INTERIM REPORT FOR THE FINANCIAL YEAR 2007 AND FOR THE QUARTER OCTOBER - DECEMBER

· Total CAG group gold production during financial year 2007 amounted to 1,073
kg (34,500 oz), whereof 250 kg (8,100 oz) were produced during the quarter Oct
- Dec 2007. During 2006 CAG produced 311 kg of gold (10,000 oz), whereof 81 kg
(2,600 oz) were produced during the last quarter. 

· Approximately 1,075 kg of gold were sold during the twelve-month period 2007,
of which 260 kg during the last quarter. The corresponding figures in 2006 were
296 kg and 161 kg. 

· A new reserve report is being prepared on the Tardan deposit for submission
to the relevant authorities. The feasibility study for the heap leaching plant
is due in summer this year, after which construction of the plant is planned to
be commenced immediately. 

· The Kopylovskoye project appraisal campaign is progressing. The sale of 25 %
of the project to external investors resulted in a capital gain of TSEK 25,968,
which is included in the full year result and in the result for the third
quarter of 2007. 

· The 2008 CAG group gold production target is 1,250 kg of pure gold (40,000
oz) divided between 350 kg from the Tardan gold mine and 900 kg from the
alluvial subsidiaries. Given the seasonal character of the alluvial gold
production only some 20 - 25% of the scheduled gold production 2008 will apply
to the first half of the year. 

· Consolidated revenues for twelve-month period 2007 amounted to TSEK 232,403
(TSEK 80,076). Revenues for the quarter October - December 2007 were TSEK
82,366 (TSEK 49,672). 

· The net result after tax and minority for the full financial year 2007 was
TSEK 
-4,762 (TSEK -14,798). For the last quarter of the financial year the same net
result amounted to TSEK -10,292 (TSEK -2,410). 

· EPS was SEK -0.012 for the twelve-month period (SEK -0.053). For the last
quarter EPS was SEK -0.025 (-SEK 0.007). 



Background
Central Asia Gold AB (CAG AB) is a Swedish junior mining company with
operations in Eastern Siberia, Russia. The group structure consists of the
Swedish joint stock parent company, which currently controls three
subsidiaries, of which two are in Russia. The Russian subsidiaries are of the
limited liability type. The subsidiary OOO Tardan Gold also owns several
sub-subsidiaries in 
Russia. The operations involve exploration and production of gold, primarily in
the Tyva and Irkutsk regions in Russia. 

The group's main assets comprise a large number of mineral licences held by the
various subsidiaries. The licences, as at early January 2008, encompass 645,000
troy ounces (oz) (1 oz = 31.1 g) of gold reserves according to the Russian
C1+C2 categories, as well as 1,049,000 oz of P1 gold resources and 6,255,000 oz
of P2 gold resources. 
The gold reserves attributable to the Tardan deposit will be subject to a new
reserve review by the authorities during the first half of 2008. In Irkutsk,
25% of the Kopylovskoye project has been sold out to a group of external
investors during 2007, which initially reduces the Kopylovskoye net gold
reserves to CAG AB. 
CAG AB was publicly listed on the Swedish NGM Nordic Growth Market stock
exchange on March 29, 2005. The number of shareholders is currently some 4,800. 


Results - the Group
For the twelve-month period ending December 31, 2007 the group reports a net
result after tax of TSEK -1,884 (TSEK -14,984), which corresponds to SEK -0.012
per share (SEK -0.053). A capital gain of MSEK 25,968 is included in this
result and applies to the third quarter of the period. The capital gain arose
as a result of the sale of 25 % of the Kopylovskoye project to a group of
external investors. 
For the fourth quarter of the reporting period the net result after tax was
TSEK -8,806 (TSEK -2,573). This corresponds to EPS of SEK -0.025 (SEK -0.007). 

Consolidated gold sales revenues were TSEK 160 967 (TSEK 42,544) during the
financial year. For the last quarter October - December 2007 gold sales
amounted to TSEK 58,868 (TSEK 22,788). 

In addition, a revenue component of TSEK 20,402 (TSEK 5,698) relating mainly to
services performed by the transportation subsidiaries of the group is included
in the consolidated P/L account. This revenue component was TSEK 8,358 during
the last quarter of the financial year (TSEK 1,737). 

The change in stock of finished and semi-finished goods during the twelve-month
period amounted to TSEK 6,973 (TSEK 14,011). During the last quarter the same
change was TSEK -11,815 (TSEK 14,011). 

According to previous statements the Tardan mine is considered to be
operational as from 1 January 2007 and, therefore, only limited costs have been
capitalized at the Tardan production license area. However, a lot of
exploration work is being conducted on the other appraisal projects in the
group, and these costs are predominantly capitalised during this stage. During
the financial year 2007 total costs of TSEK 43,255 were capitalized at
subsidiary level. In the financial year 2006 TSEK 25,823 were capitalized as
mining permits. For the quarter October - December 2007 the capitalization
component amounted to TSEK 26,959 (TSEK 11,136). 

Finally, a revenue component of TSEK 806 (0) has been recognized during the
financial year 2007 in respect of dissolution of negative goodwill. It applies
to the quarter July - September. The negative goodwill resulted from the
provisional acquisition analysis of Artelj Lena, which is consolidated in the
group PL-account as from the third quarter of 2007. 

Total operating costs in the group during the financial year 2007 amounted to
TSEK 
251,383 (TSEK 92,963). For the quarter October - December 2007 the operating
costs were TSEK 85,363 (TSEK 48,390). Included in the operating costs for the
twelve-month period is a write-down charge in respect of the Tomano-project
amounting to TSEK 2,579 (please see section on Tomano below). The write-down
occurred in the third quarter of the financial year. 

Net financial items were TSEK 25,585 for the twelve-month period (TSEK -9,019).
For the last quarter of the reporting period the net financial items were TSEK
-1,317 (TSEK -3,191). The above-mentioned capital gain of TSEK 25,968 is
included in the net financial items for the full report period and applies to
the third quarter of 2007. 

The tax cost for the financial year 2007 was TSEK -8,489 (TSEK -1,078). The tax
cost consists of actual current tax of TSEK -681. The rest of the tax cost is a
change in deferred tax. The tax cost for the last quarter of the reporting
period was TSEK -4,492 (TSEK -664). 

The minority share of the net result for the 12-month period was TSEK 2,878
(TSEK -186). For the quarter October - December 2007 the minority share
amounted to TSEK 1,486 (TSEK -209). 


Mining operations

Tardan project in the Tyva region

General overview
Tardan is a medium sized gold deposit, which was privatized in a public auction
in the summer of 2003. The established Russian reserves (C1/C2) and P1
resources, most recently updated in the early 1990s, then amounted to 413,000
oz of gold, of which 229,000 oz were C1/C2 reserves. In addition, Tardan is
estimated to contain 4,354,000 oz of P2 gold resources (Russian classification
standards). The appraisal work has so far only been conducted to a depth of
about 100 m. The average gold grade of these reserves was estimated at 10.7
grams/ton (g/t). Some 30 ore bodies exist, out of which the four main ore
bodies constitute the bulk of the gold reserves assigned thus far. 

A considerable exploration programme involving core drilling, trenching and
construction of underground drifts and shafts was carried out in the Soviet
time and has been supplemented by new data gathering in 2004 - 2007. The first
license applies to a 3.3 square kilometre area, which is located 80 km to the
east of the region's capital Kyzyl. 

Another exploration and production license with a term of 25 years was won in a
public auction in summer 2007. This license area comprises some 520 km2 and
surrounds the first license area. This new license is called the "Tardan mining
district". A large number of gold occurrences were identified on this license
block during the Soviet era, and Central Asia Gold has already commenced with
appraising them. The occurrence of initial interest is called "Tardan 2" and is
located only some 2 km to the East of the new processing plant commissioned
this year. 

Reserve status and heap leaching plans
As stated above the initial Tardan license comprised some 229,000 oz of gold
reserves assigned in the Soviet era. The cut-off grade applied then was 2 g/ton
and the appraisal work did not go below a depth of 100 m. Of the total gold
reserves assigned during the Soviet era, the 5 major ore bodies contained some
160,000 oz of the assigned C1/C2 reserves. 
Central Asia Gold has conducted a significant appraisal programme at these ore
bodies over the last two years, and gold production has commenced. The
appraisal work continues, and thus more information is added all the time. 

Central Asia Gold is now preparing to submit a new reserve report for
examination by the Russian State Mineral Reserve Committee (GKZ). The document
will be completed by end of the first quarter, and thereafter the authorities
will conduct their reserve examination during the second quarter of 2008. This
reserve review will comprise the major ore bodies at the license block, and the
ore reserves there are estimated to more than double in size. At the same time
a feasibility study will be conducted in respect of the new heap leaching plant
by a selected Russian project design institute. The feasibility is due in
summer 2008, and immediately thereafter the construction of the heap leaching
plant is planned to commence. 

The tentative time plan in respect of heap leaching plant implies that the
first stage of this plant, including leaching pads capable of leaching a few
hundred thousand tons of ores annually, should be commissioned towards the
middle of 2009. In 2009, it is planned to leach only the tailings from the
high-grade ores processed on Tardan. In 2010 the leaching capacity will be
increased, and the target is to then have a capacity of 1 million tons of ore
per year. The feasibility study will, however, give more exact parameters. In
this way, gold production on the Tardan license is planned to more than double
in 2009, and then be increased considerably in the subsequent years when also
the low-grade ores will be treated. 




Gold production - the processing plant
The gravimetric processing plant began operation in April 2007. After certain
initial start up problems the factory has been working satisfactorily since the
middle of August. 
The processing capacity of the plant is 100,000 tons of ore per year or
approximately 8,000 tons of ore per month. The capacity was gradually increased
during the year. In total some 53,000 tons of ore were processed during the
year, resulting in 194 kg of chemically pure gold (6,200 oz). The average
extraction coefficient was approximately 45%, but varied over the period
depending on factors such as gold grade in the incoming ores, size of the gold
grains, proportion of free gold and presence of other minerals such as
magnetite. During the last quarter of the financial year 2007, some 22,000 tons
of ore were processed yielding some 99 kg of pure gold. 

During the financial year 2007 OOO Tardan Gold sold 196 kg of gold including
gold in stock at the beginning of the year. Gold sales during the quarter
October - December 2007 amounted to 96 kg. 

Tardan 2 gold occurrence
The Tardan 2 occurrence is one of several occurrences within the so-called
Tardan Mining district license. This license was acquired in an open auction in
summer 2007. The license area comprises some 520 km2. The Tardan 2 occurrence
is immediately adjacent to the first Tardan license block, where gold is now
produced. The Tardan 2 occurrence was approached as a quartz vein object in the
Soviet era, but was deemed less interesting due to the limited size of the
quartz veins. Central Asia Gold's geologists have approached this object from
another angle and believe that the side rock also contains gold (please compare
with the results from the Kavkaz project described below). The conducted
geophysical work has identified significant anomalies at this object. The size
of the anomalies indicates that this object may be significantly larger than
the neighbouring Tardan project. Limited surface samples have been analysed and
reveal high gold grades. In summer 2007 a number of surface trenches have been
constructed, from which samples have been collected. 

Kopto
Continuous operation at the Kopto plant stopped at the end of the year 2006. In
the future the plant will be used to perform test enrichment of ore samples.
The fact that the Kopto plant is not used for commercial gold production has
not led to any consequences for the external group accounts since much of the
equipment has been transported to the nearby Tardan plant, where it continuous
to function. 

Kopylovskoye deposit in Irkutsk
Kopylovskoye is a gold deposit that holds 7 tons of gold reserves as per
Russian geological standards (some 240,000 oz). The project's potential reserve
base, however, is significantly larger as the gold reserves registered thus far
are only attributable to a depth of some 30 m. 

An Extraordinary General Meeting of Central Asia Gold in spring 2007 approved
the sale of a 25% ownership interest in the licence company for a consideration
of 70 MSEK (at that time the equivalent of MUSD 10). As a part of this
transaction the Russian licence company (OOO Kopylovsky) has been legally
transferred from the Russian subsidiary OOO Tardan Gold to a newly established
Swedish subsidiary named Kopylovskoye AB. The 70 MSEK were received in two
instalments during autumn 2007. The transaction has resulted in a capital gain
of 25,968 TSEK in the external group accounts, which has been recorded in the
third quarter of the financial year. A 25% minority therefore arises in the
accounts of the Kopylovskoye AB group. Central Asia Gold currently views the
acquisition of the Kopylovskoye project as an acquisition of assets and
therefore no acquisition analysis has been performed. 

Geological work has commenced on the ground in Irkutsk. Project documentation
has been submitted, the camp for the workers has been upgraded and certain
equipment has been ordered, including a powerful, new RC drilling rig. A
significant appraisal programme has been started and will continue to 2009. Up
until December 2007 some 1,400 m of core drilling has been carried out. The
current plan is to complete some 6,000 m of core drilling and more than 30,000
m of RC-drilling over the next 12 - 18 months. 
A new laboratory, or rather sample preparation unit, has been commissioned. It
is able to quickly and reliably process and concentrate test samples on line.
Thereafter the prepared test samples are sent for final analysis to an external
laboratory. It is planned to process some 50,000 samples over the next 12 - 18
months. 

It is important to stress that the existing ore body is still fully open in all
directions. The established strike of the ore body is some 300 m and the width
some 50 m. However, the license block itself has a length of 6 km and the gold
mineralized zone penetrates right through the license block. The analysis of
the first cores shows that the structure of the rocks at an absolute depth of
some 100 m is identical to the rocks in the top of the deposit (where the
established gold reserves are located). 

The other gold projects in the Central Asia Gold portfolio

Kavkaz project in Irkutsk region: The historic geologic perception was that the
Kavkaz project contained certain high-grade gold reserves in limited volumes,
which were concentrated in quartz vein zones with a thickness of slightly over
one meter. Central Asia Gold's geologists have always stated that they believed
the old data gathering methods underestimated the true gold grade as they did
not capture the larger gold grains. During 2007 new data has been gathered on
the surface of the Kavkaz deposit, primarily via surface trenches. These
samples have been analysed, and they reveal that the gold is present not only
in the quartz veins but also in the side rock. The ore zone has a thickness of
up to 45 meters instead of one or a few meters in the surface trenches studied.
This changes the whole perception of the Kavkaz project and makes it resemble
the Kopylovskoye deposit owned by Central Asia Gold. The potential of the
project has therefore increased considerably as a result of the 2007 work
programme. 

Uzhunzhul in Khakassiya region: A rather extensive exploration programme
encompassing sampling from surface trenches and from drill cores (2,600 m core
drilling performed in 2007) was conducted last year. More than 3,000 samples
have been sent to a laboratory for analysis, but thus far only some 25 % of the
results have been received. However the results are already encouraging and a
significant gold mineralization has been proved on the border to the
neighbouring license block, where gold production through heap leaching has
been conducted for many years. The geologists of Central Asia Gold therefore
believe the ore zone on the neighbouring license extends into the Uzhunzhul
license block. 

Kara-Beldyr in Tyva region: Only preparatory work was conducted at this license
area during 2007. A suitable geologic exploration program for the next few
years has therefore now been designed. In addition, a new bulk ore sample was
analysed in 2007 by a project institute in Irkutsk. The sample was relatively
large with a weight of a couple of hundred kg and was taken from a surface
trench with a width of some 70 m. Previously analysed samples from Kara-Beldyr
have not had the same weight. The new sample shows an average gold grade of
slightly less than 3 g/t taken from the full 70 m interval. The relatively
large width of the gold mineralized zone in this trench indicates that the gold
may be extracted via an open pit, which is preferable. It should also be added
that ore enrichment tests conducted via heap leaching on said ore sample
demonstrate high recoveries. This is a very cost effective extraction method.
In summary, the potential of the project looks interesting although it is still
at an early stage. 


Alluvial gold production:

The placer deposit Sivo Pravy Uval
This placer deposit held by the subsidiary OOO GRK Tomano (Tomano) is located
in the Buryatiya region of Russia, which borders on the Tyva region. It holds
19,000 oz of Russian C1 gold reserves. In March 2005 Central Asia Gold
concluded a joint venture agreement in respect of the future development of the
deposit. According to the agreement, the joint venture partner, the Russian
company OOO GRK Oreol (Oreol), was supposed to be the operator of the project
and was supposed to secure the financing. Oreol has however not performed, and
Central Asia Gold itself does not find it economically interesting to start a
development campaign in respect of this project. Consequently, the license has
been handed back to the Russian authorities. This has led to a net write-down
charge of TSEK 2,579 in the external accounts, which was recognized in the
third quarter of the financial year. 

The subsidiary gold placer producers OOO Artelj Tyva (Tyva region) and OOO
Artelj Lena (Irkutsk region) 

The acquisition of OOO Artelj Lena was completed in late June 2007. A
provisional acquisition analysis was performed upon consolidation. This
analysis has resulted in a limited negative goodwill dissolution (one-off
income component) amounting to TSEK 806. This income component was recorded in
the third quarter of the financial year. The provisional acquisition analysis
is described in the notes section of this report. Artelj Lena is thus included
in the CAG consolidated profit and loss account as from the third quarter of
2007. 

The acquisition of the other placer producer in the group, OOO Artelj Tyva, was
completed at the end of 2005. 

During the financial year 2007 (actually during May - first half of October due
to the seasonal character of placer gold production) both alluvial subsidiaries
produced in total 879 kg of gold (28,200 oz) divided into 648 kg for Artelj
Lena and 231 kg for Artelj Tyva. The alluvial gold production during the last
quarter of the financial year was 151 kg (4,800 oz). 

Both alluvial subsidiaries sold 879 kg of the produced gold in 2007, whereof
163 kg in the last quarter of the financial year. 



Investments and Liquidity 
Net investments in material and immaterial fixed assets during the financial
year 2007 amounted to TSEK 143,543 (TSEK 155,754). The corresponding figure for
the last quarter of the reporting period was TSEK 20,185 (TSEK 98,854). 

Cash in group accounts was TSEK 69,843 at the end of December 2007 (TSEK
81,947). 

The parent company
The Swedish parent company is a holding company without significant operations.
It supports the subsidiary companies with financing, investor relations
services, strategy reviews etc. It thus has no income other than interest on
loans extended to the subsidiaries from time to time or in respect of bank
deposits. The number of employees was 3 at the end of the reporting period (1).
The net result for the financial year 2007 was TSEK -11,623 (TSEK -13,499). For
the quarter October - December 2007 the corresponding result was TSEK -5,686
(TSEK -4,384). Cash in the parent company was TSEK 8,718 as at end of December
2007 (TSEK 80,009). 

Employees
The group had 1,201 employees at the end of December 2007 (507).

Issued shares
As at the end of December 2007, as well as at the date of this report, the
number of shares outstanding in Central Asia Gold AB (publ) is 412,210,070. 

In addition to this, an options programme directed at leading personnel in the
group was approved by the Annual General Meeting of shareholders on June 12,
2007 in Stockholm. In total 14,500,000 options were issued in accordance with
this programme. The term of the options is to the end of July 2009 and the
strike price is SEK 2.25 per option corresponding to one underlying share. The
options can only be exercised towards the end of the period. The allocation of
options took place during the third quarter of the financial year. The market
price of the CAG share is lower than the strike price of the options as at the
end of the report period. 


Major events after the end of the reporting period

Credits taken up by the subsidiaries Artelj Lena and Artelj Tyva and parent
company guarantee 
The two alluvial subsidiaries always take up short-term credits in the Russian
banking system during the first quarter of the year in order to have sufficient
working capital for the coming production season. In February 2008 OOO Artelj
Lena has been granted a credit of 100 MRUR (some 4 MUSD) by the Standard Bank
group. The credit is given out in certain portions and will be repaid out of
the subsidiary´s cash flow during the second half of 2008. 

The other alluvial subsidiary OOO Artelj Tyva has been granted a credit of 50
MRUR (2 MUSD) by Bank of Moscow. 
Central Asia Gold AB, the parent company, has entered into a guarantee
agreement in favour of Standard Bank in respect of the said 100 MRUR loan,
including interest thereon. 


Next reports due
The next financial report due is the interim report for the first quarter
January - March 2008. It will be released on May 28, 2008. 

Other reporting dates in 2008
Publishing of annual report for financial year 2007: April 28
Annual General Meeting June 12
Interim report for Jan - June 2008 (Q2-2008) August 28
Interim report for Jan - Sept 2008 (Q3-2008) November 28


Dividend
The Board of Directors of CAG AB recommends that no dividend will be paid for
2007. 

Annual report and 2008 Annual General Meeting 
The 2008 Annual General Meeting (AGM) will be held in Stockholm on Thursday,
June 12 at the address Operaterassen, Karl XII:s Torg, 111 47 Stockholm,
starting at 15.00. The annual report will be available in the premises of the
Company at Brovägen 9, Stocksund, Sweden as from April 28. It will also be
published on the company's website and will be mailed to the shareholders that
so request. 

Board Election Committee 
As from July 1, 2008 Central Asia Gold AB, along with all other companies
listed on the Nordic Growth Market's Equity list, start complying with the
so-called Swedish Stock Market Code. This means that no board election
committee has been appointed in 2007 to coordinate the board election on the
June 2008 AGM. However the principles for electing the members to the 2008/2009
board election committee will be approved at this AGM. These principles will be
presented in the notice to the AGM that is due in spring this year. 


Company information
The parent company's full name is Central Asia Gold AB (publ). It is a public
limited liability company with head offices in Stockholm and the corporate
identification number is 556659-4833. The address of the parent company is
Brovägen 9, 182 76 Stocksund. 


(For complete report see attached file)