TORONTO - Centerra Gold Inc. (TSX:CG) hopes its Mongolian processing operation will be up and running again shortly, but has no commitments from the Mongolian government in terms of a timeline.

"We're making progress all the time. We see some positive signs coming out of Mongolia, but as far as the timing, it's difficult to say," Jeff Parr, Centerra's chief financial officer, said on a conference call. "We're hopeful that it's not going to last much longer."

The Toronto-based gold miner has been struggling to clear things up with the Mongolian government ever since its operating licence for the Boroo mine was suspended in June because of issues such as record keeping, allegations of incorrect land use and improper operating procedures.

The mine's main operating licence was reinstated in July, but Centerra has not yet received its final operating permit for Boroo's heap leach operation, where cyanide is used to extract gold from ore.

Parr said the heap leach operation - which will also be used to process ore from the Gatsuurt mine once it's up and running in the third quarter - is not the Mongolian government's first priority when it comes to mining projects.

"Compared to some of the other projects they're dealing with, Gatsuurt is not huge, so it's just a little bit slow getting them focused," he said.

Although Parr wouldn't give a timeline as to when he expects to have the heap leach operation restarted, the company is assuming, for the sake of its guidance, that it will be back online by mid-April.

Centerra expects to produce 36,000 ounces of gold from the heap leach in 2010 and forecast total gold production of 640,000 to 700,000 ounces for the year.

Centerra is in the process of building a 55-kilometre road between Gatsuurt and Boroo so ore mined from Gatsuurt can be treated at Boroo's milling facility beginning this year. Boroo is winding down its production as it reaches the end of its mine life, but its operations will be kept busy with ore from the new mine by the third quarter.

Centerra also announced Wednesday that it has extended the expected life of its Kumtor mine in the Kyrgyz Republic by two years to 2019 due to reserve increases. The company said it expects to begin high-grade underground production at Kumtor by late 2011.

"We made the decision last year to reinvest in the open-pit fleet at Kumtor. The initial and now further extension of the operating life at Kumtor are partly the result of that decision, and we begin this year with a significant increase in reserves," said president and CEO Stephen Lang. "Our outlook for Kumtor is very upbeat."

On Tuesday, Centerra said it earned USusd140 million or 60 cents per share on usd323.9 million in revenue in the quarter ended Dec. 31. That compared with a profit of usd42.6 million or 20 cents per share on usd241.3 million in revenue in the last three months of 2008.

The year-ago results included an usd18.8-million impairment charge.

As of Dec. 31, Centerra's proven and probable reserves increased 26 per cent to 7.3 million ounces of contained gold, compared with 5.8 million ounces at the end of 2008.

Shares in the company gained three cents to usd11.82 in Wednesday trading on the Toronto Stock Exchange.