TERRACO GOLD CORP. TSX.V: TEN OTC Pink: TCEGF Contact: Todd Hilditch, President and CEO 960 - 1055 West Hastings Street Vancouver, BC Canada, V6E 2E9 Toll free: (877) 792-6688 Phone: (604) 443-3835 Fax: (604) 682-3860 Email: info@terracogold.com Website: www.terracogold.com Shares Outstanding: 130 million 52 Week Trading Range: Canada: Hi: C$0.40 • Low: C$0.165

Terraco Gold Corp. TSX.V: TEN; OTC Pink: TCEGF) -- www.terracogold.com) is aggressively underpinning its future value, in a tough market, with a second royalty transaction to complete its royalty coverage on a Barrick led joint venture of an over 3.5 million ounce gold deposit (Spring Valley Project) right next door to its 100%-owned, gold-silver Moonlight Project (13.5 sq. mile) in Nevada.
       Exploration at the Spring Valley Project, a joint venture between Barrick Gold and Midway Gold, is continuing to prove up a world-class gold deposit by growing the known gold ounces. The gold deposit remains open to the south, as well as to the north toward Moonlight, which adjoins Spring Valley.
Terraco has successfully covered the entire Spring Valley Project’s reported gold resource with a combination of a direct royalty ownership, a royalty option and a first right of refusal royalty option on an area of interest around certain claims covering the gold deposit.
       The Spring Valley royalty option could provide significant future cash flow for Terraco. Upon fulfillment of the terms of the royalty option, the company would be entitled to a 2.5% royalty on a substantial portion of the gold produced at Spring Valley as well as up to a 1% royalty on a northern area of the deposit (approx. 20%) where Barrick and Midway Gold have had excellent gold grade in holes drilled. Since the deposit is characterized by easily recoverable coarse gold, recovery rates should be relatively high. Using just Spring Valley’s NI 43-101 measured and indicated resource of 2.16 million ounces, a conservative 80% rate would generate more than 1.7 million ounces of gold. Conservatively, Terraco’s share, if its royalty option covered 75% of the ore body, could be well in excess of 30,000 ounces – and even at a fraction of today’s gold prices, that would mean tens of millions for Terraco’s bottom line.
       “We are pleased to be able to finalize royalty coverage on the entire deposit,” says Hilditch. “Our Spring Valley net smelter royalty option sets us apart from other juniors and gives us the opportunity to add more value to Terraco shareholders by underpinning our company with future cash flow or the option to monetize bits of the royalty for a non-dilutive financing to the company.”

Terraco Has Three Pillars to Provide
Shareholders Value – All Gold

Significantly, Terraco is setting itself apart with its recent transactions in an attempt to build future shareholder value. The transactions relate specifically to gold in the ground underpinning the company’s value:
       • Near 1 million ounce gold deposit (and growing) in the ground in Idaho (Almaden “Nutmeg Mountain” Project)
       • A gold production royalty option on a Barrick led project in Nevada -currently over 3.5m ounces (Spring Valley Project)
       • 13.5 sq miles of gold and Silver exploration blue-sky on a Nevada project that adjoins the Spring Valley Project outlined above (Moonlight Project)
       “Having three gold diversified related assets inside Terraco, gives our shareholders three opportunities for success with each one of them the possibility for a company maker,” says Hilditch.
       The Barrick-led Spring Valley Project currently has an estimated resource of over 3.5 million ounces of gold. Barrick has the right to earn a 60% interest in the project by completing $30 million in work expenditures before the end of 2013 and they have recently announced an $11 million budget for 2012 which would cause them to most likely earn in to the project early.
       Terraco’s Moonlight project also is just five miles from Coeur d’Alene’s massive silver-gold Rochester Mine which over its 24-year history produced 127 million ounces of silver and over 1.2 million ounces of gold and recently returned to production, while adjoining Spring Valley on the North.

Aggressive Exploration Planned in Early 2012 at the Idaho Gold Project

The 2012 exploration planning for advancement of the Almaden/Nutmeg Mountain project is currently underway. The program is fully financed by the recent $5 million cash infusion, and is expected to both expand known mineralized areas as well as search for feeder zones.
       The Almaden/Nutmeg Mountain Project, purchased by Terraco in early 2011 for under $20 an ounce, hosts an NI 43-101-compliant measured and indicated resource of 864,000 ounces of gold and an inferred resource of 84,000 ounces of gold for a total of 948,000 ounces of gold, all within approximately 300 feet of surface. The currently identified deposit is an outcropping, flat-lying orebody about 1000 feet wide, 2000 feet long and 300 feet thick.
       The 2009 NI 43-101 technical report, prepared by Mine Development Associates, outlined a measured resource of 9,810,000 tonnes grading 0.754 g/t, an indicated resource of 29,250,000 tonnes grading 0.651 g/t, and an inferred resource of 4,780,000 tonnes grading 0.549 g/t at cutoff grades of 0.274 g/t, 0.411 g/t, and 0.789 g/t for the oxide, mixed, and sulfide mineralization. The report was based on gold cutoffs of 0.274 g/t for the oxidized material, 0.411 g/t for mixed (partially oxidized) material, and 0.789 g/t for sulfide (unoxidized) material.
       One of Terraco’s key objectives at Almaden is to find the feeder zone for the mineralization discovered to date. One shallow drill hole intersected significant widths of mineralization grading an average of 0.134 ounce per ton gold over 46.6 feet. Terraco believes the existing surface deposit sits on top or nearby to feeder type higher grade gold.
       “Expanding the known resource, increasing the grade of the resource and initiating the development work required for economic review as a production scenario will be three of Terraco’s primary objectives in 2012 at Almaden,” says Hilditch. “We are expecting an initial preliminary assessment (PEA) by 3Q 2012.”
       Exploration is being conducted by highly respected professionals who were involved in the discovery or co-discovery of major Nevada gold deposits turned mines such as Barrick’s Goldstrike Mine – partially credited to Terraco Gold’s VP of Exploration Charles Sulfrian, CPG – and Newmont’s Ken Snyder ‘Midas’ Mine, named after Terraco’s lead consulting geologist, Dr. Ken Snyder.
       “The key at Terraco is an experienced geological team matched up with a creative management team,” says Hilditch.

Investment Considerations

Terraco Gold has taken significant steps over the past year to position itself as an aggressively growing company with solid leverage in the gold sector while synergistically adapting its business model to give shareholders multiple opportunities for value.
       A significant part of Terraco Gold’s value lies in its management team of particularly experienced and accomplished mining professionals.
       Hilditch has been Terraco’s President and CEO since its inception in 1995 and has over 17 years experience in the natural resource sector, including serving as president, CEO and director of numerous TSX Venture listed companies, including Salares Lithium, whose $350 million merger with Talison Lithium created the world’s largest producing lithium company.
       Sulfrian has more than 30 years of national and international exploration experience, particularly at Barrick’s Goldstrike Mine. In the 1980s, his work helped lead to the discovery of the Post Oxide Deposit and the Deep Post Deposit. Dr. Snyder has over 30 years of national and international exploration experience involving the discovery and mining of precious, base metal and mineral deposits, including the Rex Grande gold vein in Nevada, now known as Newmont Mining’s producing Ken Snyder (Midas) Mine.
       This stellar team has now given investors and shareholders a triple opportunity for synergistic success – proven gold ounces in the ground at its Almaden (Nutmeg Mountain) Project, the potential for significant future cash flow through a royalty from the Barrick-led Spring Valley project and blue sky exploration potential at its Moonlight Gold-Silver Project.
One additional and intriguing option for Terraco Gold is the possibility the company could monetize part of its Spring Valley royalty and in the process raise even further millions in capital to explore and develop its Almaden and Moonlight projects. This possibility would allow Terraco to maintain its current share structure, while bringing in money in a non-dilutive manner, without issuing additional shares.
       “Terraco Gold’s hybrid model of growth gives our company a strong upside potential within the gold industry,” says Hilditch. “Our financial position was secured by the royalty option transaction, which provides long term cash flow opportunity. Our safety is our nearly million-ounce, outcropping gold resource at Almaden. Our blue-sky is the potential of the Moonlight Property truly becoming a golden and silver elephant.”