Terraco Gold Announces 3rd Royalty Acquisition on the Spring Valley Gold Deposit, Nevada, and a Non-Dilutive US$1,000,000 Cash Infusion

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/22/13 -- 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

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Gold Price (per oz)         NSR
-------------------------------
less than $300               2%
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$300 - $399                  3%
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$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).

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.

Contacts:

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