INTERIM REPORT FOR THE FOR THE NINE MONTH PERIOD JANUARY - SEPTEMBER 2008

• On November 3, 2008 Central Asia Gold ("CAG") agreed to merge with the
Russian gold mining group "New Mining Company" ("NMC"). Technically this will
take place by CAG acquiring NMC via a directed issue in kind. The transaction
is subject to approval by an EGM on December 22, 2008. 

• Prior to the merger with NMC, CAG plans to dividend out the remaining 62.5%
of the subsidiary Kopylovskoye AB. The dividend will imply that each owner of
one CAG share on the record date will receive one Kopylovskoye AB share. 

CAG group gold production during the report period amounted to 718 kg (815 kg
during same period last year), whereof 479 kg during the quarter July -
September (715 kg). As per end of November 2008 accumulated group gold
production amounts to some 832 kg. 

The new gold reserve report in respect of the Tardan deposit was submitted to
the relevant authorities for review and approval in end of September. It was
finally approved on November 27. The registered reserves are 8.4 tons in the C1
and C2 categories. 

• Consolidated revenues for the nine month period January - September 2008
amounted to TSEK 205,669 (TSEK 150,037). The corresponding figure for the last
quarter (July - September 2008) was TSEK 98,089 (TSEK 118,466). 

• The net result after tax for the report period was TSEK -67,107 
(TSEK 6,922). For the third quarter the net result after tax amounted to TSEK
-10,382 (TSEK 32,959). The net result for the report period includes an
impairment charge relating to OOO Artelj Lena and OOO Artelj Tyva amounting to
TSEK -43,996. The impairment charge relating to the last quarter of the report
period was TSEK -11,094. 

• EPS was SEK -0.143 for the nine-month period January - September 2008 (SEK
0.014). For the last quarter July - September, EPS was SEK -0.018 (SEK 0.077). 

Comments by the Managing Director 

The third quarter of 2008 and the following two months up to the date of this
report have been a very tough period for Central Asia Gold AB and for the
global financial markets including the Russian one. Although the international
gold price has held up fairly well, gold stocks, and for that matter all types
of stocks, have tumbled all over the world. The Board of Directors of Central
Asia Gold have against that background intensified the search for a strategic
partner who could assist in the development of the company's properties. 
The proposed merger with Russian gold mining group NMC leads to the creation of
a bigger and financially stronger company. The number of gold projects
increases resulting in reduced operational risk and Mr. Preston Haskell,
American business entrepreneur resident in Moscow, becomes new main owner of
Central Asia Gold. He will bring with him to CAG his own management team and a
new Board of Directors. This business combination is planned to be preceded by
a dividend of the remaining Kopylovskoye AB subsidiary shares to Central Asia
Gold's existing shareholders. The Board of Directors of CAG AB believes that
this proposed action plan will maximise shareholder value in our company in
these challenging times. 


Torbjörn Ranta, Managing Director


Background
Central Asia Gold AB (CAG AB) is a Swedish 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
three subsidiaries also own 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, are estimated to
contain 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 Russian reserve standards do not take
account of economic viability to any large extent. The fact that Russian
inflation has increased sharply in the last few years implies that the
registered gold reserves in primarily the two alluvial subsidiaries may be
questionable at this point in time. They amounted to some 210,000 oz (6.5 tons)
C1+C2 as at beginning of 2008. An expected rouble depreciation during the
coming months may though positively impact on Russian gold production costs in
general, and in particular on those of alluvial gold companies. 

The gold reserves attributable to the Tardan deposit have now been subject to a
new reserve review by the authorities. The geologic documentation was submitted
in end of September, and was thereafter followed by the economic feasibility
study. The formal session of the reserve committee located in Krasnoyarsk took
place on November 27. The final registered amount of recoverable gold reserves
in the C1 and C2 categories is some 8.4 tons. This is in respect of initially
in place reserves, and thereof some 400 kg have been produced during 2007 -
2008. In Irkutsk region, 25% of the Kopylovskoye project was sold out to a
group of external investors in 2007. Thereafter, in November 2008, a further
12.5% of the shares were sold out. This initially reduces the Kopylovskoye net
gold reserves to CAG AB. The remaining shares in Kopylovsoye AB are planned to
be dividended out to CAG's shareholders. 
CAG AB was publicly listed on the Swedish NGM Nordic Growth Market stock
exchange on March 29, 2005. The number of shareholders was some 4,000 as at
September 30, 2008. 


Result - the Group
For the nine month period ended September 30, 2008 the group reports a net
result after tax of TSEK -67,107 (TSEK6,922) which corresponds to SEK -0.143
per share (SEK 0.014). For the last quarter of the report period the net result
after tax was TSEK -10,382 (TSEK 32,959). This corresponds to EPS of SEK -0.018
(SEK 0.077). In the net result for the report period an impairment charge
relating to the alluvial subsidiaries OOO Artelj Lena and OOO Artelj Tyva is
included in the amount of TSEK -43,996. The corresponding charge relating to
the last quarter of the report period was TSEK -11,094. At the same time, a
one-off capital gain of TSEK 25,968 was included in the net result for the
9-month period and for the quarter July - September in 2007. 

Consolidated gold sales revenues were TSEK 116,580 (TSEK 102,099) during the
financial period. For the quarter July - September 2008 gold sales amounted to
TSEK 84,706 (TSEK 89,822). The gold volume sold was 659 kg for the full report
period, whereof some 480 kg during the last quarter. 

In addition, a revenue component of TSEK 17,651 (TSEK12,044) is included in the
consolidated P/L account relating primarily to services performed by the
transportation subsidiaries of the group, providing transportation services,
partly to external clients. Only the part applicable to external clients is
included in the group accounts. The transport revenues were TSEK 3,063 during
the last quarter of the report period (TSEK6,927). 

The change in stock of finished and semi-finished goods amounted to TSEK
26,929 (18,788). During the last quarter the same change was TSEK -4,385
(9,682). 

During the nine-month 2008 report period total exploration costs of TSEK 44,411
were capitalized at subsidiary level. In the corresponding nine month period of
2007 TSEK 16,296 was capitalized as mining permits. For the quarter July -
September 2008 the capitalization component amounted to TSEK 14,702
(TSEK13,325). 

Total operating costs in the group during the nine-month 2008 report period
amounted to TSEK 272,187 (TSEK166,020). For the quarter July - September 2008
the operating costs were TSEK 107,054 (TSEK108,082). The above mentioned
impairment charges are included in the operating costs for the full report
period as well as for the last quarter. The difference in operating costs
between the respective 9-month periods in 2007 and 2008 is also explained by
the fact that subsidiary OOO Artelj Lena was acquired in the middle of 2007,
and was therefore in that year only consolidated in the group P/L account as
from the third quarter. 

Net financial items were TSEK -5,246 for the report period (TSEK 26,902). For
the last quarter of the report period the net financial items were TSEK -2,708
(TSEK 25,925). The difference between the years is mainly explained by the
above described capital gain that arose in the third quarter of 2007. That gain
related to subsidiary Kopylovskoye AB. 

The tax income for the report period was TSEK 4,657 (TSEK -3,997) and the
minority share of the net result was TSEK -4,006 (TSEK 1,392). For the quarter
July - September 2008 the tax income amounted to TSEK 1,291 (TSEK -3,350), and
the minority share was TSEK -1,529 (TSEK1,255). 

(For full report see attached file.)