THE CANADIAN PRESS

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TORONTO - Centerra Gold Inc. (TSX:CG) reported Friday a third-quarter profit of US$20.2 million, up from $16.9 million in the same period a year earlier, as it benefited from higher gold prices even as production shrank as expected.

The Toronto-based miner with operations in Mongolia, Kyrgyzstan and Nevada said its earnings amounted to nine cents per share, compared with eight cents per share in the same quarter of 2008.

Centerra, which reports results in U.S. dollars, said gold production dropped to 165,883 ounces from a year-ago 186,145 ounces. However, revenues rose to $158.8 million from $139.4 million as its realized gold price on sales was ahead 12 per cent.

The company had warned in September that its Kumtor mine in Kyrgyzstan would see production about 17 per cent below earlier forecasts, topping off at around 100,000 ounces in 2009. Centerra said third-quarter production was lower due to a 38 per cent drop in production from the Boroo mine in Mongolia as a result of an operating licence suspension and no heap leach production. The licence was reinstated in July.

'We are continuing to work with the Mongolian authorities to obtain the final heap leach operating permit and are hopeful we will receive it in the near-term," president and CEO Steve Lang said in a statement.

In late April, Centerra announced that it had reached an agreement with the government of Kyrgyzstan, resolving years of uncertainty over ownership of the Kumtor mine.

Under the agreement, which has not yet been finalized, Kyrgyzstan will get one-third ownership in Centerra - with 18.2 million new shares issued by Centerra and up to 25.3 million shares transferred from uranium miner and partial Centerra owner Cameco Corp. (TSX:CCO) - in return for a new tax regime and additional land rights.

This would leave the Kyrgyz government owning up to 33 per cent of Centerra, Cameco holding 37.8 per cent and other shareholders with 29.2 per cent.

Centerra, which employed more than 2,900 people at the end of 2008, is a mid-tier gold miner spun off by Cameco, the world's largest uranium miner, a few years ago. Cameco is expected to eventually dispose of all its shares in the company in the future.

In trading on the TSX on Friday, Centerra shares fell 20 cents to close at $8.30, a drop of 2.4 per cent.