Terraco Gold Corp. Announces Results of Second Set of Drill Hole Assays from its Idaho Project

Including the Best Intersection Drilled to Date by Terraco-76.2 Metres of 1.195 GPT Gold

VANCOUVER, 07/25/12 - Terraco Gold Corp. (TSX VENTURE: TEN) ("Terraco" or the "Company") is pleased to report additional assay results from the 2012 drill program completed at its Almaden (Nutmeg Mountain) Project located in Washington County, Idaho. The Company is reporting 8 drill holes in this release and has now reported 18 of the 32 core holes drilled this year. In-fill and metallurgical core drilling continues to encounter significant intercepts in these holes from surface to 76.2 metres ("m") or 250 feet ("ft").

Drill Highlights Include:

--  Hole MET-2 intersected 76.2 m averaging 1.195 grams per tonne ("gpt")
    gold from surface to 76.2 m (250 ft averaging 0.035 Troy ounces per
    short ton ("opt") gold from surface to 250.0 ft), including 27.0 m
    averaging 2.168 gpt gold to 40.9 m (88.5 ft of 0.063 opt gold to 134
    ft), with 5.0 m of that inclusion averaging 3.220 gpt gold to 29.4 m
    (16.5 ft of 0.094 opt gold to 96.5 ft);

--  Hole TAL-781C intersected 61.6 m averaging 1.100 gpt gold from surface
    to 61.6 m (202 ft of 0.032 opt gold from surface to 202 ft), including
    7.6 m averaging 1.488 gpt gold to 18.3 m (25 ft of 0.043 opt gold to 60
    ft), and 18.3 m averaging 1.408 gpt gold to 39.6 m (60 ft of 0.041 opt
    gold to 130 ft); and

--  Hole TAL-785C intersected 44.2 m averaging 1.182 gpt gold from 3.0 to
    47.3 m (145 ft of 0.034 opt gold from 10 to 155 ft), including 18.3 m
    averaging 2.032 gpt gold to 29.0 m (60 ft of 0.059 opt gold to 95 ft).

A table summarizing this round of drill results can be found at the conclusion of the news release.

Todd Hilditch, President and CEO of Terraco, said: "We are excited about this second set of results, from our Idaho advanced -stage project, which include the best intercept of grade and thickness drilled by Terraco to date. Terraco looks forward to the results of the remaining drill holes to be released in the coming weeks."


Drill Program Summary

The 2012 exploration program was designed to accomplish three goals:

1. continue to test continuity and confirm the grade of the deposit internally by obtaining better, more representative, samples through the use of core drilling instead of reverse-circulation ("RC") drilling;

2. obtain large diameter core samples for metallurgical testwork that will address specific questions unanswered in prior metallurgical studies; and

3. explore for high grade feeder zones below and laterally away from the known resource.

Terraco's 2012 drill program utilized HQ3 core drilling in mostly shallow holes in 4 different areas of the deposit aimed at:

- better defining resources in the areas of older conventional or rotary air blast and RC drilling; and

- measuring the difference in grades between the various drill techniques.


Metallurgical Testing

Drilling also included large diameter core to provide sufficient material / larger particle size fractions for column test work sent to McClelland Laboratories in Sparks, Nevada. Two of the 3 drilled metallurgical holes (MET-1 and MET-2) have returned the best intercepts of Terraco's designed program. Sample compositing and testwork are currently underway. Testing will focus on leach recoveries by ore type and size fractions and should be completed in calendar Q3/4.

Terraco, for the 2012 program to date, has drilled 28 HQ3 holes for a total of 2,462.3 m (8,078 ft) and 4 large diameter (4 inch) core holes for metallurgical purposes amounting to 298.7 m (980 ft). The majority of the HQ3 holes were drilled to target depths of 90 m (300 ft) or less. A few holes, drilled as deep as 610 m (2,002 ft), tested for gold mineralization down dip along structures, and explored for deeper feeder zones.

Assay results are summarized in the table below.

Drill
 Hole                     Interval  Gold From   To Interval  Gold From    To
 Number  Area                  (m) (gpt)  (m)  (m)     (ft) (opt) (ft)  (ft)
----------------         ---------------------------------------------------
MET-2    South
          Pit                 76.2 1.195  0.0 76.2      250 0.035    0   250
                Including     27.0 2.168 13.9 40.9     88.5 0.063 45.5   134
                with           5.0 3.220 24.4 29.4     16.5 0.094   80  96.5

MET-3    North
          Pit                 25.9 0.582  0.0 25.9       85 0.017    0    85
                Including      1.2 2.380  5.0  6.2        4 0.069 16.5  20.5
                with           6.6 0.708 29.9 36.4     21.5 0.021   98 119.5

TAL-776C North
          Zone                 3.0 0.456  0.0  3.0       10 0.027    0    10
                              17.0 0.650 12.2 29.0       55 0.019   40    95
                               4.6 0.669 36.6 41.2       15 0.024  120   135

TAL-777C North
          Zone                         Assays Pending

TAL-778C North
          Zone                         Assays Pending

TAL-779C Main
          Zone                         Assays Pending

TAL-780C North
          Zone                         Assays Pending

TAL-781C Main
          Zone                61.6 1.100  0.0 61.6      202 0.032    0   202
                Including      7.6 1.488 10.7 18.3       25 0.043   35    60
                Including     18.3 1.408 21.3 39.6       60 0.041   70   130

TAL-782C North
          Zone                 2.4 0.823  2.1  4.6        8 0.024    7    15
                               3.0 0.673  7.6 10.7       10 0.020   25    35
                               1.5 0.434 12.2 13.7        5 0.013   40    45
                               1.5 0.440 15.2 16.8        5 0.013   50    55

TAL-783C Main
          Zone                27.4 0.797  1.5 29.0       90 0.023    5    95
                Including      3.0 1.643 21.3 24.4       10 0.048   70    80

TAL-784C North
          Zone                25.9 0.611  0.0 25.9       85 0.018    0    85
                Including      6.1 1.052  0.0  6.1       20 0.031    0    20
                               1.5 0.340 27.4 29.0        5 0.010   90    95
                               1.5 0.473 33.5 35.1        5 0.014  110   115

TAL-785C South
          Pit                 44.2 1.182  3.0 47.3      145 0.034   10   155
                Including     18.3 2.032 10.7 29.0       60 0.059   35    95

Intersections were composited using a 0.34 gpt (0.010 opt) gold cut-off and
may include short intervals of values below the cut-off grade. Intervals are
converted from feet to metres. Rounding to metres may affect interval
values.

Assay determinations for gold were made by 50 gram fire assay, using an AA finish. Analyses were performed by ALS Minerals USA, Inc. in Reno, Nevada.

Please click on the link below for a map of the 2012 drilling released to date, which will also available on Terraco's website at www.terracogold.com

http://www.TerracoGold.com/i/misc/23july2012_dh_pr.jpg

Drilling during 2012 at the Almaden (Nutmeg Mountain) Project was conducted by Marcus and Marcus Exploration of Coeur d'Alene, Idaho and National EWP, Inc., of Hayden, Idaho.

The exploration and drill program at Terraco's Almaden (Nutmeg Mountain) Project was designed by Charles Sulfrian, CPG, Vice President, Exploration, for Terraco and William Snoddy, Almaden Project Manager. Unless otherwise noted, the technical information in this release has been reviewed and approved by Charles Sulfrian, CPG., Vice President, Exploration, of Terraco and a 'qualified person', as defined by National Instrument 43-101,Standards of Disclosure for Mineral Projects.

Terraco is a mineral exploration company, listed on the TSX Venture Exchange under the symbol "TEN".


Forward-Looking Statements

Certain of the statements made and information contained herein are "forward-looking statements" within the meaning of Canadian securities legislation or "forward-looking information" within the meaning of the Ontario Securities Act and the Alberta Securities Act. This includes statements concerning the Company's plans at its mineral properties, which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or forward-looking information. Forward-looking statements and forward-looking information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or forward-looking information, including, without limitation, the availability of financing for activities, risks and uncertainties relating to the interpretation of drill results and the estimation of mineral resources and reserves, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, metal price fluctuations, environmental and regulatory requirements, availability of permits, escalating costs of remediation and mitigation, risk of title loss, the effects of accidents, equipment breakdowns, labour disputes or other unanticipated difficulties with or interruptions in exploration or development, the potential for delays in exploration or development activities, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, expectations and beliefs of management and other risks and uncertainties. In addition, forward-looking statements and forward-looking information is based on various assumptions. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking information or forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements or forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking statements or forward-looking information, whether as a result of new information, future events or otherwise.

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, ext. 2
(604) 682-3860 (FAX)
info@terracogold.com
www.terracogold.com