TEN Terraco Gold Corp

Terraco Gold Corp. (TSX VENTURE:TEN) ("Terraco" or the "Company") is pleased to
announce that it has entered into a three-way transaction whereby Terraco and
its wholly owned Nevada subsidiary, TGC Holdings Ltd., ("TGC" and together with
Terraco, the "Terraco Parties") will receive a US$1,000,000 non-dilutive cash
infusion and an option to acquire a net smelter returns royalty ("NSR")
(described below) on part of the Spring Valley gold project located in Pershing
County, Nevada ("Spring Valley Project"). This is the third NSR transaction that
Terraco has entered into relating to the growing Spring Valley Project, which is
a joint venture between Barrick Gold Corp. ("Barrick") and Midway Gold Corp.
("Midway"). The Spring Valley Project adjoins Terraco's 100% owned Moonlight
Project that encompasses over 35 square kilometers.


"In conjunction with our first two NSR transactions on the Spring Valley Project
(December 2011 & March 2012), Terraco now has royalty coverage, either by direct
ownership or option, of up to 3% NSR on this developing project. This is
exciting for several reasons in that we believe Barrick's continued work and
development at Spring Valley will add additional ounces of gold discovered
beyond the current NI 43-101 mineral resource and that Terraco will enjoy
significant cash flow (from the 3% NSR) on those growing gold ounces when in
production. Terraco management believes that the valuation of a 3% gold NSR on a
Barrick led project will grow as the project moves towards production. We are
also excited, in these tough economic and market times, to be able to deliver to
shareholders a US$1.0 million cash infusion without issuing a single share, thus
no additional shareholder dilution," stated Todd Hilditch, President and CEO of
Terraco.


Transaction Terms 

Under the terms of the three-way transaction, the Terraco Parties have: (i)
entered into a royalty purchase agreement with the royalty owner (the "Royalty
Vendor") on certain claims on the Spring Valley Project pursuant to which TGC
will acquire 1/7ths of the sliding scale NSR (the "Purchased NSR Interest") (see
Note 1). The Purchased NSR Interest represents a 1% NSR when gold prices exceed
US$700 per ounce and on production greater than 500,000 ounces of gold from the
claims covered by the Royalty Vendor's NSR on the Spring Valley Project; and
(ii) entered into a second royalty purchase agreement with a third party
investor (the "Strategic Investor") pursuant to which the Terraco Parties will
sell the Purchased NSR Interest to the Strategic Investor and retain a 50%
interest. Transaction details are as follows:




--  in consideration of the Purchased NSR Interest, Terraco will pay the
    Royalty Vendor US$4,200,000 and issue to the Royalty Vendor 800,000
    common shares. 
    
--  the Strategic Investor will fund the US$4,200,000 for Terraco to acquire
    the Purchased NSR Interest by buying the Purchased NSR Interest from
    Terraco for US$5,200,000 thus providing Terraco a US$1,000,000 cash
    infusion. 
    
--  the Terraco Parties will retain an option to acquire, for US$2,600,000,
    one-half of the Purchased NSR Interest (0.5% of the 1% NSR based on
    current gold prices) until December 30, 2016 or within 1 year of a
    change of control of Terraco or TGC. 



As part of the transaction, Terraco retains US$1,000,000 as a cash infusion
without the issuance of debt or common shares, or any other mechanism, that
would dilute or effect the Company's share structure. The Company continues to
maintain a debt-free balance sheet and on closing of this transaction will have
in excess of CDN$2,100,000 in the treasury.


Note 1: NSR Sliding Scale



-------------------------------
Gold Price (per oz)         NSR
-------------------------------
less than $300               2%
-------------------------------
$300 - $399                  3%
-------------------------------
$400-$499                    4%
-------------------------------
$500-$599                    5%
-------------------------------
$600-$699                    6%
-------------------------------
$700+                        7%
-------------------------------



The transaction is subject to the acceptance of the TSX Venture Exchange as well
as certain other closing conditions. 


Terraco is a mineral exploration company listed on the TSX Venture Exchange
under the symbol "TEN". Please visit Terraco's website at www.terracogold.com
for additional information.


Forward Looking Statements 

This news release contains forward looking statements. Although Terraco believes
that the expectations reflected in these forward looking statements are
reasonable, undue reliance should not be placed on them because Terraco can give
no assurance that they will prove to be correct. Since forward looking
statements address future events and conditions, by their very nature, they
involve inherent risks and uncertainties. Additional information on these and
other factors that could affect Terraco's operations and financial results are
included in reports on file with Canadian securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com).


FOR FURTHER INFORMATION PLEASE CONTACT: 
Terraco Gold Corp.
Todd Hilditch
President and CEO
(604) 443-3831 or Toll free: 1 (877) 792-6688
(604) 682-3860 (FAX)
www.terracogold.com

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