Terraco Gold Corp.
TSX VENTURE : TEN

Terraco Gold Corp.

August 07, 2009 10:00 ET

Terraco Signs Agreement to Option Bonanza Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 7, 2009) - Terraco Gold Corp. ("Terraco") (TSX VENTURE:TEN) is pleased to announce that it has entered into an exploration and option agreement dated August 5, 2009 (the "Agreement") with Landen Capital Corp. ("Landen") (TSX VENTURE:LAN.P), a Tier 2 TSX Venture Exchange (the "Exchange") listed issuer, pursuant to which Terraco has granted Landen a 5 year option to acquire Terraco's undivided interest in the Bonanza Property (the "Bonanza"). Bonanza is a gold exploration property located in La Paz County, Arizona. Terraco holds its interest in Bonanza through a mining lease agreement with Jim Butt of Monticello, Utah.

Landen is a "capital pool company" under the policies of the Exchange and as such, the transaction contemplated by the Agreement will represent Landen's qualifying transaction (the "QT") and is subject to the approval of the Exchange (See Landen's news release of August 6, 2009).

Pursuant to the terms of the Agreement and in order to earn Terraco's interest in Bonanza, Landen must:

(i) spend an aggregate of USD$1,200,000 on Bonanza in work commitments (USD$100,000 in years one and two, USD$200,000 in year three, USD$300,000 in year four and USD$500,000 in year five). The USD$100,000 to be spent in year one is a firm commitment of Landen;

(ii) pay to Terraco an aggregate of USD$77,500 in cash lease payments (USD$5,000 upon execution of the Agreement, USD$7,500 in year one, USD$15,000 in year two and USD$25,000 in years three and four); and

(iii) issue to Terraco 500,000 common shares of Landen upon completion of the QT.

Landen has commissioned a National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") compliant Technical Report in compliance with the guidelines of NI 43-101, which will be filed with the Exchange.

Upon Exchange approval of the QT, Terraco will hold an aggregate of 500,000 common shares of Landen, representing approximately 4.7% of the total issued and outstanding shares of Landen on a non-diluted basis.

Bonanza

Bonanza is located within the Harquahala (or Ellsworth) Mining District of the Little Harquahala Mountains in La Paz County, Arizona and is comprised of 11 unpatented and 9 patented lode mining claims (394 acres) controlled by TGC Holdings Ltd, a wholly-owned subsidiary of Terraco. Bonanza is eight miles south of the town of Salome, Arizona, approximately 55 miles southwest of Wickenburg, Arizona and is centered primarily on the historic Harquahala and Golden Eagle Mines. The exploration work to date has included limited prospecting, rock geochemistry, geologic mapping, geophysics and drilling.

Corporate

Todd Hilditch, Chief Executive Officer, President, a director and shareholder of Terraco and Terry Lashman, a director of Terraco are also directors, officers and/or shareholders of Landen. As neither Messrs. Hilditch nor Lashman are control persons of either Terraco or Landen, the transaction is arm's length for the purposes of Exchange policies.

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

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

Contact Information

  • Terraco Gold Corp.
    Todd Hilditch
    President and CEO
    604.443.3830 or Toll free: 1.877.792.6688
    604.682.3860 (FAX)
    www.terracogold.com