Terraco Begins Geophysical Survey at Moonlight Project (Nevada)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 2, 2011) - Terraco Gold Corp. (TSX VENTURE:TEN) ("Terraco" or the "Company") is pleased to announce that it has initiated a ground geophysics program at its Moonlight property ("Moonlight"), located in Pershing County, Nevada. In addition, Terraco reports that drilling continues with two core drill rigs at its Almaden property ("Almaden"), located in Washington County, Idaho.

Moonlight Geophysics

Terraco has initiated a controlled-source, audio-frequency magnetotellurics - controlled-source induced polarization ("CSAMT-CSIP") geophysical survey at Moonlight. When complete, the CSAMT-CSIP program will augment existing magnetic surveys and recent geologic mapping (currently being interpreted) to better delineate drill targets at Moonlight. Terraco expects to begin the drill program at Moonlight this summer.

Controlled-source audio-frequency magnetotellurics ("CSAMT") is a commonly used surface-based geophysical method which provides resistivity information of the subsurface. This low-impact, non-intrusive technique has been used extensively by the minerals, geothermal, hydrocarbon and groundwater exploration industries since 1978 when CSAMT equipment systems first became available commercially.

The CSAMT method involves transmitting a controlled signal at a suite of frequencies into the ground from one location (transmitter site) and measuring the received electric and magnetic fields in the area of interest (receiver site). Calculated resistivity values from CSAMT data relate to geology. Primary factors affecting resistivity include rock or sediment porosity, pore fluids and the presence of certain mineral assemblages. Anomalously high and anomalously low resistivity values measured in a given search area may be associated with silicification and argillization, respectively.

Controlled-source induced potential ("CSIP") is an effective method for collecting Induced Polarization ("IP") data. The CSIP method utilizes the same transmitter from the CSAMT survey. IP or induced potential measures the ability of materials in the ground to polarize at interfaces. There are relatively few subsurface conditions that create an IP response. Metallic mineralization, particularly disseminated sulfides, causes increased IP values. Anomalously high IP responses from CSIP can indicate the presence of sulfides at depth that may be associated with precious metals mineralization.

At Moonlight, as at neighbouring projects including Coeur d'Alene Rochester Mine and the Barrick Gold / Midway Gold Spring Valley joint venture, structures such as the Black Ridge Fault Zone and other district and local area faults, exert significant influence or control on precious metals mineralization. The CSAMT-CSIP survey and detailed mapping will help Terraco in identifying such structures and faults.

The geophysical survey is being carried out by Zonge International of Tucson, Arizona. Geophysical survey description from Zonge's website.

Almaden Update

Terraco's Phase I core drill program utilizing two core drill rigs at Almaden is progressing. The program was designed to confirm continuity of gold mineralization within 300 feet of surface and to begin the search for high-grade, bonanza-style, structurally-controlled gold mineralization at depth.

Terraco is currently on its fourth drill hole. Both drill rigs have drilled core to depths up to 600 feet deeper than previous operators at Almaden, including the first hole terminating at 1,411 feet. The first two core holes have been submitted to ALS Chemex of Reno, Nevada, for gold determinations by fire assay. Assay results for the first two holes are expected within two to three weeks.

Core drilling will aid in further understanding local faulting and alteration and how these important factors may have impacted potential precious metals mineralization in the Almaden area, where mineralization is open to the north and to the south. Almaden currently hosts a National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101"), compliant measured resource of 239,000 ounces of gold (10,810,000 tons grading 0.022 Troy ounce per ton ("opt")), an indicated resource of 625,000 ounces of gold (32,240,000 tons grading 0.019 opt) and an inferred resource of 84,000 ounces of gold (5,270,000 tons grading 0.016 opt), at cut-off grades of 0.008 opt, 0.012 opt and 0.023 opt for the oxide, mixed and sulfide mineralization, respectively.

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

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.

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