TSX Commentary

Centerra Gold Inc. (CG) – $12.98 – Strong Q4 Production Ends Year on a Positive Note
Outperform, Speculative Risk, Price Target: $17.00
Centerra pre-released Q4/09 and full year production results and 2010 production guidance. Record Quarterly Production at Kumtor and Higher Recovery at Boroo. Q4 gold production of 296Koz was better than RBC CM’s 273Koz estimate, as a
record 247Koz of gold production at Kumtor during the quarter contributed to the solid quarter overall. The company reported higher than expected production from the Boroo mine in Mongolia due to 10-12% higher than anticipated recoveries from the mill with less refractory material processed. Due to these strong results, Centerra reported $320 million in cash at year end, up $157 million as of Q3/09. The company’s strong cash flow is expected to fund an estimated $600 million in growth and sustaining capital in the next 3 years without any debt or new equity being issued. 2010 Production Forecast: Centerra forecasts 2010 production between 640-700Koz, in line with RBC CM’s 658Koz estimate. No cost guidance was given, however RBC CM expects 2010 cash costs to be $460/oz. Centerra expects the 2010 gold production profile to be similar to that of 2009, with a strong Q1 and Q4 aided by higher grade ores from the SB Zone as part of the mining plan. Lower grades and maintenance will impact the second and third quarters.