Terra Firma Resources Inc.
TSX VENTURE : TFR

Terra Firma Resources Inc.

April 19, 2011 09:18 ET

Terra Firma Signs MOU for Gold and Copper Property in South Sulawesi, Indonesia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 19, 2011) - Terra Firma Resources Inc. (TSX VENTURE:TFR) ("Terra Firma" or "the Company") is pleased to announce that the Company, through its wholly owned Indonesian subsidiary, PT. Terra Mineral Resources Indonesia, has entered into an memorandum of understanding ("MOU") with Pt. Mutiara Surya Mallawa ("Mutiara") and TirtaWinata ("Tirta"), under which the Company has the option to acquire 75% of the issued and outstanding shares of Mutiara. Mutiara is an Indonesian mineral exploration company that holds a mineral exploration license in respect of an initial 800 hectare property in South Sulawesi, Indonesia (the "Mallawa Property") which is prospective for Gold and Copper. In addition, Mutiara is expected to acquire an additional 10,000 hectares of prospective lands (the "Additional Properties") located within the 25 kilometre radius "area of interest" defined in the MOU.

In exchange for Mutiara and Tirta entering into the MOU, Terra Firma is required to pay an aggregate of US$100,000 to the shareholders of Mutiara, US$25,000 of which was paid on execution of the MOU and US$75,000 of which is payable within 60 days following the later of the date on which the MOU is approved by the TSX Venture Exchange and a NI43-101 report on the Mallawa Property is completed. The MOU contemplates that, following approval of the MOU by the TSX Venture Exchange, the parties will enter into an option agreement (the "Option Agreement") granting Terra Firma an option to acquire 75% of the issued and outstanding shares of Mutiara. Terra Firma is required to pay an additional US$100,000 and issue 100,000 common shares to Mutiara's shareholders on execution of the Option Agreement.

Under the Option Agreement, to successfully exercise the option to acquire 75% of the outstanding shares of Mutiara, Terra Firma will be required to: (1) pay an additional US$200,000 to Mutiara's shareholders within 18 months of the approval of the MOU by the TSX Venture Exchange; (2) issue a further 200,000 common shares to Mutiara's shareholders on the later of the date on which Terra Firma exercises the option and the date which is 120 days following execution of the Option Agreement; (3) issue a further 200,000 common shares to Mutiara's shareholders on thelater of the date on which Terra Firma exercises the option and the date which is 18 months following execution of the Option Agreement; and (4) fund US$1.75 million in exploration expenditures on the Mallawa Property and the Additional Properties, including at least US$250,000 in expenditures in the first year of the Option Agreement.

As part of the transaction, Terra Firma will pay a finder's fee of US$32,000 and 40,000 common shares, representing 8% of the cash payable and shares issuable by Terra Firma under the MOU and Option Agreement.

The entering into of the MOU and the Option Agreement and the payments of cash (other than the initial US$25,000 payment) and issuances of shares thereunder are subject to the approval of the TSX Venture Exchange. All shares issuable under the transaction will be subject to a four month hold period.

Brian Buchanan, CEO of Terra Firma said, "We are excited to start our NI43-101 exploration program on this prospective Gold and Copper property acquisition, because of its geological potential and its proximity to good infrastructure. This property fits well into our plan to develop a balanced portfolio of properties through a combination of grassroots prospecting, property acquisitions and the formation of strategic relationships in Java, Sumatra and Sulawesi Indonesia."

Terra Firma also announces that it has provided notice to the company that optioned the Restigouche Property in Quebec to Terra Firma, that Terra Firma has decided to withdraw from its property option agreement respecting the property and give up its interest in the property. Pursuant to the terms of the property option agreement, the claims comprising the Restigouche Property will revert to the optionee.

About Terra Firma Resources

Terra Firma is a mineral exploration company headquartered in Vancouver, BC, Canada. The Company's objective is to develop a balanced portfolio of properties through a combination of grassroots prospecting, property acquisitions and the formation of strategic relationships. The Company is currently investigating a number of potential prospects in Java, Sumatra and Sulawesi Indonesia.

If you are not currently on the Terra Firma updates list, please send in your email address to info@terrafirmaresources.com. The Company will send out regular updates and news releases to everyone who asks to be on the list. For further information about the Company visit the website at www.terrafirmaresources.com or SEDAR at www.sedar.com or Jamie Hyland, Tribeca Capital Partners Inc. at (604) 998-4730.

ON BEHALF OF THE BOARD

Brian Buchanan

Chief Executive Officer and Director

This Company Press Release contains certain "forward-looking" statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors and strategic partners, the interest rate environment, governmental regulation and supervision, seasonality, technological change, changes in industry practices, and one-time events. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein.

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 news release.

Contact Information