Terraco Gold Corp. Commences Drilling at its Moonlight Property

Drilling Continues at Terraco's Almaden Property (Idaho)

VANCOUVER, Oct. 25, 2011 - Terraco Gold Corp. (TSX VENTURE: TEN) (“Terraco“) is pleased to announce that drilling commenced today at its 100% owned Moonlight property (“Moonlight“) in Pershing County, Nevada.

The fall 2011 drill program is expected to be approximately 4,500 metres and include up to 15 reverse-circulation (“RC“) drill holes. Drilling is being conducted by AK Drilling, Inc. of Butte, Montana. Follow-up drilling in the spring of 2012 will be based on the results of this fall's program and other targets identified in the last 6 months as prospective for gold mineralization.

Drill targets are based on the interpretation of a geologic mapping program, a prior aeromagnetic survey and the ground geophysical survey recently conducted at Moonlight and announced on October 21, 2011. Targets include drill testing the Black Ridge Fault system and other structures that may control mineralization and alteration at Moonlight.

Recent mapping confirms the structural setting and stratigraphy that includes a northerly continuation of the Black Ridge Fault system from the area of the Barrick-Midway Spring Valley joint venture that adjoins Moonlight on the south side of the claim block. As well, north-trending interpreted geophysical anomalies coincide spatially with the mapped Black Ridge Fault zone and other important structures for nearly 3 kilometres of strike length at Moonlight. The geophysical signatures interpreted in conjunction with the completed mapping further suggest that these areas are prospective for gold mineralization and helped identify exciting drill targets within the Moonlight project area. (The Black Ridge Fault, a district-scale structural zone, has long been known to be an important control of the mineralization at Coeur d'Alene Corp.'s Rochester Mine and Barrick/Midway Gold Corp.'s Spring Valley deposit.)


Almaden Project Update

Terraco's Phase I core drilling continues at its Almaden property (“Almaden“), located in Washington County, Idaho. To date, 15 HQ3 core holes have been completed at Almaden with assay results from 9 holes having been released. (See news releases dated June 29 and October 5, 2011, respectively.) Core samples from the remaining holes are currently being analyzed, with results expected over the next several weeks.

Terraco is very pleased with its progress to date at Almaden and continues to improve upon its knowledge and understanding of the project. The Almaden drill program was designed to improve grade and confirm the continuity of the shallow tabular gold resource that is near surface (within 100 metres or 300 feet of surface) and to test for high-grade, bonanza style, structurally controlled gold mineralization at depth (to 600 metres or 2,000 feet deep). To date, drilling has encountered mineralized zones much deeper than previous operators and returned gold values by the utilization of core drilling that are significantly higher in value compared to holes proximal to those drilled by past operators using conventional drilling or RAB.

The core drilling will aid in further understanding local, deeper faulting and alteration, and how these important factors may have impacted potential precious metals mineralization at Almaden, where mineralization is open to the north and to the south. Almaden currently hosts an outcropping, flat lying, tabular ore body with a National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101“), compliant measured and indicated resource of 864,000 ounces of gold from surface to 100 metres (approximately 300 feet).

The exploration and drill programs for Moonlight and Almaden were designed by Charles Sulfrian, C.P.G., Vice President, Exploration of Terraco and a 'qualified person', as defined by NI 43-101.

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).

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



Contact Information

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