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Centerra Gold Reports 2013 Fourth Quarter and Year-End Results

TORONTO, ONTARIO -- (Marketwired) -- 02/19/14 -- This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 32 and in our Cautionary Note Regarding Forward-looking Information on page 39. It should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2013 and the associated Management's Discussion and Analysis. The consolidated financial statements of Centerra are prepared in accordance with International Accounting Standard 34, as issued by the International Accounting Standards Board and the Company's accounting policies as described in note 3 of its annual consolidated financial statements for the year ended December 31, 2013. All figures are in United States dollars.

To view the 2013 Management's Discussion and Analysis and the Audited Financial Statements and Notes for the year-ended December 31, 2013, please visit the following link: http://media3.marketwire.com/docs/CG2013-YEMDA.pdf.

Centerra Gold Inc. (TSX: CG) today reported net earnings of $106.6 million or $0.45 per common share (basic) in the fourth quarter of 2013. This compares to a net loss of $70.7 million or $0.30 per common share (basic) for the same period in 2012 after a charge of $180.7 million in the fourth quarter of 2012 for the de-recognition of the underground assets at the Kumtor mine.

2013 Fourth Quarter Highlights


--  Full year gold production and costs were better than guidance.
--  Produced 362,234 ounces of gold in the fourth quarter, including 348,130
    ounces at Kumtor and 14,104 ounces at Boroo.
--  Increased revenues to $468.9 million compared to $368.5 million in the
    same quarter of 2012.
--  All-in sustaining costs per ounce sold(1) were $433 in fourth quarter
    and $818 for the full year.
--  All-in costs per ounce sold(1) were $474 in the fourth quarter and $920
    for the full year.
--  Increased indicated resources at the Oksut project in Turkey by 60% to
    1.1 million contained ounces of gold.
--  Proven and probable gold reserves total 10.2 million ounces of contained
    gold.
--  Cash provided by operations was $359.5 million compared to $209.1
    million in the fourth quarter of 2012.
--  Entered into a non-binding Heads of Agreement with the Kyrgyz Republic
    in connection with the potential restructuring of the Kumtor project,
    replaces MOU signed in September 2013.

For the full year, the Company recorded net earnings of $157.7 million or $0.67 per share (basic), compared to a net loss of $143.7 million or $0.61 per share (basic) in 2012. The increase in earnings in 2013 reflects significantly more ounces produced and sold (ounces sold increased 78% over 2012), a $4.8 million write-down of the exploration inventory at Kumtor following the closure of the exploration program and the adoption, in the first quarter of 2013, of a new accounting policy (IFRIC 20). Adoption of IFRIC 20 resulted in retroactively capitalizing approximately $40 million of previously expensed stripping costs in 2012 thereby reducing the loss in 2012. The Company's 2012 results have been restated as described in note 5 to the Company's 2013 annual financial statements. The additional capitalized stripping costs in 2012 was fully amortized in 2013, resulting in the Company's actual depreciation, depletion and amortization (DD&A) exceeding the prior DD&A guidance of February 20, 2013.

Production increases in 2013 were reported at both of the Company's operations, but these increases were partially offset by 20% lower realized gold prices in 2013. The 2012 results reflected a charge for the de-recognition of the underground assets at Kumtor of $180.7 million and the negative impact on production of the acceleration of ice and waste in the high movement area above the SB Zone which delayed the release of ore and required a re-design of the production plan in early 2012.

Consolidated gold production in 2013 totaled 690,720 ounces compared to 387,076 ounces in the prior year. Production increases in 2013 were reported at both operations; Kumtor recorded a 90% increase in ounces poured, while Boroo poured 26% more ounces in 2013. During the year, Kumtor processed higher grades and achieved higher recoveries and Boroo benefited from a full year of heap leach production (which resumed operation in October 2012). In 2012 the lower gold production was primarily due to the revised mine plan at Kumtor, which resulted from the accelerated ice and waste movements in the pit wall above the SB Zone.

Commentary

Ian Atkinson, President and CEO of Centerra stated, "Both operations exceeded their production guidance in 2013, mainly as a result of a strong fourth quarter at Kumtor and better than expected annual production from the heap leach operation at Boroo. Centerra's performance in 2013 was well within its third quarter operating cash costs guidance, and performed better than its prior all-in cash costs(1) per ounce produced guidance partly due to Boroo, which exceeded expectations, and to Kumtor's strong production in the fourth quarter of 2013, which enabled it to exceed its guidance. From a financial standpoint, in the fourth quarter of 2013, the Company had strong net earnings of $106.2 million or $0.45 per share. Cash provided by operations was approximately $360 million during the fourth quarter and our cash and short-term investments grew to over $425 million net of our debt at year-end."

"On February 5, 2014, we published our updated reserves and resources in which we reported that we successfully converted the majority of the inferred resources to indicated resources at the Oksut project in Turkey through our in-fill drilling during the year and we continued to expand the resource, which now totals 1.1 million contained ounces of gold in the indicated category with an average grade of 1.2 g/t. The Company expects to complete a preliminary economic assessment in the first quarter of 2014 and if such assessment is positive, we expect to commence a feasibility study later in the year."

"In 2014, we are expecting consolidated gold production to be in the 595,000 to 645,000 ounce range and our expected consolidated all-in sustaining costs per ounce sold(1) for 2014 to be within a range of $875 to $950 and our expected consolidated all-in costs to be $989 to $1,074 per ounce sold(1)."

On December 24, 2014, Centerra entered into a non-binding Heads of Agreement (the "HOA") with the Government of the Kyrgyz Republic and Kyrgyzaltyn JSC ("Kyrgyzaltyn") in connection with a potential restructuring transaction under which Kyrgyzaltyn would exchange its 32.7% equity interest in Centerra for a 50% interest in a joint venture company that would own the Kumtor Project. On February 6, 2014, after their review of the HOA, the Kyrgyz Parliament adopted a resolution which appears to support the concept of the restructuring described in the HOA but also contains a number of recommendations that are materially inconsistent with the terms of the HOA. Among other things, the resolution calls for further audits of the Kumtor operation and for the Government and the General Prosecutor's Office to continue pursuing claims for environmental and economic damages, which the Company disputes. The Company has not yet received an official copy of the Parliamentary resolution. The Company expects to continue its discussions with the Government regarding a potential restructuring transaction to resolve all outstanding concerns relating to the Kumtor Project. However, the Company continues to maintain that any agreement to resolve matters must be fair to all of Centerra's shareholders. Any definitive agreement for a potential restructuring remains subject to required approvals in the Kyrgyz Republic, including Government and Parliament of the Kyrgyz Republic, as well as Centerra Special Committee and Board approval, and compliance with all applicable legal and regulatory requirements and approvals, including a formal independent valuation and shareholder approval. See "Other Corporate Developments - Kyrgyz Republic" for further details on these developments.

As at December 31, 2013, the Company had $76 million outstanding debt under its $150 million revolving credit facility with the European Bank for Reconstruction and Development ("EBRD") leaving a balance of $74 million undrawn at December 31, 2013. Repayment of the $76 million outstanding was subsequently extended to August 11, 2014 or, at the Company's discretion, repayment of the loan may be further extended until February 2015.

Cash, cash equivalents and short-term investments at the end of 2013 increased to $501.5 million from $382.1 million at December 31, 2012.

Changes in Presentation of Non-GAAP Financial Performance Measures

In 2013, the Company adopted non-GAAP performance measures, "all-in cash costs(1)", which were based on production. In June 2013, the World Gold Council (WGC) published guidelines for reporting all-in sustaining costs(1) and all-in costs(1) performance measures. Centerra reviewed the recommended measures and assessed their impact from adoption on its reporting. The WGC measures are similar to Centerra's former presentation of all-in cash costs(1) except that they include accretion expense, allocate social development costs and exploration spending to the operating sites and are based on sales of gold rather than production. The following discussion presents a detailed calculation for both measures and reconciles the transition from the old measures to the new measures that have now been adopted.

The new measures have limitations as an analytical tool as they may be distorted in periods where significant capital investments are being made to expand for future growth or where significant cash mining costs are being expended on stripping to benefit future periods. These new measures should therefore not be considered in isolation, or as a substitute for, analysis of our results as reported under GAAP.

Unit Cash Costs(1) - Old Measure

The following table calculates Centerra's actual all-in cash costs using the Company's calculation methodology as presented in the first three quarters of 2013 and also compares the annual result with the Company's most recent cost guidance for 2013 presented in its third quarter 2013 public disclosures.


----------------------------------------------------------------------------
                                            2013 Year - Actual
----------------------------------------------------------------------------
$ millions, except as noted   Consolidated(7)         Kumtor          Boroo
                              ----------------------------------------------
All-in Cash Costs:
Mining (2)                               58.5           58.5              -
Milling                                  94.0           70.8           23.1
Leaching                                 10.6              -           10.6
Site support                             68.1           60.0            8.1
Regional administration                  23.7           18.1            5.8
Royalties                                 9.4              -            9.4
Management fees and other                (0.3)           0.6           (0.9)
Refining fees                             3.8            3.5            0.3
By-product credits                       (4.3)          (3.8)          (0.5)
                              ----------------------------------------------
Operating cash costs(1)        $        263.5  $       207.7  $        55.9
Capitalized stripping and ice
 unload - cash                          201.3          201.3              -
                              ----------------------------------------------
Operating cash costs and
 capitalized stripping                  464.8          409.0           55.9

Sustaining capital (cash)(1)
 (3)                                     57.7           49.7            7.4
Growth capital (cash) -
 including Gatsuurt(1) (4)               39.9           39.2              -
                              ----------------------------------------------
Operating cash costs including
 capital                                562.4          497.8           63.4
                              ----------------------------------------------

Corporate and other cash costs           68.1              -              -
                              ----------------------------------------------
All-in Cash Costs - pre-tax(1) $        630.5  $       497.8  $        63.4
                              ----------------------------------------------

Revenue-based tax and income
 tax                                    126.3          113.5           12.8
                              ----------------------------------------------

All-in Cash Costs - including
 taxes(1)                      $        756.8  $       611.4  $        76.1

----------------------------------------------------------------------------
Ounces poured                         690,720        600,402         90,318

Operating cash costs - $/oz
 produced(1) (5)               $          382  $         346  $         619
                              ----------------------------------------------
All-in Cash Costs (pre-tax) -
 $/oz produced(1) (6)          $          913  $         829  $         702
                              ----------------------------------------------
All-in Cash Costs (including
 taxes) - $/oz produced(1)     $        1,096  $       1,018  $         843
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
2013 Full Year Cost Guidance
 (reported October 2013):
  Ounces poured                     635,000 -      550,000 -         approx
                                      685,000        600,000         85,000
  Operating cash costs - $/oz
   produced(1)                 $   375 - $400  $  330 - $360    approx $680
  All-in Cash Costs (pre-tax)
   - $/oz produced(1)          $ 930 - $1,000  $  820 - $895    approx $775
----------------------------------------------------------------------------

(1)  Non-GAAP measure see discussion under "Non-GAAP Measures".
(2)  Excludes capitalized stripping and abnormal mining costs.
(3)  Sustaining capital(1) is a capital expenditure necessary to maintain
     existing levels of production. The sustaining capital(1) expenditures
     maintain the existing mine fleet, mill and other facilities so that
     they function at levels consistent from year to year.
(4)  Growth capital(1) is capital expended to expand the business or
     operations by increasing productive capacity beyond current levels of
     performance.
(5)  Operating cash costs(1) include mine operating costs such as mining,
     processing, administration, royalties and operating taxes (except at
     Kumtor where revenue-based taxes are excluded), but exclude
     depreciation, depletion and amortization (DD&A), reclamation costs,
     financing costs, capital expenditures and exploration. Certain amounts
     of stock-based compensation have been excluded as well. Operating cash
     costs per ounce produced is calculated by dividing operating cash costs
     by the ounces produced.
(6)  All-in cash costs per ounce produced(1) includes operating cash
     costs(1), capitalized stripping, sustaining and growth capital(1),
     corporate general and administrative expenses, global exploration
     expenses and social development costs. The measure is presented
     including and excluding revenue-based taxes at Kumtor and income taxes
     at Boroo.
(7)  Consolidated numbers may not add across the columns as corporate
     entities are not presented in this table, given these are not
     significant.

The following table reconciles the prior reported measure of consolidated all-in cash costs(1) to the new all-in sustaining costs(1) and all-in costs(1) measures for the Company's 2013 actual results.


----------------------------------------------------------------------------
$ millions, except as noted            2013 Year - Consolidated Actual (2)
----------------------------------------------------------------------------
                                      Old Measures          New WGC Measures
----------------------------------------------------------------------------
                                                         All-in
                                       All-in Cash   Sustaining       All-in
                                          Costs(1)     Costs(1)     Costs(1)
                                     ---------------------------------------

Operating cash costs and capitalized
 stripping                                   464.8        464.8        464.8

Sustaining capital (cash) (1)                 57.7         57.7         57.7
Growth capital (cash)(1)                      39.9                      39.9
                                     -------------
Operating cash costs including
 capital                                     562.3
                                     -------------

Corporate and General Administration          30.3         30.3         30.3
Exploration and business development          29.6                      29.6
Community investments (social
 development costs)                            6.4          6.4          6.4
Other expenses                                 1.9                       1.9
                                     -------------
All-in Cash Costs - pre-tax(1)        $      630.5
                                     -------------

  Changes in Inventories                                   10.0         10.0
  Reclamation expense                                       0.9          0.9


                                                  -------------
All-in Sustaining Costs(1)                         $      570.1
                                                  --------------------------
All-in Costs(1)                                                 $      641.4
Revenue-based tax and Income tax             126.3                     126.3
                                     -------------
All-in Cash Costs - including
 taxes(1)                             $      756.8
                                     -------------             -------------
All-in Costs (including taxes)(1)                               $      767.7
                                     ---------------------------------------
Ounces poured                              690,720
Ounces sold                                             696,818      696,818

----------------------------------------------------------------------------
Operating cash cost - $/oz produced
 (1)                                  $        382
All-in Cash Costs (pre-tax) - $/oz
 produced (1)                         $        913
All-in Cash Costs (including taxes) -
 $/oz produced(1)                     $      1,096
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
All-in Sustaining Costs - $/oz
 sold(1)                                           $        818
All-in Costs - $/oz sold(1)                                     $        920
All-in Costs (including taxes) - $/oz
 sold(1)                                                        $      1,102
----------------------------------------------------------------------------

The impact of this change in presentation of the Company's all-in cost performance measures was not a significant change from its previously reported measure for the reported periods. As presented in the above table, the consolidated all-in cash costs (pre-tax) per ounce produced(1) (old measure) for 2013 was $913, as compared to the consolidated all-in costs per ounce sold(1) (new measure) of $920. At Kumtor, all-in cash costs (pre-tax) per ounce produced(1) (old measure) for 2013 was $829, as compared to the all-in costs per ounce sold(1) (new measure) of $853, while at Boroo, all-in cash costs (pre-tax) per ounce produced(1) (old measure) for 2013 was $701, as compared to the all-in costs per ounce sold(1) (new measure) of $765. For a detailed breakdown of the all-in unit costs(1) by operation please refer to the Company's year-end MD&A.

The Company believes that this change in presentation brings the Company's performance measure reporting more in-line with the rest of the gold industry and may provide investors with better comparability in assessing performance against other gold producers. It may also help investors to assess the ability of Centerra to generate cash flow for use in investing and other activities.

"All-in cash costs(1)", "all-in sustaining costs(1)", "all-in costs(1)" and "all-in costs (including taxes)(1)" are intended to provide additional information only and do not have standardized definitions under IFRS and should not be considered as a substitute for measures of performance prepared in accordance with IFRS (see discussion under "Non-GAAP Measures"). The all-in costs measure is presented including and excluding revenue-based taxes at Kumtor and income taxes at Boroo. An investor may choose instead to treat revenue-based taxes as a royalty and include this amount as part of the all-in sustaining costs measure.

These measures are not representative of all of the Company's cash expenditures as they do not include interest costs or dividend payments.

Any references to all-in costs(1) or all-in sustaining costs(1) (whether on a unit basis or not) in the remainder of this news release are under the definitions as developed by the World Gold Council (see discussion under "Non-GAAP Measures").


Financial and Operating Summary
Consolidated Highlights
----------------------------------------------------------------------------
                             Three Months Ended                 Year Ended
                                    December 31                December 31
----------------------------------------------------------------------------
Financial and                                 %                          %
 Operating Summary        2013 2012(5)   Change      2013 2012(5)   Change
----------------------------------------------------------------------------
Revenue - $ millions     468.9   368.5       27%    944.4   660.7       43%
----------------------------------------------------------------------------
Cost of sales - $
 millions (1)            271.8   167.9       62%    559.2   383.3       46%
----------------------------------------------------------------------------
Abnormal mining costs
 - $ millions                -     8.9      100%        -    24.8      100%
----------------------------------------------------------------------------
Regional office
 administration - $
 millions                  6.2     5.6       11%     23.7    21.0       13%
----------------------------------------------------------------------------
Revenue-based taxes -
 $ millions               62.9    44.5       41%    113.5    74.7       52%
----------------------------------------------------------------------------
Other operating
 expenses - $ millions     1.9     4.8      (60%)     8.3    34.3      (76%)
----------------------------------------------------------------------------
Loss on de-recognition
 of UG - $ millions          -   180.7      100%        -   180.7      100%
----------------------------------------------------------------------------
Exploration - $
 millions                  8.8    11.5      (24%)    29.6    37.9      (22%)
----------------------------------------------------------------------------
Corporate
 administration - $
 millions                  8.1     8.8       (8%)    30.6    27.0       13%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Earnings (loss) before
 income taxes - $
 millions                107.6   (65.5)     264%    170.8  (132.0)     229%
----------------------------------------------------------------------------
Income tax expense - $
 millions                  1.0     5.2      (81%)    13.1    11.7       12%
----------------------------------------------------------------------------
Net earnings (loss) -
 $ millions              106.6   (70.7)     251%    157.7  (143.7)     210%
----------------------------------------------------------------------------
Earnings (loss) per
 common share - $
 basic                    0.45   (0.30)     250%     0.67   (0.61)     210%
----------------------------------------------------------------------------
Earnings(loss) per
 common share - $
 diluted                  0.44   (0.30)     247%     0.64   (0.61)     205%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cash provided by
 operations - $
 millions                359.5   209.1       72%    483.9   173.4      179%
----------------------------------------------------------------------------
Capital expenditures -
 $ millions               86.7    86.4        0%    376.6   464.0      (19%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Weighted average
 common shares
 outstanding - basic
 (thousands) (2)       236,388 236,339        0%  236,382 236,369        0%
----------------------------------------------------------------------------
Weighted average
 common shares
 outstanding - diluted
 (thousands) (2)       236,646 236,339        0%  236,663 236,369        0%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Average gold spot
 price(4) - $/oz         1,276   1,721      (26%)   1,411   1,669      (15%)
----------------------------------------------------------------------------
Average realized gold
 price(3) - $/oz         1,271   1,711      (26%)   1,355   1,692      (20%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Gold produced - ounces 362,234 219,316       65%  690,720 387,076       78%
----------------------------------------------------------------------------
Gold sold - ounces     368,954 215,361       71%  696,818 390,533       78%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Cost of sales (3) -
 $/oz sold                 737     780       (6%)     803     982      (18%)
----------------------------------------------------------------------------
Adjusted operating
 costs(3)- $/oz sold       247     366      (33%)     402     747      (46%)
----------------------------------------------------------------------------
All-in sustaining
 costs(3)- $/oz sold       433     664      (35%)     818   1,449      (44%)
----------------------------------------------------------------------------
All-in costs(3) - $/oz
 sold                      474     850      (44%)     920   1,991      (54%)
----------------------------------------------------------------------------
All-in costs including
 taxes (3)- $/oz sold      644   1,087      (41%)   1,102   2,212      (50%)
----------------------------------------------------------------------------

(1)  Cost of sales excludes regional office administration.
(2)  As of December 31, 2013, the Company had 236,390,219 common shares
     issued and outstanding.
(3)  Adjusted operating costs per ounce sold, all-in sustaining costs per
     ounce sold, all-in costs per ounce sold, all-in costs (including taxes)
     per ounce sold, as well as average realized price per ounce sold and
     cost of sales per ounce sold, are non-GAAP measures and are discussed
     under "Non-GAAP Measures".
(4)  Average for the period as reported by the London Bullion Market
     Association (US dollar Gold P.M. Fix Rate).
(5)  The 2012 comparative period was restated as a result of the adoption of
     IFRIC 20.

Fourth Quarter of 2013 compared to Fourth Quarter of 2012


--  Gold production for the fourth quarter of 2013 was 362,234 ounces
    compared to 219,316 ounces in the same quarter of 2012. The increased
    gold production in the fourth quarter of 2013 reflects 84% higher
    production at Kumtor as compared to the same quarter in 2012. In the
    fourth quarter of 2013, Kumtor produced 58% of its annual gold
    production as a result of the higher grades mined and milled.

--  All-in sustaining costs per ounce sold(1) were $433 in the fourth
    quarter of 2013 compared to $664 in the comparative quarter of 2012. The
    decrease in the 2013 period results mainly from significantly higher
    production at Kumtor, partially offset by higher operating costs.

--  All-in costs per ounce sold(1) were $474 in the fourth quarter of 2013
    compared to $850 in the same quarter of 2012. The decrease reflects the
    increased ounces sold from higher production and lower capital
    requirements at Kumtor in the 2013 quarter, partially offset by
    increased costs associated with the larger truck fleet.

--  Revenues in the fourth quarter of 2013 increased by $100.4 million to
    $468.9 million from $368.5 million in the same period last year mainly
    as a result of 71% higher ounces sold, partially offset by 26% lower
    realized gold price. The average realized gold price(1) in the fourth
    quarter of 2013 was $1,271 per ounce, a 26% decrease from $1,711 per
    ounce realized in the same quarter of 2012.

--  Cost of sales for the fourth quarter of 2013 was $271.8 million compared
    to $167.9 million in the same quarter of 2012. The increase reflects
    significantly more ounces sold at Kumtor, higher depreciation of
    capitalized stripping at Kumtor, higher operating costs due to increased
    consumption of reagents, cyanide and power from increased throughput and
    head grades at Kumtor's mill and volume increases due to the increased
    use of consumables for the expanded fleet at Kumtor.

    DD&A included in costs of sales for the fourth quarter of 2013 of $188.7
    million increased by $92.8 million compared to the same period last
    year, due in part to the processing and sale of more ounces in the
    fourth quarter of 2013 at Kumtor, partially offset by fewer ounces at
    Boroo. The fourth quarter of 2013 at Kumtor reflects the higher
    depletion of the capitalized stripping associated with cut-back 15,
    compared to cutback 14B that was mined in the comparative period. During
    the fourth quarter of 2013, Kumtor depleted the majority of the 142
    million tonnes associated with cut-back 15, compared to 61 million
    tonnes from cut-back 14B in the comparative period. The increased DD&A
    charge was partially offset by mining and stockpiling greater ounces
    from cut-back 15 that will defer recognition of DD&A until the ounces
    are produced in 2014.

--  There were no abnormal mining costs in the fourth quarter of 2013
    compared to $8.9 million in the comparative period of 2012. Abnormal
    mining costs represent the cost of removing the ice and waste from the
    high movement unload zone necessitated by the unexpected ice movement.

--  Other operating expenses for the fourth quarter of 2013 totaled $1.9
    million compared to $4.8 million in the same quarter of 2012. Costs in
    the fourth quarter of 2012 included $2.9 million for the closure of the
    underground development project at Kumtor. Approximately $1.9 million
    was spent in the fourth quarter in 2013 and 2012 for ongoing sustainable
    development projects in both the Kyrgyz Republic and Mongolia.

--  A charge of $180.7 million was recorded in the fourth quarter of 2012 to
    reflect the de-recognition of the underground assets at Kumtor. This
    results from the decision in early November 2012 to expand the open pit
    at Kumtor and as a result consume a major portion of the underground
    infrastructure.

--  Exploration expenditures for the fourth quarter of 2013 were $8.8
    million compared to $11.6 million in the same quarter of 2012 mainly
    reflecting a cessation of drilling activities at Kumtor and on-going
    drilling programs at the Oksut project in Turkey and the ATO Project in
    Mongolia. All exploration drilling at Kumtor ceased in the third quarter
    of the year and there are no future plans for exploration work within
    the mining concession area or on a regional scope. As a result, the
    Company recognized a $4.8 million write-down of the exploration
    inventory in the fourth quarter.

--  Cash provided by operations was $359.5 million in the fourth quarter of
    2013 compared to $209.1 million in the same period of 2012. The increase
    over 2012 reflects increased earnings from higher production and ounces
    sold and a reduction in working capital levels, partially offset by
    lower realized gold prices and higher operating costs.

--  Capital expenditures spent and accrued in the fourth quarter of 2013
    were $86.7 million, which included sustaining capital(1) of $10 million,
    growth capital(1) of $5.9 million and $70.8 million of capitalized
    stripping costs. Capital expenditures in the same quarter of 2012 were
    $86.4 million, which included $11.6 million for sustaining capital(1)
    and $24.5 million for growth capital(1) and capitalized stripping of
    $50.3 million.

Full Year 2013 compared to Full Year 2012


--  Gold production for 2013 totaled 690,720 ounces compared to 387,076
    ounces in the prior year. Kumtor recorded a 90% increase in ounces
    poured year-over-year, while Boroo poured 26% more ounces in 2013 due to
    the heap leach operating for the full year. The lower ounces poured in
    2012 were mainly due to the revised mine plan at Kumtor, necessitated by
    the accelerated ice and waste movements in the SB Zone.

--  All-in sustaining costs per ounce sold(1) for 2013 was $818. This
    compares to all-in sustaining costs(1) of $1,449 per ounce sold in 2012.
    The decrease is mainly due to higher production and sales at both sites
    (significantly higher at Kumtor), lower spending on social development
    costs and lower mine stand-by costs.

--  All-in costs per ounce sold(1) for 2013 was $920, and includes all cash
    costs related to gold production, except for revenue-based taxes in the
    Kyrgyz Republic. This compares to all-in costs(1) of $1,991 per ounce
    sold in 2012. The decrease is mainly due to higher production at both
    sites (significantly higher at Kumtor), lower spending on growth
    capital(1), partially offset by higher operating costs and higher
    spending on capitalized stripping and ice and waste unload costs.
    Capital expenditures excluding capitalized stripping costs decreased by
    $111.9 million from $209.5 million ($536 per ounce) in 2012 to $97.6
    million ($140 per ounce) in 2013 as the Kumtor mine completed the major
    portion of its mining fleet expansion during 2012.

--  Revenues for 2013 were $944.4 million, an increase of $283.6 million
    compared to the same period of 2012 due to a 78% increase in ounces sold
    partially offset by a 20% decrease in the average realized gold
    price(1). Gold sold was 696,818 ounces in 2013 compared to the 390,533
    ounces reported in 2012. The increase reflects higher gold production at
    both Kumtor and Boroo. The average realized gold price(1) for 2013 was
    $1,355 per ounce compared to $1,692 per ounce in the same period of 2012
    reflecting lower spot prices for gold throughout the year.

--  Cost of sales was $559.2 million in 2013 compared to $383.3 million in
    2012, reflecting the significantly higher ounces sold in 2013. The
    volumes in 2012 were significantly reduced as a result of the revised
    mine plan at Kumtor which led to the suspension of milling activities
    for part of the year. Cost of sales in 2013 included an increase in DD&A
    of $167 million, mainly due to higher ounces sold. Cost of sales in 2012
    also included a charge of $7.2 million representing a metal
    reconciliation variance between the gold content estimated in the
    stockpiles and the gold actually recovered through processing at Kumtor.

    DD&A associated with sales increased to $309 million in 2013 from $142.1
    million in 2012 as a result of higher volumes and increased depreciation
    for the expanded mobile fleet at Kumtor. In addition, the Company
    incurred higher amortization of capitalized stripping costs at Kumtor of
    about $40 million resulting from the adoption of IFRIC 20. The adoption
    of IFRIC 20 resulted in operating costs that were previously expensed in
    2012 in the amount of about $40 million being capitalized as stripping
    costs in 2012. The 2012 results have therefore been restated as
    described in Note 5 to the 2013 Audited Financial Statements. These
    newly capitalized costs were then amortized during 2013 as the ore in
    the related cutback was mined, increasing 2013 DD&A expense by
    approximately $40 million.

--  The Company recorded $24.8 million of abnormal mining costs at Kumtor in
    2012 (nil for 2013) representing the cost of removing the ice and waste
    from the high movement unload zone. The costs associated with this
    unloading activity resulted in a significant amount of mining costs
    which did not relate to the production of inventory in the period and
    were expensed immediately as abnormal mining costs.

--  Other operating expenses for 2013 totaled $8.3 million compared to $34.3
    million in 2012. The 2013 amount includes spending on social development
    programs (corporate social responsibility ("CSR") programs) of $6.3
    million ($26.2 million in 2012) and $1.5 million spent on closure costs
    for the underground project at Kumtor ($7.8 million in 2012). CSR
    spending in 2013 was $6.2 million in the Kyrgyz Republic and $0.1
    million in Mongolia. In 2012, $24 million was spent on CSR projects in
    the Kyrgyz Republic, including $21 million as a contribution to a
    national micro-credit financing program, and $2.2 million in Mongolia,
    including an additional contribution by Boroo to the Ulaanbaatar
    maternity hospital of $1.1 million. A decision was made in 2012 to close
    the underground project at Kumtor which resulted in closure costs being
    incurred in 2012 and 2013.

--  Exploration expenditures in 2013 were $29.6 million compared to $37.9
    million in 2012. Exploration expenditures in 2013 decreased from 2012
    mainly due to the suspension of all exploration programs in the Kyrgyz
    Republic in the second half of 2013.

--  The Company recorded a charge of $180.7 million in the fourth quarter of
    2012 to reflect the de-recognition of the underground assets at Kumtor
    following the decision to expand the open pit, as announced on November
    7, 2012. The larger open pit is expected to partially consume the
    declines rendering them unusable for future mining activities.

--  Cash provided from operations for 2013 totaled $483.9 million compared
    to $173.4 million in 2012, primarily as a result of significantly higher
    earnings at both operations in 2013, especially at Kumtor, partially
    offset by an increase in working capital levels.

--  Capital expenditures spent and accrued in 2013 were $376.6 million as
    compared to $464.0 million in the prior year. Sustaining capital(1) in
    2013 was $58.2 million (including $49.7 million at Kumtor and $7.9
    million at Boroo), compared to $44.0 million in 2012 (including $40.8
    million at Kumtor and $2.6 million at Boroo). Growth capital(1),
    excluding capitalized stripping, was $39.9 million in 2013, compared to
    $168.4 million the prior year, primarily reflecting $39.2 million of
    spending at Kumtor mainly on the infrastructure relocation project
    ($19.1 million), fleet expansion ($17.7 million) and spending at
    Gatsuurt of $0.7 million for maintenance of the site. Capitalized
    stripping in 2013 totaled $278.6 million ($201.3 million cash), as
    compared to $251.7 million ($196.7 million cash) in the prior year,
    spent on stripping activities in cut-backs and in the unload areas at
    Kumtor.

Operations Update - Summary of Key Operating Results


----------------------------------------------------------------------------
                              Three Months Ended                Year Ended
                                     December 31               December 31
----------------------------------------------------------------------------
                                               %                         %
Kumtor Operating Results    2013 2012(4)  Change      2013 2012(4)  Change
----------------------------------------------------------------------------
Revenue - $ millions       448.9   317.8      41%    810.9   533.6      52%
----------------------------------------------------------------------------
Cost of sales - $
 millions (1)              255.1   140.0      82%    473.0   306.9      54%
----------------------------------------------------------------------------
Cost of sales - $/oz
 sold (3)                    722     753      (4%)     786     974     (19%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Tonnes mined - 000s       46,866  38,185      23%  176,693 147,610      20%
----------------------------------------------------------------------------
Tonnes ore mined - 000s    4,194   4,463      (6%)   7,289   4,955      47%
----------------------------------------------------------------------------
Tonnes milled - 000s       1,460   1,547      (6%)   5,596   4,756      18%
----------------------------------------------------------------------------
Average mill head grade
 - g/t                      8.88    5.13      73%     4.26    2.79      53%
----------------------------------------------------------------------------
Recovery - %                84.1    77.7       8%     79.3    75.6       5%
----------------------------------------------------------------------------
Gold produced - ounces   348,130 189,438      84%  600,402 315,238      90%
----------------------------------------------------------------------------
Gold sold - ounces       353,252 185,936      90%  601,887 314,987      91%
----------------------------------------------------------------------------
Average realized gold
 price(3) - $/oz sold      1,271   1,709     (26%)   1,347   1,694     (20%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Adjusted operating costs
 (3) - $/oz sold             217     322     (33%)     357     727     (51%)
----------------------------------------------------------------------------
All-in sustaining costs
 (3)- $/oz sold              388     618     (37%)     775   1,483     (48%)
----------------------------------------------------------------------------
All-in costs (3)- $/oz
 sold                        407     783     (48%)     853   2,064     (59%)
----------------------------------------------------------------------------
All-in costs including
 taxes (3)- $/oz sold        585   1,023     (43%)   1,042   2,301     (55%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Capital expenditures
 (sustaining) - $
 millions                    9.6    10.5      (9%)    49.7    40.8      22%
----------------------------------------------------------------------------
Capital expenditures
 (growth) (2) - $
 millions                    5.8    24.0     (76%)    39.2   167.7     (77%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Boroo Operating Results
----------------------------------------------------------------------------
Revenue - $ millions        20.0    50.6     (61%)   133.4   127.2       5%
----------------------------------------------------------------------------
Cost of sales - $
 millions (1)               16.7    27.9     (40%)    86.2    76.4      13%
----------------------------------------------------------------------------
Cost of sales - $/oz
 sold (3)                  1,064     948      12%      908   1,011     (10%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Tonnes mined - 000s            -       -                 -   6,195    (100%)
----------------------------------------------------------------------------
Tonnes mined heap leach
 - 000s                        -       -                 -     143    (100%)
----------------------------------------------------------------------------
Tonnes stacked heap
 leach - 000s                271     456     (41%)   2,644     456     480%
----------------------------------------------------------------------------
Tonnes leached - 000s        560     904     (38%)   4,248     904     370%
----------------------------------------------------------------------------
Tonnes milled - 000s         593     581       2%    2,394   2,382       1%
----------------------------------------------------------------------------
Average mill head grade
 - g/t                      0.80    2.07     (61%)    1.12    1.32     (15%)
----------------------------------------------------------------------------
Recovery - %                58.3    58.3       0%     57.6    64.0     (10%)
----------------------------------------------------------------------------
Gold produced - ounces    14,104  29,878     (53%)  90,318  71,838      26%
----------------------------------------------------------------------------
Gold sold - ounces        15,702  29,425     (47%)  94,931  75,546      26%
----------------------------------------------------------------------------
Average realized gold
 price(3) - $/oz sold      1,272   1,720     (26%)   1,406   1,684     (17%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Adjusted operating costs
 (3) - $/oz sold             901     641      41%      683     832     (18%)
----------------------------------------------------------------------------
All-in sustaining costs
 (3)- $/oz sold              931     655      42%      765     946     (19%)
----------------------------------------------------------------------------
All-in costs (3)- $/oz
 sold                        931     672      39%      765     952     (20%)
----------------------------------------------------------------------------
All-in costs including
 taxes (3) - $/oz sold       934     892       5%      899   1,108     (19%)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Capital expenditures
 (Boroo) (2) - $
 millions                    0.4     0.7     (43%)     7.9     2.9     172%
----------------------------------------------------------------------------
Capital expenditures
 (Gatsuurt) - $ millions     0.1     0.1       0%      0.7     0.4      75%
----------------------------------------------------------------------------

(1)  Cost of sales excludes regional office administration.
(2)  Excludes capitalized stripping.
(3)  Adjusted operating costs per ounce sold, all-in sustaining costs per
     ounce sold, all-in costs per ounce sold, all-in costs (including taxes)
     per ounce sold, as well as average realized gold price per ounce sold
     and cost of sales per ounce sold, are non-GAAP measures and are
     discussed under "Non-GAAP Measures".
(4)  The 2012 comparative period was restated as a result of the adoption of
     IFRIC 20.

Kumtor

At the Kumtor mine, gold production was 348,130 ounces in the fourth quarter of 2013, which represents 58% of the mine's annual production, compared to 189,438 ounce in the same quarter in 2012. The increase in production for the fourth quarter of 2013 was due to processing high-grade SB Zone ore available from cutback 15. During the fourth quarter of 2013, Kumtor fully mined the remaining 4.2 million tonnes of ore in cut-back 15 at an average grade of 4.46 g/t. Mill head grades for the fourth quarter of 2013 were 8.88 g/t with a recovery of 84.1%, versus 5.13 g/t and a recovery of 77.7% for the same quarter in 2012.

Cost of sales per ounce sold(1) for the fourth quarter of 2013, which includes the impact of DD&A, decreased to $722 per ounce compared to $753 per ounce for the same period in 2012. The decrease on a per ounce basis reflects the higher production achieved from the higher grades of cut-back 15, partially offset by higher depreciation costs associated with the significantly greater capitalized stripping required to access ounces in cut-back 15.

All-in sustaining cost per ounce sold(1) was $388 in the fourth quarter of 2013 compared to $618 in the comparative quarter of 2012. The decrease results mainly from the significantly higher production, partially offset by higher operating costs in the current period.

All-in costs per ounce sold (pre tax)(1) were $407 in the fourth quarter of 2013 compared to $783 in the same quarter of 2012 reflecting the higher production and lower capital requirements in the 2013 quarter.

Exploration expenditures for the fourth quarter of 2013 were $0.8 million, compared to $2.9 million for the fourth quarter of 2012. During the fourth quarter of 2013, no exploration drilling was conducted at Kumtor as the Company ceased exploration activities. In the fourth quarter, the Company recorded a $4.8 million write-down of the exploration inventory at Kumtor.

Capital expenditures spent and accrued in the fourth quarter of 2013 were $15.4 million which includes $9.6 million of sustaining capital(1), $5.8 million invested in growth capital(1) mainly for relocating infrastructure and $70.8 million for capitalized stripping. Capital expenditures the comparative quarter of 2012 totaled $34.5 million, consisting of $10.5 million for sustaining capital(1) and $24.0 million for growth capital(1) excluding $50.3 million of capitalized stripping.

Boroo

At the Boroo mine in the fourth quarter of 2013, gold production was 14,104 ounces, compared to 29,877 ounces in the same period of 2012. The lower production was mainly due processing ore with a lower average mill head grade, 0.80 g/t in the fourth of 2013 compared to processing higher grade ore from Pit 6 with an average mill head grade of 2.07 g/t in the fourth quarter of 2012. In addition lower ounces were poured from the heap leach operation (5,786 ounces vs. 7,486 ounces) as a result of maintenance performed on the heap leach pond in the fourth quarter of 2013.

Cost of sales per ounce sold(1) for the fourth quarter of 2013, which includes the impact of DD&A, increased to $1,064 per ounce compared to $948 per ounce for the same period in 2012. The increase on a per ounce basis reflects the higher operating cost incurred to produce and sell lower grade stockpile ore, as Boroo is reaching the end of its mine life.

All-in sustaining costs per ounce sold(1) were $931 in the fourth quarter of 2013 compared to $655 in the comparative quarter of 2012. The increase results mainly from the lower production resulting in a 47% reduction in gold sales.

All-in costs per ounce sold (pre tax)(1) were $931 in the fourth quarter of 2013 compared to $672 in the same quarter of 2012 reflects the lower production and resulting reduction in gold sales.

During the fourth quarter of 2013 exploration expenditures in Mongolia decreased to $1.9 million from $3.0 million in the same period in 2012. The majority of the exploration work in the fourth quarter 2013 was conducted at the ATO property in eastern Mongolia.

Capital expenditures spent and accrued at Boroo and Gatsuurt in the fourth quarter of 2013 were $0.5 million compared to $0.8 million in the same period of 2012. Capital expenditures in 2013 relate to $0.4 million of sustaining capital(1) at Boroo and $0.1 million at Gatsuurt.



----------------
(1)   Non-GAAP measure, see discussion under "Non-GAAP Measures".
(2)   Numbers may not add due to rounding

Non-GAAP Measures

On June 27, 2013, the World Gold Council (WGC) released guidance regarding the non-GAAP measures "All-In Sustaining Costs" and "All-In Costs". The Company has reviewed the WGC's recommended measures and assessed their impact. The Company has adopted the WGC's measures and has modified its calculation of its "all- in cash cost" measure to conform to the industry's standard following its review. Going forward, the Company will restate the comparative periods and will provide a reconciliation of these new non-GAAP measures to the most comparable GAAP measure.

This news release contains the following non-GAAP financial measures: all-in sustaining costs per ounce sold; all-in costs per ounce sold; all-in costs including taxes per ounce sold; adjusted operating costs per ounce sold; cost of sales per ounce sold; sustaining capital; growth capital; and average realized gold price. These financial measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers, even against other issuers who may also be applying the WGC guidelines.

Management believes that the use of these non-GAAP measures will assist analysts, investors and other stakeholders of the Company in understanding the costs associated with producing gold, understanding the economics of gold mining, assessing our operating performance, our ability to generate free cash flow from current operations and to generate free cash flow on an overall Company basis, and for planning and forecasting of future periods. However, the new measures do have limitations as analytical tools as they may be influenced by the point in the life cycle of a specific mine, and the level of additional exploration or expenditure a company has to make. Accordingly, these non-GAAP measures should therefore not be considered in isolation, or as a substitute for, analysis of our results as reported under GAAP.

Definitions

The following is a description of the Non-GAAP measures used in this new release. The definitions are consistent with the WGC's guidance on these non-GAAP measures:


--  Operating costs include mine operating costs such as mining, processing,
    site support, royalties and operating taxes (except at Kumtor where
    revenue-based taxes are excluded), but exclude depreciation, depletion
    and amortization (DD&A), reclamation costs, financing costs, capital
    development and exploration.
--  Adjusted operating costs per ounce sold include operating costs,
    regional office administration, social development costs related to
    current operations, refining fees and by-product credits.
--  All-in sustaining costs per ounce sold include adjusted operating costs,
    the cash component of capitalized stripping costs, regional office
    administration costs, accretion expenses, and sustaining capital. The
    measure incorporates costs related to sustaining production.
--  All-in costs per ounce sold include all-in sustaining costs and
    additional costs for growth capital, corporate general and
    administrative expenses, global exploration expenses and social
    development costs not related to current operations.
--  All-in cost per ounce sold exclude the following:
    --  Working capital (except for adjustments to inventory on a sales
        basis).
    --  All financing charges (including capitalized interest).
    --  Costs related to business combinations, asset acquisitions and asset
        disposals.
    --  Other non-operating income and expenses including interest income,
        bank charges, and foreign exchange gains and losses.
--  All-in costs including taxes per ounce sold measure includes revenue-
    based taxes at Kumtor and income taxes at Boroo.
--  Capital expenditures (Sustaining) is a capital expenditure necessary to
    maintain existing levels of production. The sustaining capital
    expenditures maintain the existing mine fleet, mill and other facilities
    so that they function at levels consistent from year to year.
--  Capital expenditures (Growth) is capital expended to expand the business
    or operations by increasing productive capacity beyond current levels of
    performance.
--  Average realized gold price is calculated by dividing revenue derived
    from gold sales by the number of ounces sold.

Adjusted Operating Cost per Ounce Sold, All-in Sustaining Costs per Ounce Sold and All-in Costs per Ounce Sold and All-in Costs per Ounce Sold (including and excluding taxes) are non-GAAP measures and can be reconciled as follows:


----------------------------------------------------------------------------
                                           Year ended  Fourth Quarter ended
(unaudited)                              December 31,          December 31,
($ millions, unless otherwise
 specified)                           2013       2012       2013       2012
                                --------------------------------------------

Kumtor:
Cost of sales, as reported       $   473.0  $   306.9  $   255.1  $   140.0
  Less: Non-cash component           282.0      121.0      185.0       84.9
                                --------------------------------------------
Cost of sales, cash component    $   191.0  $   185.9  $    70.1  $    55.1
Adjust for:
  Regional office administration      18.1       15.5        4.8        4.2
  Mine stand-by costs                    -        4.6          -          -
  Refining fees                        3.5        1.9        2.0        1.3
  By-product credits                  (3.8)      (2.9)      (2.0)      (1.9)
  Social development costs
   related to current operations       6.2       24.0        1.9        1.3
                                --------------------------------------------
Adjusted Operating Costs         $   215.0  $   229.0  $    76.8  $    59.9
  Accretion expense                    0.6        0.6        0.2        0.2
  Capitalized stripping and ice
   unload                            201.3      196.7       50.6       44.2
  Capital expenditures
   (sustaining)                       49.7       40.8        9.6       10.5
                                --------------------------------------------
All-in Sustaining Costs          $   466.6  $   467.1  $   137.2  $   114.9
  Capital expenditures (growth)       39.2      165.2        5.8       25.4
  Exploration expense                  6.1       11.3        0.8        2.9
  Other project costs not
   related to current operations       1.5        6.6        0.1        2.4
                                --------------------------------------------
All-in Costs                     $   513.4  $   650.2  $   143.9  $   145.6
  Revenue-based taxes                113.5       74.7       62.9       44.5
                                --------------------------------------------
All-in Costs (including taxes)   $   627.0  $   724.9  $   206.8  $   190.1
                                --------------------------------------------
Ounces sold (000)                    601.9      315.0      353.3      185.9
Adjusted Operating Costs per
 ounce sold                      $     357  $     727  $     217  $     322
All-in Sustaining Costs per
 ounce sold                      $     775  $   1,483  $     388  $     618
All-in Costs per ounce sold      $     853  $   2,064  $     407  $     783
All-in Costs (including taxes)
 per ounce sold                  $   1,042  $   2,301  $     585  $   1,023

Boroo:
Cost of sales, as reported       $    86.2  $    76.4  $    16.7  $    27.9
  Less: Non-cash component            27.1       21.1        3.7       11.0
                                --------------------------------------------
Cost of sales, cash component    $    59.2  $    55.3  $    13.0  $    16.9
Adjust for:
  Regional office administration       5.7        5.5        1.4        1.5
  Mine stand-by costs                    -          -          -          -
  Refining fees                        0.3        0.3        0.1        0.1
  By-product credits                  (0.5)      (0.4)      (0.0)      (0.2)
  Social development costs
   related to current operations       0.1        2.2       (0.2)       0.6
                                --------------------------------------------
Adjusted Operating Costs         $    64.8  $    62.9  $    14.1  $    18.9
  Accretion expense                    0.3        0.2        0.1        0.0
  Capitalized stripping                  -        6.3          -          -
  Capital expenditures
   (sustaining)                        7.4        2.1        0.4        0.4
                                --------------------------------------------
All-in Sustaining Costs          $    72.6  $    71.5  $    14.6  $    19.3
    Capital expenditures
     (growth)                            -        0.3          -        0.3
    Exploration expense                  -        0.2          -        0.2
    Other project costs not
     related to current
     operations                          -          -          -          -
                                --------------------------------------------
All-in Costs                     $    72.6  $    71.9  $    14.6  $    19.8
    Income taxes                      12.7       11.7        0.1        6.5
                                --------------------------------------------
All-in Costs (including taxes)   $    85.3  $    83.7  $    14.7  $    26.3
                                --------------------------------------------
Ounces sold (000)                     94.9       75.5       15.7       29.4
Adjusted Operating Costs per
 ounce sold                      $     683  $     832  $     901  $     641
All-in Sustaining Costs per
 ounce sold                      $     765  $     946  $     931  $     655
All-in Costs per ounce sold      $     765  $     952  $     931  $     672
All-in Costs (including taxes)
 per ounce sold                  $     899  $   1,108  $     934  $     892
----------------------------------------------------------------------------

2) Consolidated


----------------------------------------------------------------------------
                                           Year ended  Fourth Quarter ended
(unaudited)                              December 31,          December 31,
($ millions, unless otherwise
 specified)                           2013       2012       2013       2012
                                --------------------------------------------

Centerra:
Cost of sales, as reported       $   559.2  $   383.3  $   271.8  $   167.9
  Less: Non-cash component           309.0      142.1      188.7       95.9
                                --------------------------------------------
Cost of sales, cash component    $   250.2  $   241.2  $    83.1  $    72.0
Adjust for:
  Regional office administration      23.7       21.0        6.1        5.6
  Mine stand-by costs                    -        4.6          -          -
  Refining fees                        3.8        2.1        2.1        1.4
  By-product credits                  (4.3)      (3.3)      (2.1)      (2.1)
  Social development costs
   related to current operations       6.4       26.2        1.7        1.9
                                --------------------------------------------
Adjusted Operating Costs         $   279.9  $   291.9  $    91.0  $    78.8
  Corporate General
   Administrative costs               30.0       26.8        7.7        8.7
  Accretion expense                    0.9        0.8        0.2        0.2
  Capitalized stripping and ice
   unload                            201.3      203.0       50.6       44.2
  Capital expenditures
   (sustaining)                       57.7       43.5       10.0       11.1
                                --------------------------------------------
All-in Sustaining Costs          $   569.8  $   565.9  $   159.6  $   143.0
  Capital expenditures (growth)       39.9      166.1        5.9       26.0
  Exploration and Business
   Development                        29.5       38.5        8.8       11.6
  Other project costs not
   related to current operations       1.9        6.9        0.2        2.4
                                --------------------------------------------
All-in Costs                     $   641.1  $   777.4  $   174.5  $   183.0
  Revenue-based taxes and income
   taxes                             126.3       86.4       62.9       51.0
                                --------------------------------------------
All-in Costs (including taxes)   $   767.4  $   863.8  $   237.4  $   234.0
                                --------------------------------------------
Ounces sold (000)                    696.8      390.5      369.0      215.4
Adjusted Operating Costs per
 ounce sold                      $     402  $     747  $     247  $     366
All-in Sustaining Costs per
 ounce sold                      $     818  $   1,449  $     433  $     664
All-in Costs per ounce sold      $     920  $   1,991  $     474  $     850
All-in Costs (including taxes)
 per ounce sold                  $   1,101  $   2,212  $     644  $   1,086

----------------------------------------------------------------------------

Total capital and capitalized stripping presented in the all-in cost calculations can be reconciled as follows:


----------------------------------------------------------------------------
Year - 2013                      Kumtor      Boroo  All other  Consolidated
----------------------------------------------------------------------------
($ millions, unaudited)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Capitalized stripping - cash      201.3          -          -         201.3
----------------------------------------------------------------------------
Sustaining capital - cash          49.7        7.4        0.6          57.7
----------------------------------------------------------------------------
Growth capital - cash              39.2          -        0.7          39.9
----------------------------------------------------------------------------
Net increase in accruals
 included in additions to
 PP&E                               9.8          -          -           9.8
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Total - Additions to PP&E         300.0        7.4        1.3     308.7 (1)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Year - 2012                      Kumtor      Boroo  All other  Consolidated
----------------------------------------------------------------------------
In $ millions
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Capitalized stripping - cash      168.0        6.3          -         174.3
----------------------------------------------------------------------------
Sustaining capital - cash          40.8        2.1        0.6          43.5
----------------------------------------------------------------------------
Growth capital - cash             176.4        0.3        0.5         177.2
----------------------------------------------------------------------------
Net increase in accruals
 included in additions to
 PP&E                              10.1          -          -          10.1
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Total - Additions to PP&E         395.3        8.7        1.1     405.1 (1)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth Quarter - 2013             Kumtor      Boroo  All other Consolidated
----------------------------------------------------------------------------
($ millions, unaudited)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Capitalized stripping - cash        50.6          -          -         50.6
----------------------------------------------------------------------------
Sustaining capital - cash            9.6        0.4        0.1         10.1
----------------------------------------------------------------------------
Growth capital - cash                5.8          -        0.1          5.9
----------------------------------------------------------------------------
Net increase in accruals
 included in additions to PP&E      19.4          -          -         19.4
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Total - Additions to PP&E           85.4        0.4        0.2     86.0 (1)
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Fourth Quarter - 2012             Kumtor      Boroo  All other Consolidated
----------------------------------------------------------------------------
In $ millions
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Capitalized stripping - cash        27.0          -          -         27.0
----------------------------------------------------------------------------
Sustaining capital - cash           10.5        0.4        0.2         11.1
----------------------------------------------------------------------------
Growth capital - cash               36.6        0.3        0.2         37.1
----------------------------------------------------------------------------
Net increase in accruals
 included in additions to PP&E       9.1          -          -          9.1
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Total - Additions to PP&E           83.2        0.7        0.4     84.3 (1)
----------------------------------------------------------------------------

----------------------------------------------------------------------------

(1)  As reported in the Company's Consolidated Statement of Cash Flows as
     "Investing Activities - Additions to property, plant & equipment".

Other Corporate Developments

The following is a summary of corporate developments with respect to matters affecting the Company and its subsidiaries in the Kyrgyz Republic and Mongolia. A summary discussion of certain regulatory matters affecting the Kumtor Project follows the discussion of events that occurred in the fourth quarter of 2013. For a more complete discussion of these matters impacting Kumtor, and for outstanding matters in Mongolia and at the corporate level, see the Company's 2012 Annual Information Form.

Kyrgyz Republic

Negotiations between Kyrgyz Republic and Centerra

As previously disclosed, the Kyrgyz Republic Parliament passed resolution #2805 on February 21, 2013, which, among other things, recommended that the Kyrgyz Government conduct consultations and negotiations with Centerra to find mutually acceptable solutions with respect to the Kumtor Project and the issues raised in the Parliamentary and State Commission reports. The resolution set a deadline of June 1, 2013 for the Government to return to the Parliament with information on how to implement the Parliament's recommendations in the resolution. The original deadline of June 1, 2013 was extended by resolution #3169-V for three months, and Parliament set a deadline of September 10, 2013 for the Government to present final agreements incorporating the mutually acceptable solution. Resolution #3169-V also provides that if a mutually acceptable solution has not been agreed to, the Government is instructed to develop and submit a draft law "On Denunciation of the Agreement for the Kumtor Project" for review by the Kyrgyz Republic Parliament.

Following discussions with representatives of the Kyrgyz Government in the third quarter, Centerra announced on September 9, 2013 that it had entered into a non-binding memorandum of understanding ("MOU") with the Government of the Kyrgyz Republic in connection with a potential restructuring transaction under which Kyrgyzaltyn would exchange its 32.7% equity interest in Centerra for an interest in a joint venture company that would own the Kumtor Project. The MOU recorded the status of negotiations that had been ongoing between management of Centerra and the Kyrgyz Republic advisory working group up until that time and set out certain principles that would guide the potential restructuring transaction.

The Kyrgyz Parliament considered the MOU on October 23, 2013 and passed a decree (the "Decree") with respect to the MOU. In the Decree, Parliament rejects the MOU and orders the Government to (among other things) continue negotiations with Centerra with a view to improving the Kyrgyz Republic's position and increasing its interest in the joint venture project to no less than 67%, to provide for the project to develop the Kumtor mine using underground mining methods, and to provide for the establishment and financing of a centre to monitor the preservation of glaciers. In the Decree, Parliament also recommends that the Kyrgyz Republic General Prosecutor's Office consider pursing allegations that management of the former parent company of Centerra, Centerra, Kumtor Operating Company, and Kumtor Gold Company violated environmental regulations and committed "other offenses", and that precious metal reserves (silver, tellurium, and other associated components) at the Kumtor deposit were deliberately understated.

In the Decree, Parliament requested that the Government and the General Prosecutor's Office report to Parliament on these matters by December 23, 2013. The Decree provides that if a mutually acceptable solution on the outstanding matters cannot be reached, the Government is ordered to initiate a process to cancel the Kumtor Project Agreements. . The Company disputes the allegations contained in the Decree.

Following further discussions with representatives of the Kyrgyz government in the fourth quarter of 2013, Centerra announced on December 24, 2013 that it had entered into a non-binding Heads of Agreement ("HOA") with the Kyrgyz Government which superceded the terms of the previously negotiated MOU. The HOA retains most of the material terms of the MOU, including the following:


--  Kyrgyzaltyn would receive a 50% interest in the joint venture company
    that would own the Kumtor Project in exchange for its 32.7% equity
    ownership in Centerra.
--  The agreements entered into between, among others, Centerra, Kyrgyzaltyn
    and Government of the Kyrgyz Republic in 2009 would remain in full force
    and effect, including the tax regime set out in such agreements.
--  The Board of the joint venture company would be comprised of an equal
    number of Centerra and Kyrgyzaltyn representatives. Consistent with
    Centerra's ability to consolidate the financial results of the Kumtor
    project, major decisions of the joint-venture company would be subject
    to discussion and approval by the Board of the joint venture company.
--  Centerra would remain the operator/manager of the Kumtor Project
    pursuant to an operating agreement which would contain typical terms and
    provisions.
--  The operating agreement would also include provisions for compensation
    for services provided by Centerra and Kyrgyzaltyn.

The HOA also includes certain additional provisions not contained in the MOU, including the following:


--  The existing mobile mine equipment at Kumtor, having a value of
    approximately $200 million, would be held by Centerra and capital leased
    to the joint venture for 10 years on commercial terms, following which
    the joint venture would be entitled to purchase such equipment for
    $1.00.
--  Further to the equipment lease arrangement, the dividend distribution
    adjustment of $100 million (from Kyrgyzaltyn in favour of Centerra)
    which was in the MOU has been removed.
--  Centerra would be entitled to compensation in a fixed amount per year
    for acting as the manager, which amount will be agreed by the parties
    and reflected in definitive documents.
--  The HOA would resolve, in accordance with the requirements of the laws
    and agreements of the Kyrgyz Republic, comprehensively and finally, all
    claims and concerns relating to the Kumtor Project, including but not
    limited to environmental, technical and land use matters, in accordance
    with the findings and recommendation of Kyrgyzaltyn's external legal,
    financial, environmental and technical experts, including AMEC, which
    has examined the Kumtor Project's environmental and technical practices.
--  The joint venture would commit to investments in community development
    projects in an amount equal to two percent of the prior year's free cash
    flow (subject to a minimum of $2 million per year)
--  The joint venture would commit to increasing local procurement in the
    Kyrgyz Republic by an aggregate of $100 million over the remaining life
    of the mine and to increase the number of Kyrgyz nationals in management
    positions at the joint venture.
--  At the end of the current life of mine plan in 2026, Kyrgyzaltyn would
    have the rights to: (a) increase its ownership interest in the Kumtor
    Project from 50% to 67% for a price equal to fair market value; and (b)
    recover the gold contained in the tailings facility for $1.00.
--  Kyrgyzaltyn would receive: (a) warrants to acquire six million Centerra
    shares, with an exercise price of CAD$10.00 per Centerra share,
    exercisable for two years after the restructuring; and (b) warrants to
    acquire four million Centerra shares, with an exercise price of
    CAD$12.00 per Centerra share, exercisable for three years after the
    restructuring.

On February 6, 2014, after their review of the HOA, the Kyrgyz Parliament adopted a resolution which appears to support the concept of the restructuring described in the HOA but also contains a number of recommendations that are materially inconsistent with the terms of the HOA. Among other things, the resolution calls for further audits of the Kumtor operation and for the Government and the General Prosecutor's Office to continue pursuing claims for environmental and economic damages, which the Company disputes. The Company has not yet received an official copy of the Parliamentary resolution.

The Company believes that the 2009 Kumtor Project Agreements and all previous agreements are legal, valid and enforceable obligations. The Kumtor Project Agreements were reviewed and approved by the Government and the Parliament, and were the subject of a positive decision by the Kyrgyz Republic Constitutional Court and a legal opinion by the Kyrgyz Republic Ministry of Justice. Such agreements provide for all disputes relating to the Kumtor project to be resolved by international arbitration, if necessary.

Centerra expects to continue its discussions with the Government regarding a potential restructuring transaction to resolve all outstanding concerns relating to the Kumtor Project. However, it maintains that any agreement to resolve matters must be fair to all of Centerra's shareholders. Any definitive agreement for a potential restructuring remains subject required approvals in the Kyrgyz Republic, including Government and Parliament of the Kyrgyz Republic, Centerra Special Committee and Board approval, as well as compliance with all applicable legal and regulatory requirements and approvals, including an independent formal valuation and shareholder approval.

While Centerra expects to continue discussions with the Government, there can be no assurance that any transaction will be consummated or that Centerra will be able to successfully resolve any of the matters currently affecting the Kumtor Project. The inability to successfully resolve matters, including obtaining all necessary approvals, and/or further actions of the Kyrgyz Republic Government and/or Parliament, could have a material adverse impact on Centerra's future cash flows, earnings, results of operations and financial conditions.

Environmental Claims

As previously disclosed, on June 7, 2013 Kumtor Operating Company ("KOC") received four court claims filed by the State Inspectorate Office for Environmental and Technical Safety ("SIETS") with the Bishkek Inter-district court. The SIETS environmental claims sought to enforce the previously disclosed environmental claims issued by SIETS in December 2012, seeking compensation in the aggregate amount of $150 million in relation to (i) placement of waste rock on glaciers; (ii) unpaid use of water from Petrov Lake; (iii) unaccounted industrial and household waste; and (iv) damages caused to land resources (top soil). Each of these claims was dismissed by the Bishkek Inter-District Court and, on appeal, by the Bishkek City Court, on the basis that the arbitration clause in the Restated Investment Agreement requires that all such disputes be resolved through international arbitration. Each of these claims has been appealed to the Kyrgyz Republic Supreme Court.

In addition to the original four claims of SIETS discussed above, SIETS has filed the following additional claims against KOC: (i) on October 12, 2013, a claim in the amount of approximately $485,000 for damages caused to land resources due to disturbance of land at the Kumtor project (similar to the claim in (iv) above but involving a different area of the Kumtor concession); and (ii) on January 21, 2014, a claim for approximately $8.5 million for lost agricultural production and lost profits from 1994 to 2042. Kumtor has responded in writing to SIETS disputing both of these additional claims.

With respect to the previously disclosed claim commenced by the State Agency for Environmental Protection and Forestry under the Government of the Kyrgyz Republic ("SAEPF") for the aggregate amount of approximately $315 million, SAEPF has commenced court proceedings in the Bishkek Inter-District Court, which dismissed the Company's motion to dismiss the claim based on the arbitration provision in the Restated Investment Agreement although the court is still considering other procedural motions argued by the Company.

On October 11, 2013, Centerra received a statement of claim from the Green Party of Kyrgyzstan in the Bishkek Inter-District Court which seeks damages of approximately $9 billion for alleged environmental damages arising from the Kumtor operations since 1996. The claimant, Green Party, requests that the damage be paid by Kumtor to the Issyk-Kul Nature Protection and Forestry Development Fund, a Kyrgyz state fund. The claim by the Green Party relates to allegations substantially similar to the claims raised by SIETS and SAEPF.

As previously disclosed, KOC believes the claims are exaggerated and without merit. The Kumtor Project has been the subject of systematic audits and investigations over the years by Kyrgyz and international experts, including by an independent internationally recognized expert who carried out a due diligence review of Kumtor's performance on environmental matters at the request of Centerra's Safety, Health and Environmental Committee of the Board of Directors. The report of this expert released in October 2012 can be found on the Kumtor website at www.kumtor.kg/en/ under the "Environment" section.

There can be no assurance that the Company will be able to successfully resolve any of these matters discussed above. The inability to successfully resolve matters could have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial conditions.

Land Use Claim

On November 11, 2013, the Company received a claim from the Kyrgyz Republic General Prosecutor's Office requesting the Inter-District Court of the Issyk-Kul Province to invalidate the Company's land use certificate and seize certain lands within Kumtor's concession area.

As previously noted, the Company believes that the invalidation of the land use certificate and purported seizure of land is in violation of the Kyrgyz Republic Land Code as well as the Restated Investment Agreement, which provides that the Kumtor project is guaranteed all necessary access to the Kumtor concession area, including all surface lands as are necessary or desirable for the operation of the Kumtor project.

Kumtor Waste Dump Movement

As previously disclosed in May 2013, the abnormal waste dump movement experienced at Kumtor has required Kumtor to develop and implement alternative waste rock dumps at the Kumtor mine and to revise its mine development plan. During the third quarter of 2013, Kumtor received final regulatory approval for a revised 2013 annual mining plan that, among other things, allows for the placement of waste rock in the Sarytor Valley, the Davidov Valley and the Lysi Valley. Kumtor is currently working in accordance with the revised plan. Movement of the Central Valley Waste Dump was forecasted in the 2012 Kumtor Technical Report and has now returned to its pre-March 2013 movement rate. The Company continues to make progress in relocating and reconstructing certain infrastructure at Kumtor which was, or is currently, in the path of the Central Valley Waste Dump.

Management Assessment

There are several outstanding issues affecting the Kumtor Project, which require consultation and co-operation between the Company and Kyrgyz regulatory authorities. The Company has benefited from a close and constructive dialogue with Kyrgyz authorities during project operations and remains committed to working with them to resolve these issues in accordance with the Kumtor Project Agreements, which provide for all disputes to be resolved by international arbitration, if necessary. However, there are no assurances that the Company will be able to successfully resolve any or all of the outstanding matters affecting the Kumtor Project. There are also no assurances that continued discussions between the Kyrgyz Government and Centerra will result in a mutually acceptable solution regarding the Kumtor project that any agreed upon proposal for restructuring would receive the necessary legal and regulatory approvals under Kyrgyz law and/or Canadian law and that the Kyrgyz Republic Government and/or Parliament will not take actions that are inconsistent with the Government's obligations under the Kumtor Project Agreements, including adopting a law "denouncing" or purporting to cancel or invalidate the Kumtor Project Agreements or laws enacted in relation thereto. The inability to successfully resolve the current outstanding matters, including the outstanding environmental claims against Kumtor, could have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial conditions. See "Caution Regarding Forward-looking Information".

Mongolia

Gatsuurt

Centerra continues to be in discussions with the Mongolian Government regarding the development of the Gatsuurt property. Centerra remains reasonably confident that the economic and development benefits resulting from its exploration and development activities will ultimately result in the Mongolian Water and Forest Law having a limited impact on the Gatsuurt project, in particular, and other of the Company's Mongolian activities, including the ATO deposit. As previously disclosed, the Mongolian Water and Forest Law prohibits mineral prospecting, exploration and mining in water basins and forestry areas in Mongolia.

Centerra understands that, in May 2013, the Mongolian Government added seven deposits, including Gatsuurt, to the list of "mineral deposits of strategic importance". Such a designation, which is subject to the approval of the Mongolian Parliament, would have the effect of excluding the Gatsuurt deposit from the application of the Water and Forest Law. Centerra expects that Parliament and/or any relevant committees of Parliament will consider this matter further in the first half of 2014. If the Mongolian Parliament ultimately approves this designation, it would allow the Government of Mongolia to acquire up to a 34% interest in Gatsuurt. The terms of any such participation would be subject to negotiations with the Mongolian Government.

There can be no assurance, however, that the Water and Forest Law will not have a material impact on Centerra's Mongolian operations. Unless the Water and Forest Law is repealed or amended such that the law no longer applies to the Gatsuurt project or Gatsuurt is designated by the Parliament of Mongolia as a "mineral deposit of strategic importance" that is exempt from the Water and Forest Law, mineral reserves at Gatsuurt may have to be reclassified as mineral resources or eliminated entirely and the Company may be required to write-off approximately $37 million related to the investment in Gatsuurt and approximately $39 million remaining capitalized for the Boroo mill facility and other surface structures. These amounts represent the capitalized costs at December 31, 2013 associated with its investment in Gatsuurt and Boroo (where Gatsuurt ore is planned to be milled).

Corporate

Enforcement Notice by Sistem

The claim commenced in March 2011 by a Turkish company, Sistem Muhenkislik Insaat Sanayi Ticaret SA ("Sistem") which alleges that the shares in Centerra owned by Kyrgyzaltyn are, in fact, legally and beneficially owned by the Kyrgyz Republic continues to be subject to proceedings in the Ontario courts. Centerra is not a party to the proceedings, but understands that the matter is being scheduled for consideration on its merits.

Pursuant to a Court Order issued by the Ontario Superior Court of Justice (as amended from time to time, and most recently amended on June 5, 2013) (the "Court Order"), Centerra is holding in trust (for the credit of the Sistem court proceedings) dividends otherwise payable to Kyrgyzaltyn. Effective as of June 6, 2013, when a dividend was paid by Centerra, the maximum amount to be held in trust, as set out in the Court Order (Cdn$11.3 million), has been reached. As of December 31, 2013, Centerra holds in trust, for the benefit of the Sistem court proceeding, approximately Cdn$11.4 million, including interest earned.

Background Description of Outstanding Kumtor Matters

The disclosure below is a summary description of the outstanding matters affecting the Kumtor Project. For a more detailed description, see the Company's prior disclosure, in particular, its news release on 2013 first quarter results dated May 8, 2013 and its 2012 Annual Information Form. Both of these documents can be found on www.sedar.com.

Parliamentary Commission and Report

On February 15, 2012, the Kyrgyz Parliament established an interim Parliamentary Commission to inspect and review: (i) Kumtor's compliance with Kyrgyz operational and environmental laws, as well as community standards, and (ii) state regulation over the Kumtor project's activities. The Parliamentary Commission issued its report (the "Parliamentary Report") on June 18, 2012 and made a number of assertions regarding the operation of the Kumtor project, including alleging non-compliance by the Kumtor project with Kyrgyz environmental laws, particularly at Kumtor's tailings facility, the Davidov glacier and the Sarychat-Ertash State Reserve which is in the vicinity of the Kumtor project. The Parliamentary Commission alleges that the violations have resulted in substantial monetary damages.

The Kyrgyz Parliament met in late June 2012 to consider the Parliamentary Report and adopted Resolution 2117-V that took note of the Parliamentary Report and declared the Kumtor Project Agreements to be contrary to the interests of the Kyrgyz Republic. Resolution 2117-V also called for the formation of a State Commission to "assess the environmental, industrial and social damage" caused by the Kumtor project and to initiate the renegotiation of the current Kumtor project agreements "in order to protect economic and environmental interests".

As contemplated in Resolution 2117-V, on July 5, 2012, the Kyrgyz Government cancelled Government Decree #168, which provided Kumtor with land use rights over the surface of the Kumtor concession area for the duration of the restated concession agreement effective June 6, 2009 (the Restated Concession Agreement). Based on advice from Kyrgyz legal counsel, the Company believes that the purported cancellation of land rights is in violation of the Kyrgyz Republic Land Code, because the Land Code provides that land rights can only be terminated by court decision and on the listed grounds set out in the Land Code. Kumtor has communicated this to the Kyrgyz Republic and requested the issuance of a new land use certificate in light of the rights and obligations under the restated investment agreement dated June 6, 2009 between Centerra and the Kyrgyz Republic (the Restated Investment Agreement). No response has been received from the Kyrgyz Government. Pursuant to the Restated Investment Agreement, the Kumtor project is guaranteed all necessary access to the Kumtor concession area, including all surface lands as are necessary or desirable for the operation of the Kumtor project. The Restated Investment Agreement also provides for the payment of quarterly land use and access fees.

In response to the Parliamentary Report's allegations of non-compliance with environmental laws, in August 2012, the Board of Directors of Centerra retained an independent internationally recognized consultant to carry out a due diligence review of Kumtor's performance on safety, health and environmental matters. The report issued in October 2012 concluded that "no major or materially significant environmental issues were identified". The report of this expert can be found on the Kumtor website at www.kumtor.kg/en/ under the "Environment" section.

State Commission and Report

In response to Resolution 2117-V passed by the Parliament, the Kyrgyz Government established a state commission (the "State Commission") for the purpose of reviewing the Parliamentary Report as well as inspecting and reviewing Kumtor's compliance with Kyrgyz operational and environmental laws and community standards. The State Commission was comprised of three working groups, responsible for (i) legal matters; (ii) social and economic matters; and (iii) environmental and technical matters. The State Commission released its report (the "State Commission Report") in late December 2012 following five months of study. The State Commission Report included a large number of allegations, including allegations that the Kumtor project was violating Kyrgyz legislation relating to environmental and subsoil legislation and caused environmental damage to water and land resources.

Environmental Claims

In December 2012, KOC received four claims from SIETS and a claim from SAEPF (which was subsequently withdrawn) relating to alleged environmental damages at the Kumtor project. The SIETS claims are for an aggregate amount of approximately $150 million and include:


--  a claim for approximately $142 million for alleged damages in relation
    to the placement on waste dumps of waste rock from mining operations
    (2000 to 2011)
--  a claim for approximately $4 million for use of water resources for the
    period of 2000 to 2011
--  a claim for approximately $0.3 million for unaccounted industrial and
    household waste
--  a claim for approximately $2.3 million for alleged damages caused to
    land resources at the time of initial construction of Kumtor

In addition, KOC has also received a directive from SIETS requiring that actions be taken to correct various alleged environmental and technical violations discovered in its review.

On February 21, 2013, KOC announced the receipt of a claim from SAEPF for the amount of approximately $315 million for alleged damage in relation to waste placed in the tailings management facility, waste rock dumps, and for the generation, management and treatment of other types of wastes. The claim covers the period from 1996 to 2011.

The Company notes that the Kumtor Project Agreements provide a complete listing of all taxes and payments to be made to the Kyrgyz Republic, including a fixed environmental charge. Accordingly, no other tax, duties, or other obligations are to be paid to the Kyrgyz Republic, however they may be characterized.

In addition, Centerra, the Kyrgyz Republic and others entered into a release agreement (the Release Agreement) dated June 6, 2009, whereby, subject to certain exceptions which we believe are not applicable in the circumstances, the Kyrgyz Republic released Centerra from any and all claims, and damages with respect of any matter (including any tax or fiscal matters) arising or existing prior to the date of the Release Agreement, whether such matters were known or unknown at such time, and the Kyrgyz Republic agreed not to commence any actions or assert any demands for such actions or demands so released.

Kyrgyz Republic Advisory Committee and Requests to Negotiate

On February 21, 2013, the Kyrgyz Parliament adopted Resolution #2805 which among other things, recommended that the Government ensure the continuous operation of the Kumtor mine, and within three months of the date of the resolution, conduct negotiations with Centerra with a view to revising the Kumtor Project Agreements to return to conditions that existed prior to the restructuring of the project in 2003, but subject to the application of the current Kyrgyz legislation, and to enter into new project agreements. The resolution provided a deadline of June 1, 2013 for the Government to return to Parliament, which subsequently was extended to September 10, 2013 and then on December 23, 2013 (as discussed above).

The Draft Law on Denunciation

On April 9, 2013 an initiative group chaired by Mr. Beknazarov A.A. submitted a draft Law on Denunciation for consideration by Parliament. The draft law "denounces" the Agreement on New Terms for the Kumtor Project ("ANT") entered on April 24, 2009, and recognizes as invalid all other agreements associated with the ANT (namely, the Kumtor Project Agreements), and calls for the Government to bring all of its decisions in accordance with the Law on Denunciation. To date, the Law on Denunciation has not been considered by Parliament. Based on Kyrgyz media reports, an opposition party in the Parliament, the Respublika faction, has endorsed the Law on Denunciation. The Law on Denunciation was referenced in Resolution #3169-V (discussed above).

The Company believes that the adoption of a law that denounces or purports to invalidate the Kumtor Project Agreements would be a breach of the Government's obligations under the Kumtor Project Agreements. The Company believes that the Kumtor Project Agreements are legal, valid and enforceable obligations. The agreements were reviewed and approved by the Government and the Parliament, and were the subject of a positive decision by the Kyrgyz Republic Constitutional Court and a legal opinion by the Kyrgyz Republic Ministry of Justice. Furthermore, under the Kumtor Project Agreements, the Government agreed to use its best efforts to reverse or annul any actions of public officials (including state agencies) which conflict with the rights and benefits granted to Kumtor under the Kumtor Projects Agreements.

There can be no assurance that the Company will be able to successfully resolve any of these matters discussed above. The inability to successfully resolve matters could have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial conditions.

2014 Outlook

Kumtor's forecasted 2014 production and costs discussed in this news release are provided on a 100% basis and the forecast does not make any assumptions regarding possible changes in the structure and management of the Kumtor Project, including without limitation the level of ownership resulting from ongoing discussions with the Government of the Kyrgyz Republic and Kyrgyzaltyn JSC, Centerra's largest shareholder. See "Material Assumption and Risks" for other material assumptions or factors used to forecast production and costs for 2014.

Centerra's 2014 gold production and unit costs are forecast as follows:


----------------------------------------------------------------------------
                     2014 Production       2014 Adjusted                2014
                            Forecast Operating Costs(1)      All-in Costs(2)
                    (ounces of gold)  ($ per ounce sold)  ($ per ounce sold)
----------------------------------------------------------------------------
Kumtor             550,000 - 600,000         $373 - $407         $833 - $909
----------------------------------------------------------------------------
Boroo                 Approx. 45,000              $1,533              $1,557
----------------------------------------------------------------------------
Consolidated       595,000 - 645,000         $454 - $493       $989 - $1,074
----------------------------------------------------------------------------

(1)  Adjusted operating costs per ounce sold is a non-GAAP measure and
     includes operating costs, regional office administration, community
     costs related to current operations, refining fees and by-product
     credits. Operating costs include mine operating costs such as mining,
     processing, site support, royalties and operating taxes (except at
     Kumtor where revenue-based taxes are excluded), but exclude DD&A,
     reclamation costs, financing costs, capital expenditures and
     exploration.
(2)  All-in costs per ounce sold is a non-GAAP measure and includes adjusted
     operating costs, the cash component of capitalized stripping costs,
     accretion expenses, sustaining and growth capital and additional costs
     at the consolidated level for, corporate general and administrative
     expenses, global exploration expenses and social development costs.

Gold Production

Centerra's 2014 consolidated gold production is expected to be 595,000 to 645,000 ounces.

Centerra estimates that the Kumtor mine will produce between 550,000 and 600,000 ounces in 2014 and, similar to 2013, over 50% of this gold production is expected during the fourth quarter when mining will reach the high-grade section of the SB Zone.

The 2014 production guidance range is lower than that outlined in the life of mine plan set out in the Kumtor technical report filed on December 20, 2012 as a result of a lower 2014 starting ore stockpile inventory and a reduction in the rate of vertical advancement of cut-back 16, which provides access to the high grade SB Zone ore in 2014.

At the Boroo mine, gold production is forecast to be approximately 45,000 ounces. The forecasted annual production at Boroo includes about 20,000 ounces from heap leaching and 25,000 ounces from the mill. The Boroo mill is expected to process ore stockpiles during the year with an average grade of 0.70 g/t gold. The 2014 forecast assumes no mining activities at Boroo or Gatsuurt, and no gold production from Gatsuurt.

All-in Unit Costs:

Centerra's 2014 all-in sustaining costs per ounce sold(1) and all-in costs per ounce sold(1) are forecast as follows:


----------------------------------------------------------------------------
                                   Kumtor            Boroo     Consolidated
----------------------------------------------------------------------------
Ounces sold forecast      550,000-600,000    Approximately  595,000-645,000
                                                    45,000
----------------------------------------------------------------------------
US $ / gold ounces sold
----------------------------------------------------------------------------
Operating costs(1)             $358 - 390             $956       $400 - 434
----------------------------------------------------------------------------
Changes in inventories         (29) - (30)          438(4)            4 - 4
----------------------------------------------------------------------------
Operating Costs (on a
 sales basis)(1)               $329 - 360           $1,394       $404 - 438
----------------------------------------------------------------------------
Regional office
 administration                   32 - 35              128          39 - 42
----------------------------------------------------------------------------
Community costs related to
 current operations               13 - 13               13          12 - 14
----------------------------------------------------------------------------
Refining costs and by-
 product credits                 (1) - (1)              (2)        (1) - (1)
----------------------------------------------------------------------------
Sub-Total (Adjusted
 Operating Costs)(1)           $373 - 407           $1,533       $454 - 493
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Corporate general &
 administrative costs                   -                -          57 - 62
----------------------------------------------------------------------------
Accretion expense                   1 - 1                7            1 - 2
----------------------------------------------------------------------------
Capitalized stripping
 costs - cash                   319 - 348                -        296 - 321
----------------------------------------------------------------------------
Capital expenditures
 (sustaining)(1)                  69 - 76               17          67 - 72
----------------------------------------------------------------------------
All-in Sustaining Costs(1)     $762 - 832           $1,557       $875 - 950
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Capital expenditures
 (growth)(1)                      71 - 77                -          66 - 72
----------------------------------------------------------------------------
Other costs(2)                          -                -          48 - 52
----------------------------------------------------------------------------
All-in Costs(1)                $833 - 909           $1,557     $989 - 1,074
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Income and Revenue-based
 taxes(3)                      $175 - 191                -       $163 - 176
----------------------------------------------------------------------------
All-in Costs including
 Taxes(1), (3)             $1,008 - 1,100           $1,557   $1,152 - 1,250
----------------------------------------------------------------------------

(1)  Non-GAAP measure, see discussion under "Non-GAAP Measures".
(2)  Other costs per ounce sold include global exploration expenses,
     business development expenses, and project development costs not
     related to current operations.
(3)  Includes revenue-based tax that reflects a forecasted gold price
     assumption of $1,250 per ounce sold.
(4)  The Boroo operation is nearing the end of its mine life. All forecast
     production and sales are a result of drawing down the existing
     stockpiles and assumes no mining activities.

2014 Exploration Expenditures

Planned exploration expenditures for 2014 total approximately $20 million, which is $9.5 million lower than the 2013 expense of $29.5 million. No expenditures are planned for exploration at Kumtor which accounts for most of the reduction in the planned exploration costs.

In Mongolia, approximately $6 million is planned for exploration programs in the greater ATO district. In Turkey, approximately $3.5 million is allocated for further exploration work on the Oksut property and $2.5 million to test exploration targets elsewhere in the region. Exploration spending for Russia is planned at approximately $3 million and includes funds to complete the assessment of targets on the Dvoinoy and Umlekan earn-in projects.

The 2014 exploration plan also includes $3 million to fund programs of generative exploration and advanced-project evaluations in Turkey, the Caucasus, Russia, Asia and western Canada. These programs will fund efforts to identify, evaluate and acquire drill-ready through resource-development gold projects in high-ranking geologic terrains.

2014 Capital Expenditures

Centerra's projected capital expenditures for 2014, excluding capitalized stripping, are estimated to be $86 million, including $43 million of sustaining capital(1) and $43 million of growth capital(1).

Projected capital expenditures (excluding capitalized stripping) include:


----------------------------------------------------------------------------
                                                             2014 Sustaining
                            2014 Growth Capital(11)               Capital(1)
Projects                      (millions of dollars)    (millions of dollars)
----------------------------------------------------------------------------
Kumtor mine                                     $43                      $42
----------------------------------------------------------------------------
Mongolia (Boroo and
 Gatsuurt)                                        -                        1
----------------------------------------------------------------------------
Consolidated Total                              $43                      $43
----------------------------------------------------------------------------

Kumtor

At Kumtor, 2014 total capital expenditures, excluding capitalized stripping, are forecast to be $85 million. Spending on sustaining capital(1) relates primarily to the major overhaul maintenance of the heavy duty mine equipment ($32 million), purchase of replacement mining equipment and ball mill girth gear ($5 million), tailings dam construction raise ($3 million) and other items ($2 million).

Growth capital(1) investment at Kumtor for 2014 is forecast at $43 million and includes the relocation of certain infrastructure at Kumtor related to the KS-13 life-of-mine expansion plan amounting to $32 million, dewatering projects ($4 million) and purchase of new mining equipment ($7 million).

The cash component of capitalized stripping costs related to the development of the open pit is expected to be $191 million in 2014.

Mongolia (Boroo and Gatsuurt)

At Boroo, 2014 sustaining capital(1) expenditures are expected to be $1 million primarily for maintenance rebuilds and overhauls.

No growth capital(1) is forecast for Boroo or Gatsuurt.

2014 Corporate Administration and Social Development

Corporate and administration expense for 2014 is forecast to be $41 million, which includes $37 million for corporate and administration costs, and $4 million for business development activities.

Total planned social development expenditures for 2014 are forecast at $8 million, which includes $5 million for donations, and sustainable development projects in the various communities in which Centerra operates and $3 million for strategic community investment projects.

Oksut Project

The Company expects to complete a preliminary economic assessment in the first quarter of 2014 and if such assessment is positive, expects to commence a feasibility study for its Oksut property in 2014. The total planned spending in 2014 of approximately $10 million includes work for technical studies, environmental and social impact assessment and project support (collectively, $6.4 million) and $3.5 million for exploration (discussed earlier).

2014 Depreciation, Depletion and Amortization

Consolidated depreciation, depletion and amortization expense included in costs of sales expense for 2014 is forecasted to be approximately $290 million before the impact of the 2013 year-end reserve and resource calculations. This includes approximately $275 million at Kumtor and $15 million at Boroo. Refer to the Company's 2013 Audited Financial Statements note 11 for further details on the Company's capital assets and the related changes to DD&A.


----------------------------------------------------------------------------
                                                    2014 DD&A         2013
                                                     Forecast         DD&A
(In millions)                                     (Unaudited)        Actual
----------------------------------------------------------------------------
Kumtor
----------------------------------------------------------------------------
Mine equipment                                   $         95  $         98
----------------------------------------------------------------------------
Less DD&A capitalized to stripping costs (1)              (71)          (77)
----------------------------------------------------------------------------
Capital stripping costs amortized                         170           331
----------------------------------------------------------------------------
Other mining assets                                         5            34
----------------------------------------------------------------------------
Mill assets                                                 7             6
----------------------------------------------------------------------------
Administration assets and other                            10            14
----------------------------------------------------------------------------
Inventory movement (non-cash depreciation)                 59           (93)
----------------------------------------------------------------------------
Subtotal for Kumtor                              $        275  $        282
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Boroo
----------------------------------------------------------------------------
Mine equipment                                   $          1  $          1
----------------------------------------------------------------------------
Less DD&A capitalized to stripping costs                    -             -
----------------------------------------------------------------------------
Stripping costs amortized                                   -             2
----------------------------------------------------------------------------
Mine development and other mining assets                    -             1
----------------------------------------------------------------------------
Mill assets                                                 4             6
----------------------------------------------------------------------------
Administration assets and other                             5            10
----------------------------------------------------------------------------
Inventory movement (non-cash depreciation)                  5             7
----------------------------------------------------------------------------
Subtotal for Boroo                               $         15  $         27
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Total                               $        290  $        309
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1)  Use of the Company's mining fleet for stripping activities results in a
     portion of the depreciation related to the mine fleet to be allocated
     to capitalized stripping costs. In 2013, $77 million of depreciation
     costs was allocated to capitalized stripping costs.

Kumtor

At Kumtor, depreciation, depletion and amortization expense included in costs of sales expense for 2013 was $282 million which is $81 million higher than the guidance for 2013 provided in the Company's MD&A of February 20, 2013. The increase in the DD&A expense is mainly due to higher amortization expense of capitalized stripping costs ($40 million), a lower credit for inventory movement ($34 million) and higher mining and other assets depreciation ($7 million). The higher amortization of capitalized stripping costs was mainly a result of the adoption of IFRIC 20 which re-stated the 2012 results. Operating costs previously expensed in 2012 in the amount of $37 million were capitalized as stripping costs as a result of IFRIC 20's adoption. These newly capitalized costs were amortized during 2013 as the ore in the related cut-back was mined, increasing 2013 DD&A expense by $37 million. The non-cash inventory movement recorded in 2013 of $93 million was $34 million lower than the guidance for 2013, reflecting lower than forecasted levels of gold stockpile inventory at the end of 2013 due in part to higher than forecasted ore processing and a negative production reconciliation. The depreciation of mining and other assets was higher than the guidance due to higher production a $4.8 million write down of exploration related spare parts inventory following the close of the exploration program.

The forecast for 2014 DD&A expensed as part of costs of sales is approximately $275 million before the impact of the 2013 year-end reserve and resource calculations. The amortization of capitalized stripping costs is the largest component of depreciation expense in 2014 totaling $170 million. Capitalized stripping costs include mining operating costs such as labour, diesel and maintenance costs, as well as the depreciation expense for the mine equipment used in the stripping campaign. The capitalized stripping costs are amortized over the ounces contained in the ore body exposed by the stripping campaign.

The mine equipment assets are depreciated on a straight-line basis over their estimated useful lives. The total mine equipment depreciation for 2014 is forecasted at $95 million. The depreciation related to mine equipment engaged in a stripping campaign and capitalized as stripping costs is forecasted to be $71 million in 2014.

Boroo

At Boroo, depreciation, depletion and amortization expense included in costs of sales expense for 2013 was $27 million which is $10 million higher than the guidance for 2013 provided in the Company's MD&A of February 20, 2013. The increase in the DD&A expense is mainly due to significantly higher production than forecasted in 2013.

The forecast for 2014 DD&A expensed as part of costs of sales is approximately $15 million before the impact of the 2013 year-end reserve and resource calculations, compared to $27 million in 2013. The decrease in 2014 reflects a lower forecasted production at Boroo in 2014 compared to 2013. The largest components of depreciation expense are related to depreciation of the mill, the administration buildings and other assets forecasted at $5 million.

Taxes

Pursuant to the Restated Investment Agreement, Kumtor's operations are not subject to corporate income taxes. The agreement replaced the prior tax regime applicable to the Kumtor Project with a simplified tax regime effective January 1, 2008. This simplified regime, which assesses tax at 13% on gross revenue (plus 1% for the Issyk-Kul Oblast Development Fund) effective January 2009, was approved and enacted by the Parliament of the Kyrgyz Republic on April 30, 2009.

The corporate income tax rate for Centerra's Mongolian subsidiary, Boroo Gold LLC, is 25% for taxable income over 3 billion Mongolian tugriks (approximately $1.8 million at the December 31, 2013 foreign exchange rate) with a tax rate of 10% for taxable income up to that amount. Following the expiration of the Boroo Stability Agreement in July 2013, Boroo Gold LLC's corporate income tax rate was unchanged, however the royalty paid to the government increased from 5% to a rate varying between 5% and 10% based on the price of gold, to a maximum of 10% for gold prices at or above $1,300 an ounce. In January 2014, the royalty rate was reduced to 2.5% for gold sold to the Bank of Mongolia and Boroo Gold LLC is exploring sales to the Bank of Mongolia as a result. Boroo Gold LLC is forecasted to not pay any income tax in 2014.

Production, cost and capital forecasts for 2014 are forward-looking information and are based on key assumptions and subject to material risk factors that could cause actual results to differ materially. These risks are discussed herein under the headings "Material Assumptions & Risks" and "Cautionary Note Regarding Forward-Looking Information" and under the heading "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2012.

Sensitivities:

Centerra's revenues, earnings and cash flows for 2014 are sensitive to changes in certain variables and the Company has estimated the impact of any such changes on revenues, net earnings and cash from operations.


----------------------------------------------------------------------------
                                                  Impact on
                                                 ($ millions)
                                 -------------------------------------------
                                                       Cash  Earnings before
                           Change   Costs  Revenues    flow       income tax
----------------------------------------------------------------------------
Gold Price                 $50/oz     4.9      32.1    27.2             27.2
----------------------------------------------------------------------------
Diesel Fuel (1)               10%    10.5         -    10.5             10.5
----------------------------------------------------------------------------
Kyrgyz som (2)              1 som     3.0         -     3.0              3.0
----------------------------------------------------------------------------
Mongolian tugrik (2)    25 tugrik     0.5         -     0.5              0.5
----------------------------------------------------------------------------
Canadian dollar (2)      10 cents     2.8         -     2.8              2.8
----------------------------------------------------------------------------
(1)  a 10% change in diesel fuel price equals $16/oz produced
(2)  appreciation of currency against the US dollar will result in higher
     costs and lower cash flow and earnings, depreciation of currency
     against the US dollar results in decreased costs and increased cash
     flow and earnings

Material Assumptions and Risks:

Material assumptions or factors used to forecast production and costs for 2014 include the following:


--  a gold price of $1,250 per ounce,
--  exchange rates:
    --  $1USD:$1.05 CAD
    --  $1USD:48.5 Kyrgyz som
    --  $1USD:1,600 Mongolian tugriks
    --  $1USD:0.81 Euro
--  diesel fuel price assumption:
    --  $0.75/litre at Kumtor
    --  $1.22/litre at Boroo

The Company cannot give any assurances in this regard.

The assumed diesel price of $0.75/litre at Kumtor assumes that no Russian export duty will be paid on the fuel exports from Russia to the Kyrgyz Republic. 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 $108 per barrel.

Other material assumptions were used in forecasting production and costs for 2014. The Company cannot give any assurances in this regard. These material assumptions include the following:


--  That current discussions between the Government of the Kyrgyz Republic
    and Centerra regarding a potential restructuring of the Kumtor Project
    will result in a mutually satisfactory solution to the outstanding
    matters affecting the Kumtor project, which is fair to all of Centerra's
    shareholders, and that such proposal will receive all necessary legal
    and regulatory approvals under Kyrgyz law and/or Canadian law.
--  Any recurrence of political or civil unrest in the Kyrgyz Republic will
    not impact operations, including movement of people, supplies and gold
    shipments to and from the Kumtor mine and/or power to the mine site.
--  The activities of the Kyrgyz Republic Parliament and Government,
    referred to under the heading "Other Corporate Developments - Kyrgyz
    Republic" do not have a material impact on operations or financial
    results. This includes any action being taken by the Parliament or
    Government purporting to cancel the current project agreements governing
    the Kumtor Project, or taking any actions which would be inconsistent
    with the rights of Centerra, Kumtor Gold Company and Kumtor Operating
    Company under the project agreements governing the Kumtor project.
--  The previously disclosed environmental claims received from the Kyrgyz
    regulatory authorities in the aggregate amount of approximately $476
    million, the claim received from the Kyrgyz Green Party for $9 billion
    and the claim of the Kyrgyz Republic's General Prosecutor's office
    purporting to invalidate land use rights and/or seize land at Kumtor,
    and any further claims, whether alleging environmental allegations or
    otherwise, are resolved without material impact on Centerra's operations
    or financial results.
--  The movement in the Central Valley Waste Dump at Kumtor, referred to
    under the heading "Other Corporate Developments - Kyrgyz Republic -
    Kumtor Waste Dump Movement", does not accelerate and will be managed to
    ensure continued safe operations, without impact to gold production,
    including the successful demolition of buildings and relocation of
    certain other infrastructure as planned.
--  Grades and recoveries at Kumtor will remain consistent with the 2014
    production plan to achieve the forecast gold production.
--  The Company is able to manage the risks associated with the increased
    height of the pit walls at Kumtor.
--  The timing of the infrastructure move at Kumtor not impacting the
    maintenance of the mobile fleet and its availability.
--  The dewatering program at Kumtor continues to produce the expected
    results and the water management system works as planned.
--  The Company is able to satisfactorily manage the ice movement and to
    unload the ice and waste in the southeast portion of the Kumtor pit.
--  The Kumtor ball mill and the rotated ring gear or replacement ring gear
    continue to operate as expected.
--  The successful negotiation of new collective agreements at Kumtor and
    Boroo without any labour actions/strikes and without significantly
    increasing labour costs. Kumtor's current agreement expires December 31,
    2014 and Boroo's current agreement expires June 30, 2014
--  There are no changes to the Mongolian tax regime which would impact
    Boroo operations because of the expiry of the Boroo Stability Agreement
    in July 2013.
--  Prices of key consumables, costs of power and water usage fees are not
    significantly higher than prices assumed in planning.
--  Precious metal prices and costs remain stable and do not result in an
    impairment to the Company's asset valuations.
--  No unplanned delays in or interruption of scheduled production from our
    mines, including due to civil unrest, natural phenomena, regulatory or
    political disputes, equipment breakdown or other developmental and
    operational risks.
--  All necessary permits, licenses 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 and results of operations and 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, results of operations or cash flows and the market price of Centerra's shares. See the section entitled "Cautionary Note Regarding Forward-Looking Information" in this news release and also the Risk Factors listed in the Company's Annual Information Form for the year ended December 31, 2012, available on SEDAR at www.sedar.com.


Centerra Gold Inc.
Condensed Consolidated Statements of Financial
 Position

                                                  December 31,  December 31,
                                                          2013          2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Expressed in Thousands of United States
 Dollars)                                                         (Restated)


Assets
Current assets
  Cash and cash equivalents                      $     343,108 $     334,115
  Short-term investments                               158,358        47,984
  Amounts receivable                                    78,707        75,338
  Inventories                                          373,289       292,565
  Prepaid expenses                                      29,191        49,317
                                                ----------------------------
                                                       982,653       799,319

Property, plant and equipment                          539,070       625,923
Goodwill                                               129,705       129,705
Restricted cash                                         10,731         6,087
Other assets                                            20,276        23,270
Long-term inventories                                    5,229        10,094
                                                ----------------------------
                                                       705,011       795,079
                                                ----------------------------
Total assets                                     $   1,687,664 $   1,594,398
                                                ----------------------------
                                                ----------------------------

Liabilities and Shareholders' Equity
Current liabilities
  Accounts payable and accrued liabilities       $      32,109 $      63,940
  Short-term debt                                       75,582        74,617
  Revenue-based taxes payable                           30,742        18,643
  Taxes payable                                          2,108         5,180
  Current portion of provisions                          1,194         5,257
                                                ----------------------------
                                                       141,735       167,637

Dividend payable                                        10,636         5,949
Provisions                                              58,826        49,911
Deferred income tax liability (net)                      2,157         1,808
                                                ----------------------------
                                                        71,619        57,668
Shareholders' equity
  Share capital                                        660,486       660,420
  Contributed surplus                                   20,087        36,243
  Retained earnings                                    793,737       672,430
                                                ----------------------------
                                                     1,474,310     1,369,093
                                                ----------------------------
Total liabilities and shareholders' equity       $   1,687,664 $   1,594,398
                                                ----------------------------
                                                ----------------------------

Centerra Gold Inc.
Condensed Consolidated Statements of Earnings (loss) and Comprehensive
 Income (loss)

                              Three months ended        Twelve months ended
                                    December 31,               December 31,
                               2013         2012          2013         2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Expressed in
 Thousands of United
 States Dollars)
(except per share                    (Unaudited)
 amounts)               (Unaudited)   (Restated)                 (Restated)


Revenue from Gold
 Sales                 $    468,918 $    368,461  $    944,373 $    660,737

  Cost of sales             271,780      167,896       559,236      383,316
  Abnormal mining
   costs                          -        8,855             -       24,769
  Mine standby costs              -            -             -        4,585
  Regional office
   administration             6,148        5,636        23,746       21,041
----------------------------------------------------------------------------
Earnings (loss) from
 mine operations            190,990      186,074       361,391      227,026

  Revenue-based taxes        62,852       44,499       113,532       74,697
  Other operating
   expenses                   1,884        4,793         8,259       34,280
  Loss on de-
   recognition of
   underground assets             -      180,673             -      180,673
  Exploration and
   business
   development                8,789       11,551        29,572       38,531
  Corporate
   administration             8,106        8,794        30,642       27,046
----------------------------------------------------------------------------
Earnings (loss) from
 operations                 109,359      (64,236)      179,386     (128,201)

  Other (income)
   expenses, net                518          (56)        3,568         (132)
  Finance costs               1,244        1,263         4,989        3,978
----------------------------------------------------------------------------
Earnings (loss) before
 income taxes               107,597      (65,443)      170,829     (132,047)

  Income tax expense          1,044        5,239        13,153       11,684

----------------------------------------------------------------------------
Net earnings (loss)
 and comprehensive
 income (loss)         $    106,553 $    (70,682) $    157,676 $   (143,731)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Basic earnings (loss)
 per common share      $       0.45 $      (0.30) $       0.67 $      (0.61)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Diluted earnings
 (loss) per common
 share                 $       0.44 $      (0.30) $       0.64 $      (0.61)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Centerra Gold Inc.
Condensed Consolidated
 Statements of Cash Flows        Three months ended     Twelve months ended
                                       December 31,            December 31,
                                   2013        2012        2013        2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Expressed in Thousands of              (Unaudited)
 United States Dollars)     (Unaudited)  (Restated)              (Restated)

Operating activities
Net earnings (loss)          $  106,553  $  (70,682) $  157,676  $ (143,731)
Items not requiring
 (providing) cash:
  Depreciation, depletion
   and amortization             188,787     102,388     309,389     152,737
  Finance costs                   1,244       1,262       4,989       3,978
  Loss on disposal of
   equipment                        557         932       2,818       1,403
  Compensation expense on
   stock options                    588         704       2,830       2,335
  De-recognition of
   underground assets                 -     180,673           -     180,673
  Change in other provision        (386)       (123)       (613)        614
  Income tax expense              1,044       5,239      13,153      11,684
  Other operating items             572        (130)         15        (673)
                            ------------------------------------------------
                                298,959     220,263     490,257     209,020
  Change in operating
   working capital               46,386      (5,800)    (15,463)        129
  Change in long-term
   inventory                      1,413         439       4,865       2,080
  Revenue-based taxes
   applied (advanced)            16,078         155      20,000     (30,000)
  Income taxes paid              (3,290)     (5,952)    (15,746)     (7,838)
                            ------------------------------------------------
Cash provided by operations     359,546     209,105     483,913     173,391
                            ------------------------------------------------
Investing activities
  Additions to property,
   plant and equipment          (85,956)    (84,279)   (308,682)   (405,094)
  Net (purchase) redemption
   of short-term investments   (120,566)    (45,985)   (110,374)    324,683
  Purchase of interest in
   Oksut Gold Project- net
   of cash acquired                   -           -     (19,742)          -
  Increase in restricted
   cash                             299      (3,096)     (4,644)     (5,908)
  Decrease (increase) in
   other assets                     892       6,752       2,222      (1,070)
  Proceeds from disposition
   of fixed assets                   24          32         205          79
                            ------------------------------------------------
Cash used in investing         (205,307)   (126,576)   (441,015)    (87,310)
                            ------------------------------------------------
Financing activities
  Dividends paid                 (8,706)     (6,571)    (31,085)    (22,238)
  Payment of interest and
   other borrowing costs         (1,412)       (231)     (2,820)     (1,416)
  Proceeds from short term
   debt                               -           -           -      76,000
  Proceeds from common
   shares issued for cash             -         (20)          -         149
                            ------------------------------------------------
Cash (used in) provided by
 financing                      (10,118)     (6,822)    (33,905)     52,495
                            ------------------------------------------------
Increase in cash during the
 period                         144,121      75,707       8,993     138,576
Cash and cash equivalents at
 beginning of the period        198,987     258,408     334,115     195,539
                            ------------------------------------------------
Cash and cash equivalents at
 end of the period           $  343,108  $  334,115  $  343,108  $  334,115
                            ------------------------------------------------
                            ------------------------------------------------

Cash and cash equivalents
 consist of:
Cash                         $   57,087  $   51,675  $   57,087  $   51,675
Cash equivalents                286,021     282,440     286,021     282,440
                            ------------------------------------------------
                             $  343,108  $  334,115  $  343,108  $  334,115
                            ------------------------------------------------
                            ------------------------------------------------

Centerra Gold Inc.
Condensed Consolidated Statements of Shareholders' Equity


----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Expressed in Thousands of United States Dollars, except share information)

                     Number of     Share
                        Common   Capital Contributed   Retained
                        Shares    Amount     Surplus   Earnings       Total
----------------------------------------------------------------------------

Balance at
 January 1, 2012
 (restated)        236,339,041 $ 660,117 $    33,994  $ 844,348  $1,538,459
----------------------------------------------------------------------------

Share-based
 compensation
 expense                     -         -       2,335          -       2,335
Shares issued on
 exercise of
 stock options          30,752       235         (86)         -         149
Shares issued on
 redemption of
 restricted share
 units                   6,218        68           -          -          68
Dividend declared            -         -           -    (28,187)    (28,187)
Net loss for the
 period                      -         -           -   (143,731)   (143,731)
----------------------------------------------------------------------------
Balance at
 December 31,
 2012 (restated)   236,376,011 $ 660,420 $    36,243  $ 672,430  $1,369,093
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Balance at
 January 1, 2013
 (restated)        236,376,011 $ 660,420 $    36,243  $ 672,430  $1,369,093
----------------------------------------------------------------------------
Share-based
 compensation
 expense                     -         -       2,830          -       2,830
Adjustment for
 acquisition of
 30% non-
 controlling
 interest                    -         -     (18,986)         -     (18,986)
Shares issued on
 redemption of
 restricted share
 units                  14,208        66           -          -          66
Dividend declared            -         -           -    (36,369)    (36,369)
Net earnings for
 the period                  -         -           -    157,676     157,676
----------------------------------------------------------------------------
Balance at
 December 31,
 2013              236,390,219 $ 660,486 $    20,087  $ 793,737  $1,474,310
----------------------------------------------------------------------------
----------------------------------------------------------------------------

To view the 2013 Management's Discussion and Analysis and the Audited Financial Statements and Notes for the year ended December 31, 2012, please visit the following link: http://media3.marketwire.com/docs/CG2013-YEMDA.pdf.

The 2013 Audited Financial Statements and Notes and Management's Discussion and Analysis for the year-ended December 31, 2013 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.

Qualified Person & QA/QC

All reserve and resource estimates, production information and other related 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 and were prepared, reviewed, verified and compiled by Centerra's geological and mining staff under the supervision of Dan Redmond, Ontario Professional Geoscientist, Centerra's Director, Technical Services - Mining, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs are done consistent with industry standards and independent certified assay labs are used with the exception of the Kumtor project as described in its Technical Report.

The Kumtor deposit is described in Centerra's 2012 Annual Information Form and a technical report dated December 20, 2012, which is filed on SEDAR at www.sedar.com. The technical report is prepared in accordance with NI 43-101 and 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 Boroo deposit is described in Centerra's 2012 Annual Information Form and a technical report dated December 17, 2009 prepared in accordance with NI 43-101, which is available on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Boroo deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Boroo site are the same as, or similar to, those described in the technical report.

The Gatsuurt deposit is described in Centerra's 2012 Annual Information Form and a technical report dated May 9, 2006 prepared in accordance with NI 43-101. The technical report has 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.

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 "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".

Cautionary Note Regarding Forward-looking Information

Information contained in this news release and the documents incorporated by reference herein, contain statements which are not current statements or historical facts and may be "forward looking information" for the purposes of 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.

The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things, general economic indicators affecting the price of gold and gold production, interest rates, and exchange rates, the Company's plans for future borrowing under its revolving credit facility, the successful resolution of outstanding matters in the Kyrgyz Republic (discussed under the heading "Other Corporate Development - Kyrgyz Republic") to the benefit of all shareholders including matters relating to the State Commission report, government resolutions and decrees, discussions with the Kyrgyz Government on the Kumtor Project Agreements and a possible restructuring of the Kumtor project into a joint venture, the resolution of environmental claims received from SIETS and SAEPF by Kumtor in 2012 and 2013, the environmental claim received from the Green Party of Kyrgyzstan in the amount of $9 billion, the claim of the General Prosecutor's Office of the Kyrgyz Republic purporting to invalidate Kumtor's land use certificate and to seize certain lands within the Kumtor concession area and the draft Kyrgyz law on denunciation having no material impact on Kumtor operations, the Company's ability to successfully demolish certain buildings and relocate other infrastructure at Kumtor and to maintain the availability of the Kumtor mobile fleet, the Company's ability to manage the movement of the Central Valley Waste Dump, the Company's ability to access and mine high-grade ore in the SB Zone at Kumtor, the Company's future production for 2014, including estimates of adjusted operating costs(1) and all-in unit costs(12), exploration plans and expenditures and the success thereof, capital expenditures, mining plans at Kumtor, statements regarding having sufficient cash and investments to carry out the Company's business plans for 2014, processing activities at Boroo, the outcome of discussions with the Mongolian government on the potential development of the Company's Gatsuurt deposit and the strategic designation status of the Gatsuurt deposit, plans for mining, processing and construction at Gatsuurt, asset retirement obligations, future planned exploration expenditures; the Company's business and political environment and business prospects; hedging activities; the timing and development of new deposits; and Centerra's plans to complete a preliminary economic assessment and commence a feasibility study for its Oksut property in 2014.

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. Material assumptions used to forecast production and costs include those described under the heading "Material Assumptions and Risks". Factors that could cause actual results or events to differ materially from current expectations include, among other things: (A) political and regulatory risks, including the political risks associated with the Company's principal operations in the Kyrgyz Republic and Mongolia, resource nationalism, the impact of changes in, or to the more aggressive enforcement of, laws, regulations and government practices in the jurisdictions in which the Company operates, the impact of any actions taken by the Government and Parliament relating to the project agreements governing the Kumtor Project (the "Kumtor Project Agreements") and any proposals to restructure the Kumtor project into a joint venture, the impact of any actions taken by the Kyrgyz authorities or political groups relating to allegations of environmental violations and other offences and the deliberate understatement of the reserves by management, any impact on the purported cancellation of Kumtor's land use rights at the Kumtor Project, the effect of the Water and Forest Law on the Company's operations in Mongolia, the effect of the 2006 Mongolian Minerals Law on the Company's Mongolian operations, the effect of the November 2010 amendments to the 2006 Mongolian Minerals Law on the royalties payable in connection with the Company's Mongolian operations, the impact of continued scrutiny from Mongolian regulatory authorities on the Company's Boroo project, the impact of changes to, or the increased enforcement of, environmental laws and regulations relating to the Company's operations;

(B) risks related to operational matters and geotechnical issues, including the movement of the Central Valley Waste Dump, the waste and ice movement at the Kumtor Project and the Company's continued ability to successfully manage such matters, the occurrence of further ground movements at the Kumtor Project, the timing of the infrastructure move potentially impacting the maintenance of the mobile fleet and its availability, the ability of the Company to access and mine the high-grade ore in the SB Zone, the success of the Company's future exploration and development activities, including the financial and political risks inherent in carrying out exploration activities, the adequacy of the Company's insurance to mitigate operational risks, mechanical breakdowns, the Company's ability to obtain the necessary permits and authorizations to (among other things) raise the tailings dam at the Kumtor Project to the required height, the Company's ability to replace its mineral reserves, the occurrence of any labour unrest or disturbance and the ability of the Company to successfully re-negotiate collective agreements when required, seismic activity in the vicinity of the Company's operations in the Kyrgyz Republic and Mongolia, long lead times required for equipment and supplies given the remote location of the Company's properties, reliance on a limited number of suppliers for certain consumables, equipment and components, illegal mining on the Company's Mongolian properties, the Company's ability to accurately predict decommissioning and reclamation costs, the Company's ability to attract and retain qualified personnel, competition for mineral acquisition opportunities, risks associated with the conduct of earn-in arrangements, and the possibility of failure of the ring gear and spare ring gear at the Kumtor ball mill;

© risks relating to financial matters including the sensitivity of the Company's business to the volatility of gold prices, the impact of declining gold prices and rising costs on the Company's asset valuation leading to potential impairment, the imprecision of the Company's mineral reserves and resources estimates and the assumptions they rely on, the accuracy of the Company's production and cost estimates, the impact of restrictive covenants in the Company's revolving credit facility which may, among other things, restrict the Company from pursuing certain business activities, the Company's ability to obtain future financing, the impact of global financial conditions, the impact of currency fluctuations, the effect of market conditions on the Company's short-term investments, the Company's ability to make payments including any payments of principal and interest on the Company's debt facilities depends on the cash flow of its subsidiaries; and (D) risks related to environmental and safety matters, including the ability to continue obtaining necessary operating and environmental permits, licenses and approvals, the impact of the significant environmental claims made in 2012, and 2013 relating to the Kumtor Project, inherent risks associated with using sodium cyanide in the mining operations; legal and other factors such as litigation, defects in title in connection with the Company's properties, the Company's ability to enforce its legal rights, risks associated with having a significant shareholder, and possible director conflicts of interest. 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 "Risks that can affect our business" in the Company's Annual Information Form for the year ended December 31, 2012, 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 herein or incorporated by reference. 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 February 19, 2014. 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 Gold Inc. 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 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 based in Toronto, Ontario, Canada.

Conference Call

Centerra invites you to join its 2013 fourth quarter, year-end conference call on Thursday, February 20, 2014 at 11:00AM Eastern Time. The call is open to all investors and the media. To join the call, please dial Toll-Free in North America (800) 734-8507 or International callers dial +1 (212) 231-2900. 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 Thursday, February 27, 2014 by calling (416) 626-4100 or (800) 558-5253 and using passcode 21704596.

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


(1) Non-GAAP measure, see discussion under "Non-GAAP Measures".

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