Gatsuurt Exploration Activities

EXPLORATION AND DEVELOPMENT ACTIVITIES

In 2004 Centerra commissioned Roscoe Postle Associates Inc. (RPA) to conduct a new drilling program at the Gatsuurt deposit and prepare a new resource estimate.

Included in RPA's January 27, 2005 technical report is a resource estimate based on drill holes that were completed as of November 17, 2004. At a 2.0 g/t gold cutoff grade and cutting high-grade assays to 25 g/t gold, the indicated resources were estimated to be 8.1 million tonnes at an average grade of 3.4 g/t gold for a total of 890,000 ounces of contained gold. Additional inferred resources were estimated at 1.5 million tonnes at an average grade of 3.1 g/t gold for a total of 152,000 ounces of contained gold.

The drilling program continued at the Gatsuurt deposit until mid-January, 2005, resulting in an additional 52 drill holes being completed and added to the database and the use of a lower cutoff grade and higher cutting levels for high grade samples. The new estimate used a 1.6 g/t gold cutoff grade and cutting high-grade composites to values varying from 30 g/t gold to 45 g/t gold depending on the mineralized zone. A new resource model was prepared by Centerra staff using three different shells to partition the deposit into three mineralized populations to reflect different grade ranges. Ordinary kriging was used to interpolate block grades within each shell.

As a result, Centerra announced the addition of 387,000 ounces of indicated resources at Gatsuurt on April 29, 2005 and advised that the updated estimate now stood at 11.3 million tonnes at an average grade of 3.5 grams per tonne ("g/t") gold for a total of 1,277,000 ounces of contained gold. Additional inferred resources were estimated at 2.2 million tonnes at an average grade of 3.0 g/t gold for a total of 210,000 ounces of contained gold.

Based on the expansion of the Gatsuurt deposit and encouraging metallurgical testwork, Centerra's Board of Directors approved the initiation of a feasibility study on the development of the project. The study is scheduled to begin in May 2005 and be completed before the 2005 year-end.

New resource estimates were announced in January 2006 following further exploration programs and the completion of a feasibility study in December 2005. 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.

At the end of December 2010, Gatsuurt probable reserves were 1.5 million contained ounces of gold, measured and indicated were estimated at 426,000 ounces of contained gold and inferred resources 491,000 ounces of contained gold.

The open pit ore will be hauled from Gatsuurt to the existing Boroo facilities. Mill production will be optimized by processing the higher grade oxide ore from Gatsuurt, followed by the Gatsuurt sulphide ore. The facility will be modified with the addition of a bio-oxidation circuit to process the refractory sulphide ore from Gatsuurt.

In 2010 construction on the road to Gatsuurt was completed. The construction on the bio-oxidation facility is planned on receipt of final approvals and regulatory commissioning.