. Through the Corporation's website, shareholders and other stakeholders may access webcasts of these conference calls and most of the presentations made by the Corporation to the investment community. In addition, the Corporation has in place procedures to ensure that inquiries or other communications from shareholders are answered by an appropriate person in the Corporation.

You may contact the Board or Centerra's independent directors as a group by writing to them c/o Patrick M. James, Chair of the Board of Directors, Centerra Gold Inc., 1 University Avenue, Suite 1500, Toronto, Ontario, M5J 2P1.

Statement of Corporate Governance Practices  (PDF 172 KB)