Terraco Gold Announces Merger Highlights

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 26, 2011) - (TSX VENTURE:TEN) Terraco Gold Corp. ("Terraco" or the "Company") is pleased to announce highlights of the recently completed merger between Terraco and Western Standard Metals Ltd., as announced on January 24, 2010. The combined assets of the Company have created a mix of advanced and early-stage gold-silver projects in Idaho and Nevada, USA.

Terraco's CEO Todd Hilditch stated: "Terraco is excited to have completed the merger with Western Standard Metals Ltd. to create a company that offers shareholders exposure to an exciting combination of gold exploration and development assets in the western United States. An upcoming drill program will target additional near-surface gold mineralization potential along with higher grade feeder mineralization at the Company's Almaden Gold deposit in Idaho. In addition, Terraco will continue to explore the potential at the Company's Moonlight Project in Nevada which adjoins the expanding Barrick/Midway joint venture project at Spring Valley. Terraco is currently planning its 2011 exploration program for both the Almaden Gold and Moonlight Projects. These programs are expected to commence with mapping and geophysical work in February, followed by an initial drill program anticipated to begin in early spring 2011."

Company Highlights

Almaden Gold Project

The 100% owned Almaden Gold Project is located 12 miles east of Weiser and 78 miles north of Boise, Idaho. The project hosts an NI 43-101 compliant Measured and Indicated Resource of 864,000 ounces of gold and an Inferred Resource of 84,000 ounces of gold within 300 feet of surface. Terraco plans to initiate a spring 2011 drill program to explore the extension of the near-surface mineralization that is open to the north and south, as well as test for high-grade, bonanza-style, structurally-controlled gold mineralization at depth. The advanced-stage Almaden Gold Project boasts excellent access and infrastructure, along with over 199,806 feet of historic drilling in 887 holes.

Moonlight Project

The 100% owned Moonlight Project is located 21 miles northeast of Lovelock in Pershing County, Nevada. The property adjoins the Spring Valley joint venture between Barrick and Midway, and is located approximately five miles north of the Coeur d'Alene Rochester silver-gold mine. Drilling on the Moonlight Project has returned 35 grams per tonne silver over 24 metres, including 211 grams per tonne silver over 1.5 metres. Surface sampling has returned strong gold-silver grades of up to 11.86 grams per tonne gold and 139 grams per tonne silver.

Terraco now has 112,459,151 issued and outstanding common shares, as well as 44,787,125 issued and outstanding warrants and options, for a total of 157,246,276 shares on a fully diluted basis. Further details regarding Terraco or Western and the details of the Arrangement can be obtained from www.sedar.com. Full details of the merger of Western and Terraco are disclosed in Terraco's news releases available on SEDAR. A presentation of the combined companies can be accessed at Terraco's website at www.terracogold.com.

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 NI 43-101, Standards for Disclosure of Mineral Projects, unless otherwise noted.

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 as 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 the Canadian securities regulatory authorities and may be accessed through SEDAR (www.sedar.com).