Terraco Gold Corp.
TSX VENTURE : TEN

Terraco Gold Corp.

September 12, 2007 07:00 ET

Terraco Initiates Drilling at Moonlight

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 12, 2007) - Terraco Gold Corp. ("Terraco") (TSX VENTURE:TEN) is pleased to report that drilling is underway at its 100% owned Moonlight Property in Pershing County, Nevada.

The Moonlight Phase I drilling program, consisting of approximately 20,000 feet ("ft") of reverse circulation drilling, was developed by Charles Sulfrian, P.Geo., Vice President, Exploration, and Ken Snyder, P.Geo., based upon a systematic grass-roots program of mapping, sampling and airborne and ground geophysical surveys. The drilling program will test several targets that appear to display either geological or geophysical characteristics similar to areas of gold mineralization in Midway Gold Corp.'s ("Midway") Spring Valley Project, adjacent to Moonlight to the south. The targets suggest that Moonlight could comprise the next mineralized locus along a string of deposits ranging from Relief Canyon at the south end, northward through Nevada Packard, Rochester and Spring Valley.

Terraco has retained the services of O'Keefe Drilling ("O'Keefe") of Butte, Montana, to carry out an initial series of reverse circulation drill holes. O'Keefe crews have considerable experience in local drilling conditions, having drilled at Midway's very successful Spring Valley Project.

The Moonlight Property is located 25 miles northeast of Lovelock, Nevada in the Humboldt Range, 5 miles north of Coeur d'Alene Mining Company's Rochester Mine. Throughout its 17-year history, the Rochester Mine has produced over 107 million ounces of silver and well over 1 million ounces of gold, as reported on Coeur d'Alene's website. The Moonlight Property constitutes the northern boundary of Midway's Spring Valley Project, where Midway has reported drill intercepts that include highlights of 105 ft of 0.325 ounce per ton ("opt") gold, 215 ft of 0.137 opt gold and 123 ft of 0.169 opt gold. The Humboldt Trend contains some very exciting projects and prospects. Covering more than nine square miles, Terraco's Moonlight Project is one of the largest untested properties remaining among the projects being developed along this trend.

Terraco would also like to report that an updated technical report entitled 'Technical Report on the Moonlight Property - Indian Mining District, Pershing County' dated August 31, 2007 ("Moonlight Technical Report"), was filed on SEDAR on September 11, 2007. The full report is also available on Terraco's website at www.terracogold.com. For reference, the original technical report with the same title dated October 3, 2006 ("Moonlight Technical Report"),was announced and filed on November 6, 2006. N.C. Carter, PhD., P. Eng is the qualified person, as defined in NI 43-101, responsible for the preparation of the Moonlight Technical Report.

The technical information in this release has been reviewed and approved by Charles Sulfrian, P.Geo., Vice President, Exploration of Terraco and a 'qualified person', as defined by NI 43-101.

Terraco also announces that on September 12, 2007, it granted 355,000 incentive stock options to consultants and an officer of the Company pursuant to its Stock Option Plan. These options will be exercisable at a price of $0.60 per share. Of these options, 25,000 will expire on September 12, 2009 and the remaining 330,000 options will expire on September 12, 2012.

Terraco Gold Corp. 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.

ON BEHALF OF THE BOARD

Todd Hilditch, President and CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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