Boroo Gold

Strathcona Mineral Services Limited
TECHNICAL REPORT
on the
BOROO GOLD MINE
MONGOLIA
for
CENTERRA GOLD INC.
Henrik Thalenhorst, P. Geo

May 13, 2004 Graham Farquharson, P. Eng
Toronto, Canada Strathcona Mineral Services Limited
2
1 CRUSHER AND MILL COMPLEX 4 PIT 2 6 IKH DASHIR ALLUVIAL PIT

2 WORKSHOP 5 PIT 3 7 WASTE DUMP
3 CAMP
Boroo Site - Satellite Image

September 2003
TABLE OF CONTENTS
Page
1. SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Boroo Gold Mine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Geology and Mineral Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Mining Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Projected Economic Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. BACKGROUND AND TERMS OF REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Terms of Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. PROPERTY DESCRIPTION AND LOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE
AND PHYSIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5. PROJECT HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Exploration History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Production History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.3 History of Mineral Resources and Reserves . . . . . . . . . . . . . . . . . . . . . . . . 23
5.3.1 Historical Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.3.2 Recent Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6. GEOLOGICAL SETTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.1 Plate-Tectonic Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.2 Boroo Bedrock Geology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7. GOLD MINERALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8. SAMPLING METHOD AND APPROACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.1 Historical Methods (pre-1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.2 AGR and BGC Methodology (from 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9. SAMPLE PREPARATION, ANALYSIS AND SECURITY . . . . . . . . . . . . . . . . . . 39
9.1 Historic Methods (pre -1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.2 AGR and BGC Methodology (from 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.2.1 1999 Drill Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.2.2 2002 and 2003 Drill Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.3 Bulk Density Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.4 Summary Comments on the Analytical and Bulk Density Databases . . . . . 46
10. DATA VERIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.2 Core Loss in JE Drill Holes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.3 Verification Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ii
11. MINERAL RESOURCE MODEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

11.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.2 Mineralized Envelopes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.3 Estimation Procedures and Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.3.1 Bulk Density Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.3.2 Assay Capping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.3.3 Compositing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
11.3.4 Variography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.3.5 Grade Interpolation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
11.3.6 Developing a Realistic Grade-Tonnage Curve and Dilution Factors . . 55
11.4 Resource Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12. MINERAL RESERVES AS OF DECEMBER 31, 2003 . . . . . . . . . . . . . . . . . . . . 62
12.1 Procedures and Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.2 Open Pit Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.3 Boroo Mineral Reserve Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
12.4 Mineral Reserve Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
12.5 Life-Of-Mine (LOM) Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
13. COMMENTS ON THE BOROO RESOURCE AND RESERVE ESTIMATES . . . 69
13.1 Accuracy of the Current Resource and Reserve Estimates . . . . . . . . . . . . . 69
13.1.1 Database . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
13.1.2 Grade Estimation Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
13.1.3 Data Density . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
13.1.4 Economic Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
13.1.5 Actual Performance and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . 71
13.2 Updating the Boroo Mineral Reserve Estimate . . . . . . . . . . . . . . . . . . . . . . . 72
14. POSSIBLE MINERAL RESERVE ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 73
14.1 Pit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
14.2 Areas Adjacent to Boroo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
14.2.1 Ikh Dashir Placer Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
14.2.2 Exploration around the Boroo Deposit . . . . . . . . . . . . . . . . . . . . . . . . . 75
14.3 Regional Exploration and Possibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
14.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
14.3.2 Gatsuurt Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.3.3 Other Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
14.4 Planned Development and Exploration Programs . . . . . . . . . . . . . . . . . . . . 86
14.5 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
iii
15. CURRENT OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

15.1 Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
15.2 Mineral Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
15.2.1 Metallurgical Testwork . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
15.2.2 Process Flowsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
15.3 Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
16. PERMITTING, ENVIRONMENTAL MANAGEMENT AND CLOSURE PLAN . . . 97
16.1 Permits and Licences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
16.2 Environmental Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
16.3 Closure Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
16.4 Occupational Health and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
17. GOLD SALES AND TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
17.1 Gold Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
17.2 Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
17.3 Corporate Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
17.4 Royalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
17.5 Value Added Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
18. ECONOMIC ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
18.1 Production Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
18.2 Revenue Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
18.3 Cash Production (Operating) Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
18.3.1 Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
18.3.2 Royalties and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
18.3.3 Gold Institute Standard Unit Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
18.4 Project Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
18.5 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
18.6 Boroo Mine Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
18.7 Centerra Economic Interest in Boroo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
19. REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
CERTIFICATES OF QUALIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
iv
LIST OF FIGURES
Figure Page
1 Location Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2 BGC and CGM Exploration Licences, Northern Mongolia . . . . . . . . . . . . . . . . . 10
3 Boroo Mining and Exploration Licences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4 Site Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5 Boroo Area Drill Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6 Major Tectonic Elements, North-Central Mongolia . . . . . . . . . . . . . . . . . . . . . . . 27
7 Boroo Area Geology a. Surface Map . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
b. Typical Cross Section . . . . . . . . . . . . . . . . . . . . 29
8 Grade-Thickness Plan, Boroo Mineralized Zones . . . . . . . . . . . . . . . . . . . . . . . . 32
9 Geological Cross Sections a. Zone 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
b. Zone 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
c. Zone 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10 Lost-Core Intervals in 79 JE Intersections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11 Block Model Sections a. Zone 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
b. Zone 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
c. Zones 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
12 Ultimate Pit Design and December 31, 2003 Pits . . . . . . . . . . . . . . . . . . . . . . . . 65
13 Chargeability Results and Drill Hole Coverage, Boroo Area . . . . . . . . . . . . . . . . 77
14 Geological Setting, Gatsuurt Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
15 Regional Stream Sediment Survey Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
16 Panoramic View of Pit 2 and Mill Buildings, January 2004 . . . . . . . . . . . . . . . . . 91
17 Mill Flowsheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
18 Centerra Attributable Cash Flows - NPV Sensitivities . . . . . . . . . . . . . . . . . . . . 111
iv
LIST OF TABLES
Table Page
1 Boroo Mining Licences held by BGC, March 2004 . . . . . . . . . . . . . . . . . . . . . . . 12
2 BGC Boroo Area Exploration Licences - December 31, 2003 . . . . . . . . . . . . . . 15
3 Summary of Drilling Completed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4 History of Boroo Resource and Reserve Estimates . . . . . . . . . . . . . . . . . . . . . . 23
5 Average Bulk Densities of the Mineralization and by Weathering Zone . . . . . . . 45
6 Capping Levels on Individual Assays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7 Grade Interpolation Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8 Development of Dilution Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9 Simulated Composites and Kriged Blocks Above 1.2 g/t Cut-off Grade . . . . . . . 57
10 Boroo Pit Design Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11 Boroo Mineral Reserves at December 31, 2003 . . . . . . . . . . . . . . . . . . . . . . . . . 66
12 Boroo Life-Of-Mine Plan and Production Forecast . . . . . . . . . . . . . . . . . . . . . . . 68
13 Zone 2 Reconciliation as of March 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
14 Boroo Mineral Resources Additional to Mineral Reserves . . . . . . . . . . . . . . . . . 74
15 Noyon Project Mining Licences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
16 Noyon Project Exploration Licences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
17 Summary of Gatsuurt Drill Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
18 Central Zone Mineral Resource Estimate, Gatsuurt Deposit . . . . . . . . . . . . . . . 84
19 Planned 2004 Development and Exploration Drilling, Northern Mongolia . . . . . . 88
20 Boroo Employees December 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
21 Boroo Production Forecast 2004 - 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
22 Gold Sales 2004 - 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
23 Boroo Operating Cost Forecast 2004 - 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . 104
24 Royalty and Income Tax 2004-2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
25 Gold Cash Production Costs 2004 - 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
26 Project Costs 2004 - 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
27 Financing Costs 2004 - 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
28 Boroo Mine Net Cash Flow 2004 - 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
29 Boroo Net Cash Flow Attributable to Centerra . . . . . . . . . . . . . . . . . . . . . . . . . 110
30 NPV of Boroo Net Cash Flow Attributable to Centerra . . . . . . . . . . . . . . . . . . . 110
v
1. SUMMARY
1.1 Boroo Gold Mine

The Boroo gold property in northern Mongolia was explored by joint East German-
Mongolian geological expeditions from 1982 to 1990, and that period of exploration
activity has provided much of the geological database for the property. The Boroo
Gold Company Limited (BGC) acquired the Boroo project in 1997, and in 1998 AGR
Limited (AGR), an unlisted public company incorporated in the British Virgin Islands,
acquired an initial 85% interest in BGC. Altai Trading Company Limited (Altai), a
Mongolian private company, held the remaining interest in BGC, but in 2000 sold two-
thirds of their interest to AGR resulting in the current 95% interest in BGC for AGR
and the remaining 5% for Altai.
Centerra Gold Inc. (Centerra) has a 56% interest in AGR that was acquired in 2002
by Cameco Gold Inc. (Cameco Gold), the predecessor to Centerra. It is the intent of
Centerra to make an offer to acquire all or any part of the remaining 44% in AGR not
held by Centerra.
From 1997 to 2001 BGC conducted further exploration and undertook feasibility
studies on the Boroo project, which were continued by Cameco Gold upon acquiring
the initial interest in AGR. In 2002 the decision was made to put the Boroo gold
property into production, with a subsidiary of Cameco Gold providing a $70 million
loan to finance the mine development, processing facilities and associated
infrastructure. The capital investment program was successfully completed on
schedule and commercial production for the Boroo gold project was confirmed by
Centerra, effective March 1, 2004. The Boroo Gold project is forecast to produce an
average of about 180 000 ounces of gold per year over the period 2004-2009 at an
average cash cost of $160 per ounce.
1.2 Geology and Mineral Reserves

Gold mineralization on the Boroo property is controlled by a northerly trending thrust
fault that dips at a very low angle to the west. In the northern part of the property, the
thrust fault cuts across the contact between sedimentary rocks and granitic rocks,
while in the southern part of the property the thrust fault is entirely contained within
sedimentary rocks. Gold mineralization within the thrust fault zone is found together
with disseminated sulphides in a pervasive zone of quartz-sericite alteration, and also
in quartz-sulphide veins in which gold is commonly coarse-grained.
To date, four zones of economic gold mineralization have been identified on the Boroo
property along the trend of the thrust fault, identified as Zones 2, 3, 5 and 6. The gold
mineralization and the enclosing near-surface rocks have been subject to oxidation.
The oxide zone has the highest degree of oxidation, followed by a transitional zone,
and then the underlying fresh rocks in the primary zone of mineralization. The oxide
zone is the host to 40% of the mineral reserves on the Boroo property, and a further
45% are in the transitional zone, thus facilitating the recovery of gold in the treatment
of Boroo ore. The total depth to the bottom of the gold mineralization currently
planned to be mined is less than 130 metres reflecting the flat-lying nature of the gold
deposits.
Mineral reserves as at December 31, 2003 for the Boroo property have been
estimated using a gold price of $325 per ounce, and with cut-off grades of 1.1 to 1.4
grams of gold per tonne (g/t), that reflect differences in metallurgical recovery
depending upon the degree of oxidation.
Metallurgical testwork on samples of Boroo ore has resulted in forecasts of gold
recovery for oxidized, transitional and unoxidized ore of 95%, 90% and 77%
respectively, and those recoveries have been incorporated in the determination of
mineral reserves within the designed open pits.
Four open pits contain the current Boroo mineral reserves. Lower-grade material left
outside the present pit designs is reported as additional mineral resources, and much
of this additional gold mineralization is located within the unoxidized or primary rocks.
Boroo Mineral Reserves at December 31, 2003
Tonnes Gold Contained Gold

Category
000’s g/t Ounces - 000's Tonnes
Proven
Stockpiles 33 4.2 4 0.1
Probable
Zone 2 1 667 2.8 149 4.6
Zone 3 6 478 3.3 683 21.2
Zone 5 1 572 5.3 268 8.3
Zone 6 419 4.0 54 1.7
Total Mineral Reserves 10 169 3.5 1 158 36.0
2
Boroo Mineral Resources Additional to Mineral Reserves

Oxide Transition Fresh Total Contained Gold
Zone Tonnes Gold Tonnes Gold Tonnes Gold Tonnes Gold Ounces
Tonnes
000's g/t 000's g/t 000's g/t 000's g/t 000's
Indicated Mineral Resources (diluted)

2 73 1.7 172 1.6 357 1.6 602 1.6 31 1.0
3 88 1.7 552 2.0 1 151 1.8 1 791 1.9 108 3.4
5 9 2.7 111 3.6 266 4.0 386 3.9 48 1.5
6 10 3.8 309 2.2 289 2.0 608 2.1 41 1.3
Total 180 1.8 1 144 2.1 2 063 2.1 3 387 2.1 228 7.1
Inferred Mineral Resources (undiluted)
Total 869 3.0 83 2.6
1.3 Mining Operations

The Boroo project is located at an elevation of 1200 metres in a sparsely populated
area of moderate relief with grassland cover in a relatively arid landscape. Climatic
conditions are typically continental with extreme seasonal temperature variations.
The Boroo project is very well situated with respect to access to the principal
infrastructure of northern Mongolia, being 140 kilometres from Ulaanbaatar, the
capital of Mongolia, and the project has been connected to the national electric power
grid.
Development and construction activities commenced at the Boroo site in 2002. A
conventional open-pit gold mining operation was planned to mine about 1.7 million
tonnes of ore per year with an average gold grade of 3.6 g/t. Gold would be
recovered following standard gravity and leaching flowsheets with average gold
recovery of 90% forecast for the life of the mine.
Ore was first delivered to the Boroo process plant in November 2003, and to the end
of March 2004, 512 000 tonnes of ore from Zone 2 has been milled with gold recovery
of 96%, including recovery of about one-half of the gold in the gravity circuit. The gold
grade for that tonnage, however, was 4.0 g/t versus the 2.7 g/t that was forecast, and
resulted in the production and sale of 51 000 ounces of gold. All of the ore milled
came from the oxide zone and whether the substantial improvement in ore grade will
continue is unknown, but the tonnage milled to date does represent a very large bulk
sample from the Zone 2 oxide reserves.
3
The mining of mineral reserves at Boroo requires rather shallow open pits with a
consequent overall modest waste-to-ore strip ratio of 3.9, and with the possibility that
further drilling may result in some of the current pits being connected, adding to the
mineral reserves. The annual expenditures for mining decline over the period 2004 -
2009 as the strip ratio becomes less. Boroo is somewhat unique amongst mining
projects in that total mining costs, as a proportion of total operating costs over the
current life-of-mine plan, are lower than those presently forecast for either milling or
for administration costs, and illustrates the relative simplicity of mining at Boroo.
Gold production from Boroo will be about 200 000 ounces in 2004 and 2005 and total
in excess of 1.0 million ounces over the next six years.
Boroo Life-Of-Mine Production Forecast

-thousands of tonnes of ore and waste and ounces of gold-
2004 2005 2006 2007 2008 2009 LOM
Waste Mined
Tonnes 11 095 8 222 7 857 7 268 3 902 1 238 39 582
Strip Ratio 6.3 4.5 3.5 5.6 2.3 0.9 3.9
Au Au Au Au Au Au Au
Ore Mined Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes
(g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t)
Oxide 1 261 4.3 947 3.6 938 3.1 448 3.6 341 4.7 56 2.9 3 992 3.8
Transitional 498 3.9 634 4.2 908 3.5 715 3.1 1 099 3.4 697 3.2 4 550 3.5
Fresh 1 1.7 245 4.3 388 3.2 127 2.6 247 2.9 603 2.8 1 612 3.1
Total 1 760 4.2 1 827 3.9 2 233 3.3 1 291 3.2 1 687 3.6 1 356 3.0 10 154 3.6
Ore Milled
1 723 4.2 1 750 3.9 1 750 3.4 1 750 3.3 1 750 3.6 1 469 3.1 10 191 3.6
Gold Sold
Ounces 212 201 170 168 180 132 1 064
Tonnes 6.6 6.3 5.3 5.2 5.6 4.1 33.1
1.4 Projected Economic Performance

Boroo is expected to be a low-cost gold producer, because of the low waste-to-ore
ratio, good ore grade for an open-pit mining operation, and amenability of the ore to
standard metallurgical treatment. Total operating costs are anticipated to be within
the range of $14 to $20 per tonne milled. The resulting cash cost per ounce of gold
produced, including a 2.5% royalty on gold sales paid to the Government of Mongolia,
is estimated to average about $160 per ounce over the period 2004 -2009.
A portion of the Boroo gold production has been committed under forward sales
agreements with 200 000 ounces to be delivered over the period 2004-2007 at an
4
average price of $316 per ounce, of which 10 000 ounces were delivered in April
2004. Revenue from the hedged gold sales has been included in projected cash flow
for the Boroo mine.
Based on projected gold production for the Boroo mine and associated operating
costs for the period 2004-2009, estimates for sustaining capital, royalty and taxes,
and a gold price of $350 per ounce for the six-year period, BGC would have net mine
cash flow for that period of $169 million, before allocation of funds for exploration
programs and repayment of the debt owing to Centerra for the funding provided to
develop the Boroo mine. At a gold price of $400 per ounce the net mine cash flow
would increase to $206 million.
The total capital investment to develop and construct the mining facilities of Boroo
was approximately $75 million which was largely financed by the loan advanced by
a subsidiary of Cameco Gold, now a subsidiary of Centerra. The consequent Boroo
net cash flow attributable to Centerra over the period 2004-2009 would be $109
million at a gold price of $300 per ounce and $147 million at a $400 price. The
Centerra economic interest in the Boroo net cash flow would be 83% at a $300 gold
price and 71% at a $400 price.
In summary, the performance of the Boroo project has been very satisfactory to date
with the project having been developed and brought into production as planned. The
operating results from the initial four months of operation have been very encouraging
with the gold grade of ore mined being higher than was forecast, and metallurgical
recoveries as anticipated. The Boroo mine should thus enjoy a successful minimum
six-year mine life.
Centerra is planning an aggressive exploration program on the Boroo property, and
within economic transport distance elsewhere in northern Mongolia, to take advantage
of the now established base in the region and further extend the life of the Boroo
operation. In particular the Gatsuurt deposit, 35 kilometres from Boroo, is being
studied as to the possibility of either providing one year of oxide ore to Boroo, or to
install a process facility on site to treat refractory non-oxide mineralization.
5
2. BACKGROUND AND TERMS OF REFERENCE
2.1 General
The Boroo gold project in Mongolia is owned by Boroo Gold Company Limited (BGC),
a company incorporated in Mongolia. BGC is wholly-owned by Boroo Mongolia Mining
Company Limited (BMMC), a Bahamian company, which, in turn, is owned by AGR
Limited (AGR), an unlisted public company incorporated in the British Virgin Islands
with a 95% interest and by Altai Trading Company Limited (Altai), a Mongolian private
company, which holds the remaining 5% interest.
Cameco Gold Inc. (Cameco Gold), a wholly-owned subsidiary of Cameco Corporation
(Cameco), acquired an initial 51.85% interest in AGR on February 28, 2002 for $12
million in cash and a $4.8 million promissory note and subsequently increased this
interest to 56% by funding $3 million of exploration on the Boroo and nearby Gatsuurt
properties. The development of the Boroo mine has largely been financed by a $70
million loan provided by Cameco Barbados Inc. (now Centerra Barbados Inc.), a
subsidiary of Cameco Gold, with commercial production of gold declared on March
1, 2004. The Cameco Gold interest in the Boroo gold mine was transferred to
Centerra Gold Inc. (Centerra) on April 1, 2004. It is the intent of Centerra to make an
offer to acquire all or any part of the remaining 44% in AGR not held by Centerra.
2.2 Terms of Reference

The Boroo gold deposit was initially discovered in 1910, and an undocumented
amount of gold was produced intermittently from near-surface deposits until about
1945. The area was extensively explored by a joint East German (DDR)-Mongolian
geological expedition from 1982 to 1990. Much of the early project database, and
nearly all of the diamond drilling done, originates from this period. Additional work was
carried out from 1991 to 1994 by the Boroo Gold Mining Joint Venture (the Mining
Bureau of the Government of Mongolia and the Morrison-Knudson Gold Company).
Only limited drilling with poor core recoveries was undertaken during this latter time
period.
BGC acquired the Boroo project in 1997, and completed initial due diligence diamond
drilling in 1997. AGR acquired its initial indirect interest in BGC in 1998 and
embarked on an extensive reserve delineation drill program. Additional in-fill drilling
was undertaken in 2002 and 2003, and is ongoing as of the date of this report.
6
The results of the various historic field campaigns have been collated into a large
number of reports and technical documents (see References). The project database,
including a feasibility study prepared by AGR in December of 1999, was critically
reviewed by SRK Consulting in 2000 on behalf of NM Rothschild & Sons Australia
Limited. This review identified a number of shortcomings that were subsequently
addressed. An updated feasibility study for a project with a larger throughput of 1.75
million tonnes per year (compared to 1.3 million tonnes per year in the original study)
was completed by AGR in April of 2001, that included an updated reserve estimate
by SRK.
Following an in-house due diligence process, Cameco Gold acquired its initial interest
in AGR on February 28, 2002. A production decision was taken shortly thereafter,
based on the SRK (2001) mineral reserve estimate that was discounted by 20% on
the grade, while increasing the mineable tonnes by a like percentage. The reason for
the adjustments was the judgment by Cameco Gold staff that the 2001 SRK mineral
reserve estimate was too optimistic. Construction commenced in June 2002, and the
project started commissioning in early November 2003. Commercial production at
Boroo was achieved on March 1, 2004.
The mineral resources for the Boroo project were last estimated in July 2003 by
Geostat Systems International Inc. (Geostat). This estimate, prepared to National
Instrument 43-101 (NI 43-101) reporting standards, is currently the basis for the
December 31, 2003 reserve estimate and life-of-mine plan for the project. The
estimation process is under the control of the Cameco mining resources group at the
Cameco office in Saskatoon, Saskatchewan headed by Alain Mainville, P. Geo. and
Centerra in Toronto by Rob Chapman, P. Geo., each of whom is a qualified person
within the meaning of NI 43-101.
Strathcona Mineral Services Limited (Strathcona) has been retained by Centerra to
provide an independent technical review of the Boroo gold project. This review was
requested by Centerra in connection with its proposed initial public offering and listing
on the Toronto Stock Exchange. This report complies with the requirements for an
independent technical review as set forth in NI 43-101 pertaining to Standards of
Disclosure for Mineral Projects.
In preparing this report, we have relied on many of the earlier studies and reports. We
have not conducted independent sampling, or sample analysis, or surveys to verify
the validity of the assay data, the location of drill holes, or the location or validity of
mining claims. We have evaluated the data provided by BGC on the basis of our
experience in the mining industry, and particularly in the gold sector. In addition,
7
Henrik Thalenhorst of Strathcona has visited the Boroo project from January 16 to 22,
2004 at which time all relevant technical and economic data were reviewed with BGC
staff both at the mine site and at the administrative and exploration offices in
Ulaanbaatar, the capital and principal city of Mongolia. A complete list of sources of
information and data is set out in the References section of this report.
As a result of our review of the Boroo gold project and the data supplied to us, we are
satisfied that the estimate of mineral reserves, and the life-of-mine plan based
thereon, for the project are in all material respects fair and reasonable subject to the
limits of uncertainty of certain data as expressed in this report.
This report uses the metric system of units, deviating only to report ounces of gold,
and the currency used is the United States dollar, unless otherwise indicated.
3. PROPERTY DESCRIPTION AND LOCATION

The Boroo gold project is located in the Republic of Mongolia some 110 kilometres
to the northwest of the capital city of Ulaanbaatar (Figure 1) and about 230 kilometres
to the south of the international boundary with Russia, at 48°45' N and 106°10' E.
The following information with respect to the property and its legal status was
provided by BGC and has not been independently verified. Figure 2 shows, in a
general way, the location of all of the mineral properties in the northern part of
Mongolia held either by BGC or Centerra Gold Mongolia LLC, which is also controlled
indirectly by AGR.
In the Boroo mine area, BGC has been granted the exclusive rights to all hard-rock
minerals and placer deposits within a number of contiguous mining licences, which
cover 3146 hectares of land centred on, and surrounding the Boroo gold deposit
(Figure 3). The licenses are located in about equal measure in the counties (soums)
of Bayangol and Mandal, situated in the province (aimag) of Selenge. Both the aimag
and the soums play an important role in some of the permitting and environmental
management aspects of the project, as will be discussed in greater detail in Section
16. The particulars of the individual mining licences are summarized in Table 1.
8
85°E 90°E 95°E 100°E 105°E 110°E 115°E 120°E
RUSSIA Irkutsk Chita

Hovsgol Ulan Ude
Nuur
K Uvs Nuur Rinchinlhumbe LOCATION
AZ
AK OF LICENCES
H Ulaangom
ST Olgiy Suhbaatar
AN Bayandun
Hyargas Moron Dzuunharaa Onon
Nuur Bayan-adraga
Hovd Bulgan
Tosontsengel
Har
Us ULAANBAATAR
Nuur Dzuunmod Ondorhaan
See Figure 2
MONGOLIA Baruun Urt
Jargalan Mandalgovi
Buyan-uhaa
Hovsgol
Dalandzadgad
82 82
80 80
76
KaralSea Laptev Sea 76
72 72
Baotou BEIJING
64
68 68
64
CHINA
iberia
Yakutia
rn S
60
110°E 115°E
60
Easte
90°E RUSSIA
YAKUTSK
95°E 100°E 105°E
CLIENT
CENTERRA GOLD INC.
56
56
Ru
75
ssia
Southeastern
52 NOVOSIBIRSK 52
Mining and Exploration Licences
nF
Siberia
And PROJECT
ar E
78 Transbaikalia
Boroo Technical Report
ast
48
IRKUTSK
BGC (Boroo Gold Company)

Ulaangom Baikal
KHABAROVSK
KAZAKHSTAN
48 Hatgal ULANUDE
44 TITLE
BOROO
GATSUURT
CGM (Cameco Gold Mongolia LLC)
90
ULAANBAATAR
MONGOLIA VLADIVOSTOK
40
Location Map
CHANGCHUN
36
Scale 1: 2.5 million

N
96
CHINA KOREA
PA
PENINSULA
APPROVAL DATE
40
JA
SEOUL TOKYO PROJECT No.

102
BEIJING
n
32
0 100 500 H.T. March 2004 329-7

0 500 1000 TAEJON ea
Oc
11 ic 144
cif
108 4 120
Pa
STRATHCONA MINERAL SERVICES LIMITED
KM
Base map from WarrenJ.Noklebergand others OFR 03220

126
138
Kilometres
132
TORONTO - CANADA
Lambert Conformal Conic Projection
Map Source: Licences information from Centerra Gold Inc.

Datum: Pulkovo 1942, Russia 04LocationMap.cdr .ECKHA
104°E 105°E 106°E 107°E 108°E
Tsagaannuur RUSSIA
Suhbaatar
50°N
Shaamar
Dzuunburen N
50°N
Dulaahhaan
Yoroo
MONGOLIA Yoroohoroo
Darhan
Hangal Sant Sharingol

Buren
Orhon
49°N
49°N
Barunnharaa
Orhontuul
Dzuunharaa
BOROO MINE
Mandal
Jargalant GATSUURT DEPOSIT

Bornuur
Batsumber
Ugtaaltsaydam Bayanchandmani
Dzaamar
48°N
Dumda
Urtaiin ULAANBAATAR
48°N
Bayantsogt
Bayshing
Hadasan
Nalayh
Bayandelger
Lun
Dashinchilen
Songino
Arhust
Altanbulag Dzuunmod
Ondorshireet
Naban Tseriyn
Guuiy Huree
Abdar Bayan Suma
Scale 1 : 2 million
0 20 100
47°N
47°N
Kilometres
Lambert Conformal Conic Projection CLIENT
Datum: Pulkovo 1942, Russia
Moron Buren Bayanbaraat CENTERRA GOLD INC.
PROJECT
107°E
104°E 105°E 106°E
108°E
Legend: TITLE
BGC and CGM Exploration Licences,

Towns/villages Mining and Exploration Licences
Northern Mongolia
Roads BGC
APPROVAL DATE PROJECT No.
(Boroo Gold Company) H.T. March 2004 329-7
Drainages
CGM STRATHCONA MINERAL SERVICES LIMITED
Railroad (Cameco Gold Mongolia LLC) TORONTO - CANADA
File:
04BGC_CGM_Lic.cdr Figure 2
584000m.E 588000m.E 592000m.E 596000m.E
5404000m.N
5404000m.N
Boroo River
Scale 1 : 60,000
0 500 2,500
Man
Metres
Bay
UTM WGS84-48N 198A
N
dal
ang
1797X
Sou
ol S
m
oum
6964A
1970A
147
1960A
A
724A
5400000m.N
5400000m.N
1961A
1970A
238A
6963A
198A
1797X
72
2A
51
47
A
BGC MINING LICENSES BGC EXPLORATION LICENSES

198A (Boroo, 21 June 1997) 1797X (Ikh Dashir, 10 August 1999))
238A (Ikh Dashir 09March 2000) 028X (Boroo, 31 May 1997) CLIENT
CENTERRA GOLD INC.
5396000m.N
724A (Ikh Dashir Ar, 14 August 1997)

PROJECT
1960A (Boroo, 29 November 1999) EXCLUSIONS Boroo Technical Report
1961A (Boroo, 29 November 1999) 147A (Undram Sed Co.Ltd)
TITLE
1970A (Boroo, 06 December 1999) 722A (Anod Bank) Boroo Mining and Exploration Licences
6963A (Bayangol, 17 January 2004) 5147A (Anod Bank)
6964A (Boroogol, 17 January 2004) H.T. March 2004 329-7
7170A (Chandagat Uul, 31 March 2004) STRATHCONA MINERAL SERVICES LIMITED

TORONTO - CANADA
File:
04BorooMiningLic.cdr Figure 3
Table 1 Boroo Mining Licences held by BGC, March 2004
Licence Licence Area Issue Annual

Soum Expiry Date
No. Name (hectares) Date Fees
198 A Bayangol & Mandal Boroo 1 407 Jun 21, 1997 $14 070 June 21, 2057
238 A Bayangol Ikh Dashir 130 Jul 26, 1995 1 304 Mar 9, 2055
724 A Bayangol & Mandal Ikh Dashir Ar 90 Aug 14, 1997 900 Aug 14, 2057
1960 A Bayangol Boroo 571 Nov 29, 1999 4 283 Nov 29, 2059
1961 A Bayangol Boroo 1 Nov 29, 1999 13 Nov 29, 2059
1970 A Bayangol & Mandal Boroo 562 Dec 6, 1999 4 215 Dec 6, 2059
6963 A Bayangol Bayangol 25 Jan 17, 2004 125 Jan 17, 2064
6964 A Mandal Boroogol 345 Jan 17, 2004 1 725 Jan 17, 2064
7170 A Mandal Chandagat Uul 14 Mar 31, 2004 68 Mar 31, 2064
Total 3 146 $26 703
Mining Licence A-32 covering the Boroo gold deposits was originally granted to Altai
on July 4, 1996 for an initial period of 15 years. BGC was established in 1997 as a
joint venture between Altai (50%) and the London-based Asia Mining Investment
Corporation (AMIC, 50%). Mining Licence A-32 was transferred to BGC by the
Ministry of Energy, Geology and Mining on June 21, 1997 by Special Ministerial
decree (Order A\107). It was re-registered as Licence 198 A on September 20, 1997
as part of the adjustments when a new mining law was promulgated in Mongolia.
Mining licence 238 A was re-registered, also on September 20, 1997, from its pre-
decessor licence A-62 (originally issued to Mongol Erdene on July 26, 1995) and
subsequently transferred to Altai on January 23, 1998. Altai in turn transferred the
licence to BGC on May 5, 1999.
Mining licence 724 A was originally granted on August 14, 1997 to Altanhargui
Company covering part of an existing exploration licence. The licence was transferred
to the Nuuriin Gol Company on April 30, 1998 who subsequently changed their name
to Lanars Company. Lanars transferred licence 724 A to BGC on October 9, 2000.
Mining licences 1960 A, 1961 A, 1070 A, 6963 A and 6964 A were granted to BGC
directly on the dates indicated in Table 1. The two newest licence added in January
2004 serve to cover vital mine infrastructure such as the water wells in the Boroo river
valley.
12
Centerra has advised that, other than a gold and silver royalty of 2.5% payable to the
Mongolian Government (Section 17.4) and a 50% profit royalty payable to Altai in
case of gold production from alluvial operations on licence 238 A, there are no other
royalties, payments or other agreements or encumbrances related to the Boroo
mining licences.
Surface rights have been negotiated with the soums, providing sufficient surface area
for the mill, for tailings and waste rock disposal. An order of the governor of Bayangol
soum dated November 11, 2003 provides BGC with the use of 1451.7 hectares for
ten years for an annual payment of 12 million tugriks (the local currency, currently
approximately $10 000). A similar order by the governor of Mandal soum dated
November 5, 2003 provides BGC with the use of 274 hectares for an annual payment
of 4 million tugriks (currently approximately $3400).
The mining license areas held by BGC enclose a mining license covering the Altan
Dashir placer gold deposit, owned and operated intermittently by Undram Sed, a
Mongolian company. While this enclosed area does not hinder operations, BGC have
agreed in principle to acquire this licence in consideration for a cash payment and to
enter into a two-year agreement to use equipment operated by Undram Sed.
The Government Committee Act on Commissioning of the Boroo facilities into
operation has been passed and gives BGC the right to operate and produce gold.
The Stability Agreement, originally concluded between BGC and the Mongolian
Government represented by the Minister of Finance on July 8, 1998 and amended on
May 9, 2000, stipulates that there will be no nationalization, compulsory acquisition
or illegal confiscation of the project by the Government of Mongolia. The Stability
Agreement applies to any gold production from the Boroo gold deposits.
The Stability Agreement further provides for BGC to be exempted from income tax for
the first three years of production, and for reduced income tax thereafter. It also
allows the mine to offset value-added tax against certain taxes payable (as provided
for in the Value Added Tax Law of Mongolia), allows the unlimited export of physical
gold, and the deposit of proceeds from gold sales in an offshore account provided that
sufficient funds are retained in Mongolia to pay royalty fees and taxes. The tax
provisions of the Stability Agreement are discussed in greater detail in Section 17.
A general site map is provided in Figure 4. Power for the operation is supplied from
the main Mongolian grid via a 110 KVA line that has the capacity to supply 40 MW of
power to the site. The national grid is connected to the Russian grid in the north.
13
584000m.E 586000m.E 588000m.E 590000m.E 592000m.E 594000m.E
Boroo
5404000m.N
5404000m.N
River
Powerline
N
ad
Ro
Water pipeline of
Outline of
Man
Undram Sed Co. Ltd.
Bay
Mining Licences Main Pump
Dump Station
dal
5402000m.N
5402000m.N
ang
Clay Pit Top Soil
Sou
ol S
Dump
m
oum
Top Soil Tailings
Pond
Explosives Powerline
Magazine Workshop Camp Monitoring Well
Well
Waste Crusher and
Dump Mill Complex Water
Water Pipeline Powerline Pipeline
5400000m.N
5400000m.N
Farmland
PIT 2 Well
Top Soil Water Pipeline
PIT 3 Tailings Road
Camp
PIT 5 Gravel Well
Pit
PIT 6 ROM Ore

Stockpile
5398000m.N
Well
CLIENT
CENTERRA GOLD INC.
Si
te
Waste
Ac
Top Soil PROJECT

ce
Dump
ss
Ro
TITLE
ad
Site Map
Ro
Scale 1 : 50,000
ad
0 500 2,500
5396000m.N
H.T. March 2004 329-7

Metres
UTM WGS84-48N
TORONTO - CANADA
Map Source: Site map information from Centerra Gold Inc.
File:
04Boroo_SitePlan.cdr Figure 4
584000m.E 586000m.E 588000m.E 590000m.E
Historic records indicate a generally stable power supply, with few interruptions. A
power supply agreement was entered into by AGR on August 21, 2000 with the
Electrical Power Supply Office of Darkhan Province, a Mongolian-registered company.
The price per kilowatt-hour (kWh) was set at 41 tugriks, but has since been increased
to 47 tugriks, the current rate (about $0.045 per kWh). A new power supply
agreement is expected to be concluded during the second quarter of 2004.
Other agreements include a water supply agreement with the Mandal Soum that
covers the taking of water from five wells along the Boroo River. The annual payment
for the water is nominal, amounting to the equivalent of $15 000.
BGC also controls a number of exploration licences that surround the area covered
by the mining licences. These are shown in Figures 2 and 3 and are summarized in
Table 2.
Table 2 BGC Boroo Area Exploration Licences - December 31, 2003
74 Licence Area Issue Expiry

2004 Fees
Licence No. Name (hectares) Date Date
028 X, X-1, X-2 Boroo 34 438 May 31, 1997 - Oct 1, 2004
1797 X Ikh Dashir 1 246 Aug 10, 1999 $1 869 Aug 10, 2006
2085 X Baraat Uul 3 778 Feb 14, 2000 3 778 Feb 14, 2007
2086 X, X-1 Onjon Uul 20 580 Feb 14, 2000 20 580 Feb 14, 2007
2087 X Tseel 14 180 Feb 14, 2000 14 180 Feb 14, 2007
2748 X Bugtur Nars Uul 3 056 Nov 21, 2000 3 056 Nov 21, 2007
2750 X Baruun Bor Uul 5 270 Nov 21, 2000 5 270 Nov 21, 2007
3405 X Zurhiin Oboo 4 712 Jun 19, 2001 4 712 Jun 19, 2008
6061 X Ikh Olont 4 975 Jul 16, 2003 498 Jul 16, 2010
Total 92 235 $53 943
Note: The expiry dates of all exploration licences granted in the first half of 1997 were extended by the
Mongolian authority to October 1, 2004.
According to the Mongolian mining law enacted in 1997, an exploration licence is

initially issued for a period of three years, and can be renewed twice for two years, for
a total of seven years, at which time the claims must be abandoned. Conversion into
a mining licence is possible at any time during the seven years. Annual fees are
graduated, starting with $0.05 per hectare in year one, $0.10 per hectare in years two
and three, $1.00 per hectare in years four and five and finally increasing to $1.50 per
hectare in years six and seven.
15
The exploration licences held by CGM (Figure 2) will be reviewed in Section 14,
where the exploration results on the various BGC and CGM exploration licences will
be summarized as to their potential to provide supplementary ore supply to the Boroo
process plant.
4. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE

AND PHYSIOGRAPHY
The Boroo mine site is easily reached by travelling northward from Ulaanbaatar on the
paved Ulaanbaatar-Irkutsk highway for about 130 kilometres (km), then on an
improved all-weather road east of the highway for about 10 km, the total trip taking
just over two hours to complete. The railroad town of Baruunkharaa is located about
20 km north of the junction of the all-weather road with the Ulaanbaatar-Irkutsk
highway (Figure 2). Ulaanbaatar is served by commercial aircraft connecting to
national and international destinations.
The Boroo area is sparsely populated, inhabited mainly by nomadic herdsmen living
in single family camps on rural land or in small villages. The nearest towns are
Baruunkharaa (20 km north), Zuunkharaa (25 km north-east) and Bornuur (32 km).
Of these, only Baruunkharaa and Zuunkharaa have populations exceeding 3000
people, and are served by the Trans-Mongolian railway that links Ulaanbaatar with
Irkutsk and Beijing. This important rail link passes within 20 km of the Boroo gold
deposit.
The project is situated in an area of gently or moderately steeply rolling hills, largely
covered by grasslands but with small discontinuous forests of birch and alder trees
on north facing slopes. The average elevation is about 1200 metres above sea level.
Boroogol (gol meaning river) is the main drainage system in the area and flows
northward into the Kharaagol, a major river that continues northward into Russia and
ultimately into Lake Baikal. The Ikh Dashir valley, which originates in the area of the
Boroo deposit and is host to placer gold resources, is a mostly dry western tributary
of the Boroogol.
North-central Mongolia is semi-arid with a continental climate. It is a land of extreme
seasonal and diurnal temperature variations. Winter temperatures can dip to -40o C
while summer temperatures may exceed +40o C. The mean annual temperature is
about 0o C, but there is no permafrost in the Boroo area. The dry continental climate
of northern Mongolia results in the Boroo region having more than 300 days of
sunshine each year and only a light snow cover in winter. The area receives about
16
25 cm of precipitation per year, most as rain during the rainy season of July and
August.
The operating conditions resemble those that might be found in northern Alberta or
the southern parts of the western Northwest Territories, if perhaps somewhat drier.
There is no principal impediment to industrial activities as exemplified by the operation
of the placer gold dredges that operate from April through October when streams are
ice-free, and by the large Erdenet open-pit copper-porphyry mine, located some 180
km west of Boroo, which operates year-round. The Erdenet mine reportedly milled 24
million tonnes of ore in 2001 from which 460 000 tonnes of copper concentrate (27%
Cu) and 3000 tonnes of molybdenum concentrate (50% Mo) were produced
(International Finance Corporation, 2002). The Boroo mining project will operate
continuously throughout the year.
The Boroo project provided employment for 453 permanent employees as of
December 31, 2003, of which 408 were citizens of Mongolia and 45 were expatriates.
In addition, there were 118 seasonal Mongolian workers and contractors, most of
whom were employed for the continuing tailings dam construction.
The mine site is served by the Mongolian national power grid via a 110 kVA line that
connects to a 110-kV overhead power line. Reliability of the system appears to be
good, however, the mine maintains emergency generators capable of supplying
power required for vital services in case of power outages. Fresh water for human and
industrial use is taken from five wells that tap into the water table in the Boroo River
valley (Figure 4). Draw-down tests have shown that a supply in excess of 80 litres
per second can be sustained from the five wells which compares to a maximum
requirement of 70 litres per second.
Boroo has all of the required facilities to support production such as a camp/residence
for the employees, a warehouse, maintenance shops, offices, and other services. A
description of the essential mining, treatment and general operating facilities is
provided in Section 15.
5. PROJECT HISTORY
The Boroo deposit was reportedly discovered in 1910 and was exploited by Mongolor
on an industrial scale until the 1920s when the facilities were destroyed during a civil
war. Activities did not start again until about 1933, when the gold potential of the area
was again investigated, followed by the installation of a gold refinery in 1942 that
probably treated gold from the mining of a number of individual, near-surface quartz
17
veins (Cameco Gold Mongolia Inc., 2004b). There are no production records from this
time. Events in the ensuing years until about 1965 remain undocumented.
5.1 Exploration History

The exploration history of the Boroo deposit that is currently being mined commences
with prospecting activities between 1965 and 1969 that led to the recognition of
Boroo’s potential as a bulk-mineable deposit and ultimately to a program of detailed
field evaluation and reserve estimation by a joint East German (DDR)-Mongolian
(MPR) Geological Expedition from 1982 to 1990. During this time, the deposit area
was drilled using vertical core holes on an 80-metre by 80-metre grid with in-fill
drilling to a density of 40 metres by 40 metres and even 40 metres by 20 metres in
two areas along the eastern edge of the areas of interest. These diamond core holes
of the Joint Expedition, the JE series, generally had a comparably large diameter of
76 millimetres (mm), larger than HQ core size, less frequently 52 mm (between NQ
and HQ), 93 mm or 112 mm, both larger than PQ core size.
Two bulk samples were obtained from underground openings for pilot-scale
metallurgical testing. Initial bench scale tests were conducted in Freiberg, East
Germany, followed by pilot scale testing by Irgiredmet, Irkutsk, Russia, in 1987. Other
studies examined the metallurgical character of both oxidized and fresh ore.
The East German-Mongolian project was terminated in 1991 because of the German
reunification.
From 1991 to 1994, the concession, which includes the Boroo deposits, was
controlled by the Boroo Gold Mining Joint Venture comprised of Mongol Erdene,
representing the Mining Bureau of the Government of Mongolia (51%), and Morrison
Knudsen Exploration (MKE) representing the Morrison-Knudsen Gold Company
(49%). MKE drilled 19 vertical diamond holes, apparently with generally poor core
recovery. The location of these holes is uncertain, and they are not being used in the
current database. In 1994, MKE engaged the Simons Mining Group to prepare a
feasibility study (H. A. Simons, 1994) that investigated a heap leach (oxides only) and
a combined heap leach/treatment plant option (oxides plus sulphides). Subsequently,
MKE allowed the joint venture to lapse because of unsatisfactory project economics.
BGC completed nine confirmatory diamond drill holes and check assaying of DDR
sample splits in 1997. The new drill holes were sampled by Australian consultants
Mining and Resource Technology (MRT) personnel in Mongolia, and MRT established
a database for the project.
18
In May 1998 Resolute Limited (Resolute), an Australian gold mining and exploration
company, was introduced to the project, and at the end of 1998, a tentative
agreement was in place whereby AGR, an affiliate of Resolute, would indirectly
acquire 85% of BGC. The remaining 15% was retained by Altai. In August 2000, AGR
purchased two-thirds of the Altai interest, leaving Altai with a 5% indirect interest in
BGC.
In preparation for a bankable feasibility document, AGR undertook a significant in-fill
drill program of the deposit area in 1999 to bring the existing “reserves” to comply with
the Australian JORC code for reporting of mineral resources and mineral reserves.
The definition drilling program aimed to evaluate mineralization within optimized pit
shells developed by Resolute in July 1998. The main zones of mineralization were
drilled on a nominal 40-metre by 40-metre pattern. Ulaanbaatar-based Gobi Drilling,
a division of Radial Drilling of Townsville, Australia, was contracted for a combined
reverse circulation (RC) and diamond drilling program undertaken in 1999.
The intention was to drill at right angles to the geology as mapped, rather than at right
angles to the mineralization as interpreted, in case the lithological control of
mineralization was stronger than previously thought. Therefore, holes of the main RC
drilling program were inclined at 60°, with an azimuth of 270° with respect to the local
grid over Zones 2, 3 and 5. Over Zone 6, the holes were inclined at 60°, with an
azimuth of 270° UTM grid. Lithological control on mineralization was expected to be
strongest where large blocks of metasediment occurred within the granitoid sections
of Boroo Zones 2, 3 and 5. Drill hole depths were designed to test the main ore
envelope and to intersect lithologically-controlled mineralization that might lie within
a mineable distance below it.
Three drilling programs with tightly-spaced RC holes were also undertaken by BGC
in 1999 to establish the continuity of mineralization and to provide a geostatistical
basis for the mineral resource estimation process. These were completed on the
deposit planned to be mined first (Zone 5) and on an interpreted “high grade lens” in
Zone 3, with the third cluster providing more general information in the northern part
of Zone 3 (Figure 5).
As will be detailed in Section 10.2, the DDR-MPR core holes did appear to have a
low-grade bias as compared to the more recent RC drill hole results. Consequently,
additional RC in-fill drilling was undertaken in 2002 and 2003 by BGC to investigate
this question resulting in a substantial amount of additional data being created.
Drilling in 2002 was conducted by Major Pontil, a large Australian drilling company,
which supplied a UDR 650 multi-purpose drill rig mounted on a truck.
19
The various drill programs at Boroo are summarized in Table 3, sub-divided into drill
holes that are reflected in the current resource estimate and the newer holes that are
not.
Table 3 Summary of Drilling Completed

No. of Holes
Type of Drill Hole Number of Length
Year Company Used for
Drilling Prefix Holes (metres)
Estimate 1
1982-88 DDR-MPR Expedition DDH JE 343 28 431 343
1992-94 MKG/Erdene DDH - 19 Unknown -
1997 BGC DDH BG 9 735 3
1999 BGC DDH MDD 28 1 852 28
Sub -total DDH 399 31 018 374
1999 BGC RC MRC 162 10 945 162
2002 BGC RC MRC 177 10 097 177
Sub- total RC 339 21 042 339
Total Available for Resource Model (July 2003) 738 52 060 713
2002 CGM for BGC RC BX 16 1 953
2003 BGC RC BRC 223 8 475
2003 CGM RC BX 33 3 814
Data not yet incorporated into Resource Model 272 14 242
1
Mineral Resource Estimate by Geostat, July 2003
20
584000m.E 585000m.E
Explosives
Legend: Magazine
Diamond Drill Holes Reverse Circulation Holes

JE MRC
Licence Exclusions Sec 1

BGC BX
Boundary
MDD BRC
Surface projection of 0.8 g/t envelope

(August 2003)
Zone 2 Sec 1 Workshop
5400000m.N
5400000m.N
0
Roads (December 31, 2003) Secti
on (F
igure
9a &
11a)
Sec 2
0
Crusher and Mill
Complex
Secti Sec 3
on (F 0
igure
9b &
11b) Zone 3
5399000m.N
5399000m.N
Sec 4
5W Sec 4
0
Zone 6
Sec 4
6
N
Sectio
n (Fi
gure
Zone 5 9c &
11c)
Licence Exclusions
Boundary
CLIENT
Sec 6
3W
CENTERRA GOLD INC.
PROJECT
5398000m.N
TITLE
Boroo Area Drill Plan

Scale 1 : 12,500
0 100 500 APPROVAL DATE PROJECT No.
H.T. March 2004 329-7
Metres
UTM WGS84-48N STRATHCONA MINERAL SERVICES LIMITED
TORONTO - CANADA
File:
04BorooDhPlan.cdr Figure 5
Map Source: Drill hole information from Centerra Gold Inc.
While the investigations at Boroo prior to 2002 consisted predominantly of surface

drilling, a small ground magnetic survey and some underground cross-cutting, it was
only in 2002 that other exploration methods were more systematically being employed
at Boroo. The area of known mineralization was covered by an induced polarization
(IP) survey to more fully understand the geophysical signature of the mineralization,
and a substantial stream sediment geochemical survey was undertaken that covered
the general Boroo area in search of additional mineral deposits. The results of these
investigations will be more fully described in Section 14.
The Morrison-Knudsen holes drilled in 1992-94 were excluded from the resource
model database because of poor recoveries. Also, only three of the BG 1997 holes
were used for resource estimation because of collar survey errors for the six others.
The total drilled in 2003 includes about 50 condemnation holes that did not encounter
any mineralization of economic interest.
Figure 5 shows the coverage by the various drill campaigns, the original DDR-MPR
(section lines 1 to 63) and the newer exploration grids which have an orientation of
N 15° E. The Geostat block model, the basis for the current mineral reserve estimate,
has the same orientation. Boroo mining operations, in contrast, use a truncated
Gauss-Kruger grid aligned with astronomic north, also shown in Figure 5.
For all of the holes drilled at Boroo, collar locations have been surveyed. Down-hole
deviations have generally not been determined. This is not considered a serious
omission as the mineral resources at Boroo are at shallow depth, mineralized drill
intercepts are rarely more than 75 metres down the hole, and a majority of the drill
holes are vertical.
5.2 Production History

The Boroo mill started the commissioning phase in November of 2003, and thus has
a rather short production history at the time of this report. To the end of March 2004,
a total of 512 000 tonnes of ore had been milled from the oxide part of Zone 2, with
an average gold content of 4.0 grams per tonne (g/t). Overall recovery was 96%,
resulting in the recovery of 63 800 ounces of gold, of which 51 300 ounces was
produced and sold in the form of doré, with the balance retained in process inventory.
In addition, 6.6 million tonnes of waste had been mined, mostly pre-stripping in Zone
5, for a strip ratio of 10.7 to 1, taking into account the 102 000 tonnes of stockpiled
ore.
22
5.3 History of Mineral Resources and Reserves

There have been numerous estimates of the mineral resources and reserves of the
bulk-mineable deposits at Boroo, reflecting different methods and the database
plateaus reached at various times. A partial listing is given in Table 4, and explanatory
notes are offered on historical and recent estimates.
Table 4 History of Boroo Resource and Reserve Estimates

– millions of tonnes and contained ounces –
CoG Gold Contained

Year Method Author Type Classification Tonnes
(g/t ) (g/t) Ounces
Historical Estimates
1989 Polygonal DDR-MPR “Reserve” B & C1 2 0.8 13.8 3.1 1.4
1994 BM, PO H. A Reserve Unclassified Unspecified 3.5 2.4 0.3
BM, PO Reserve Unclassified Unspecified 7.8 2.1 0.5
1997 BM MRT Resource Unclassified 0.7 26.9 2.2 1.9
Resource Unclassified 1.5 13.0 3.4 1.4
1998 Sectional Resolute Resource Unclassified Unknown 9.1 2.8 0.8 3
1999 BM, PO, PD AGR Reserve Unclassified 1.0 11.0 2.8 1.0
Recent Estimates
2001 BM, PO & PD SRK Reserve Probable 1.0 to 1.4 9.4 3.8 1.1
2001 Factored Cameco Reserve Unclassified 1.0 to 1.4 11.2 3.2 1.1
2002 BM, PO SRK Reserve Probable 1.2 11.0 4.0 1.4
2003 BM, PO Cameco Reserve Probable 1.2 10.0 3.3 1.0
2003 BM Geostat Resource 4 Indicated 1.2 13.5 3.2 1.4
2003 PO & PD Geostat Reserve Probable 1.1 to 1.35 10.3 3.5 1.2
Note: CoG = Cut-off grade; BM = block model; PO = pit optimization; PD = pit design; HL = heap leach
2
Category B in the Soviet system is broadly equivalent to the current “proven”, C1 to the current “probable”
category. Only about 14% of the 1989 total was classified as category B.
3
Recoverable ounces, using a recovery of 90%
4
Resources include the reserves on the line below
23
5.3.1 Historical Estimates

The first mineral reserve estimate for the bulk-mineable mineralization at Boroo was
completed at the end of the DDR-MPR geological expeditions in 1989 using the
Soviet
reserve evaluation and classification criteria. It is interesting to note that the latest
resource estimate in 2003 by Geostat (last line in Table 4) is close to the 1989
estimate . The reserves of the Ikh Dashir placer deposit were also estimated in 1989
(see below).
MKE had a preliminary mineral resource calculation on the deposit prepared in 1992
(not shown in Table 4). After additional fieldwork, MKE in 1994 engaged Cominco
Engineering Services and their successor, H.A. Simons (Simons, 1994) to prepare a
feasibility study of the Boroo project that evaluated the project as a stand-alone heap-
leach operation or, alternatively, as a combined heap-leach (for the oxidized part of
the deposit)/CIP operation. Because of the lower metallurgical recovery achievable
by heap leaching, the mineral reserves considered for the two approaches are
significantly lower than other estimates using the same database.
In 1997, the Australian group Mining and Resource Technology (MRT) completed a
preliminary mineral resource estimate using DDR-MPR geological expedition and
BGC drilling data compiled by MRT.
In May 1998 Resolute used the MRT database to carry out a sectional interpretation
of the deposit (Tchaikov, 1998). The model envisaged six individual zones numbered
1 through 6. Later in 1998, AGR produced a block model using the East German
drilling results.
All of the mineral resource and reserve estimates in the upper part of Table 4 are
“historical estimates” for the purpose of NI 43-101 that use essentially the original
DDR/MPR drill database except for the 1999 AGR estimate that was used for the
feasibility study of that year.
Alluvial gold deposits occur in valleys extending east from the Boroo deposit. The
largest of these deposits, Ikh Dashir, prominently displayed as a brown scar on the
Frontispiece, was originally evaluated by the DDR-MPR expeditions from 1985 to
1989 to contain “economic reserves” (C1 plus C2) of 2.8 million cubic metres contained
in two horizons with an average gold grade of 1.7 g/ m3, determined using prescribed
Soviet methods such as cable-tool drilling and vertical sample pits. The Ikh Dashir
deposit has in the interim been worked by a Mongolian government-owned company
24
on a seasonal basis. BGC has estimated that about 60% of the original “reserve” is
currently remaining. This colluvial placer will in part have to be removed during pre-
stripping of Zone 3, and detailed grade control drilling at that time will be performed
to determine what portion can be mined and processed. This material is not now in
the Boroo mineral reserves or in the life-of-mine plan.
5.3.2 Recent Estimates

More recent estimates had a substantially larger database to work with compared to
the historical estimates, as is apparent from Table 3. The two SRK estimates of 2001
and 2002 were carried out in accordance with the Australasian JORC code and used
ordinary kriging followed by uniform conditioning. Uniform conditioning is an advanced
geostatistical estimation technique that attempts “...to allow the theoretical recovered
tonnage and grades of small blocks to be estimated.” (Resource Services Group,
2000, page 2). A review of the earlier of the two estimates (SRK, 2001) by Cameco
as part of the due diligence in 2001 arrived at the assessment (Mainville & Chauvet,
2001) that the SRK estimate was over-stating the grade and under-estimating
tonnage and that the very tight grade control regime anticipated by SRK was
unrealistic. As a result, a 20% (positive) factor was applied to the SRK tonnage and
a 20 %(negative) factor to the SRK grade estimate. The resulting figures, shown in
bold in the lower part of Table 4, then served as the basis for the decision by Cameco
to put the Boroo project into production.
After additional drilling in 2002, mineral resource and reserve estimation was again
undertaken in parallel by SRK (2003) and by the Cameco resource estimation group
in late 2002 (Chapman, 2003 b), and again there was a significant divergence of the
two estimates due to the different approaches taken with respect to the treatment of
high-grade assays, the continuity of high-grade mineralization and mining selectivity.
The two resulting reserve estimates are compared in Featly Pty Limited (2003).
Geostat was brought in to provide another independent opinion, and their estimates
of the Boroo mineral resources and reserves as of July 2003, completed in
accordance with NI 43-101, are shown on the last two lines of Table 4. The Geostat
reserve estimate, which will be discussed in greater detail in Sections 11 and 12, with
results intermediate to the Cameco and SRK (2003) estimates, is the estimate on
which the current Boroo life-of-mine plan is based. The similarity between the original
polygonal estimate by DDR-MPR in 1989 and the Geostat resource estimate is to be
noted.
25
6. GEOLOGICAL SETTING
6.1 Plate-Tectonic Setting

Mongolia occupies a central part of the Asian continent, and an interior portion of the
Eurasian Plate. Major tectonic events took place during the Paleozoic and early
Mesozoic when exotic terranes and micro-plates were repeatedly accreted to the
ancient core of the Siberian plate. The age of the terranes in Mongolia thus decreases
southward, with the northern Tuva Terrane consisting mostly of Proterozoic and
Lower Paleozoic rocks while the Southern Terrane contains an important component
of Permian to Jurassic intrusives. A major Caledonian event cratonized northern Mon-
golia, while a subsequent Hercynian event affected central and southern Mongolia.
Post-Permian intrusions were of anorogenic alkalic affinity, and Mesozoic volcanics
were extruded in response to extensional relaxation (adapted from IFC, 2002).
The structural setting of north-central Mongolia is dominated by several northeasterly
striking strike-slip faults of regional extent that are considered terrane-bounding in
nature and may have tens of kilometres of cumulative sinistral displacement
(Figure 6). The Gatsuurt deposit (Section 14.3.2) is controlled by one of these, the
Yeroogol Fault, while the Boroo gold deposits are interpreted to be located near a
second-order, northwesterly striking sympathetic structure locally termed the
“Highway Fault”.
6.2 Boroo Bedrock Geology
The bedrock geology of the Boroo area (Figures 7 a and 7 b) is dominated by the
folded Haraa sediments, (PZhr in Figure 7 a), a fairly monotonous sequence of flysch
sediments consisting of siltstone, sandstone and greywacke. These rocks are of
regional extent and are interpreted to be of Late Proterozoic to Lower Paleozoic age.
Intrusive rocks of the Boroo Complex, of early Paleozoic age (~520 to 450 Ma), have
intruded the sediments. In the area, the Boroo complex is represented by leucocratic
granite and granodiorite (PZgr), underlying the eastern part of Figure 7 a. Detailed
drilling around the Boroo gold deposits shows that the contact between the intrusive
and the sedimentary rocks is highly irregular, with sedimentary xenoliths floating in the
intrusive rocks in the border zone. A significantly younger igneous event of probably
late Paleozoic age is restricted to narrow dikes and fissures of granitic to dioritic
composition.
26
105°E 106°E 107°E 108°E
RU
Tsagaannuur
M
Suhbaatar
SS
O
IA
NG
Dzuunburen
50°N
O
Shaamar
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50°N
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N
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Dulaahhaan
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Hig
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oc sin in
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Pz la i T
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-m ou n
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49°N
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49°N
Barunnharaa
Permian
Volcanic
Dzuunharaa Complex
BOROO MINE Mandal

GATSUURT
oc sin in
DEPOSIT
ge Ba ra
Jargalant
M stic e
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Pz la l T
lin
Bornuur Permian
id s C te
Volcanic
-m ou n
io
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Complex Ea erri Kh
Ugtaaltsaydam Bayanchandmani
h
ut
Dzaamar
So
T
Dumda Urtaiin Bayshing
48°N
ULAANBAATAR
48°N
Bayantsogt
Lun
Nalayh
Scale 1 : 1.5 million CLIENT
0 10 50 CENTERRA
DZUUNMOD GOLD INC.
PROJECT
Kilometres
Lambert Conformal Conic Projection; Datum: Pulkovo 1942, Russia
TITLE
Legend: Major Tectonic Elements,

Mining and Exploration Licences
North-Central Mongolia
BGC (Boroo Gold Company) APPROVAL DATE PROJECT No.
H.T. March 2004 329-7
CGM (Cameco Gold Mongolia LLC) STRATHCONA MINERAL SERVICES LIMITED

TORONTO - CANADA
File:
107°E 04Tectonic_Map.cdr Figure
108°E 6
Map Source: Licences information and geological content from Centerra Gold Inc.
584000 E 585000 E 586000 E
PZgr PZgr
PZhr
5401600 N
5401600 N
Licence Exclusions Qal
Boundary
Q
N
Qal
PZgr
PZgr
PZhr
Qal
PZhr Q
gr Q
PZgr
5400600 N
5400600 N
Qal PZgr
PZgr
Q PZhr
PZgr gr
dr
Qal
A Q
Zone 2
gr
PZhr PZhr PZgr

PLACER
5399600 N
JE117
5399600 N
OPERATIONS
Q
Qal
Q PZhr Q
Q PZgr
PZhr Qal
A’(Se
eF
PZhr igu
re 7
b)
gr
Licence Exclusions
Zone 3 PZgr Boundary
PZgr
Zone 6 5º
PZhr
5398600 N
5398600 N
PZgr
gr
Qal
PZhr
PZhr
Scale 1 : 20,000
0 200 1,000
Zone 5 Q
Q
Metres
Legend: UTM WGS84-48N
Quaternary PZhr CLIENT

Qal Sediments, alluvium Geologic contacts CENTERRA GOLD INC.
Q Diluvium PROJECT
Paleozoic
Fault (observed) Boroo Technical Report
Fault (approximate) TITLE
gr Granite
dr Diorite Fault (inferred) Boroo Area Geology
PZgr Granite and granodiorite,
Surface Map
Surface projection of
Boroo Complex 0.8 g/t envelope APPROVAL DATE PROJECT No.
H.T. March 2004 329-7
Lower Paleozoic (August 2003)
PZhr Siltstone, sandstone and STRATHCONA MINERAL SERVICES LIMITED
graywacke (partly metamorphosed), TORONTO - CANADA
Haraa Series File:
04BorooGeolMap.cdr Figure 7a
Map Source: Geological content from Centerra Gold Inc.
A A'
1,200 m 1,200 m
gr
JE117
PZhr
dr
1,000 m 1,000 m
ZONE 3
PZgr
200
Legend: Vertical
Scale
Quaternary
Qal Sediments, alluvium Geologic contacts
Q Diluvium Horizontal Scale 0
Fault (approximate)
Paleozoic Fault (inferred) 0 100 500
gr Granite
Metres
dr Diorite
Mineralized zone, Boroo Deposit
CLIENT
Granite and granodiorite, Boroo Complex
CENTERRA GOLD INC.
PZgr
Selected drill holes
Lower Paleozoic PROJECT

PZhr Siltstone, sandstone, and graywacke
TITLE
(partly metamorphosed), Haraa Series
Boroo Area Geology
Typical Cross Section
H.T. March 2004 329-7

TORONTO - CANADA
File:
04BorooGeolSection.cdr Figure 7b
The fault pattern, with the exception of the gold-bearing structures, is poorly known,
but two crossing, high-angle, faults are indicated in Figure 7 a, one of them striking
70°, the other 340°, parallel to the Highway Fault mentioned above. The trace of the
340° fault, in its northern part, is directly underneath the Ikh Dashir Placer. A parallel
fault is indicated on the satellite picture some 1.7 kilometres to the east
(Frontispiece).
Much of the general area around the mine is covered by overburden that can reach
several tens of metres in thickness and that consists of colluvium and loess, and
minor alluvium deposited in head water drainages. The alluvial deposits can contain
significant gold placer deposits. In addition, the colluvium deriving from Zone 3 also
contains placer resources.
Oxidation has affected the rocks in the area to a depth of 40 to 60 metres. Oxidation
is accompanied by kaolinization of the feldspar crystals in the granitic rocks, but, not
having taken place under tropical conditions, has not progressed to the formation of
a saprolite profile, with the rocks retaining most of their original strength even near-
surface.
7. GOLD MINERALIZATION
Bulk-mineable gold mineralization at Boroo is controlled by a northerly trending
structure that has been followed for a distance of three kilometres and is interpreted
to be a thrust fault that is nearly flat or dips at a low angle to the west (see section in
bottom part of Figure 7) that cuts across the intrusive contact between sediments and
granitic rocks in the north, but is entirely contained within the sediments in the south.
The surface trace of this feature is shown as a dark black line in Figure 7 a.
There is a question as to whether there is more than one such mineralized structure,
and the interpretation shown assumes that the southern zones of ore-grade
mineralization are actually on a second, upper thrust compared to the northern parts.
However, an alternate explanation would be a cross-cutting fault with a relatively
minor vertical movement. While this question remains unresolved, some of the deep
holes drilled during the DDR-MPR program have given strong indications of similar
mineralized thrust structures at depth.
The main low-angle fault(s) is (are) variously altered and mineralized, and where
these features are strongest, individual deposits are formed. These are termed, from
north to south, Zones 2, 3, 5 and 6. Mining has started at Zone 2 (Pit 2) and Zone 5
30
is being pre-stripped. All of the deposits are elongated in a northeasterly direction,

with a length to width ratio of about two to one. Individual dimensions are:
Zone metres
2 350 x 200
3 900 x 400
5 400 x 200
6 300 x 150
Grade-thickness contours show the same overall elongation (Figure 8), probably
caused more by the width than by the gold grade, with the “stacking” of multiple,
superimposed zones of alteration and mineralization responsible for the thicker parts.
The thickness of the individual deposits thus varies from a few metres at the deposit
edges to several tens of metres and averages around 20 to 30 metres except for
Zones 5 and 6 that are closer to 10 metres. Figures 9 a, b and c provide sectional
views of the three main deposits, with Zones 5 and 6 shown together in Figure 9 c.
Two main, but rather different types of alteration and mineralization have been noted:
• Gold-sulphide zones host the largest proportion of gold mineralization at Boroo.
This type manifests itself as an earlier, gold-pyrite-arsenopyrite-quartz phase that
occurs in thin, irregular veinlets, less often in breccia zones, and disseminated
within a pervasive zone of quartz-sericite alteration (“beresite” in the Soviet
nomenclature). This earlier type is overprinted, and locally completely replaced,
by a carbonate-bearing phase that is also quartz-sericite dominated and contains
disseminated sulphides. It appears that the gold in this mineralization is relatively
fine-grained. The overall intensity of the “beresite” alteration changes within the
individual mineralized zones;
• The second major gold bearing facies are massive, white quartz-sulphide veins
in which gold is commonly coarse-grained. From a volume point of view, this type
is subordinate, but can carry very high gold values of up to several hundred grams
per tonne.
The sulphide content in both types is relatively low, typically a few percent.
Geochemical assay results from the BGC due diligence drilling indicates that, in
keeping with the sulphide species observed, arsenic is highly anomalous (up to
21 500 ppm), but a positive correlation with gold is restricted to gold values up to
31
584000m.E 585000m.E
Legend:
Diamond Drill Holes Reverse Circulation Holes Explosives
Magazine
JE MRC
BGC BX Licence Exclusions

Boundary
MDD BRC

(August 2003) Zone 2
Workshop
5400000m.N
5400000m.N
Roads (December 31, 2003)
Scale 1 : 12,500 Crusher and Mill

0 100 500 Complex
Metres
UTM WGS84-48N
Zone 3
Licence Exclusions
Boundary
5399000m.N
5399000m.N
N
Zone 5
Zone 6
CLIENT
CENTERRA GOLD INC.
PROJECT
5398000m.N
5398000m.N
TITLE
Grade-Thickness Plan,
BOROO GxT Boroo Mineralized Zones
(m x g/t)
100
150
200
10
20
50
2

H.T. March 2004 329-7

TORONTO - CANADA
File:
04BorooGxT.cdr Figure 8
Map Source: Drill hole and grade-thickness information from Centerra Gold Inc.
6800m.E 6900m.E 7000m.E 7100m.E
1150m. elev. 1150m. elev.
JE050
ACTUAL PIT
JE052
Dec. 31, 2003
BR
BR
BR
20
JE003
BR
C0
C0
MR
C0
JE023
JE004
C0
JE101
Surface
JE014
00
C0
00
MR
00
C2
JE053
83
84
00
85
69
86
gr
Q Q
Q Q
Q ga Q Q
sst Q
g
sstr ga ga gr ga
ga wrk ga
gr ga ga dim gr ga
ga flt qvz flt flt
dim ga qvzt
qvz
ga fqltvz ga gr gr qvz
flt gr dim fl dim
Base of sst flt z flqtvz ga gr
qv ga dim grst
ga gr s
Oxide gr
flt ga ga dim
ga
--
ga dim ga
gr flt ga
dim
gr ga dim ga
dim dim ssta
sst
sst ga sst g ga
dim ga m ga dim ga
sst flt dim dim
ga m di
sst ga
dim di ga gr
sst
MR
1050m. elev. ga 1050m. elev.
ga
C2
gr gr
sst gr gr
67
sst gr
sst dim
qvz ga
flt
qvz sst sst
ga
sst sst qvz gr
sst
sst gr ULTIMATE PIT

qvz
DESIGN
MR
gr
Top of
C2
ga
Fresh Rock
68
Scale 1:1,250
0 10 50
950m. elev.
Legend: Metres
Drillhole
Quaternary Drillhole collar
Base of oxide MRC158
Sediments, alluvium Q
Drillhole number CLIENT
Diluvium
Top of fresh rock sst
CENTERRA GOLD INC.
qvz PROJECT
Paleozoic Boroo Technical Report
Diorite Drillhole trace TITLE
Quartz vein Drillhole lithology Geological Cross Section
Granite and granodiorite, Zone 2
Boroo Complex (Looking North)
0.8g/t envelope (August 2003) H.T. March 2004 329-7
Lower Paleozoic
Siltstone, sandstone and STRATHCONA MINERAL SERVICES LIMITED
Haraa Series Map Source: Geology and Drillhole contents from Centerra Gold Inc. File:
04Sect14120N_geo.cdr Figure 9a
6600m.E 6700m.E 6800m.E 6900m.E 7000m.E
JE091
Q
sst
330
ga
50
49
48
90
sst
MRC
C0
C0
MR
35
MR
C0
MR
C0
46
47
45
ga
MR
MR
C3
Surface
C14
MR
C0
sst
MR
C0
C0
C14
Q Q
C13
dim Q Q s
MR
sstst gr Q
MR
MR
MR
Q gr
1
gr gr
0
6
ga Q Q gr ss gr
Q Q gr t
Q qvz sst sst sst
sst sst
gr
qvz
Base of sst
ga gr gr
sst r
Oxide grg sst
1100m. elev. gr
sst
gr 1100m. elev.
gr sst
gr gr gr
ga
sst
gr ss sst
sst t gr
sst gr
qvz gr
flt sst
qv qvz
gr gr z gr
qvz sst
dim gr qvz
sst flt sst
ga dim gr qvz gr
sst Top of
ga qvz gr
1050m. elev. Fresh Rock 1050m. elev.
gr
sst
0.8g/t Au gr
sst
Envelope
qvz ULTIMATE PIT
ga
qvz DESIGN
ga
ga sst
sst
ga
Scale 1:1,250
0 10 50
Legend: Metres
Drillhole
Diluvium
CENTERRA GOLD INC.
qvz PROJECT
Lower Paleozoic
04Sect13360N_geo.cdr Figure 9b
6300m.E 6400m.E 6500m.E 6600m.E
ACTUAL PIT
Dec. 31, 2003
Surface
BRC00250
JE211
24
C1
MR
4
Q
C11
Base of
MDD07
sst
Oxide
MR
12
sch Q
C1
s
sst shst
MR
54 JE322
sst sst s c Q
hc
07
shc
--
C1
sst sst ssst sst
hc
46
MR
47
sh
49
sst c
C1
shc
58
59
C1
C1
C1
MR
Q
C1
C1
sstsst
MR
shc
MR
42
MR
sst
MR
MR
shc
41
08
00
1200m. elev. sch sst shc Q Q 1200m. elev.
00
C1
C0
sst shc sst sst Q
C0
sst
MR
BR
sst sh qvz sst
--
JE346
sst c qvz sst
BR
di shc sst sst Q
Q
--
sst sst qvz sst dim Q
qvz sst qv flt
sst z sst
sst sst sst s st qvz qvz qvz
Top of qvz sst
sst qvz Q
Fresh Rock shc sst
qvz sst
--
ss ss qvz sst sst
shct qvzt
sst
--
sst qvz dim sst
qv sst
sst z
0.8g/t Au sst
sst di
sst sst
Envelope sst
dim
dim
1150m. elev. sst 1150m. elev.
15
flt
ULTIMATE PIT
C1
MR
sst
DESIGN

Scale 1:1,250
0 10 50
Legend: Metres
Drillhole
Diluvium
CENTERRA GOLD INC.
qvz PROJECT
Lower Paleozoic
04Sect12680N_geo.cdr Figure 9c
about 2 g/t. Sulphur shows the same pattern, being noticeably lower in the higher gold
grade ranges. This would appear to separate the two main types of
mineralization/alteration described above. Silver values are generally low and are not
obviously correlated with gold, with most samples below the detection limit of 2 g/t.
Silver values can be higher in the quartz veins.
Given their very different macroscopic and geochemical character, the two types of
mineralization/alteration would also be strongly suspected to have different gold grade
distribution patterns.
The low-angle fault is often accompanied in its footwall by fine-grained, intermediate
to mafic dikes termed “microdiorite”. The weight of the evidence suggests that the
dikes are younger than the mineralization, which they are also seen to cross cut,
albeit in patterns that are difficult to discern with the existing drill hole spacing.
It has long been recognized that the degree of oxidation is an important economic
parameter at Boroo, as the gold in the fresh ore has a refractory component that limits
the metallurgical recovery. Three facies of oxidation have been defined. All sulphides
are completely or predominantly oxidized in the oxide zone, and additionally, the
feldspars in the granitic rocks have been partly or completely altered to kaolin. In the
transition zone, kaolinization of the feldspars is partial and the original sulphides
survive in the core of oxidized grains. This process has liberated enough of the gold
that metallurgical recoveries are nearly as high as in the overlying oxide zone. In the
fresh zone, there is no discernable oxidation in the drill core or in the RC chips. The
metallurgical significance of the different weathering zones is discussed in Section
15.2.
8. SAMPLING METHOD AND APPROACH
8.1 Historical Methods (pre-1997)
Nearly one-half of the current resource drill hole database is constituted by the JE
holes, drilled by the DDR-MPR expeditions in the years 1981 to 1989. When BGC
conducted their due diligence drilling in 1997 under the supervision of an independent
Australian consulting firm, a critical review of the DDR-MPR database and the
underlying sampling and assaying methods was also conducted, as described in
Waltho, 1998. Waltho also inspected some of the DDR-MPR drill core that was then
36
“.. still in quite good condition, considering handling of core during splitting and
sampling.” (Waltho 1998, page 83).
Waltho reports that the drill logs and assay ledgers were of excellent quality, and
describes the sample protocol used that observed lithologic boundaries and identified
sections of lost core. This latter item will be of importance when discussing the Boroo
grade estimation, that is to some extent dependent on how the lost-core intervals are
handled in the compositing process. We have observed copies of a few of the JE drill
logs which consist of a graphic and descriptive portion, the latter in Russian.
Nearly all of the drill core was split in two, and a one-half split submitted for assay.
According to SRK 2000, most of the sampling appears to have been done by splitting
rather than sawing. Full core was used for assaying in cases where the core was
smaller than 76 mm and for drill holes that were spaced so tightly that their results
were used to estimate Soviet category B resources. Unfortunately, most of the
remaining half-core is now largely lost, having been misplaced or destroyed since
1997 and was not available for the Cameco due diligence study or this review, or for
future reference.
The underground openings excavated by the DDR-MPR expeditions in Zones 3 and
5 were systematically sampled on a 0.2 by 0.2-metre grid, yielding 7 kg per sample
consisting of 20 to 25 rock pieces (Waltho, 1998).
On the basis of the evidence given by authors who had the opportunity to observe the
results of the historical methods and approach to drill core sampling, we conclude that
the methods applied reflect historical and current industry standards, and that there
are no obvious negative issues.
8.2 AGR and BGC Methodology (from 1997)
In 1997 BGC conducted a due-diligence drilling program of nine diamond drill holes
(Table 3). Drilling was performed by Vancouver-based Can-Asia Drilling Services Ltd.
The holes were sampled by Australian consultants Mining and Resource Technology
(MRT) personnel in Mongolia (Waltho, 1998). The core was stored at the BGC
exploration camp in a locked shipping container to which only the BGC camp
manager and chief geologist had access. MRT sampled the drill holes following
lithological intervals based on the BGC geological logs in a manner that provided
samples with an average down-hole length of about one metre. Whole core was
sampled, and 661 samples were packed in heavy plastic bags which were sealed
using staples and a self-adhesive label that would be damaged or destroyed if any
attempt was made to open the sample bags. Bags were carefully packed into small
37
wooden crates that were nailed closed for shipment to Analabs in Townsville,
Australia. All samples arrived in good condition with no evidence of tampering.
Drill core from the 28 MDD holes drilled in 1999 by AGR was shipped to Analabs in
Ulaanbaatar for sawing. SRK (2000 a), who were able to physically inspect much of
the JE and later BGC drill core pronounced themselves satisfied: “In summary, core
sampling is considered by SRK to be acceptable for the purpose of the project” (SRK
2000 a, page 11), with the “purpose of the project” referring to the AGR feasibility
study.
Subsequent drilling was by the reverse circulation method only. The sample protocol
used for the MRC holes in 1999 is described in SRK (2000 a). There was a first-pass
sample taken by scooping chips from each one-metre interval and combining into
four-metre composites. One-metre “re-samples” were taken at the same time, using
the more conventional and more reliable Jones riffle splitter, however, these were only
submitted for assay if the four-metre composite “scoop” assay returned a value of
greater than 0.2 g/t. The samples from occasional wet intervals were also taken by
scoop, an unsatisfactory method. There is no record showing how many RC holes
had wet intervals, and how many such intervals are in the database.
After Cameco assumed responsibility for the project in March of 2002, the logging and
sampling protocols were improved. Major changes were focussed on improvement
of the sampling quality which included on-site chip tray filling, permanent geological
control and preliminary field logging. Chip trays were sent to the CGM Ulaanbaatar
office, where detailed logging took place. The geology and alteration of the cuttings
were systematically logged and recorded in digital format using the CoreView
software.
This information was used to specify mineralized intervals. One-metre samples from
intervals identified as mineralized were submitted for assay directly. Two-metre
composite samples were created and assayed as before from intervals that appeared
visually unmineralized. Where samples returned anomalous gold values, the
appropriate one-metre samples were also submitted and assayed. Transport of the
samples from the field to Analabs was under the supervision of a geologist. The
receiving officer at the laboratory certified the samples as received.
Chip trays are in locked storage at CGM’s Ulaanbaatar office; rejects and pulps
currently are stored in locked storage in CGM’s warehouse in Ulaanbaatar.
The sample protocol for the BX and BRC holes in 2003 did not significantly differ from
that of the previous RC drilling campaign.
38
As is the case in many exploration ventures that evolve into mining projects, sampling
and data recording procedures at Boroo have improved over time. However, no
shortcomings of a serious nature are apparent in the past procedures that would
compromise the quality of the database used for mineral resource and reserve
estimates for the Boroo project.
9. SAMPLE PREPARATION, ANALYSIS AND SECURITY
9.1 Historic Methods (pre -1997)
The sample preparation and analysis protocols of the DDR-MPR campaigns is

described in Waltho (1998) and Cameco Gold Mongolia LLC (2004 b). The samples
produced from drill core or underground openings were submitted to the Central
Laboratory in Ulaanbaatar, a Soviet-era institution. Each sample was initially crushed
to minus one millimetre and a one-kilogram split was coarse pulverized to minus 315
microns (50 mesh). This material was split into two 250-gram sub-samples of which
the first was subjected to a spectral gold analysis without further comminution. For
this method, the pulverized sample is digested in aqua regia and the gold adsorbed
by powdered activated carbon. The activated carbon is combusted in an optical
emission spectrograph using a direct current arc, and the resulting spectrum fixed on
photographic plates where the strength of the signal is compared to known gold
concentrations. This method was in wide use in the former USSR, both for gold and
also for other metals.
Samples returning elevated gold values (the threshold was variably set at 0.1 or 0.2
g/t), were re-assayed using the second 250-gram split that was pulverized to minus
63 microns (230 mesh) and subjected to a 50-gram fire assay with an atomic
adsorption (AA) finish (Waltho, 1998, page 85). Given the secrecy surrounding any
precious metals exploration and its results in the former USSR, there is reason to
believe that security measures were taken to protect the samples (and the information
derived from them), although no actual information is available.
A number of trace elements were determined among them silver, arsenic, antimony,
chromium, nickel, and barium.
According to Waltho (1998) and Cameco Mongolia Gold LLC (2004 b), a rigorous
check assaying regime was maintained during the DDR-MPR programs, involving the
systematic submission of duplicate samples amounting to 5 to 10% of the total
sample stream to three outside laboratories, all of them in the former East Germany
39
(in Halle, Stendal and Bismuth). Waltho has reviewed the results of 439 duplicate
assays in 1997 and has concluded that they “...indicate excellent agreement between
original gold assay and duplicate assay.....The duplicate assay precision exceeds ten
percent for 50 percent of sample pairs.” (Waltho 1998, page 86)5.
As part of their very detailed project review in 1999, SRK (2000 a) have also
commented on the fire assay results of the JE drill holes. They noted that the ...”fire
assaying of JE holes is generally of poor precision.” and that “...the overall precision
is not adequate to enable reliable local estimation of resources for bankable
feasibility.” They also note, however, that “... there is little overall bias between original
fire assay and repeat fire assays. The issue relates to precision, not accuracy. “ And
they finally conclude “...that area solely informed by JE holes should not be
considered for conversion to reserves in the feasibility study, i.e. can only have the
status of Inferred Resources. Areas with substantial modern drilling can be classified
as Indicated. In these areas, the JE holes can be used.” (SRK 2000 a, pages 16, 17).
As part of the BGC due diligence in 1997, 254 repeat “samples collected from original
DDR-MPR expedition drill core .... by BGC geologists were also analysed at Analabs,
Ulaanbaatar.” Despite a problem to exactly match the original sample intervals due
to lost core intervals that had moved, the “analysis of this data by MRT confirmed the
existence and tenor of mineralisation at Boroo. ... The work completed by MRT
demonstrates that original DDR-MPR expedition gold assays are both accurate and
precise.” (Waltho 1998, Summary, page ii).
There is a difference of opinion between Waltho (1998) and SRK (2000 a) regarding
the precision of the JE drill hole fire assay database. Having reviewed the graphs in
both reports, we do not consider the lack of precision in the JE assay data sufficient
grounds to relegate areas solely defined by JE holes to the inferred resource
category. In addition, the argument is now largely moot, because of the very
substantial additional drilling that has taken place since.
There is no indication that the historical part of the Boroo assay data base is biased,
but individual assay results do have a significant degree of imprecision, as a result of
the inhomogeneous distribution of the gold in the Boroo mineralization (“nugget
5
Precision measures the reproducibility of assays (the percent variation at the two standard deviation (95%)
confidence level), while accuracy (determined by the use of standards for which assay values are well
established.) can be defined as the degree to which an analysis, or the mean of a set of analyses, approaches
the “true” concentration in the sample.
40
effect”). The question of the treatment of the lost core intervals in the JE holes during
compositing is discussed in Section 10.
9.2 AGR and BGC Methodology (from 1997)
Sample preparation and assaying protocols used, and security precautions taken in
the years 1999 to 2003 are described by drill campaign (refer to Table 3).
9.2.1 1999 Drill Program

The 661 samples originating from the nine BGC due-diligence diamond drill holes in
1997 (BG series) were initially analysed at Analabs in Townsville, Australia using a
50-gram fire assay aliquot with an AA finish under supervision by MRT. Analabs was
subsequently certified by the Council of the National Association of Testing
Authorities, Australia, as an accredited laboratory in September of 2000, but did not
have that certification in 1997. All samples assaying greater than 4 g/t gold were re-
assayed in duplicate using gravimetric and metallics screened fire assay techniques
to confirm the accuracy of fire assay data and examine the contribution of coarse gold
to high grades associated with some samples.
For the 1999 program, assays were performed at Analabs in Ulaanbaatar, a
commercial laboratory established by its Australian parent, that had not yet received
certification. The sample and assay protocol used by AGR/BGC for the 1999 MRC
drill holes (Table 3), that represent nearly one-quarter of the drill hole database for
the current resource estimate, is described and commented upon in SRK, 2000 a:
• Samples received are dried for three to four hours;
• A one-half to one-kilogram sample is riffled out for further crushing and
pulverization;
• Crush the sub-sample in a jaw crusher to minus 5 mm;
• Pulverize the sub-sample to 95% passing 75 microns (200 mesh). The capacity
of the pulverizer was the reason for the initial sample splitting after drying;
• A 50-gram aliquot of the pulp is fire assayed with an AA finish at all gold
concentrations.
The following observations can be made on the sample preparation and assaying
protocols for the 1999 program:
1. The initial splitting of the RC samples into sub-samples with a mass of only one-
half to one kilogram before further comminution will have increased the sample
41
error attached to those assay results, due to the inhomogeneous gold distribution
in this style of mineralization, continuing the poor reliability of individual assays of
the earlier drill campaigns.
2. The use of the metallics screen assay method is a more reliable method for such
materials, and that method could have been put to good use on the higher-grade
part of the Boroo sample population to reduce the variance of individual assay
results. The lack of a laboratory balance at Analabs to perform a gravimetric finish
for gold assays of >10 g/t is a further deficiency, one that still remains;
3. The results of internal pulp repeat assays at Analabs are graphed in SRK
(2000 a), showing very good precision;
4. AGR/BGC did not add any external standards to the sample stream, a quality
control and assurance measure that was standard industry practice at the time.
The sample preparation and assay protocols in place during the 1999 drill program
were less than optimal for Boroo-type gold mineralization, affecting about one-quarter
of the database used in the current resource estimate. The lack of proper quality
control does not mean that the resulting assay data are unreliable, but it means that
reliability cannot be documented.
Indirect evidence is, however, available as to the performance of Analabs in 1999:
1. While BGC did not submit any external standards together with the samples from
Boroo, the exploration group of CGM (and predecessor company Cascadia),
undertaking work elsewhere, did. The results of the CGM quality assurance-quality
control (QA/QC) measures were reviewed by Analytical Solutions (2002), who
concluded that the results “... for standards submitted to Analabs in 1999 are
biased low ...” and that there was “... a possibility that Analabs had technical
difficulties during this time period that could affect gold assays.” (Executive
Summary, first point).
2. Cameco Gold (2001) report that 657 new splits were renumbered and submitted
to Analabs by BGC. The results are described as follows: “The original and
duplicate assay pairs show poor reproducibility, however there is not a bias ...”
(page 8). The poor reproducibility is at least in part the obvious result of the poor
sample preparation protocol and the resultant increase in the sample error.
Analytical Solutions (2002) conclude with respect to this set of 657 repeat assays
as follows: “For re-splits between 5 to 10 g/t Au there is no statistical significance
to the differences [i.e., there is no bias], probably due to inhomogeneity of the
42
rejects with respect to gold. Samples with low gold grades (<5 g/t) show that there
may be slight statistically significant bias towards higher assays in the original
splits compared to the re-split assays.“ (Analytical Solutions, 2002, page 11).
3. In 2002, a further 436 check assays were performed on samples from the 1999
MRC drill holes. This included 338 samples collected from the coarse reject bags
stored at the Boroo site (Cameco Gold Mongolia, 2003 b). The entire content of
each coarse reject bag was recovered, re-bagged and sent to Analabs for sample
preparation and fire assay. The original bags were rotted and open to the wind,
rain and surface contamination, and it was difficult to confirm the exact sample
numbers, but they all appeared to be in the original order as laid out by BGC
geologists originally responsible for archiving the samples.
The repeat assay results show no significant differences between the means and
standard deviations between the two assay sets, but scattergrams demonstrate
considerable differences of individual pairs, in line with earlier findings and
additionally caused by the poor condition of the samples and identification
problems during sample retrieval.
4. Finally, 98 pulps were also recovered from storage in Ulaanbaatar and re-assayed
by Analabs. Comparison between original assays and re-assays of the 98 pulp
samples shows a good correlation (R2 > 0.9) between the two sets.
As was apparent for the early (historical) assay data, that part of the Boroo assay data
base created in 1999 is not biased, but, as before, individual assay results have a
significant degree of imprecision, as a result of the sample preparation protocol and
the small aliquot size, particularly for high-grade samples.
9.2.2 2002 and 2003 Drill Programs

The RC holes drilled in 2002 and 2003 constitute more than 25% of the total Boroo
drilling. Analabs in Ulaanbaatar was again the only practical choice for assaying of the
samples created from these drill campaigns. It appears that the sample preparation
and assaying protocols were identical to those in 1999, without use of the metallics
screen method. The limitations of the laboratory with respect to handling of larger sub-
samples, and to providing a gravimetric finish for a fire assay continued. However,
161 pulps from the 2002 Gatsuurt program were sent to American Assay Labs in
Nevada, USA where the check assays used a gravimetric finish for samples with
greater than 5 g/t gold. The results show the usual scatter of assay pairs but the
average values were confirmed, indicating the absence of a bias.
43
There was a QA/QC program directly connected with the Boroo assaying in 2002 and
not in 2003, but again there is indirect evidence as to the performance of Analabs
through the QA/QC measures taken, more or less coincidentally, by CGM for their
exploration samples as reported in Cameco Gold Mongolia (2003) and Cameco Gold
Mongolia (2004 a).
In 2002, CGM used a total of 22 standards spanning the gold grade range from 0.02
g/t to 25 g/t. Some of these were originally produced by Rocklabs, Auckland, New
Zealand. Others were created by Shea Clark Smith Minerals Exploration &
Environmental Geochemistry of Reno, Nevada by “doping” certain Rocklabs and
certain Lovstrom & Associates (Tucson, Arizona) standard reference materials with
gold chloride while others were synthetically created. For the 2003 program, there
were 14 such standards with a grade range of 0.6 g/t to 21 g/t gold. In each of 2002
and 2003, one of these standards was added for approximately every ten samples
submitted. In addition, one of two commercial blanks was added at a rate of one in
twenty samples. Finally, a total of 465 duplicate samples from RC holes drilled by
CGM were prepared and submitted simultaneously with the original samples in 2002,
and 93 drill core duplicates in 2003, a total of 558 for the two years.
The samples representing standards would have been readily apparent to the
laboratory because of their pulverized nature. However, the large number of different
grades used, some of them quite close to each other, would have made them all but
blind for the laboratory. The blanks, also pulverized, would have by-passed the
crushing and pulverizing stages in the lab and were thus of limited use as a check on
the sample preparation process.
In both of 2002 and 2003, the acceptance level for each standard used in the CGM
program was set at ±10% of its certified value (although this rule was not universally
followed). On this basis, there was a 5% failure rate in 2002 (43 out of 792) and a
failure rate of 9% (7 out of 80) in 2003, with no systematic preference of the failures
to occur low or high. Sample batches in which a standard failed were repeated. The
blanks had failure rates of a similar magnitude.
Overall, the QA/QC results on the CGM samples were reasonable, and provide
confidence on the accuracy of the assaying process at Analabs, even for high-grade
assays where a gravimetric finish would have been more appropriate.
The 558 re-numbered duplicate field sample assays show a fairly strong scatter, but
no bias, in keeping with the earlier observation that an individual assay at Boroo has
44
a significant sample error due to the nugget effect resulting from the coarse gold in
the Boroo mineralization.
9.3 Bulk Density Determination

A total of 2319 samples were collected from drill core by the DDR-MPR expedition,
and another 158 from MDD holes for the purpose of specific gravity determinations.
Samples consisted of meta-sedimentary rocks, granite, diorite and altered/mineralized
rocks. The DDR-MPR data were obtained using the method of total immersion of
unwrapped and unwaxed whole drill core in water and determination of the volume
displaced. This method can be reliably translated into bulk densities only for non-
porous drill core. However, the specific gravity figures will be higher than the bulk
density where rock porosity at the surface of the core is encountered and filled with
water during the process.
The specific gravity data have been directly translated into bulk density figures. The
database was large enough to allow Geostat (2003 b) to interpolate by kriging the
bulk density data for the various zones of weathering in each deposit. The results are
summarized in Table 5:
Table 5 Average Bulk Densities of the Mineralization and by Weathering Zone

– tonnes per cubic metre –
Zone Oxide Transition Primary Total
2 2.59 2.60 2.67 2.62
3 2.54 2.57 2.59 2.57
5 2.60 2.67 2.70 2.65
6 2.66 2.65 2.69 2.67
Total 2.56 2.59 2.62 2.59
The bulk density of 2.62 tonnes per cubic metre for the primary hard rock appears
reasonable, given the composition of this material. However, based on observation
while at Boroo that the oxidized parts of the mineralized zone in Zone 2 are somewhat
porous, and noting the very small overall difference in interpolated bulk density
between the oxidized and the primary mineralization, the bulk density figure of 2.56
for oxidized mineralization may be too high by an unknown, but probably small factor,
and the tonnage of this material would be over-estimated by the same factor. A
detailed comparison between a sizeable excavated ore volume and the corresponding
45
tonnage milled is required to settle this question and to develop a better bulk density
for the oxide zones.
9.4 Summary Comments on the Analytical and Bulk Density Databases

There are some uncertainties with the assay database created during the various drill
programs at Boroo (Table 3) that pertain mainly to the precision of the assay results,
both for the early JE diamond drill holes and for the later RC holes with precision
being a measure of the ability of the laboratory to reproduce the same result. This is
largely due to the erratic distribution of relatively coarse gold in the Boroo
mineralization, which in turn is evidenced by the recovery of about 50% of the gold in
the ore treated to date in the gravity circuit in the Boroo mill.
All individual assay results in the Boroo database thus appear to have a relatively
large variance due to the sample error, and local grade estimation based on only a
few assays is therefore unreliable. The application of a cut-off grade, based on assays
alone, is particularly affected by this uncertainty. The only bias identified is artificial
and is caused by the insertion of 0.8 g/t gold values into the lost core intervals of the
JE drill holes that will be discussed in more detail in Section 10.
Some of the later drill programs did not follow current QA/QC industry practices, and
the overall reliability of part of the assays obtained in the years 1999 to 2001 and
again in 2003 is only indirectly supported by the results of the QA/QC programs
undertaken by CGM, mostly on samples from different areas, but assayed at the
same laboratory in Ulaanbaatar as was used for the Boroo program and at about the
same time. However, despite this lack of direct evidence, the indirect evidence cited
earlier provides comfort that the accuracy of the analytical results throughout the
many drill campaigns that used a variety of analytical laboratories for initial and check
assaying, is not compromised. There is thus no indication of any large assay bias
(either low or high) in the various assay populations. Without such a bias, the
variances of the individual assay results during grade estimation on a larger scale,
using many individual assays, will cancel out and will thus not impart any bias on the
estimation results.
There is a possibility that the oxide tonnages (both ore and waste) in the Boroo
deposits are over-estimated by a small factor owing to the translation of specific
gravity data into bulk density figures, without giving adequate consideration to rock
porosity.
46
10. DATA VERIFICATION
10.1 General
During the AGR feasibility study of the Boroo project in 1999, the information from
surface trenches and drill holes was entered into a computerized database. Drill collar
coordinates, assay results, and information on lithology, alteration and mineralization
were recorded in the mine database that is used for reserve and resource estimation
purposes. These data were validated at different times, initially by MRT for BGC in
early 1998, later by BGC staff and subsequently by SRK (2000). CGM performed a
rigorous database evaluation in 2002/2003 and added the DDR/MPR underground
information to it. The mining resources group at the Cameco head office in Saskatoon
validated the original 0.3 g/t gold envelope and created the new 0.8 g/t gold envelope
(Section 11.2). One of the results of this process was the identification of some of the
1997 BG holes being unsuitable for resource estimation.
A substantial amount of additional drill data has now been created, and after the
further considerable in-fill drilling planned for the current year, a full and complete
database validation is required as part of a new, updated resource estimate.
Survey control of the JE drill holes was based on a considerable number of
trigonometric stations established in the area by the Soviet military. For the 1999 BGC
drill program, a new grid was surveyed by the Mongolian company Geomaster and
tied to the existing trigonometric stations. At that time, two-metre contour topographic
maps of the general area, and one-metre topographic maps in areas contemplated
for infrastructure projects were established. Drill holes in subsequent years were
surveyed by BGC personnel with audits provided by Geomaster, with further
verification by CGM in 2002.
There are reports of periodic “wet” samples being recovered during reverse circulation
drilling. From informal accounts it is likely that the status of these samples would have
been better characterized as damp. It has not been possible to determine where
these samples were located, nor how many there are. This information should be
assembled to aid in the determination of the water table in the pits planned for mining,
and for possible exclusion of the wet portions of the affected RC holes from the
database because of the possibility of sample contamination.
47
10.2 Core Loss in JE Drill Holes

It has been recognized for some time that core recovery of the JE holes in the
mineralized zones was somewhat problematical. “High grade mineralisation is
invariably associated with poor drilling conditions. Frequent core loss is recorded in
DDR-MPR expedition sampling and assay ledgers. ... Comparable levels of core loss
were experienced in all BGC drill holes.” (Waltho 1998, page 73, referring to the nine
due-diligence holes). It is not clear on what observations this statement is based.
However, SRK (2000 a) interviewed the chief geologist of the DDR-MPR era and were
told that core loss was greatest at the edges of the sheared zones, and that visible
gold was seen frequently in that structural position, implying that the core loss would
lead to a systematic bias in the assay database.
Historically, there were two “mineralized envelopes” at Boroo, both based strictly on
gold grade (Section 11.2). One was drawn at a grade of 0.3 g/t gold, the other at
0.8 g/t. The current database used for the estimation of the Boroo mineral resources
was changed by SRK to assign a gold value of 0.3 g/t if a missing interval falls into the
0.3 g/t envelope, and to assign a value of 0.8 g/t if the missing interval falls into the
0.8 g/t envelope.
Within the industry, there are several ways of dealing with the problem of core loss.
The most conservative is to assign a zero value to all missing intervals. A second,
less conservative, is the approach adopted at Boroo for the existing database, of
assigning a low value to all missing intervals. A third is to assign the zone average
grade, and a fourth is to assign the average of the immediately surrounding assay
intervals to the missing core, with the last two approaches giving very similar results.
The procedure chosen will depend on the circumstances of each individual case.
We have undertaken a brief review of the first one-third of the JE drill holes (JE 1 to
138) that provide 79 recognizable mineralized intersections totalling 1213 metres. The
upper graph in Figure 10 is a scatter plot of the average gold grades of the
mineralized zones in these holes, calculated using a 0.8 g/t gold grade for the lost
core intervals in one case (plotted along the horizontal axis), and using the average
grade of the two adjacent assays in the other (plotted along the vertical axis). The
average grade of the 1213 metres in the database, which assigns a value of 0.8 g/t
gold to lost core intervals, was 2.50 g/t gold. If one substitutes the average of the
adjoining assays for the arbitrary 0.8 g/t, then the average grade increases to 2.73 g/t
gold, nearly 10% higher. If one assigns a zero value to the missing intervals, the
average grade decreases to 2.42 g/t. This study needs to be completed for the entire
JE drill hole database.
48
The lost core in the mineralized zone in any hole varied from zero to a maximum of
54%, averaging nearly 10%. The highest proportions of lost core occurred in near-
surface intersections (lower graph in Figure 10).
Geostat International (2003 b) have studied the effect of the low grade bias of the JE
drill holes with respect to the rest of the drill hole database, and have concluded that
there is a significant difference in JE holes 1 to 200 (a large low bias) while the later
holes numbered 200 and higher did not show such a bias. The earlier holes would
mainly impact on Zones 2 and 3 (amounting to perhaps a 10% negative bias beyond
the regular variability of the various drill hole assay populations tested), while Zone
5 is not so affected. As a result, Geostat for future mineral resource estimates, has
proposed to remove from the resource database all those JE holes numbered 1 to
200 in Zones 2 and 3 that are within 15 metres of a newer drill hole.
From Figure 10 it is apparent that removing drill holes because of the date of drilling
is an unsatisfactory solution to the question of what assay values to assign to intervals
where core has been lost. The exercise of substituting neighbouring grades to lost-
core intervals rather than a fixed grade should be completed for all of the JE holes to
determine whether the pattern developed from analysing assays from one-third of the
holes applies to all drill holes. The grade interpolation should then be re-run with
bothsets of JE data and both grade predictions used in the grade and tonnage
reconciliation with the mill at the end of 2004. JE holes with particularly large amounts
of lost core may then be selectively removed from the database (the outliers in
Figure 10), but care should be taken that another hole with solid information is
nearby.
10.3 Verification Summary

The general database underlying the current Boroo mineral resource estimate,
assembled prior to 2002, has been verified several times in the past. While a few
clerical errors persist, they will not have a noticeable effect on the outcome of the
estimate. The database from the drilling after 2002, including the ongoing drill
program, will require verification prior to the next resource and reserve estimates.
49
Figure 10 Lost-Core Intervals in 79 JE Intersections
Scattergram of Composite Gold Gades of the Mineralized Envelope
12.0
Gold grade using average of adjacent assays
10.0
8.0
(g/t)
6.0
4.0
2.0
0.0
0.0 2.0 4.0 6.0 8.0 10.0 12.0
Gold grade with 0.8 g/t inserted
Core Loss vs. Depth of Intersection
60%
50%
40%
Core loss
30%
20%
10%
0%
0 20 40 60 80 100 120 140 160
Depth of intersection
50
Intervals of core loss in the JE drill holes, which represent nearly one-half of the
database, have been assigned a 0.8 g/t gold grade. The brief study presented in this
section indicates that this approach may be unduly conservative and may understate
the resource gold grade for the Boroo deposits in a systematic fashion. The size of
the negative bias may be in the range of 5 to 10%, but can only be quantified by
careful reconciliation of mineral reserve estimates with production data.
11. MINERAL RESOURCE MODEL
11.1 General
Section 11 provides a description of the mineral resource model. The procedures for
estimating mineral reserves for the Boroo project are described in Section 12, while
a review of the mineral resource and mineral reserve estimates follows in Section 13.
As outlined in Section 5.3, the current mineral resource estimate for the Boroo project
was undertaken by Geostat in 2003 on a database supplied by Cameco (Geostat
2003 a). It was based on a total of 713 drill holes drilled from 1982 to 2002, as
detailed in Table 3 and shown in Figure 5. The resource estimate relies on a drill hole
spacing of 40 metres by 40 metres, but a few areas have poorer coverage, such as
much of the northern part of Zone 5, most of Zone 6 and the down-dip portions of
Zones 2 and 3. The substantial in-fill drilling shown in Figure 5 has yet to be
incorporated into an updated resource model, but alleviates some of the lack of drill
hole coverage, mostly near-surface. Additional RC and diamond drilling is planned for
2004 to improve the coverage (92 holes with 12 400 metres), with a completion date
of August, 2004 (Bradley, 2004).
11.2 Mineralized Envelopes

Geostat were given two “mineralized envelopes”, an outer envelope using a 0.3 g/t
gold grade developed by SRK, and an inner envelope using a 0.8 g/t gold grade
developed by Cameco. It appears that no other information but the gold grade was
used to define the two envelopes, with the inner envelope being used as a guide to
define “ore” for the resource estimation process. Geostat have changed the outlines
of the 0.8 g/t gold envelope to some extent, by excluding a few isolated intersections,
and have otherwise ignored the outer envelope. The total volume included within the
adopted inner mineralized envelope is just over 10 million cubic metres.
As described in Section 7, the two types of mineralization/alteration (“beresite” and

quartz veins), with their suspected divergent gold grade distributions, should normally
51
be correlated and estimated independently, including the separate evaluation of the

gold grade statistics. The geological sections observed in the CGM exploration office
in Ulaanbaatar have the thicker veins clearly marked, and in addition classify the
beresite intensity as strong, intermediate or weak. None of this information has been
included in the geological modelling of the deposit. All of the gold grade statistics,
capping levels and variography results of the current resource estimate are thus
based on what may be a mix of two or more distinct gold grade populations.
A greater effort should be made to develop a geological model to serve as the basis
for the resource estimation process. Besides giving more credence to the resulting
mineralization envelope, the geological model would provide two or more sub-units
within the overall envelope which would be expected to show different gold grade
distributions and which could then be evaluated separately with respect to the
statistical treatment of their assay data.
Geostat used a drill oxidation file supplied by Cameco and a contact surface file by
SRK to model the oxide/transition and the transition/fresh surfaces. Of the 10 million
cubic metres within the 0.8 g/t gold envelope, one-quarter is in the oxide zone, nearly
40% is in the transition zone, and one-third is designated fresh or primary rock.
11.3 Estimation Procedures and Parameters
11.3.1 Bulk Density Model

A bulk density model for the Boroo project was built by Geostat using nearly 2000
actual core measurements. After producing correlograms (a variety of the variogram),
the density data were kriged using a search ellipsoid of 100 by 100 by 50 metres.
Comments on a possible small high bias for the bulk density data within the oxide
zone were made in Section 9.3.
11.3.2 Assay Capping

Geostat (2003 a) evaluated the Boroo assay database above 1.2 g/t gold, the cut-off
grade used for the resource estimate, within the 0.8 g/t mineralized envelope to
determine the appropriate level to which high, outlier gold assays should be cut back
(capping) to restrict their influence. Cumulative frequency plots were used to
determine natural “breaks” in the assay populations. In addition, a percentile-based
statistical approach was taken that examines the contribution that individual high
assays make to the gold content of the deposit compared to their tonnage contribution
and sets an upper, acceptable limit of ten times for this value. The two methods
52
together have resulted in Geostat proposing the following capping levels for Boroo
gold assays:
Table 6 Capping Levels on Individual Assays
Zone No. of Assays Capping Level (g/t) Percentile Gold Removed
2 1 200 35 99.6 2.3%
3 2 621 45 98.7 9.1%
5 727 70 98.6 3.2%
6 297 45 98.6 4.9%
In the absence of mill production or reliable bulk sampling data, the determination of
gold capping levels is an inexact process. From a purely statistical point of view, the
capping levels arrived at by Geostat are reasonable. However, as noted in the
preceding section, the assay statistics probably incorporate data from more than one
natural gold assay population. For the next resource estimation, this exercise should
thus be repeated for each of the populations separately. There will then be a
substantial sample from Zone 2 that will have been mined and milled, that can be
used as a test case as to the reasonableness of the gold capping level for that
deposit.
Geostat (2003 a) use a gold capping level of 30 g/t for all assays that are outside of
the 0.8 g/t mineralized envelope, which thus applies to the inferred resources.
11.3.3 Compositing
Following adjustments for the high outlier gold values, the assays were bench-
composited, with the bench height set at 2.5 metres, the actual mining dimension.
This is a safeguard against the inclusion of an insufficient amount of dilution during
compositing. Provisions were taken that incomplete composites would be maintained
as is (if they were larger than one metre) or merged with an adjoining bench
composite (if they were shorter). The compositing started and stopped at the zone
boundaries, i.e., the process did not add dilution or remove any of the mineralization.
An initial grade-tonnage curve for each of the Boroo mineralized zones was created
from the capped composites that were declustered or not, using whichever resulted
in the lower mean gold grade. Of the total tonnage within the mineralized envelopes
(some 25.9 million tonnes with an average gold grade of 2.1 g/t gold), about 12.1
million tonnes (48%) with an average gold grade of 3.8 g/t were above the cut-off
grade of 1.2 g/t. This would be considered the best possible result, assuming no
53
internal or external dilution, perfect selectivity during mining, and no sample error on
individual assays.
11.3.4 Variography
The grade continuity of the bench composites was tested with correlograms, showing
the decrease of the coefficient of correlation between bench composites with
increasing distance. The correlograms were constructed in the four principal
horizontal6 directions (N-S, NE-SW, E-W, NE-SW) and the vertical. The nugget effect
for all zones and in all directions is modest at 35%, a first spherical range in the
horizontal is typically isotropic, i.e., there is no preferred direction, and clusters from
25 to 30 metres except for Zone 5 where it is about one-half of that number. Zone 2
is somewhat anisotropic with better continuity northeast-southwest than in the other
directions. The first spherical range in the vertical is generally around 10 metres. The
second spherical component represents 15% of the variability and has horizontal
ranges of 60 to 80 metres.
The results of the variography would appear to confirm the observation that the
pronounced elongation apparent in the grade-thickness contours (Figure 9) is mainly
caused by the thickness variations.
11.3.5 Grade Interpolation

The capped bench composites were used to interpolate the gold grade into the blocks
of the block model by ordinary kriging, using the variography models described earlier.
Kriging was completed in three steps, each step using a larger search ellipsoid. A
minimum of three composites in three different octants was generally required for a
successful grade interpolation. Because nearly all of the blocks had been estimated
after the second step, only the first two passes are summarized in Table 7.
6
Because of the dip of about 20° in Zone 2, the horizontal actually moves from the footwall to the hanging
wall of the zone and thus incorporates a degree of “vertical”. The “horizontal” search in the next resource
estimate should be inclined into the plane of the mineralization. The other zones are sufficiently horizontal
and do not require this adjustment.
54
Table 7 Grade Interpolation Parameters
First-Pass Search Ellipsoid (metres) Second-Pass Search Ellipsoid (metres)

Zone NE-SW NW-SE Vertical Blocks estimated NE-SW NW-SE Vertical Blocks estimated
2 25 15 12 37% 60 40 20 99%
3 30 30 8 70% 80 80 15 100%
5 60 60 6 88% 120 120 12 97%
6 30 30 8 57% 80 80 15 100%
The search distances closely match the variogram ranges except for Zone 5 where
a range of 15 x 15 x 3 metres would not have allowed successful grade interpolation
satisfying the criteria for minimum number of composites per octant. This reflects the
lack of drill hole coverage in parts of Zone 5.
11.3.6 Developing a Realistic Grade-Tonnage Curve and Dilution Factors

The results of the grade interpolation by kriging were adjusted three times, as follows:
1. The over-smoothed kriged gold grades need to be adjusted to the steeper grade-
tonnage curve of the actual block dimensions. This “change of support” was
accomplished by first simulating likely bench composite grades on a very fine grid
of 1 x 1 metre and then to calculate the grade of 5 x 5 metre areas from the
results.
2. The next step was to take into account the “information effect”, the future data
available to the grade control geologist. This supposed a blasthole pattern of 5 x 5
metres and assigned a sample error of 30% by increasing the variability of the
simulation results. With actual operating experience, the sample error assigned
to the blasthole results should be reviewed for the next resource estimate.
3. The final step was to take into account what is called “contact dilution” in Geostat,
2003 a. This was set at one metre on each contact over which distance the block
above cut-off grade (1.2 g/t) is diluted to the grade of the neighbouring low-grade
block.
The individual steps are shown in Table 8 which summarizes Table 9 in Geostat,
2003 a. The final result is a theoretical diluted tonnage of 13.9 million tonnes with an
average grade of 3.1 g/t gold. The overall tonnage dilution, compared to the initial
grade-tonnage curve for the capped composites, is 15%, the gold grade is reduced
by 18%, and the contained gold by 5%.
55
Table 8 Development of Dilution Factors*

- thousands of tonnes of ore and of contained ounces of gold -
Zone 2 Zone 3 Zone 5 Zone 6 All Zones
Ore Gold Ore Gold Ore Gold Ore Gold Ore Contained Gold
ounces
tonnes g/t tonnes tonnes g/t tonnes tonnes g/t tonnes tonnes g/t tonnes tonnes g/t tonnes
(000s)
No Cut-off Grade 4 742 1.7 8.2 17 265 1.9 32.1 2 294 4.4 10.2 1 615 2.2 3.5 25 916 2.1 53.9 1 750
1.2 g/t Cut-off on Bench Composites 2 033 3.3 6.6 7 527 3.5 26.3 1 642 5.9 9.7 882 3.4 3.0 12 084 3.8 45.6 1 477
1.2 g/t Cut-off on Blocks 2 569 2.6 6.7 8 530 3.1 26.3 1 954 5.1 9.9 1 047 2.9 3.0 14 101 3.3 45.9 1 496
After Information Effect 2 523 2.5 6.3 8 430 3.0 25.3 1 938 5.0 9.7 1 028 2.9 3.0 13 920 3.2 44.3 1 432
After Contact Dilution 2 523 2.4 6.0 8 430 2.9 24.6 1 938 5.0 9.7 1 028 2.8 2.9 13 920 3.1 43.2 1 388
Overall Dilution 24% -27% -9% 12% -17% -6% 18% -15% 0% 17% -18% -3% 15% -18% -5%
* From Geostat (2003 a).

The overall dilution is calculated on the basis of the 1.2 g/t gold cut-off on bench composites (line 2).
56
The grade-tonnage curve for 5 x 5 metre blocks that result from these three steps is
used as a target for the grade-tonnage curve of the final, diluted resource model. The
comparison of the theoretical and actual model tonnages above cut-off, and their
average gold grades, are reasonably close, as shown in Table 9.
Table 9 Simulated Composites and Kriged Blocks Above 1.2 g/t Cut-off Grade
Tonnage at Zero Target Results Final Kriged Blocks

Zone Cut-off Grade
000's Percent Above Mean Grade Percent Above Tonnes Mean Grade
Cut-off Grade gold g/t Cut-off Grade 000's gold g/t
2 4 742 53.2 2.39 50.7 2 398 2.50
3 17 265 48.8 2.92 47.4 8 175 3.00
5 2 294 84.5 4.98 84.9 1 947 5.00
6 1 615 63.7 2.83 63.4 1 020 2.85
Total 25 916 53.7 3.10 52.3 13 540 3.19
The approach taken by Geostat is prudent as it attempts to provide a fully diluted

block model for pit optimization and pit planning. Mining experience will determine the
validity of the magnitude of the assumptions made in implementing the various
adjustments. Comments on the possible accuracy of the mineral resource estimate
are offered in Section 13.1. Block model cross- sections, the same as used earlier
for the geology (Figure 9), are shown in Figures 11 a to c.
11.4 Resource Classification

The classification of mineral resources as required by NI 43- 101 is spelled out in the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Resource and Reserve
Definitions, that read in part as follows:
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which

quantity, grade or quality, densities, shape, and physical characteristics are so
well established that it can be estimated with confidence sufficient to allow the
appropriate application of technical and economic parameters, to support
production planning and evaluation of the economic viability of the deposit.
57
6800m.E 6900m.E 7000m.E 7100m.E
JE050
ACTUAL PIT
JE052
Dec. 31, 2003
BR
BR
BR
20
JE003
BR
C0
C0
MR
C0
JE023
JE004
C0
JE101
Surface
JE014
00
C0
00
MR
00
C2
JE053
83
84
00
85
69
86
--
Base of
Oxide
--
0.8g/t Au
Envelope
MR
C2
67
ULTIMATE PIT
DESIGN
MR
Top of
C2
Fresh Rock
68
--
Scale 1:1,250
0 10 50
950m. elev. Legend:
Metres
Resource Blocks Grade Histogram Drillhole

Drillhole collar
Less than 1.2g/t Au Base of oxide Less than 1.2g/t Au MRC158
CLIENT
1.2 - 4.9g/t Au Top of fresh rock 1.2 - 4.9g/t Au

Drillhole number CENTERRA GOLD INC.
PROJECT
Grade histogram
5.0 - 9.9g/t Au 5.0 - 9.9g/t Au Boroo Technical Report
TITLE
Drillhole trace
Greater than 10.0g/t Au Greater than 10.0g/t Au
0 Block Model Section
5
10g
/t A
Zone 2
u (Looking North)
H.T. March 2004 329-7
0.8g/t envelope (August 2003)
TORONTO - CANADA
File:
Map Source: Resource blocks and drillhole contents from Centerra Gold Inc. 04Sect14120N_blk.cdr Figure 11a
6600m.E 6700m.E 6800m.E 6900m.E 7000m.E
JE091
330
50
49
48
90
MRC
C0
C0
MR
35
MR
C0
MR
C0
46
47
45
MR
MR
C3
Surface
C14
MR
C0
MR
C0
C0
C14
C13
MR
MR
MR
MR
1
0
6
Base of
Oxide
--
--
--
Top of
1050m. elev. Fresh Rock 1050m. elev.
0.8g/t Au
Envelope
ULTIMATE PIT
DESIGN

--
Scale 1:1,250
0 10 50
Legend: Metres

Drillhole collar
CLIENT

PROJECT
Grade histogram
TITLE
Greater than 10.0g/t Au Greater than 10.0g/t Au Drillhole trace
5
10g Zone 3
/t A
u (Looking North)
H.T. March 2004 329-7
TORONTO - CANADA
Map Source: Resource blocks and drillhole contents from Centerra Gold Inc. File:
04Sect13360N_blk.cdr Figure 11b
6300m.E 6400m.E 6500m.E 6600m.E
ACTUAL PIT
Dec. 31, 2003
Surface
BRC00250
JE211
24
C1
MR
Base of
4
C11
Base of
MDD07
Overburden Oxide
MR
12
C1
MR
54 JE322
07
--
C1
46
MR
47
49
C1
58
59
C1
C1
C1
MR
C1
C1
MR
MR
42
MR
MR
MR
41
08
00
00
C1
C0
C0
MR
BR
--
JE346
BR
--
Top of
Fresh Rock
--
--
0.8g/t Au
Envelope
15
C1
ULTIMATE PIT
MR
DESIGN

Scale 1:1,250
0 10 50
Legend:
Metres

Drillhole collar
CLIENT

PROJECT
Grade histogram
TITLE
Greater than 10.0g/t Au Greater than 10.0g/t Au Drillhole trace
5
10g
/t A
Zone 5
u (Looking North)
H.T. March 2004 329-7
TORONTO - CANADA
Map Source: Resource blocks and drillhole contents from Centerra Gold Inc. File:
04Sect12680N_blk.cdr Figure 11c
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which

quantity and grade or quality, densities, shape, and physical characteristics can
be estimated with a level of confidence sufficient to allow the appropriate
application of technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit.
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which

quantity and grade or quality can be estimated on the basis of geological evidence
and limited sampling and reasonably assumed, but not verified, geological and
grade continuity.
In somewhat re-defining the boundaries of the mineralized envelopes, Geostat
(2003 a) have excluded areas with a drill hole spacing of more than 40 metres from
the envelopes. Statistics provided in their report show that between one-half and two-
thirds of all resource blocks are within 15 metres of a composite, and that more than
90% of all resource blocks are within 25 metres of a composite. On this basis Geostat
(2003 a) conclude that all of the mineral resources summarized in Table 9 can be
classified as indicated.
We agree that the classification by Geostat is, for the most part, in accord with these
reporting standards, with the following annotations:
1. Geostat (2003 a) includes in the indicated resources in the northern part of Zone
5, an area that contains 6.5% of the gold content of this zone but which has a very
wide drill hole spacing. Because the resources in this area have excellent grade,
this area has an important effect on the configuration of Pit 5. This area could
have been placed in the inferred resources category pending in-fill drilling
recommended by Geostat and planned for 2004.
2. Geostat (2003 a) has properly assigned the inferred category to resource blocks
that fall outside of the 0.8 g/t gold mineralized envelopes but satisfy the cut-off
grade of 1.2 g/t. These blocks have remained undiluted and were estimated using
the nearest-neighbour grade interpolation with a search radius limited to 20
metres. The blocks total almost 0.9 million tonnes at an average gold grade of 3.0
g/t and represent some of the exploration potential of the Boroo project in the
immediate vicinity of the planned open pits.
3. Geostat has also placed in the inferred resource classification those gold ounces
that were removed from the assay population by the process of capping, which
amounts to nearly 100 000 ounces. We do not agree with this treatment of the
“surplus” gold, as the capping is done to limit the undue influence of high values,
61
a process that is standard in most other gold mines. Only a comprehensive mine-
mill reconciliation will show whether the capping levels need to be adjusted, and
that might result in an adjustment either up or down. Centerra does not publish
these inferred resources “created” by the capping process.
12. MINERAL RESERVES AS OF DECEMBER 31, 2003

The CIM Reserve Definitions required by NI 43-101 read in part as follows:
A ‘Mineral Reserve’ is the economically mineable part of a Measured or Indicated

Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate, at the time of reporting, that
economic extraction can be justified. A Mineral Reserve includes diluting materials
and allowances for losses that may occur when the material is mined.
A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated,

and in some circumstances a Measured Mineral Resource demonstrated by at
least a Preliminary Feasibility Study. This Study must include adequate
information on mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic extraction can be
justified.
A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured

Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time of reporting,
that economic extraction is justified.
12.1 Procedures and Parameters

Mineral reserves are that part of a mineral resource that can be profitably mined given
a specific set of technical and economic parameters. These include the gold price,
mine and mill operating costs, metallurgical recovery, the forecast geotechnical
behaviour of the rocks in the future pit walls, and equipment size parameters.
Computer software “optimizes” the resource model of the deposit by interrogating
each block of the block model as to its ability to pay its own way plus the incremental
tonnage of waste that must be removed to mine the block. This process results in one
or more “pit shells” which recover the economic part of the mineral resources and
62
which are then engineered in detail by adding ramps for mining access and by
smoothing of the pit walls.
The current open-pit design for each zone was engineered by Boroo mine staff based
on the Geostat resource model. The final pit shells were passed back to Geostat
(Geostat 2003 a) who then produced mineral reserves for each zone. Mine planning
and scheduling resulting in the current life-of-mine (LOM) plan are based on this
estimate and were undertaken by Boroo staff. The main economic parameters for this
pit design (Boroo Gold Company, 2003 a) are summarized and compared to the 2004
budget figures in Table 10. The 2004 budget figures are based on an improved
understanding of the overall scope of the project, and on limited actual operating
experience.
Table 10 Boroo Pit Design Parameters
2004 LOM Plan Pit Optimization

Gold Price per ounce $375 $325
royalty 2.5% 2.5%
Operating Costs
Mine per tonne ore mined $0.76 $1.16
per tonne waste mined $0.76 $1.16
Mill per tonne milled $7.53 $7.60
General & Admin. per tonne milled $4.67 $2.72
Haulage Ramps width (metres) 20 reducing to 13 metres
grade 10%
Minimum Mining Width 25 metres (E–W) and 35 metres (N–S)
Metallurgical Oxidized ore 95.0%
Recoveries Transition ore 90.5%
Fresh ore 77.0%
The operating cost parameters in the 2004 budget, with the exception of the milling
costs, are quite different from the pit optimization assumptions. The budgeted mine
operating costs are lower than had been assumed while the general and
administration costs in the 2004 budget are substantially increased compared to costs
used in the pit design.
63
Comparative optimization results at gold prices of $400 per ounce and $250 per
ounce show that Zones 2 and 3 are sensitive to a lower gold price, while the high-
grade Zone 5 is relatively insensitive.
12.2 Open Pit Design
All of the open pits designed for the Boroo mineralized zones (Figure 12) will be
relatively shallow, with a maximum depth of 130 metres below the original surface.
Geotechnical wall design parameters were developed at the time of the initial AGR
feasibility study (C. M. Orr, 1999). Rock conditions are described as generally “good”
in the intrusive rocks and “fair” in the sediments. The pits are simple, shallow and the
design used a recommended face bench angle of 60° with catch berms ranging in
width from three to five metres. The bench heights are from five to ten metres. All of
the pits will be asymmetrical, with a highwall where each deposit dips underneath the
overlying topography, while ramp access is maintained on the up-dip side. The
ultimate pit outlines in section are shown in Figures 11 a to c.
The overall pit wall angle in the lower parts of the highwalls for each zone is 43°, with
the upper, near-surface parts of the highwalls being generally flatter. Berms are from
three to five metres wide which, given the short pit lives, is judged to be sufficient to
catch loose rocks from the upper parts of the pits. This may become a temporary
issue for the highwall of the pit for Zone 5 where the steeply dipping sediments may
be subject to ravelling as a result of the thaw-and-freeze cycle.
Compared to the original pit shells produced by the pit optimization, the final designed
Boroo pits recover essentially the same amount of ore but mine 10% more tonnage,
increasing the overall strip ratio from 3.6 to 4.1.
64
584000m.E 585000m.E 586000m.E
Legend:
Lic
enc
Explosives
e
Magazine
Ex
cl
Ultimate pit design
usi
on
1055
s
Actual pit (December 31, 2003)
1110 Waste Dump
Crushed Ore
Stockpiles Subgrade Ore
Roads (December 31, 2003) Stockpiles
1172.5 Workshop
5400000m.N
5400000m.N
NOTE: Topographic contour at 2.5m interval
Topsoil
1180
PIT
PIT 2
2
Crusher and Mill
Complex
ROM Ore
1075 Stockpiles
1245
N 1120 1040
Ikh Dashir
Alluvial Pit
PIT
PIT 3
3
1252.5 1110
1147.5
5399000m.N
5399000m.N
1167.5
1177.5
PIT
PIT 5
5 1132.5
1137.5
Licence Exclusions
Pit 3/5 Waste Rock
1157.5
PIT
PIT
Facility Area
6
6
1147.5
1140
Waste Dump CLIENT

1197.5
Topsoil CENTERRA GOLD INC.
PROJECT
Topsoil Boroo Technical Report
5398000m.N
TITLE
1262.5
Ultimate Pit Design and
December 31, 2003 Pits
Scale 1 : 12,500 APPROVAL DATE PROJECT No.
H.T. March 2004 329-7
0 100 500
Metres STRATHCONA MINERAL SERVICES LIMITED
TORONTO - CANADA
UTM WGS84-48N
File:
04Boroo_Pits_Area_EOY2003.cdr Figure 12
Map Source: Pit and infrastructure information from Centerra Gold Inc.
12.3 Boroo Mineral Reserve Estimate

The estimate of the Boroo mineral reserves at a gold price of $325 per ounce and
available for mining as of December 31, 2003 is based on the initial estimate by
Geostat (2003 a) adjusted for the initial production in the last few weeks of 20037.
Table 11 summarizes the figures by mineralized zone and by weathering regime:
Table 11 Boroo Mineral Reserves at December 31, 2003

Contained Gold
Tonnes Percent Gold
Category Ounces Tonnes
000's % g/t
000's
By Mineralized Zone
Proven
Stockpiles 33 – 4.2 4 0.1
Probable
Zone 2 1 667 16 2.8 149 4.6
Zone 3 6 478 64 3.3 683 21.2
Zone 5 1 572 15 5.3 268 8.3
Zone 6 419 4 4.0 54 1.7
Total Mineral Reserve 10 169 100 3.5 1 158 36.0
By Weathering Regime
Proven & Probable
Oxide 4 007 39 3.7 479 14.9
Transitional 4 550 45 3.5 516 16.1
Fresh 1 612 16 3.1 162 5.0
Total Mineral Reserve 10 169 100 3.5 1 158 36.0
Waste
Sub-grade 931 1.1 33 1.0
Waste 38 651
Total Waste 39 582 Strip Ratio 3.9
Note: Totals may not calculate exactly because of rounding
The mineral reserves are reported at incremental cut-off grades that take into account
the changes in metallurgical recovery with the degree of oxidation, calculated at 1.10
g/t gold for oxide ore (0.9 g/t for oxide sub-grade), 1.15 g/t for transitional ore (0.95
7
There are very slight differences between the Geostat and the Boroo mineral reserve figures due to the
different software used. They amount to a variance of 8000 tonnes and 3000 ounces, with the mine figures
being higher.
66
g/t) and 1.35 g/t (1.1 g/t) for fresh ore. These figures were recently reviewed due to
the increase in general and administration costs (Table 10) (Boroo Gold Company
2003 d). The study concludes that a value of 1.2 g/t gold be used for both oxide and
transition ore for the daily grade control. Given the sharp ore/waste contacts in Zone 2
currently being mined, this change will have little impact.
12.4 Mineral Reserve Classification

In accordance with the classification of the resources by Geostat (2003 a), all of the
in-situ reserves of the Boroo project as summarized in Table 11 are classified as
probable. The small tonnage in the 2003 year-end stockpile is in the proven category.
The mineral reserve classifications are appropriate.
12.5 Life-Of-Mine (LOM) Plan

Based on the estimate of probable mineral reserves as of December 31, 2003
(Table 11) adjusted for 2004 first quarter production, BGC staff have developed a
LOM plan that is summarized in Table 12. A substantial amount of pre-stripping of
all pits except for Zone 2 is required which means that the strip ratio remains higher
than the LOM average of 3.9 until 2007. The amount of gold produced assumes mill
gold recoveries of 95%, 90.5% and 77% for oxide, transition and fresh ore,
respectively, as described in more detail in Section 15.2.
A total of nearly one million tonnes of sub-grade mineralization with an anticipated

average grade of 1.1 g/t gold will be accumulated in a separate stockpile. While this
material is currently counted as waste, the economic conditions at the end of the mine
life will determine whether it can be processed with an economic benefit.
Mining activities at Boroo were initiated in the second half of 2003, and 3.6 million
tonnes of waste were mined during 2003, along with initial oxide ore from Zone 2.
Milling operations commenced in November with 113 000 tonnes of ore being milled
by year-end during the commissioning period including 18 000 tonnes of sub-grade
material. The ore grade was 2.9 g/t with gold recovery of 97% during that start-up
period and reflects the oxidized nature of the near-surface ore allowing for good gold
recovery in a simple process circuit with one-half of the gold being recovered in the
gravity circuit. Metallurgical recovery of gold was 10 400 ounces with 4300 ounces
produced as doré and the balance retained in process circuits. Mine and mill
production for 2003 is not included in Table 12.
67
Table 12 Boroo Life-Of-Mine Plan and Production Forecast

-thousands of tonnes of ore and waste and ounces of gold-
2004 2005 2006 2007 2008 2009 LOM
Tonnes Au Tonnes Au Tonnes Au Tonnes Au Tonnes Au Tonnes Au Tonnes Au
(g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t)
Pit 2 Oxide 451 3.3 39 2.6 490 3.2
Transition 360 3.2 470 2.5 830 2.8
Fresh 1 1.7 364 3.1 365 3.1
Waste 1 975 446 2 422
Pit 3 Oxide 71 2.5 811 3.6 899 3.2 448 3.6 341 4.7 56 2.9 2 626 3.5
Transition 45 3.1 320 2.8 715 3.1 1 099 3.4 697 3.2 2 874 3.2
Fresh 127 2.6 247 2.9 603 2.8 978 2.8
Waste 384 5 314 7 124 7 117 3 692 1 058 24 688
Pit 5 Oxide 630 5.3 116 3.1 746 5.0
Transition 110 5.7 332 5.0 118 9.5 560 6.1
Fresh 243 4.3 24 4.7 266 4.3
Waste 7 255 2 433 105 9 794
Pit 6 Oxide 109 4.4 21 5.3 130 4.5
Transition 29 6.7 258 3.4 287 3.8
Fresh 3 1.5 3 1.5
Waste 1 441 306 1 747
Total Oxide 1 261 4.3 947 3.6 938 3.1 448 3.6 341 4.7 56 2.9 3 992 3.8
Transition 498 3.9 635 4.2 908 3.5 715 3.1 1 099 3.4 697 3.2 4 551 3.5
Fresh 1 1.7 245 4.3 388 3.2 127 2.6 247 2.9 603 2.8 1 612 3.1
Total Ore 1 760 4.2 1 827 3.9 2 233 3.3 1 291 3.2 1 687 3.6 1 356 3.0 10 154 3.6
Sub-grade 39 1.0 169 1.1 182 1.1 151 1.1 210 1.1 180 1.1 931 1.1
Waste 11 056 8 053 7 675 7 117 3 692 1 058 38 651
Total Waste 11 095 8 222 7 857 7 268 3 902 1 238 39 582
Waste–to–ore Ratio 6.3 4.5 3.5 5.6 2.3 0.9 3.9
Oxide 36 4.0 68 2.4 299 3.1 -415 3.1 - -24 2.9 -37
Stockpile
Transition 1 1.2 7 3.1 184 2.8 -44 3.4 -60 3.4 -88 3.5 0
Changes
Fresh 1 1.7 3 1.5 - - -4 1.6 - 0
Total 37 3.9 77 2.5 483 3.0 -459 3.3 -63 3.3 -113 3.4 -37
Mill Feed Oxide 1 226 4.4 880 3.6 639 3.1 863 3.4 341 4.7 81 2.9 4 029 3.8
Transitional 497 3.9 628 4.2 723 3.7 759 3.1 1 159 3.4 785 3.3 4 551 3.5
Fresh - 243 4.3 388 3.2 127 2.6 251 2.9 603 2.8 1 612 3.1
Total 1 723 4.2 1 750 3.9 1 750 3.4 1 750 3.3 1 750 3.6 1 469 3.1 10 191 3.6
Average Recovery 93.8% 90.6% 89.2% 92.1% 90.1% 85.7% 90.6%
Gold Ounces 220 201 170 168 180 124 1 064
Recovered Tonnes 6.8 6.3 5.3 5.2 5.6 3.9 33.1
68
13. COMMENTS ON THE BOROO RESOURCE AND RESERVE ESTIMATES

A summary of observations with respect to the accuracy of the existing estimates of
the Boroo mineral resources and mineral reserves is provided in this section, along
with a forward look to the updating of these estimates later in 2004.
13.1 Accuracy of the Current Resource and Reserve Estimates
13.1.1 Database
The uncertainties in the Boroo assay database, which could have some impact, either
positive or negative, on the projected mine production versus mineral reserve
estimates, have been noted in Sections 9.4 and 10.3 and may be evaluated as
follows:
1. Individual assay results have poor precision or high variance due to the erratic
distribution of relatively coarse gold in the Boroo mineralization. This variance
could have been reduced using larger samples and screen metallics assays on
higher-grade samples. The main effect is to make local gold grade estimation
based on only a few assays unreliable. However, there is no effect on the
resource grade estimate, as the individual variances during gold grade estimation
using many individual assays should be offsetting;
2. There is a lack of QA/QC as now practised affecting the assay database created
prior to 2001. A rigorous check assaying program is reported from the JE holes
drilled during the DDR/MPR period, 1982 to 1988 (Table 3). Only indirect
evidence exists for the reliability of the 1999 AGR assay results in the form of
quality control programs undertaken coincidentally at the same laboratory by CGM
on samples from other programs, and by a certain amount of check assaying at
independent laboratories. The available information does not suggest that the
accuracy of the assay results is in doubt.
3. There is a low bias for the calculated grade of some samples from the original JE
drill holes (Table 3) as the result of the preferential loss of gold in intervals with no
core recovery, as discussed in Section 10. This could result in the current gold
grade estimate also being biased low as is currently being experienced with ore
from Pit 2 (Section 13.1.5) . Geostat (2003 b) came to the conclusion that Zone
2 in particular, and Zone 3 to a lesser extent, will show an increased gold grade
as a result of the detailed in-fill drilling (Figure 5). Conversely, the in-fill drilling in
the near-surface part of Zone 5 has resulted in a small loss of grade, according
to Geostat (2003 b).
69
4. The oxide tonnages (both ore and waste) in the Boroo deposits may be over-
estimated by a small factor due to a possible small reduction in the bulk density,
as discussed in Section 10.3 but this problem would not have a significant effect
on mineral reserve tonnages.
13.1.2 Grade Estimation Methodology
The data presented in the lower part of Table 4 show that the 2002 SRK mineral
reserve estimate, and the 2003 Cameco and Geostat estimates, have resulted in
divergent grade and tonnage predictions that reflect mainly the different treatment of
the same database during grade estimation, including the treatment of high outlier
assay values and the amount of dilution included in the model. The Geostat and
Cameco estimates appear more reasonable and defensible than the SRK estimate.
Resource Service Group has commented on the SRK methodology (used also for an
earlier SRK estimate for Boroo) as follows: “RSG considers the resource models
compiled by SRK overstate the likely recovered grade but conversely understate the
potential tonnes available, with the overall recovered metal being similar.” (Resource
Service Group (2001), page 3). We agree with this assessment.
13.1.3 Data Density
As noted in Table 3, a significant amount of drill hole data was created after the
current resource model was produced, and the in-fill program is ongoing. A non-
quantitative review suggests that the drill hole results not yet incorporated into the
resource database appear to corroborate the resources, and maybe expand them, as
will be discussed in Section 14.1.
In the northern part of Zone 5 the drill hole spacing is quite open, and there are a few
benches where projected gold grades are considerably higher than the drill hole
composite grades which are overwhelmed by high-grade information from other drill
holes. This area may show a loss of gold grade upon in-fill drilling, affecting perhaps
one or two percent of the total contained gold at Boroo.
13.1.4 Economic Factors

Some of the economic factors such as the gold price, and some of the unit operating
costs used for the pit optimization process (Section 12.2), are now out of date. The
database for the prediction of the metallurgical gold recovery in the fresh
mineralization (14% of the total contained gold in the current mineral reserve
estimate) is small and the results are quite variable, so that the gold recovery factor
of 77% used for the pit optimization is not well documented and based on test data.
70
13.1.5 Actual Performance and Conclusions

The resource and reserve estimation approach adopted by Geostat (2003 a) is
reasonable and realistic. The accuracy of the Boroo reserve estimate can be
assessed on the careful reconciliation between mineral reserves and mill production.
Because of the short operating history, no firm judgment is as yet possible, but the
initial results in Zone 2 are encouraging, as summarized in Table 13 for the period of
project inception in November 2003 to the end of March 2004.
Table 13 Zone 2 Reconciliation as of March 31, 2004
Ore Sub-grade Waste Total
Tonnes Gold (g/t) Gold (oz) Tonnes Gold (g/t) Tonnes Tonnes
Mined 575 500 4.26 78 800 63 300 0.84 6 396 200 7 035 000
Block Model 635 200 2.73 55 800 19 600 1.01 6 606 000 7 260 800
Milled 493 300 4.19 66 500 19 200 0.45
Stockpiles 102 300 4.18 13 700
Total Ore 595 600 4.19 80 200
Note that mined figures are by survey for tonnes and from blasthole assays for gold
grades. The waste mined includes Pit 5.
There was a small shortfall in tonnage mined versus the block model estimate (3%
for waste and 7% for ore), but a very significant increase in gold grade by some 50%,
compared to the grades predicted by the block model, and the contained ounces of
gold were more than 40% higher than forecast. The trend, if not the extent of the
grade difference, was predicted by the Geostat (2003 b) study on the influence of the
lost core intervals in the JE holes, but is expected to diminish in size as fresher rocks
are mined below the oxide zone. The difference in ore tonnage may be the result of
less dilution predicted than experienced.
The uncertainties affecting the Boroo mineral reserve estimate as discussed above
are typically found in projects at the beginning of their production cycle. This is
expressed in the classification of all of the reserves as probable rather than a portion
as proven. The JE lost core question does result in an under-stated grade prediction
for some of the reserves. As Section 18 demonstrates, the Boroo project is
economically robust, and the other uncertainties addressed in this section will not
change this assessment.
71
13.2 Updating the Boroo Mineral Reserve Estimate

As the previous section shows and as normal for new mining projects, the Boroo
mineral resource and mineral reserve estimates need to be adjusted to take into
account new information as mining progresses. It is anticipated, that the Boroo
resource and reserve estimates will require a substantial update later in 2004 that
would take into account the following items:
For the Diluted Resource Model
• Additional drilling completed in 2003 (Table 3) and not incorporated into the
current resource estimate, plus the drilling conducted in 2004;
• An improved geological model that defines the mineralized envelope based on
alteration information in addition to the gold grade, and that models separately the
major quartz veins and the various intensities of beresite alteration;
• The results of the large-scale bulk density test provided by the mining and milling
of oxide ore from Zone 2;
• The cautious removal of only those JE drill holes from the database that have a
very large amount of lost core. For the rest of the JE drill holes, the lost-core
intervals should be handled based on the reconciliation between mineral reserves
and mill production. In addition, those RC hole intervals that were designated
“damp” or “wet” should be scrutinized for sample contamination and possibly
removed from the drill hole database;
• The very useful basic approach by Geostat of estimating diluted resources should
be maintained. However, a thorough review of the various dilution and gold grade
adjustment parameters used in the current resource estimate is required based
on a comprehensive reconciliation between the current resource model and actual
mining and milling experience.
For the Reserve Estimate
• Additional bottle roll testing on existing assay rejects should be completed to
systematically document the expected mill gold recoveries in the lower transitional
and fresh ore domains;
• The gold price should reflect the actual blend of the price for the quantity that has
been hedged to date and the price used for financial modelling for the balance of
forecast production;
72
• Pit shells at a suitably higher gold price will determine the quality of the resources
that are not included in the new pit designs and that can be reported as additional
mineral resources;
• The accumulated actual operating cost experience will give a firmer and more
detailed basis for the pit optimization, including the use of different haulage costs
for the individual pits reflecting the distance to the mill.
It is not anticipated that such a process, would necessarily alter the current mineral
reserves and Boroo mine plan to a great extent. However, the Boroo mineral resource
and mineral reserve estimates as well as the forecast project economic performance
will be based on a larger technical database and more operating experience.
14. POSSIBLE MINERAL RESERVE ADDITIONS

The possibility of mineral reserve additions at Boroo will come from three sources,
including extensions of the current pits, additional zones of mineralization from the
area immediately surrounding the Boroo mining licences, and ore from identified
resources in the region under Centerra control and within economic transport
distance. The favourable economic provisions of the Stability Agreement described
in Section 3 would only apply to additional reserves for the current Boroo gold
deposits.
14.1 Pit Extensions

Not all of the mineral resources within the 0.8 g/t gold mineralization envelope devel-
oped by Geostat were “depleted” by the mineral reserve estimation process. What is
left beyond the pit walls from the Geostat block model constitutes the current
additional mineral resources at Boroo. For the indicated mineral resource class, this
is simply the difference in tonnage originally included in the class, minus what has
been shown to be economically mineable and is now included in the mineral reserve.
In contrast, all of the inferred mineral resources are outside the 0.8 g/t gold envelope
and remain undepleted. Table 14 is a summary, developed from data provided in
Geostat 2003 a:
73
Table 14 Boroo Mineral Resources Additional to Mineral Reserves

Oxide Transition Fresh Total Contained Gold
Zone Tonnes Gold Tonnes Gold Tonnes Gold Tonnes Gold Ounces
Tonnes
000's g/t 000's g/t 000's g/t 000's g/t 000's
Indicated Mineral Resources (diluted)

2 73 1.7 172 1.6 357 1.6 602 1.6 31 1.0
3 88 1.7 552 2.0 1 151 1.8 1 791 1.9 108 3.4
5 9 2.7 111 3.6 266 4.0 386 3.9 48 1.5
6 10 3.8 309 2.2 289 2.0 608 2.1 41 1.3
Total 180 1.8 1 144 2.1 2 063 2.1 3 387 2.1 228 7.1
Inferred Mineral Resources (undiluted)
Total 869 3.0 83 2.6
Of the 13.5 million tonnes contained in the Geostat resource model for the Boroo
mineralized zones before mining (Table 9), the mineral reserve estimation process
depletes about 75%, with depletion figures for the three weathering zones being 96%,
80% and 46% for oxide, transitional and fresh ore, respectively. The depletion is more
efficient yet with respect to the contained ounces, where the figures are 98%, 83%
and 55% for the three weathering zones, and 82% for the entire resource. The
mineral resources left beyond the pit outlines thus tend to be of lower grade than the
ore recovered within the pits. The higher proportion of fresh mineralization with its
partially refractory quality also influences the determination of the additional
resources.
The in-fill and exploration drilling in 2002 and 2003 (holes with prefixes BRC and BX,
Table 3) have shown ore-grade material to extend beyond the limits of the 0.8 g/t gold
mineralized envelope as used in the current resource and reserve estimate that was
completed in mid-2003. Together with a higher gold price, this would be expected to
result in a somewhat higher reserve estimate. At a gold price of $325 per ounce, the
same as used for the reserve estimation, most of the ore tonnage increase, however,
would be within the pits as currently designed, with a corresponding decrease in the
strip ratio. At a higher gold price, the economic pits for Zones 3 and 5 might increase
in size. According to Geostat (2003 b) who evaluated the new drilling and compared
it to the existing reserve estimate: “However, if gold price can increase to US$375/oz,
there is some indication that part of the material around the BX holes on the west side
of pit#3 and in the transition zone between pit#3 and pit#5 may be included in the final
shell of pit#3 and pit#5 respectively. Hence those "hot spots" constitute excellent
74
targets for additional exploration drilling...” (Geostat 2003 b, page ii). Quantification of
this effect awaits the completion of the 2004 drill program and of the subsequent
resource and reserve update.
Any increase of the Boroo mineral reserve base in the areas between and
immediately surrounding the current open pits from the additional mineral resources,
or on the basis of the additional drilling completed since the reserve estimate, will
likely be of modest size.
14.2 Areas Adjacent to Boroo
14.2.1 Ikh Dashir Placer Deposit

The most obvious possible addition to mineral reserves in the immediate Boroo area
would be from the Ikh Dashir placer deposit, transferred to BGC by Altai in 1998. As
outlined in Section 5.3.1, some 60% of the original volume of 2.8 million cubic metres
with an average gold grade of 1.7 g/m3 (or about 0.8 to 0.9 g/t, just at the level of the
cut-off grade for sub-grade material) estimated by the DDR-MPR expedition in 1989
is thought to be still available for mining. While this estimate has not been prepared
in accordance with current mineral reserve reporting requirements, this colluvial placer
represents a potential resource of 90 000 ounces of gold as parts of the placer will
have to be removed during pre-stripping of Zone 3. Investigations into the gold
comportment within the various size fractions of the placer deposit should be
undertaken that might indicate ways for increasing the gold grade of the material prior
to processing. Detailed grade control drilling at the time of mining will determine what
portion can be used as mill feed.
Note that any gold production from this source is subject to a 50% profit royalty
payable to Altai.
14.2.2 Exploration around the Boroo Deposit

Field investigations undertaken by CGM in the last two years show that the Boroo
gold mineralization is characterized by a pronounced stream geochemical response,
including the development of alluvial and colluvial placer deposits. The fresh and
transitional mineralization responds well to induced polarization surveys showing an
increased chargeability coupled with a decrease in resistivity. The oxidized portions
of the deposits do not show such a response, given the destruction of any sulphides.
Overall, the mineralized zones appear to occupy magnetic lows, which may, in the
granitic rocks at least, be interpreted to indicate the destruction of the primary
magnetite in these rocks by the mineralizing solutions.
75
In the immediate Boroo area, the stream geochemical, induced polarization (IP) and
magnetic coverage is complete. The chargeability results and the existing drill holes
are shown in Figure 13. The area within a distance of two kilometres from the pits
planned for production has been drilled fairly extensively, if on a relatively open
pattern, and most of the obvious geophysical targets have been tested. The results
do not indicate the likelihood of an undiscovered major zone of mineralization in
proximity to the known deposits, a conclusion confirmed by the results of
condemnation drilling to the north of Zones 2 and 5 that did intersect the mineralized
low-angle fault but found only a few, discontinuous assay intervals with a grade above
1.2 g/t gold.
There remain few IP targets in the immediate surroundings of the present open pits
that remain untested by drilling, which will be undertaken in 2004. One apparent
target is the large positive chargeability anomaly at the southern edge of Figure 13.
This area, based on its high resistivity and its magnetic response, is interpreted to be
caused by a specific rock type rather than by mineralization.
14.3 Regional Exploration and Possibilities
14.3.1 General
Regional exploration pertinent to the Boroo project has been undertaken since 1999
in two different corporate settings and on two sets of mining and exploration licences
that are shown in Figure 3. The northern Mongolia exploration licences held by BGC
form the Boroo project. This land package was introduced in Section 3, is shown in
red in Figure 3, and is summarized in Table 2.
Cameco has also been involved with the Noyon project since 1997. The original
Noyon land position, centred on the Gatsuurt deposit, was assembled by Cascadia
Chemicals and Minerals Corporation, which later became Cascadia Minerals Inc.
(Cascadia) during 1996 and 1997, with Cameco assuming a role in the project in
1997.
In August 1997, Cameco Resources (Mongolia) Inc. entered into a subscription and
earn-in agreement with Cascadia pursuant to which Cameco acquired an ownership
interest in Cascadia through exploration funding in the spring of 1998. The interest in
the project was held by wholly-owned Cameco Gold Investments Inc. (CGII), a
Cayman company. CGII earned an additional interest in Cascadia in the fall of 1998,
increasing its Cascadia interest to 41.78%. In October 2001, CGII acquired Cascadia
LLC, Cascadia’s Mongolian subsidiary, that held the licences to the Noyon project,
76
582000m.E 584000m.E 586000m.E 588000m.E
5404000m.N
5404000m.N
Legend:

(August 2003)
BX-35 Drill hole location / Number
7.49
6.40
5.99
5402000m.N
5.76
5402000m.N
5.58
5.44
5.33
5.23
BX-06 BX-35
5.14
BX-30
5.06
4.98 BX-05
4.89 BX-07
4.81 BX-04
4.71 BX-03
BX-02
4.61 BX-08
4.50
4.36 N
4.18
3.94 BX-01
BX-09 BX-10
3.63
BX-12 BX-11
Leveled Zone 2
5400000m.N
5400000m.N
Chargeability BX-13
(msec) BX-47
BX-48
BX-14
BX-46
BX-52,53
BX-50 BX-49 BX-45
BX-17
Licence Exclusions
BX-18
BX-15 Boundary
BX-51 BX-16
BX-54
BX-28 BX-19 BX-60 BX-44
BX-27 BX-55
BX-20 Zone 3
BX-26 BX-21
BX-56
Zone 6 BX-22
BX-57
BX-58
BX-25
Zone 5
BX-59
BX-23
5398000m.N
5398000m.N
BX-32 BX-24 Licence Exclusions
Boundary
BX-37 BX-31 BX-29
BX-34
BX-39
BX-40
BX-33
BX-36 BX-43
BX-41
BX-38
BX-42
CLIENT
CENTERRA GOLD INC.
PROJECT
5396000m.N

TITLE
Chargeability Results and

Drill Hole Coverage, Boroo Area
Scale 1 : 40,000
0 400 2,000 H.T. March 2004 329-7
Metres STRATHCONA MINERAL SERVICES LIMITED

TORONTO - CANADA
UTM WGS84-48N
File:
04Chargeability_Map.cdr Figure 13
Map Source: Drill hole and chargeability information from Centerra Gold Inc.
in exchange for the surrender of the Cascadia shares held by CGII and $2.5 million.
Cascadia LLC is now Centerra Gold Mongolia Limited.
In December 2002, Cameco Gold satisfied a $4.8 million promissory note owing to
AGR by transferring a 61% interest in CGII to AGR (now owned 56.4% by Centerra),
and retaining a 39% holding in CGII. Thus, the Centerra effective interest in the
Noyon project is 73.4%. CGM is the project operator.
The Noyon project land position is continually changing with large mature licenses
being reduced in size and new licenses being acquired. As of December 31, 2003 the
project consists of mining licenses totalling 3 222 hectares and exploration licenses
totalling 215 537 hectares as shown in yellow in Figure 6. A portion of the land
position covers non-contiguous blocks over a 200-kilometre strike length of the
Yeroogol regional fault system (Figure 5). Most of the remaining exploration licenses
are along the trend of the Boroo deposit. Tables 15 and 16 provide a summary of the
property holdings within the Noyon project.
Noyon represents a very substantial licence area comprising 2150 km2 in a region that
has not been subjected to much surface exploration employing modern concepts and
methods.
Table 15 Noyon Project Mining Licences - December 31, 2003

Licence Area Issue Expiry
Licence No. 2004 Fees
Note(s) Name (hectares) Date Date
194 A 1, 2 Sujigtei 600 Dec 7, 2001 $6 000 Dec 7, 2056
372 A 1, 3 Gatsuurt 416 Dec 7, 2001 4 160 Dec 7, 2056
431 A 1, 3 Gatsuurt 1 820 Dec 7, 2001 18 200 Dec 7, 2056
1400 A 1, 4 Yalbag gol 2-1 17 Dec 7, 2001 173 Dec 7, 2054
1401 A 1, 4 Yalbag gol 3-1 9 Dec 7, 2001 89 Dec 7, 2054
5082 A 1 Biluut 360 Nov 1, 2002 1 800 Nov 1, 2062
Total 3 222 $30 422
Notes to Tables 15 and 16
1 All mining and exploration licenses in Mongolia are encumbered by a 2.5% Royalty to the
Government of Mongolia pursuant to Article 38.3 of the Minerals Law of Mongolia (1997). In
addition to this royalty, there are the following encumbrances:
2 Sujigtei licence – 7% net profits interest (NPI).
3 Gatsuurt licences – 3% net smelter royalty (NSR) Royalty on all hard-rock gold produced, held or
sold.
78
4 Yalbag gol licences – 1.5% NSR.

5 Haraa gol licences – 5% NPI.
Table 16 Noyon Project Exploration Licences - December 31, 2003
Area
Licence No. Notes Licence Name Issue Date 2004 Fees Expiry Date
(hectares)
193 X, X-2, X-3 1, 5 Haraa gol 17 524 Jun 14, 1997 – Oct 1, 2004
193 X-1 1 Shivert 886 Jun 14, 1997 $1329 Oct 1, 2004
2825 X 1 Nariin 34 Dec 7, 2001 34 Dec 7, 2008
4077 - 79 X 1 Haraa 2-4 1 600 Jan 21, 2002 160 Jan 21, 2009
4156, 57 X 1 Haraa 6, 5 721 Feb 18, 2002 72 Feb 18, 2009
4271 X 1 Haraa 7 42 Apr 13, 2002 4 Apr 13, 2009
4662 X 1 Shaazgait 2 829 Jul 19, 2002 283 Jul 19, 2009
5199 X 1 Chandagatai-2 1 851 Dec 10, 2002 185 Dec 10, 2009
5311 X 1 Chandagatai 11 999 Jan 16, 2003 1 200 Jan 16, 2010
5572, 73 X 1 Davkhar Uul, Bayansydal 14 663 Jan 1 2003 1 466 Jan 1, 2010
5847, 48 X 1 Ganga undurt Uul, Munglulug Uul 6 738 May 26, 2003 674 May 26, 2010
5864 X 1 Toli Sair Uul 16 510 Jun 2, 2003 1 651 Jun 2, 2010
5924 X 1 Buureg Uul 11 184 Jun 12, 2003 1 118 Jun 12, 2010
6075, 76, 77 X 1 Zuun Orgon Uul & 2, Airag Uul 52 978 Jul 22, 2003 5 298 Jul 22, 2010
6258, 60, 61, 62 X 1 Lun, Ikh Borolzoi 1, 2, Bayan 44 161 Sep 1, 2003 4 416 Sep 1, 2010
6265, 66, 67 X 1 Halzan Uul, Tarni, Bayangol 31 817 Sep 2, 2003 3 182 Sep 2, 2010
Total 215 537 $21 072
14.3.2 Gatsuurt Project

The Gatsuurt project is by far the most important within the Noyon holdings. Extensive
placer operations have historically taken place, and a bedrock gold deposit is
indicated by the drilling completed. The following is a summary project description
based on data supplied by Centerra. We have not visited this property but have
reviewed the information available at the Centerra exploration office in Mongolia and
believe it to be reliable.
Location
The Gatsuurt prospect is located 90 kilometres north of Ulaanbaatar and 35
kilometres southeast of the Boroo mine site (Figure 4). Access to Gatsuurt is via a
79
14-kilometre dirt road from the town of Tunkhel. A railway station is located at Tunkhel
and a 100-kV power line passes within 25 kilometres of the area. Local topography
is gentle to moderately steep.
Property
The Gatsuurt deposit is within mining licenses 372A and 431A, which expire in 2058
and 2059, respectively, at the end of the original 60-year term. Upon expiration,
mining licenses can be extended once for an additional 40-year term.
History
Placer operations have taken place at Gatsuurt beginning in 1995 and ending
recently. Total production is uncertain but believed to be in the order of 1.5 tonnes of
gold. From 1996 to 1998, reconnaissance exploration programs were completed to
evaluate the large land position. Gold mineralization was intersected in the Gatsuurt
area in 1998 during a small drill program to test geochemical anomalies in the active
gold placer mining area. Subsequent drilling and trenching programs successfully
delineated continuous mineralized zones at the Gatsuurt Central Zone and the
Gatsuurt Main Zone areas. Most of the data for the two deposits was obtained by
drilling. Table 17 provides a summary of drilling by zone, by year and by drilling
method. Drilling is generally restricted to the upper 75 to 100 metres of the deposits.
A few deeper holes demonstrate the continuation of the Central Zone in that direction,
and the Main Zone is also “open” at depth.
Table 17 Summary of Gatsuurt Drill Programs
Central Zone Drilling Main Zone Drilling

Year
DDH RC Metres DDH RC Metres
1998 3 594 1 277
1999 3 342 5 749
2000 13 1 796 3 425
2001 28 2 738
2002 52 4 814
2003 2 6 1 162 11 435
Totals 101 6 11 446 9 11 1 886
80
Geology
The regional structural zone transecting the Gatsuurt area is the Sujigtei fault, an
element of the Yeroogol fault zone. It is a northeasterly trending, high-angle fault
system that can be traced for over 200 kilometres along strike (Figure 5). Outside of
the Noyon project licences, the Sujigtei and Yalbag bedrock gold prospects and
numerous placer gold workings occur along the fault system.
In the Gatsuurt area, the Sujigtei fault separates two profoundly differing geologic
settings. To the northwest, the bedrock is constituted by Permian felsic volcanic rocks
associated with the Dzuun Mod caldera. To the southeast, the Lower Paleozoic clastic
metasedimentary rocks of the Haraa Formation are intruded by intermediate members
of the Boroo Intrusive Complex. Figure 14 shows the geologic setting.
Mineralization
Gold mineralization at Gatsuurt occurs immediately adjacent to the Sujigtei fault. The
fault and the mineralized zones are sub-vertical. The Main Zone is hosted by the
Permian felsic volcanic rocks in the footwall (northwestern side) of the fault while the
Central Zone is hosted mostly by the intrusive rocks and, to a lesser extent, by
enclosed meta-sedimentary xenoliths. It is likely that the two zones once formed a
single deposit, and that the Sujigtei fault displaced the Main Zone from the Central
Zone by a left-lateral offset of some 750 metres (Figure 14).
At the Central Zone, continuous gold mineralization has been traced over a strike
length of 900 metres and over widths that vary from three metres to more than 70
metres. It comprises a broad lower grade shell (>1.0 g/t gold ) containing higher grade
(>3.0 g/t gold) lenses with variable lateral and vertical continuity.
In both zones, the host rocks are variably altered to a quartz-sericite-potassium
feldspar-pyrite-arsenopyrite assemblage. Gold is associated with three styles of
mineralization:
• The most important style of mineralization is contained in fracture-controlled
stockwork zones of quartz-sericite alteration with quartz and sulphide veinlets.
Predominant sulphides are pyrite and acicular arsenopyrite in equal amounts.
Sulphide concentrations reach 10%, and tend to be higher in the intrusive rocks
compared to the sedimentary rocks. The gold grade is positively correlated with
the amount of sulphides present, but native gold has been observed in this facies
of mineralization also, amounting to perhaps 20% of the total gold content.
Petrographic studies have identified micron-size gold as discrete particles within
81
106°34'22.5" 106°35'0.00"
PLACER
CENTRAL ZONE
A A'
OPERATIONS GT-55
48°37'55"
GT-17 GT-98 GT-100 GT-111

Q GT-88
N Drh 1250m.
PZgr
Base of Oxide
Drh PZhr
Q PZhr
Drh PZgr
CENTRAL 1150m.
A
GT-17
ZONE
48°37'30"
0 100 m
Drh
t
PZgr
ul A'
Fa
MAIN ZONE
tei
Q
B B'
jig
Su
B Trenc
h 01-21
MAIN 1 GT-06
ZONE GT-06 PZhr PZgr
B' 1300m.
48°37'05"
Drh
Drh Drh
Qal
1200m.
0 100 m
PZgr
CLIENT
Q
PZgr 0 500 CENTERRA GOLD INC.
Meters PROJECT
TITLE
Legend:
Quaternary PZgr Granite and granodiorite,
Boroo Complex
Fault (observed) Geological Setting, Gatsuurt Deposit
Qal Sediments, alluvium
Fault (approximate)
Q Diluvium
Paleozoic APPROVAL
H.T.
DATE
March 2004
PROJECT No.
329-7
Paleozoic Drh Devonian rhyolite, rhyolite-porphyry Mineralized zone
dr Diorite (Drh), Dzuun Mod Series (>1g/t Au) STRATHCONA MINERAL SERVICES LIMITED
PZhr Siltstone, sandstone, and graywacke Selected drill holes TORONTO - CANADA
(partly metamorphosed), Haraa Series File:
04Gatsuurt_Geology.cdr Figure 14
Some “lattice-bound” gold within arsenopyrite is also suspected – especially in the

Main Zone; pyrite grains.
• Pervasive silicified zones lack the abundant sericite of the quartz-sericite type of
mineralization. Sulphides in addition to pyrite and arsenopyrite are rare
tetrahedrite, stibnite, sphalerite, scheelite and galena. Free gold is common in this
setting, and the so-called Black Quartz Zones can attain very high gold values of
up to several hundred grams per tonne. This type of mineralization, because of its
distinctive mineralogical character, is interpreted to be a younger event, possibly
re-mobilizing some of the gold from the existing quartz-sericite mineralization;
• Discrete white quartz veins with variable sulphide content and occasional visible
gold are generally restricted to the sedimentary inclusions in the intrusive rocks.
Due to its location beneath a valley floor the oxide zone is typically only 5 metres to
15 metres thick, much of it having been eroded and re-deposited given rise to the
placer deposits in the local valley. The boundary between the transition zone and
fresh rock is erratic, but most material below a depth of 60 metres is in the fresh
(sulphide) zone.
Metallurgical Testwork
The Central Zone mineralization is variably refractory. The metallurgical testwork was
most recently reviewed by Young (2003). A total of 49 standardized bottle-roll tests
were performed on a wide range of samples that cover the entire deposit. Excluding
two samples of strongly silicified material, samples from the oxide zone yield gold
recoveries in the 80% to 99% range. Material from the transition and fresh zones,
however, yields gold recoveries that range from 30% to 70%.
A metallurgical test was performed on a composite of mineralized intercepts that
graded 3 g/t gold and consisted of transition zone and fresh zone material from nine
drill holes. The flowsheet consisted of gravity separation, flotation, and cyanide
leaching of the flotation concentrate that contained 89% of the gold. The flotation tails
were not leached. The concentrate was leached at three different grind sizes, at the
original 110 microns, and at 10 microns and 5.5 microns, respectively, after
regrinding. The overall gold extraction for the samples, including the gravity
concentrate, was 52% for the 110-micron sample, 57% for the 10-micron sample and
60% for the 5.5-micron sample. The ultra fine grinding thus improved the gold
recoveries only marginally.
83
Based on this poor performance, CGM have begun to explore the possibility of
treating the Gatsuurt refractory mineralization by bulk sulphide flotation followed by
bio-oxidation of the concentrate to make the entrapped gold available for cyanide
dissolution.
Initial bottle roll tests on transitional and fresh mineralization from the Main Zone
resulted in gold recoveries of only 13 to 15%, while bottle roll recoveries on oxidized
material averaged 60%.
Resource Estimation
A preliminary estimate of the mineral resources in the Central Zone has been
completed by the Cameco mining resources group following the 2002 drilling season.
No resources were estimated for the insufficiently-drilled and refractory Main Zone.
The parameters and methods were as follows:
• The mineralized zones were modelled with solids defined by gold distribution,
lithology and assay composites;
• Assays were composited observing a minimum of 1 g/t over 3.5 metres down-hole
(to give approximately two metres true thickness) including up to 1 metre of
internal waste;
• Grade interpolation was by ordinary kriging on a block model with 10 m x 4 m x
5 m blocks;
• High-grade assays were capped at 60 g/t Au; and
• A bulk density of 2.7 t/m3 was used to translate volume into tonnage.
The estimated mineral resources for the Central Zone at a 1.2 g/t cut-off grade are
summarized in Table 18.
Table 18 Central Zone Mineral Resource Estimate, Gatsuurt Deposit

- thousands of tonnes of resources and ounces of gold -
Indicated Resources Inferred Resources

Tonnes Gold Contained Gold Tonnes Gold Contained Gold
g/t ounces tonnes g/t ounces tonnes
Oxide 967 3.0 92 2.9
Transition & Fresh 4 262 3.2 444 13.8 906 2.7 77 2.4
Total 5 229 3.2 536 16.7 906 2.7 77 2.4
84
The mineral resource estimate summarized in Table 18 was performed using the CIM
best practice guidelines for mineral resource and mineral reserve estimation, and the
classification meets the appropriate CIM standards.
Outlook
There are two main scenarios that would allow exploitation of the Gatsuurt gold
resources. The simpler (and smaller) approach is currently being subjected to a
feasibility study by BGC (Boroo Gold Company, 2004 a & b) and involves mining of
the oxide mineralization only and trucking the ore to the Boroo mill for processing. The
main capital item is the haul road to Boroo, a distance of some 40 km. One of the
alternate options to be investigated is to heap leach the oxide material at Gatsuurt.
The total cost of the feasibility study that will also address all environmental and
permitting questions is estimated at $0.6 million, including a provision for 6000 metres
of RC in-fill drilling and additional, systematic metallurgical characterization work. The
expected completion date is early 2005. Scoping-level investigations (Boroo Gold
Company, 2004 a) indicate that the economics of this solution should be positive, and
that an addition to the Boroo milling operation of up to one year of production is
possible.
For the sulphide, refractory part of the Gatsuurt deposit, an alternate approach being
investigated would involve a treatment facility at Gatsuurt that would produce a bulk
sulphide concentrate to be bio-oxidized with the gold recovered from the concentrate
at Boroo. Much testwork remains to be completed before this option can be fully
evaluated, but given the size of the deposit, the potential for expansion of the sulphide
resources at depth, and the possible operational synergies, this approach is worth
pursuing in parallel to the oxide pre-feasibility study and is the subject of a separate
scoping study currently underway.
With the current drill coverage extending to a depth of less than 100 metres, four or
five widely-spaced holes are planned to be drilled at the Central Zone in 2004 to test
the continuation of the zone to a depth of 150 to 200 metres. In addition, a newly-
identified mineralized area to the southeast of the Central Zone will be tested by
surface drilling.
14.3.3 Other Targets

The broader region around the Boroo and Gatsuurt deposits has been covered by
stream sediment sampling since 1999, targeting second and higher order streams.
The area involved is roughly centred on the Boroo deposit and extends for a total of
250 km along the northeast-southwest strike and with a width that varies from 30 to
85
80 km, covering two structural lineaments, one interpreted to be associated with the
Boroo deposit, the other with Gatsuurt (Figure 15).
Within this overall area, some 5000 samples had been collected in the period 1999
to 2003 by Cascadia, BGC and CGM personnel. The method works well in areas of
low overburden with gold and arsenic being the main elements of interest, but gives
a subdued response in areas of deep loess cover. Similarly, soil geochemical
responses are adversely affected in areas of substantial loess cover which acts as an
impermeable blanket.
A large number of target areas indicated by the stream geochemical results, and the
large number of exploration licences acquired by CGM in 2003 was in response to
more recent stream sediment survey results (Table 16). Reconnaissance work has
been undertaken on licences acquired in earlier years, and detailed follow-up work
(prospecting, soil geochemical sampling, geophysical surveys and test drilling) has
taken place on a number of others, as indicated in Figure 15. The best results to date
have been obtained at the following prospects:
• At Ulaan Bulag, located 14 km to the southeast of Boroo, drilling has encountered

a mineralized system similar to Boroo in altered granitic rocks of the Boroo
Intrusive Complex (compare Section 6.2). Initial drill results generally returned
values of 1 to 2 g/t gold over lengths of two to ten metres, with one better
intersection grading 7 g/t gold over six metres. Additional drilling is planned to
more fully investigate this mineralized system;
• The Argal prospect (Figure 15), located some 100 km to the southwest of Boroo,
occurs in Boroo-type intrusive rocks and minor Haraa sediments. Surface
exposures consist of a system of sheeted quartz veins that form a zone at least
200 metres wide, surrounded by quartz-sericite-pyrite alteration. The system is
gold bearing, with initial surface sampling results indicating the possibility of ore-
grade mineralization. Soil geochemistry indicates anomalous conditions over a
total strike length of eight kilometres. Drilling is currently in progress.
Beyond the two identified targets, follow-up work remains to be completed on many
individual target areas, a process that will require several years of field work to be
accomplished.
14.4 Planned Development and Exploration Programs

Development programs in 2004 are planned for Boroo and Gatsuurt. The Boroo
program consists of detailed in-fill drilling within and immediately around the
86
500000m.E 600000m.E 700000m.E
Legend:
Sangiin
Roads
Buguntai
t
Railroad
en
am
nt
me
ne
Khoshig Stream sediment anomalies
ea
Li
in
Khalzan
ol
Argal Prioprity exploration targets
lL
og
go
ro
oo
Bo
r
Ye
Khar Mod
Mining and Exploration Licences Khailast
Ganga
Khoyer
BGC (Boroo Gold Company) Sevsuul Khurai
Shiver
October Ulan Bulag
CGM (Cameco Gold Mongolia LLC) Mergen (Belkh)
Tarni
Sair
5400000m.N
Davkhar
Uul
Boroo Mine
Khujirt
Bayan
Tsogt Dzun Mod
Tsagaan Gatsuurt Deposit
Chuluut
Salkhit
Khar Tavag N
Agit
Red Pit
(Tsagaan Uul)
Khurga
Saikhan
Scale 1 : 1,250,000
Enger 0 10 50
Asgat Kilometers
UTM WGS84 Zone 48N
Dund Urt CLIENT

Argal Khadin
Davaa
CENTERRA GOLD INC.
PROJECT
TITLE
5300000m.N
Khamar
Uidzen
Regional Stream Sediment
ULAANBAATAR Survey Results
H.T. March 2004 329-7
Khoshig STRATHCONA MINERAL SERVICES LIMITED

TORONTO - CANADA
File:
04RgnlStreamSurvey.cdr Figure 15
Map Source: Stream sediment survey contents from Centerra Gold Inc.
mineralized zones scheduled for mining and will take place in two phases, the second
being dependent on the results of the first. At Gatsuurt, detailed near-surface RC
drilling is planned as part of the oxide project pre-feasibility study described in
Section 14.3.2.
The exploration programs planned by CGM for the combined Boroo and Noyon
projects for 2004 consist of further regional and detailed follow-up geochemical and
geophysical surveys and include a provision for drill testing.
Table 19 summarizes the substantial drilling planned for development and exploration
purposes in northern Mongolia for 2004.
Table 19 Planned 2004 Development and Exploration Drilling, Northern

Mongolia
Area Number of Holes Metres

Development and In-Fill Drilling
Boroo Phase 1 62 8 740
Phase 2 30 3 760
Gatsuurt Oxide Pre-Feasibility Study 100 6 000
Sub-total 192 18 500
Exploration Drilling
Boroo mine area, west of pits 6 1 000
Ulaan Bulag 20 2 500
Argal 10 1 200
Gatsuurt Central Zone 12 2 300
Other targets 1 000
Sub-total 48 8 000
Total 240 26 500
The regional exploration programs in northern Mongolia will require a sustained effort
over several years to systematically cover the current substantial exploration
concessions and any new concessions that BGC is likely to acquire in future. Such
programs are warranted given the presence of the Boroo operation in the area that
lowers the economic threshold for new discoveries.
The within-pit drill program in 2004 at Boroo estimated to cost $0.4 million will be
funded from the mine operating budget. The other exploration programs on the Boroo
88
project will be funded by BGC. The Noyon programs will be funded by Centerra as to
39% and AGR as to 61% in accordance with their direct interests in the Noyon
project. The cost for 2004 for Boroo programs outside the mining pits, and the Noyon
programs, is $2.0 million.
14.5 Discussion
While the possibilities of adding mineral reserves in the immediate Boroo mine area
appear to be modest, the Gatsuurt Central Zone represents potential additional gold
resources for Centerra in northern Mongolia, either as a supplementary operation by
adding perhaps one year of oxide ore to the Boroo mine life, or as a more substantial
stand-alone project, if the metallurgical challenges for gold recovery can be
successfully overcome.
Beyond the Boroo and Gatsuurt deposits that have been known for a long time and
have given rise to placer operations, the surrounding area in northern Mongolia has,
prior to the arrival of western-based companies, not been systematically explored at
the “grass-roots” level using modern concepts and exploration technologies. This
process is still in the early stages.
The Centerra predecessor companies have assembled a very large land package
covering what could turn out to be a new gold district, and have already identified two
drill targets. Future exploration activities and expenditures as summarized in Table
20 are warranted, but the timing of these should be integrated into the overall Boroo
LOM plan so that any additional mineral reserves resulting from the exploration
activities becomes available for mining before the mineral reserves at Boroo are
exhausted.
15. CURRENT OPERATIONS
15.1 Mining
The Boroo mining operations are based on conventional open-pit methods to mine a
nominal 5000 tonnes per day (tpd) of ore. The waste tonnage is initially higher than
indicated by the average waste-to-ore ratio of 3.9 over the mine life, but will decline
from 30 000 tpd in 2004, to near 20 000 tpd in the years 2005 to 2007, to 11 000 tpd
in 2008, and 3000 tpd in 2009.
Mining commenced in 2003 with the initial ore for processing coming from Zone 2 (Pit
2) while the waste removal program for the higher-grade Zone 5 (Pit 5) was in
89
progress. Mining is done with bench heights of five metres, with ore mined on half-
benches for improved grade control in the flat-lying ore. Figure 16 is a panoramic
view of mining operations in Pit 2, with the milling facilities nearby.
Blasthole drilling is carried out with two rotary-percussion drill rigs, with holes of 115
mm diameter drilled on a 3.5 x 3.5-metre pattern, with wider spacing in the waste .
Bulk explosives trucks blend ammonium nitrate with fuel oil as each hole is loaded,
and explosives consumption is 0.35 kg per cubic metre of ore or waste.
The principal rock handling equipment is supplied by Caterpillar and includes two
7.6 m3 hydraulic excavators and eight 50-tonne haul trucks. Additional haul trucks
are to be temporarily added to the fleet in 2004 for tailings dam construction. The
waste rock mined is deposited on waste dumps immediately adjacent to the individual
pits.
Additional mining equipment includes two large front-end loaders for ore handling and
blending, three tracked dozers for the maintenance of waste dumps and benches, and
two graders maintain the roads and bench floors.
Current mining operations are well above the water table. Drill hole information
indicates that water is first encountered some 30 to 40 metres below surface, and
may occur in individual perched lenses rather than as a continuous water table.
Grade control in mining is by manual sampling of the blasthole cuttings. Two separate
samples are taken for each blasthole, one for the initial 2.5 metres, one for the second
2.5 metres, which allows ore and waste selection to occur for those short vertical
intervals. The mine plans to purchase automatic sampling devices for the blasthole
rigs similar to those being used in mineral exploration on reverse circulation drills.
Sorting of ore in the pit is done as per the following grade ranges:
Designation Gold Grade (g/t) Destination

Ore >1.2 Oxide & Transition Crusher or temporary stockpiles for
>1.5 Fresh blending
Sub-grade >0.8 and < ore cut-off Stockpile, not scheduled for milling, counted
as waste for the calculation of the strip ratio
Waste <0.8 Waste dumps adjacent to pits
The cut-off grades were reviewed in November 2003 (Olson, 2003) because of higher
operating costs for administration than earlier estimates. As a result, the grade control
90
CRUSHER
CRUSHER AND
AND MILL
MILL
COMPLEX
COMPLEX
CLIENT
CENTERRA GOLD INC.
PROJECT
TITLE
Panoramic View of Pit 2

and Mill Buildings, January 2004
H.T. March 2004 329-7

TORONTO - CANADA
File:
04BorooPanoramicView.cdr Figure 16
cut-off grades currently used in mining are slightly higher than those used for the
Geostat mineral reserve estimate (Section 12.3) that were set at 1.1 g/t gold for
oxide, 1.15 g/t for transitional and 1.35 g/t for fresh ore. Once a more solid base of
operating cost experience has been gained, the question of incremental cut-off grades
will be reviewed. The mining experience in Zone 2 to date shows a very sharp grade
contrast between ore and waste, and the exact level of the cut-off grade may have
little impact on definition of ore and waste boundaries.
The blasthole assay data are determined at a laboratory in Ulaanbaatar. A large
proportion of each sample needs to be pulverized, and the metallics screen method
is required to obtain results that are both accurate and precise (reproducible) and
allow grade control decisions to be made based on few samples. A laboratory will be
installed at Boroo in 2004 that will result in sample assays being available more
rapidly to assist grade control in mining operations.
The blasthole assay data are combined into an ore control model that is being used
to determine the boundaries for the various grade categories and to estimate the
monthly pit production. The blasthole cuttings are logged, and a geological map is
produced for each bench mined. The grade and geological maps produced as a result
of the grade control work are assembled into packages that can be readily used in
mining operations and are of excellent quality.
15.2 Mineral Processing
15.2.1 Metallurgical Testwork

The current Boroo ore processing flowsheet is the result of a number of past
metallurgical test programs. Two bulk samples from underground excavations were
used for pilot scale metallurgical testing during the period when the Boroo deposits
were being examined by the DDR-MPR technical personnel. Initial bench scale tests
were conducted in Freiberg, East Germany, and were followed by pilot scale testing
by Irgiredmet, Irkutsk, Russia, in 1987 (USSR All Union Export and Import Association
(Tsvetmetpromexport), 1987). The Irgiredmet study developed a flow sheet for
processing of Boroo ore involving semi-autogenous and ball milling to 80% passing
74 microns, recovery of 50 to 55 % of the gold by gravity concentration, followed by
flotation and leaching of a gold and sulphide mineral concentrate. Total gold recovery
obtained in pilot scale testing exceeded 90 %.
McClelland Laboratories Inc. of Sparks, Nevada in 1991 recommended to Morrison
Knudsen Company Inc. a heap-leach facility for oxide ore and a flotation facility for
92
fresh, high-grade ore that would produce a bulk sulphide concentrate to be re-ground
followed by cyanidation.
As part of the initial BGC due diligence in 1997, a composite bulk sample of drill core
weighing 160 kg that represented various types of Boroo ores was collected for bottle
roll tests to assess the feasibility of heap leaching and was sent to AMMTEC Limited,
Balcatta, Australia. Later, more exhaustive testwork on chips from reverse-circulation
drilling at AMMTEC included testing on different composites representing the
oxidized, transitional and fresh, sediment-hosted ore types. This work resulted in the
determination of the basic Boroo processing flowsheet of a combination of gravity
separation and cyanidation. The excellent metallurgical behaviour of the oxidized ore
and of the upper part of the transitional ore with gold recoveries in the 90% to 95%
range was indicated, and somewhat lower recoveries for the lower part of the
transitional zone (85%). Little work was completed on the primary or fresh material,
and the few test results were highly variable.
Comminution testing was undertaken by Orway Mineral Consultants of Mt. Pleasant,
Western Australia in 1999 and indicated ball mill work indices of 12.2 and 13.0 for
oxidized and fresh “granite”, respectively, while the figures for the Haara sediments
(hornfels) were much higher in the range of 22.3 to 24.6. Several options for the
design of a comminution circuit were evaluated.
Additional bottle roll testwork at a grind of 80% passing 75 microns on ore within the
planned open pits that had not been adequately covered earlier was undertaken in
2002 (Chapman, 2003), using ore from the lower transitional or fresh material. Again,
the results in the fresh ore were very variable, averaging 75% gold recovery, but
ranging from 57% to 90%.
The testwork to date has confirmed the gold recovery predictions for the oxidized and
transitional zones at 95% and 90%, respectively. However, there is a variation in
metallurgical response for the primary or fresh ore at Boroo, and the current expected
average gold recovery at 77% is not as well-founded. Only about 15% of total Boroo
mill feed will be primary ore based on current mine plans. Further testing will be
undertaken on samples from the lower transitional and primary zones during the
planned in-fill drilling program that is underway, including an investigation into the
mineralogical reason(s) for the relatively low recoveries in the fresh mineralization.
93
15.2.2 Process Flowsheet
The selected flowsheet for Boroo ore (Figure 17), based on the test results described
above, is a standard layout that consists of crushing, grinding, gravity concentration,
cyanide leaching and gold recovery in a carbon-in-pulp (CIP) circuit.
A jaw crusher reduces the ore to 100% minus 20 centimetres. The crushed ore is fed
directly to a semi-autogenous (SAG) mill (8.5-metre diameter) or to a temporary
coarse ore stockpile from which it can be reclaimed during crusher maintenance.
Limefor pH control is added ahead of the SAG mill which, together with a ball mill,
reduces the particle size to 80% passing 75 microns. Cyclones part the ore into two
streams, with the cyclone underflow reporting to the ball mill. About 17% of the total
cyclone underflow reports to the gravity circuit, which consists of two 750-mm Knelson
concentrators followed by an Acacia reactor where the gravity-recovered gold is
leached in high cyanide solution.
The cyclone overflow is thickened prior to the leaching circuit that consists of two pre-
leach tanks where air is injected, followed by six CIP tanks. Gold in solution from the
leaching circuit is recovered on the carbon in the CIP circuit and subsequently
stripped from the carbon and again put in solution to be recovered by electrowinning,
followed by smelting and the production of a doré bar.
The tailings after processing of the ore have an average grade of 0.1 g/t gold and are
thickened and detoxified to meet a target cyanide level of one part per million (ppm)
using a modified INCO air-sulphur-dioxide process. Heavy metals are removed by
treatment with ferric sulphate. The tailings are discharged by gravity to the permanent
tailings facility, five kilometres from the process plant (Figure 4). The tailings storage
is designed for no discharge, with all of the water being reclaimed for re-use in the
mill, and will have an ultimate capacity of ten million cubic metres, sufficient for the
tonnage to be mined as per the life-of-mine plan (Section 12.5). The height of the
dams retaining the tailings will be increased yearly until 2007 and can be further
expanded as required.
The Boroo mill was designed with a capacity to process 1.8 million tonnes of ore per
year (5000 tpd). Throughput in December 2003 was 94 000 tonnes or 3000 tpd, and
normal plant commissioning issues were addressed. The first quarter of 2004 saw a
steady improvement in the mill tonnage processed, rising to 153 000 tonnes or 4900
tpd in March 2004. The gravity circuit has, to the end of March 2004, recovered
nearly50% of the gold contained in the ore, and the overall gold recovery has been
96%, in accordance with the expectations based on the metallurgical testwork.
94
PRIMARY CRUSHER
CRUSHED ORE STOCKPILE
SAG MILL Mill Building
BALL MILL
CYCLONES
THICKENER
GRAVITY CONCENTRATION
CYANIDATION
INTENSE CYANIDATION
CARBON - IN - PULP
LOADED CARBON
STRIPPING TAILINGS DETOXIFICATION
ELECTROWINNING CARBON REGENERATION
DORE
TAILINGS POND
NO DISCHARGE
CLIENT
CENTERRA GOLD INC.
PROJECT
TITLE
Mill Flowsheet
H.T. March 2004 329-7

TORONTO - CANADA
File:
04MillFlowSheet.cdr Figure 17
Map Source: Flowsheet contents from Centerra Gold Inc.
15.3 Human Resources

The Boroo operation employed a total of 453 permanent and 118 seasonal
employees, distributed by department as shown in Table 20.
Table 20 Boroo Employees December 2003
Mongolian
Department Expatriates Total Employees
Nationals
Mining 127 10 137
Milling 47 13 60
Maintenance – Mine 15 4 19
– Mill 37 6 43
Camp Operation 72 3 75
Site Administration 81 5 86
Ulaanbaatar Office 29 4 33
Sub-total 408 45 453
Seasonal 118 - 118
Total 526 45 571
The proportion of Mongolian nationals in the permanent work force at Boroo is about
90%, and training programs have been implemented to further the capabilities of
those employees in their current placements, and to prepare them for career
advancement, and reflects the Centerra policy of involving the residents of Mongolia
to the maximum extent.
The language used for communications between senior and supervisory staff is
English, but all manuals, policies and instructions are maintained in the Mongolian
language as well as English. A number of translators are employed at the operation
to permit collaboration between local and expatriate employees. As in many other
mining operations in the start-up phase, turn-over in the labour force is still relatively
high, but is expected to improve as the operation matures.
96
16. PERMITTING, ENVIRONMENTAL MANAGEMENT AND CLOSURE PLAN
16.1 Permits and Licences

The required operating permits for the Boroo mine have been issued to BGC. Some
of these permits are with Mongolian state agencies, some with the local agencies of
the aimag (province) Selenge, and others are with the governors of the two counties
(soums) of Bayangol and Mandal on which the Boroo facilities are located. The major
operating permits are briefly characterized as follows:
1. The Mineral Resources Authority of Mongolia (MRAM) has granted the various
mining licences as described in Section 3;
2. The Environmental Impact Assessment document prepared by JEMR Consulting
Co., Ltd., 1999 and updated by SENES Consultants Limited, 2002, and the
Environmental Monitoring and Protection Plans have been approved by the
Mongolian Government. Recent addenda include specific sections dealing with a
revised tailings storage design, addition of a tailings detoxification plant, increased
production and the sewage system;
3. The State Special Inspectorate Agency, Mining Division (SSIA) and MAM have
approved the mining plan for 2003 and 2004 (Boroo Gold Company, 2003 b).
Future annual mine plans are also required to be submitted for approval;
4. Contracts are in place for land use with the Byangol and Mandal Soum
administrations, including the operation of the permanent camp, reagent storage,
mining of aggregate materials, fuel storage, operation of a fuel dispensing station,
and the building of the tailings dam;
5. Licences for the import, storage, use, and disposal of reagents and chemicals are
in place, and include permits for the import, transport, use and on-site storage of
cyanide;
6. The BGC Health and Safety plan has been accepted by the SSIA.
Some of the permits that have been issued for the Boroo mine are for the forecast
mine life, others are for three years, and others have to be renewed annually. Among
the latter are the provincial licences for the import, storage, use, and disposal of
reagents and chemicals, environmental monitoring reports and plans, the mine plan
and the health and safety plan. Permits that are issued by the Mongolian state
agencies for an initial period of three years include the letter of authorization to mine,
and the permits for the importation, transport, storage and use of cyanide.
97
BGC have confirmed that all required licences and permits for the development and
operation of the Boroo mine have been secured. The Mongolian authorities have
been cooperative in providing permits as required and it is anticipated that this
cooperation will continue given the importance of the Boroo mine for the local
economy.
16.2 Environmental Management System

An Environmental Management System has been developed by BGC with the
assistance of Cameco to address the impacts of the Boroo operation on the
environment and to monitor compliance with the various permits issued by the state
and provincial authorities. The system provides scheduled monitoring, engineering
controls and reporting on the following areas:
• tailings management facility
• mill site and mine waste dumps effluents
• acid generation potential testing
• dust control
• spill incidents on-site and off-site
• hazardous materials handling
• environmental impact monitoring
• planning for site decommissioning and rehabilitation
• potable water treatment system
• sewage operation
• landfill operation and inventory
The tailings management facility is designed for zero discharge and is located in the
Ikh Dashir river valley (Figure 4). It consists of a tailings line, tailings dam and a
decant water reclaim system to pump the reclaimed water from the tailings pond back
to the mill process water tanks. These facilities received government approval in
2003. The tailings pipeline is approximately five kilometres in length and is inclined
1.7%. The tailings dam was designed by, and constructed under the supervision of
Golder Associates and Mongolian engineering and design consultants to assure
compliance with quality requirements. The dam has a current footprint of 500 by 600
98
metres and is up to ten metres in height. The bottom of the tailings storage area was
sealed with a compacted clay liner and an HDPE liner on all embankments.
In April 2004, the Mongolian government approved an extension to the tailings dam,
which is estimated to cost $2.5 million.
AMMTEC (1999 d) undertook acid mine drainage testing of tailings composites during
their metallurgical testwork and report that “The above results indicate that the
Blended Composite # 2 leach residue possess no acid generating potential, but rather
have significant acid consuming potential.” (AMMTEC 1999 d, page 4), and therefore
no concerns have been indicated for acid generation from the tailings storage areas.
An Environmental Protection Plan and an Environmental Monitoring Plan for 2004
were formulated and submitted to the state ministry for the environment, and written
approval has been received.
16.3 Closure Provisions

There has not been as yet an approved closure plan prepared for the Boroo mine.
However, BGC have advised that the firm of Gazar Eco of Ulaanbaatar will be
retained to develop a conceptual decommissioning plan, with a completion date of
June 2004. The plan will have to be submitted to the Mongolian authorities for review
and approval. The initial estimate of the costs of decommissioning and reclamation
for the Boroo mine by JEMR Consulting is $2.7 million.
A reclamation trust fund has not yet been established for the Boroo property but BGC
have commenced discussions with governmental authorities about putting such an
arrangement in place. Funding would be funded from gold sales at a rate of about
$500 000 per year. In addition funds would be available at the end of the mine life
from reduction in working capital requirements.
16.4 Occupational Health and Safety

New employees at Boroo receive general safety orientation, hazard identification and
emergency response courses including basic first aid within two days of starting work,
as well as safety training specific to the job before being allowed to work
unsupervised. The rules to be followed are outlined in a detailed brochure entitled
Occupational Health and Safety Handbook that addresses such items as chemical
toxic elements, transportation and machinery, blasting, fire prevention and control, the
safe handling of electricity and includes detailed emergency response plans.
99
Safety elements are incorporated in the design and operational procedures of major
facilities of the mine. The open-pit operation is carried out under safe blasting
procedures. The pit slopes are designed with a 1.5 failure factor and stability is
constantly monitored for safety. Pit design has incorporated rock fall catchment
berms. The in-pit ramps and the haulage road between the pits and the mill are
constructed 25 metres wide to allow two haul trucks to pass safely and are equipped
with safety berms and drainage ditches. Dumping berms and procedures are in place
to avoid incidents with equipment. Pit operators are properly trained in the safe
handling of heavy equipment.
Process and effluent treatment facilities were designed to address issues of dust
control, noise, toxic chemicals, moving pieces of stationary equipment, potential
electrical and fire hazards.
The camp complex providing accommodation, kitchen, dining and recreation facilities
is equipped with smoke detectors, fire hose reels and hand-held fire extinguishers.
The transportation of materials and personnel, both on- and off-site, is undertaken
under accident prevention and safety procedures that include speed limitations and
control signs as required. All transport equipment units are under a preventive
maintenance program. The mine site is under security with authorized entry policy
enforced by specialized personnel.
At the mine site, two doctors and one certified nurse provide first aid, routine medical
services and operate a fully equipped first aid clinic centre. An ambulance equipped
to accommodate a stretcher and with appropriate medical supplies, is on standby.
17. GOLD SALES AND TAXATION
17.1 Gold Sales

All gold doré produced by BGC at the Boroo mine is currently exported and refined
under a contract with Johnson Matthey plc (JM). The terms provide that:
• gold is delivered to JM at the mine site with JM assuming the risk relating to
security and transport, and responsibility for insurance from Boroo to the JM
refinery in the United Kingdom;
• gold is refined by JM to meet purity and impurity specifications; and
100
• BGC may elect to take physical delivery of the refined gold, or to sell it to JM with
an early payment provision to receive 95% of the value based on the mine site
assay within two working days of delivery to the refinery, and the balance following
agreement on assays.
17.2 Taxation
BGC entered into a Stability Agreement with the Mongolian Government in 1998, as
amended in 2000, and which expires in 2013. The Stability Agreement stabilizes all
existing Mongolian taxation legislation as it was in effect on December 31, 1998,
unless more favourable laws take effect. The agreement provides for an exemption
from income tax for the first three years from the commencement of production, and
for 50% tax relief for the next three-year period. For the final period, until the
agreement expires, the tax rate is specified to be 15% for annual taxable income up
to 100 million tugriks (approximately $90 000 as of December 31, 2003), and 40% on
taxable income above that level.
17.3 Corporate Income Tax

BGC is resident in Mongolia where, until the beginning of 2004, tax on corporate
income was at the rate of 40%, with the tax rate applicable to BGC modified in
accordance with the Stability Agreement as noted in Section 17.2. Subsequent to the
signing of the Stability Agreement, amendments to Mongolian income tax laws have
reduced the corporate income tax rate from 40% to 30%, effective January 1, 2004.
BGC may make an application to the Mongolian Government to be subject to the
reduced rate. If successful this reduction will have the effect of decreasing the
income tax rate for BGC from 20% to 15% for the second three-year period, and
thereafter from 40% to 30% on taxable income exceeding 100 million tugriks, until the
expiry of the Stability Agreement.
17.4 Royalty
A 2.5% royalty will be paid to the Mongolian Government on the revenue from the
sale of gold and silver, valued at market prices.
17.5 Value Added Tax

Mongolia levies a value-added tax (VAT) of 15% on goods and services produced in,
as well as goods imported into Mongolia. The Stability Agreement provides for a VAT
at 10% on goods imported into Mongolia by BGC. In addition, the Stability Agreement
provides for VAT obligations to be credited against certain taxes as provided for in the
Value Added Tax Law of Mongolia, including corporate income tax.
101
18. ECONOMIC ANALYSIS

The following economic analysis is based on mining the current Boroo mineral
reserves (Table 11), which will support mining operations at the rate of 1.7 million
tonnes per year with an average gold grade of 3.6 g/t for the period 2004-2009.
Centerra plans to continue exploration programs on the Boroo property and other
exploration licences in northern Mongolia, and is currently reviewing the options for
treating mineral resources from the Gatsuurt property, which may extend the
production period for Boroo.
18.1 Production Forecast
Table 21 summarizes the forecast of gold production from Boroo over the next six
years based on the current LOM plan (Section 12.5).
Table 21 Boroo Production Forecast 2004 - 2009

- thousands of tonnes of ore and waste and ounces of gold -
2004 2005 2006 2007 2008 2009 Total

Mining
Ore tonnes 1 760 1 827 2 233 1 291 1 687 1 356 10 154
Waste tonnes 11 095 8 222 7 857 7 268 3 902 1 238 39 582
Waste-to-ore ratio 6.3 4.5 3.5 5.6 2.3 0.9 3.9
Stockpiles tonnes 37 77 483 -459 -63 -113 -37
Milling
Ore tonnes 1 723 1 750 1 750 1 750 1 750 1 469 10 191
Grade g/t 4.2 3.9 3.4 3.3 3.6 3.1 3.6
Gold recovery % 93.8 90.6 89.2 92.1 90.1 85.7 90.6
Gold recovered ounces 220 201 170 168 180 124 1 064
Gold sold ounces 212 201 170 168 180 132 1 064
18.2 Revenue Estimates

The annual average gold price over the period 1990 to 2003 along with the first
quarter of 2004 is presented in the following chart:
102
Gold Price 1990 - 2004

420
$ per ounce 380
340
300
260
1990 1992 1994 1996 1998 2000 2002 2004
A portion of future gold production from Boroo is hedged using forward sales
contracts. As at March 31, 2004, a total of 200 000 ounces of gold were designated
against hedge contracts at an average expected price of $316 per ounce, with 10 000
ounces having been delivered against those commitments in April 2004. The balance
of the gold production will be sold at the prevailing market price at the time of delivery.
The expected sales revenues based on average gold prices for the six-year period of
2004-2009 of $300, $350 and $400 per ounce, and taking into account the existing
hedged portion are shown in Table 22.
Table 22 Gold Sales 2004 - 2009

2004 2005 2006 2007 2008 2009 Total
Forward Sales Commitments
Quantity - ounces 000’s 81.5 60.5 49.0 9.0 - - 200.0
Gold - $ per ounce 311 314 323 329 - - 316
Revenue Including Forward Sales - $ millions
Gold - $300 per ounce 64.5 61.2 52.0 50.8 54.1 39.5 322.1
350 71.1 68.2 58.0 58.7 63.2 46.1 365.3
400 77.6 75.3 64.1 66.7 72.2 52.6 408.5
103
18.3 Cash Production (Operating) Costs
18.3.1 Operating Costs

The estimated operating costs cover open-pit mining and milling at the Boroo mine
site, including on-site administration and the costs administered from the office
located in Ulaanbaatar (Table 23).
Table 23 Boroo Operating Cost Forecast 2004 - 2009
2004 2005 2006 2007 2008 2009 Total

Annual Operating Costs -$ millions
Mining $9.7 $7.6 $7.6 $6.5 $4.3 $2.0 $37.7
Milling 12.9 13.1 13.1 13.1 13.2 11.3 76.7
Site administration 3.0 2.7 2.7 2.9 2.9 1.7 15.9
Off-site administration 5.9 5.2 5.2 5.2 5.2 5.1 31.7
1
Sales royalties 1.9 1.7 1.5 1.4 1.6 1.2 9.3
Total operating costs 33.4 30.3 30.1 29.1 27.2 21.3 171.3
Unit Operating Costs - $ per tonne
Mining 0.76 0.75 0.75 0.76 0.76 0.78 0.76
Milling 7.47 7.51 7.51 7.51 7.53 7.68 7.53
Total operating costs $19.38 $17.36 $17.18 $16.67 $15.50 $14.45 $16.81
1
Sales royalties at gold price of $350 per ounce
The most noteworthy feature about Boroo operating costs is the relatively low
proportion of total operating costs that is represented by mining. Over the period
2004-2009 mining is only 22% of total costs, and that is a result of low waste-to-ore
ratios for the near-surface deposits and minimal quantities of hard rock to be mined.
Initial operating cost experience at Boroo, based only on actual costs for the first
quarter of 2004, indicates that mining costs could be lower than estimated, milling
costs as estimated, but general and administration costs will be higher including
procurement and transportation of supplies, and catering. Total operating costs for
the first quarter of 2004 were within budget. It is normal to have somewhat higher
operating costs when a mine is in the start-up phase, which then trend lower as the
personnel and operating procedures stabilize.
104
18.3.2 Royalties and Taxes

All revenue from the sale of gold and silver, valued at market prices, is subject to a
2.5% royalty payable to the Government of Mongolia. The royalty is included in
determining the unit cash cost of production.
BGC is subject to corporate income tax as previously described in Section 17.3, with
BGC benefiting from a tax-free period for the first three years of production from
Boroo.
Table 24 Royalty and Income Tax 2004-2009

- $ millions -
Gold price
2004 2005 2006 2007 2008 2009 Total
per ounce
Royalty
$300 $1.6 $1.5 $1.3 $1.2 $1.4 $1.0 $8.0
350 1.9 1.7 1.5 1.4 1.6 1.2 9.3
400 2.1 2.0 1.7 1.7 1.8 1.3 10.6
Income Tax
$300 - - - $1.1 $2.2 $1.5 $4.8
350 - - - 2.9 4.2 2.7 9.8
400 - - - 4.6 5.9 4.1 14.6
18.3.3 Gold Institute Standard Unit Cost

Unit cash production costs for gold, calculated in accordance with the Gold Institute
Standard, include all cash production costs and production and sales related royalties.
Table 25 summarizes the cash production costs per ounce of gold produced at Boroo,
which averages about $160 per ounce over the current projected life of the mine with
only minor variations related to the effect of the gold price on the royalty on sales
revenue.
105
Table 25 Gold Cash Production Costs 2004 - 2009

- $ per ounce -
Gold price
2004 2005 2006 2007 2008 2009 Average
per ounce
$300 $150 $150 $176 $172 $149 $170 $160
350 152 151 177 173 150 172 161
400 153 152 178 174 152 173 162
18.4 Project Costs
Project costs for Boroo, shown in Table 26, consist of sustaining capital expenditures
and funding of the reclamation trust to be accumulated and used in post-production
reclamation projects.
Capital expenditures include the extension of the tailings storage capacity and
sustaining capital and are small in value, relative to operating costs, totalling $14.8
million over the projected life of the mine.
The reclamation funding is based on a contribution of $0.26 for every tonne of ore
milled, which amounts to approximately $500 000 in annual funding requirements.
These funds are expected to be deposited into a separate cash account to be used
to fund reclamation projects once the mineral reserves are depleted.
Table 26 Project Costs 2004 - 2009
Project Costs - $ millions 2004 2005 2006 2007 2008 2009 Total
Tailings dam construction $3.5 $1.4 $1.4 $0.7 - - $7.0
Sustaining capital 4.6 1.2 0.9 0.6 0.5 - 7.8
Funding of reclamation trust 0.4 0.5 0.5 0.5 0.4 0.4 2.7
Total Project Costs $8.5 $3.1 $2.8 $1.8 $0.9 $0.4 $17.5
18.5 Financing
Financing costs, shown in Table 27, include interest to service the debt facility that
BGC has in place with AGR, which in turn has a debt facility in place with Centerra
Barbados Inc. for $70 million. Cash received by AGR will be used to make payments
on the amount outstanding under the Centerra Barbados loan, commencing June 30,
2004, based on the following requirements:
106
• principal repayments in 20 consecutive quarters, with three quarterly payments of

$1.3 million, followed by 16 quarterly payments of $4 million, and a final payment
for the balance;
• at least 75% of available cash must be used to make payments of principal and
interest and prepayments of principal under the facility; and
• any excess funds after principal and interest repayment may be distributed to the
AGR shareholders as dividends.
In addition to debt financing, cash will be required throughout the life of the Boroo
project to fund changes in the levels of working capital, with a release of working
capital expected in the later years as stockpile and gold concentrate inventories are
depleted, materials and supplies inventories are drawn down and trade receivables
and payables are fully realized.
Other payments in Table 27 refers to the refund of certain exploration expenditures

to the Mongolian Government.
Table 27 Financing Costs 2004 - 2009

Financing Costs - $ millions 2004 2005 2006 2007 2008 2009 Total
Interest and financing costs $0.3 $0.2 - - $(0.1) $(0.1) $0.3
Other payments 0.9 0.5 0.5 0.3 - - 2.2
Working capital required (released) 4.0 (1.0) 0.3 (0.7) (2.0) (5.0) (4.4)
Total Financing Requirements $5.2 $(0.3) $0.8 $(0.4) $(2.1) $(5.1) $(1.9)
18.6 Boroo Mine Cash Flow
Table 28 summarizes the projected Boroo mine cash flows at gold prices of $300,
$350 and $400 per ounce, net of operating costs, sustaining capital, reclamation costs
and taxes, but before expenditures on exploration, and before repayment of the
project loan of $70 million advanced by Centerra Barbados Inc. together with
associated interest costs.
Exploration expenditures of $0.5 million are planned by BGC in 2004 on the Boroo
property in close proximity to the four zones of gold mineralization in the current
mineral reserves. Expenditures for subsequent years are likely to be for similar
amounts dependent upon the results of the exploration programs for prior years. In
addition an exploration budget of $1.5 million in 2004 has been established for work
107
on other exploration licenses held by BGC and CGM in northern Mongolia (Section
14.4).
BGC has also budgeted $0.6 million for a pre-feasibility study on Gatsuurt oxide gold
mineralization to be completed in 2004. Funding of the exploration programs, both
on and off the Boroo property, and the Gatsuurt pre-feasibility study is not included
in the summary of Boroo mine net cash flow in Table 28.
Table 28 Boroo Mine Net Cash Flow 2004 - 2009

- $ millions -
2004 2005 2006 2007 2008 2009 Total

Gold price - $300
Sales revenue $64.5 $61.2 $52.0 $50.8 $54.1 $39.5 $322.1
Operating costs 31.5 28.6 28.6 27.7 25.6 20.1 162.0
Project costs 8.5 3.1 2.8 1.8 0.9 0.4 17.5
Financing 5.2 (0.3) 0.8 (0.3) (2.0) (5.1) (1.7)
Royalty 1.6 1.5 1.3 1.2 1.4 1.0 8.0
Income tax - - - 1.1 2.2 1.5 4.8
Sub-total 46.8 32.9 33.5 31.5 28.1 17.8 190.6
Net Mine Cash Flow $17.7 $28.3 $18.5 $19.3 $26.0 $21.7 $131.5
Gold price - $350
Sales revenue $71.1 $68.2 $58.0 $58.7 $63.1 $46.1 $365.3
Operating costs 31.5 28.6 28.6 27.7 25.6 20.1 162.0
Project costs 8.5 3.1 2.8 1.8 0.9 0.4 17.5
Financing 5.2 (0.3) 0.8 (0.4) (2.1) (5.1) (1.9)
Royalty 1.9 1.7 1.5 1.4 1.6 1.2 9.3
Income tax - - - 2.9 4.2 2.7 9.8
Sub-total 47.1 33.0 33.7 33.3 30.2 19.3 196.7
Gold price - $400
Sales revenue $77.6 $75.3 $64.1 $66.7 $72.2 $52.6 $408.5
Operating costs 31.5 28.6 28.6 27.7 25.6 20.1 162.0
Project costs 8.5 3.1 2.8 1.8 0.9 0.4 17.5
Financing 5.2 (0.3) 0.8 (0.6) (2.1) (5.1) (2.1)
Royalty 2.1 2.0 1.7 1.7 1.8 1.3 10.6
Income tax - - - 4.6 5.9 4.1 14.6
Sub-total 47.3 33.3 33.9 35.2 32.2 20.7 202.6
108
NPV of Boroo Mine Net Cash Flow 2004 - 2009

At 0%, 5% and 10% Discount Rates
300
250
NPV $ million
NPV $ million
Gold price 0% 5% 10% 200
0%
per ounce
$300 $131 $111 $95 150 5%
350 169 142 122 10%

100
400 206 174 149
50
275 300 325 350 375 400 425 450 475 500
Gold Price ($/oz)
18.7 Centerra Economic Interest in Boroo

Centerra receives payments indirectly from BGC and also, therefore, indirectly from
Boroo. After paying for operating, project and other costs, the remaining cash flow
from the Boroo mine is paid by BGC to AGR in the form of interest payments (which
are subject to withholding tax) and principal repayments on the inter-company loan
from AGR. The remaining free cash flow is distributed by BGC in the form of
dividends to AGR and Altai. AGR in turn uses some of the cash flow to make
payments on the debt outstanding under the $70 million loan facility provided by
Centerra Barbados Inc.
The sum of the loan repayments, plus the Centerra equity interest in the residual cash
flows of the Boroo mine through its 56% interest in AGR, results in the Centerra
effective economic interest attributable to the net cash flows from the mine being
greater than its equity ownership in AGR. From the start of production in 2004,
Centerra will be entitled to approximately 88% of the cash flow from the Boroo mine
until the loan to AGR is repaid, after which its entitlement will be based solely on its
equity ownership through AGR. The Centerra economic interest in the Boroo net
cash flow varies from 83% at a $300 gold price, to 71% at a $400 gold price, and is
79% at the $325 gold price used in the estimation of mineral reserves. Table 29
summarizes the net cash flow attributable to Centerra from the forecast of net mine
cash flow from the operations of the Boroo mine as presented in Table 28.
109
Table 29 Boroo Net Cash Flow Attributable to Centerra

- $ millions -
Gold price
2004 2005 2006 2007 2008 2009 Total
per ounce
$300 $15.9 $25.0 $16.3 $17.0 $23.0 $12.0 $109.2
350 21.4 31.0 21.5 21.6 17.6 14.6 127.7
400 27.0 37.0 26.7 17.5 21.3 17.3 146.8
For every $50 per ounce change in the price of gold, the net mine cash flow for Boroo
attributable to Centerra over the period 2004-2009 will change by approximately $19
million.
The NPV of the Boroo cash flow attributable to the economic interest of Centerra has
been analyzed for sensitivity to changes in the key parameters of gold price, operating
costs and mineral reserves over the life of the Boroo project based on the current
mineral reserves. The resulting NPV values are tabulated in Table 30 and presented
in Figure 18. As with all gold mine projects, the Boroo mine cash flow is most
sensitive to changes in the gold price.
Table 30 NPV of Boroo Net Cash Flow Attributable to Centerra

At 0%, 5% and 10% Discount Rates
- $ millions -
Gold price
$ per ounce 0% 5% 10%
$300 $109 $93 $80
350 128 110 95
400 147 126 110
Operating Costs 10% Decrease 10% Increase

Gold price 0% 5% 10% 0% 5% 10%
$300 $116 $100 $86 $102 $86 $74
350 135 116 101 120 103 89
400 155 133 116 139 120 104
Mineral Reserves 10% Increase 20% Increase

Gold price 0% 5% 10% 0% 5% 10%
$300 $114 $96 $83 $119 $100 $85
350 134 115 99 141 119 103
400 155 133 115 164 139 120
110
Figure 18 Centerra Attributable Cash Flows - NPV Sensitivities
200
175 Gold Price
NPV $ millions
150
0%
125
5%
100
10%
75
50
275 300 325 350 375 400 425 450 475 500
Gold Price ($/oz)
200
Operating Costs
175
NPV $ millions
150
0%
125 5%
100 10%
75
Base Case Gold Price - $375
50
+10% Base Case -10%
Operating Costs
200
Gold Reserves1
175
NPV $ millions
150
0%
125
5%
100 10%
75
Base Case Gold Price - $375
50
Base Case +10% +20%
Gold Reserves
1
Increases in net mine cash flows are based on any ounces of gold in excess of current reserves being
produced in 2009 or later, at a total cash cost of $165 per ounce, including royalties.
111
The NPV of the Boroo net cash flow attributable to Centerra, or the NPV of the
Centerra economic interest, expressed as a percentage of the NPV of the entire
Boroo mine net cash flow is presented in the following tabulation.
Centerra Economic Interest in Boroo Net Mine Cash Flow NPV
Gold price Discount Rate

per ounce 0% 5% 10%
$300 83% 84% 84%
350 76 77 78
400 71 73 74
112
19. REFERENCES
AGR Limited, 1999

Feasibility Study, Boroo Project. Prepared by AGR and Resolute Limited, November 1999.
Nine volumes.
AGR Limited, 2001

Boroo Project, 1.75 mtpa Feasibility Study Review. Prepared by AGR and Resolute
Limited, April 2001
AMMTEC LTD., 1999 a

Gravity Separation/Cyanidation Leach Testwork Conducted upon Variability Ore
Composites from Boroo Gold Deposit. For Resolute Ltd. Report No. A6727 dated May
1999 (Appendix 5.3 in AGR Feasibility Study)
AMMTEC LTD., 1999 b

Gravity Separation/Cyanidation Leach Testwork Conducted upon Six Variability Ore
Composites from Boroo Gold Deposit. For Resolute Ltd. Report No. A6843 dated July
1999 (Appendix 5.4 in AGR Feasibility Study)
AMMTEC LTD., 1999 c

Acid Mine Drainage Analysis Conducted upon Samples of Ore from the Boroo Gold
Deposit. For African Gold Resources. Report No. A6959 dated September 1999 (Appendix
to Appendix 8.6 in AGR Feasibility Study).
AMMTEC LTD., 1999 d

Cyanidation Leach Testwork/AMD Analysis conducted upon a Composite of Samples of
Ore from the Boroo Gold Deposit. For AGR Ltd. Report No. A7100 dated December 1999
(Appendix to Appendix 8.6 in AGR Feasibility Study).
Analytical Solutions Ltd., 2002

Gatsuurt and Boroo. Memo to Rob Chapman of Cameco Gold Inc. regarding QA/QC
results at Analabs in Ulaanbaatar. Dated June 17, 2002
Boroo Gold Company, 2003 a

Whittle Optimization. Internal memorandum, Boroo Gold Co., Ltd. dated June 18, 2003
Boroo Gold Company, 2003 b

Boroo Gold Project. Operating Budget 2004. Dated October 6, 2003
113
Boroo Gold Company, 2003 c

2004 Boroo Gold Project Mining Plan. Comprehensive Project description submitted for
approval to the State Social Inspectorate Agency (Mining Division), dated September 2003
Boroo Gold Company, 2003 d

Ore Cut-Off Grade. Internal company memorandum dated November 13, 2003
Boroo Gold Company, 2003 and 2004

Month-End Reports for December 2003 and January to March 2004.
Boroo Gold Company, 2004 a

Gatsuurt Oxide Feasibility Study – Project Justification. Internal BGC document dated
March 8, 2004
Boroo Gold Company, 2004 b

Gatsuurt Oxide Feasibility Study – Project Scope. Internal BGC document dated March
8, 2004
Bradley, T., 2004

BGC - 2004 Mine Development Drilling Program. Internal BGC memorandum dated
February 12, 2004
Cameco Gold Inc., 2001

Boroo Gold Project. Technical Due Diligence. Authors M. F. Lindsay and R. Chapman.
August 2001
Cameco Gold Mongolia Limited, 2003 a

Noyon Project. Exploration Report 2002. Dated February 20, 2003
Cameco Gold Mongolia Limited, 2003 b

Boroo Project. Exploration Report 2002. Dated February 26, 2003
Cameco Gold Mongolia Limited, 2004 a

Gatsuurt Gold Prospect. Summary of QA Programs 1999 - 2004. Dated January 15, 2004
Cameco Gold Mongolia Limited, 2004 b

Noyon Project. Exploration Report 2003. Dated February 8, 2004
114
Cameco Gold Mongolia Limited, 2004 c

Boroo Project. Exploration Report 2003. Dated February 10, 2004
Chapman, R., 2003 a

Boroo Deposit - Metallurgical Test Work Results. Internal Cameco Gold Inc. memo dated
February 7, 2003
Chapman, R., 2003 b

Boroo Deposit - Summary of Pit Optimizations Completed by James Pearson. . Internal
Cameco Gold Inc. memo dated February 10, 2003
Canadian Institute of Mining, Metallurgy and Petroleum, 2000

Standards on Mineral Resources and Reserves, CIM Bulletin,
Vol. 93, No. 1044, pp 53-61, October 2000.
C M Orr, 1999
Boroo Gold Project, Mongolia. Assessment of Ground Conditions Influencing Pit Wall
Stability and Excavation Requirements, and Recommended Wall Designs. George, Orr
and Associates (Australia) Pty Ltd., September 1999 (Appendix 4.4 in AGR Feasibility
Study)
D. E. Cooper & Associates Pty. Ltd., 1999

AGR Limited. Boroo Gold Project, Tailings Management. Dated 8 December 1999
(Appendix 6.11 in AGR Feasibility Study).
Featly Pty Limited, 2003

Boroo Gold Project. Pit Optimisations and Design, Model Comparisons. January 2003
Geostat Systems International Inc., 2003 a

Resource/Reserve Estimation for the Boroo Gold Deposit. Unpublished Report for Cameco
Gold Corp. Final version dated August 11 2003
Geostat Systems International Inc., 2003 b

Resource/Reserve Estimation for the Boroo Gold Deposit. Update of December 2003.
Unpublished Report for Cameco Gold Corp., dated December 2003
H. A. Simons, 1994
MK Gold Corporation. Boroo - Joint Venture in Mongolia - Feasibility Study. November
1994
115
International Finance Corporation (IFC), 2002

Investors’ Forum 2002, Ulaanbaatar, Mongolia, September 2002
JEMR Consulting Co., Ltd., 1999

Boroo Gold Project. Environmental Impact Assessment. (Appendix 8.6 in AGR Feasibility
Study)
Mainville, A. & Chauvet, J-F., 2001

Boroo Resources/Reserves Comments. Cameco Inter-Office Memo dated July 17, 2001
Metplant Engineering Services, 1999

African Gold Resources, Boroo Project: Mongolian Power System. Ref. 968/AFR448/089
dated 15. October 1999 (Appendix 6.9 in AGR Feasibility Study)
Olson, T., 2003

Ore Cutoff Grade. Internal memorandum, Boroo Gold Inc., dated November 13, 2003
Orway Mineral Consultants, 1999

African Gold Resources Ltd. Boroo Gold Project - Ore Characterization and Grinding
Circuit Design. August 1999 (Appendix 5.5 in AGR Feasibility Study)
Resource Service Group, 2000

Boroo: Comparative Resource Estimate. Memorandum to Rothschild Australia Limited and
to Macquarie Bank Limited dated March 27, 2000
Resource Service Group, 2001

Comparative Resource Estimate at Boroo. Memorandum to Resolute Limited dated May
14, 2001
SENES Consultants Limited, 2002

Addendum No. 1, Environmental Impact Assessment, Boroo Gold Project. Prepared for
Cameco Gold Inc. Dated July 2002
SRK Consulting, 2000 a

Review of Boroo Gold Project (for NM Rothchilds & Sons). February 2000
116
SRK Consulting, 2000 b

Review of Boroo Gold Project. Project Summary June Update. Prepared for AGR Limited.
June 2000
SRK Consulting, 2001 a

Resolute Limited. Re-estimation of Pit 5 by Uniform Conditioning for the Boroo Gold
Project. February 2001. Appendix 1 in AGR Limited 2001
SRK Consulting, 2001 b

AGR Ltd. Boroo Pit 5 - Optimisation and Practical Pit Design. Resolute Limited. March
2001. Appendix 2 in AGR Limited 2001
SRK Consulting, 2003

Updated estimation of the Boroo Gold Project by Uniform Conditioning. January 2003
Stability Agreement, 2000

By and between the Government of Mongolia represented by the Minister of Finance and
Boroo Gold Company Limited established under the laws of Mongolia (certificate of
registration 21/498). Originally concluded 6th of July, 1998 and amended 9th of May, 2000.
Unknown Authors, 1991

Report on Hydrology of the Boroo area (the English translation does not include the report
cover).
USSR All Union Export and Import Association (Tsvetmetpromexport), 1987

Report on Laboratory and Pilot Tests to develop a Rational Technology for Gold Extraction
from ore of Boroo Deposit (MNR). Executed by the Irkutsk State Research Institute of Rare
and Non-ferrous Metals IRGIREDMET. (Appendix 5.2 in AGR Feasibility Study)
Waltho, A.E. 1998

Boroo Gold Project Mongolia. Review of Geology, Resources and Previous Work for Boroo
Gold Company Ltd. Mining and Resource Technology Report MRT 0583, Ref 97160, dated
January 1998 (Appendix 3.3 in AGR Feasibility Study).
Young, P., 2003

Gatsuurt Project – Testwork Review. Memorandum on letterhead of SNC-Lavalin,
Engineers & Constructors, to Rob Chapman of Cameco Gold Inc. dated March 18, 2003
117
CERTIFICATES OF QUALIFICATION

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Strathcona Mineral Services Limited

BOROO GOLD MINE

CENTERRA GOLD INC.

Henrik Thalenhorst, P. Geo

1 CRUSHER AND MILL COMPLEX 4 PIT 2 6 IKH DASHIR ALLUVIAL PIT

Boroo Site - Satellite Image

11. MINERAL RESOURCE MODEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

15. CURRENT OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

1.1 Boroo Gold Mine

1.2 Geology and Mineral Reserves

Boroo Mineral Reserves at December 31, 2003

Tonnes Gold Contained Gold

Boroo Mineral Resources Additional to Mineral Reserves

Indicated Mineral Resources (diluted)

1.3 Mining Operations

Boroo Life-Of-Mine Production Forecast

1.4 Projected Economic Performance

2. BACKGROUND AND TERMS OF REFERENCE

2.2 Terms of Reference

3. PROPERTY DESCRIPTION AND LOCATION

RUSSIA Irkutsk Chita

BGC (Boroo Gold Company)

Scale 1: 2.5 million

SEOUL TOKYO PROJECT No.

0 100 500 H.T. March 2004 329-7

Base map from WarrenJ.Noklebergand others OFR 03220

Map Source: Licences information from Centerra Gold Inc.

Hangal Sant Sharingol

Jargalant GATSUURT DEPOSIT

BGC and CGM Exploration Licences,

BGC MINING LICENSES BGC EXPLORATION LICENSES

724A (Ikh Dashir Ar, 14 August 1997)

7170A (Chandagat Uul, 31 March 2004) STRATHCONA MINERAL SERVICES LIMITED

Table 1 Boroo Mining Licences held by BGC, March 2004

Licence Licence Area Issue Annual

1961 A Bayangol Boroo 1 Nov 29, 1999 13 Nov 29, 2059

Total 3 146 $26 703

PIT 3 Tailings Road

PIT 6 ROM Ore

Top Soil PROJECT

H.T. March 2004 329-7

Table 2 BGC Boroo Area Exploration Licences - December 31, 2003

74 Licence Area Issue Expiry

According to the Mongolian mining law enacted in 1997, an exploration licence is

4. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE

5.1 Exploration History

Table 3 Summary of Drilling Completed

1992-94 MKG/Erdene DDH - 19 Unknown -

1997 BGC DDH BG 9 735 3

1999 BGC DDH MDD 28 1 852 28

Sub -total DDH 399 31 018 374

1999 BGC RC MRC 162 10 945 162

2002 BGC RC MRC 177 10 097 177

Sub- total RC 339 21 042 339

2003 CGM RC BX 33 3 814

Data not yet incorporated into Resource Model 272 14 242

Diamond Drill Holes Reverse Circulation Holes

Licence Exclusions Sec 1

Surface projection of 0.8 g/t envelope

Boroo Area Drill Plan

While the investigations at Boroo prior to 2002 consisted predominantly of surface

5.2 Production History