Terraco Gold Corporation TCEGF

RE: Dr. Michael Berry's Morning Notes

[segltech]

Michael Berry, Morning Notes (11/03/10)

"Terraco Gold announced that it had entered into a binding letter agreement with Western Standard Metals as of October 29, 2010. Under terms of this agreement, Terraco plans to acquire all the outstanding shares and warrants of WSM in an all-share transaction. We think it will benefit both the shareholders of Terraco Gold and Western Standard Minerals.

Yesterday, the shares of Terraco sold off substantially (18%) before recovering at market close to trade down
.06. There seemed to be concern, as always, in the potential dilution inherent in this transaction. One must recognize that with this transaction the combined company, which will retain the name Terraco Gold, will have in its portfolio an M&I resource of ~900,000 ounces of gold.

We think this deal stands alone as attractive to both companies. However, having spoken with several geologists who have known the Almaden project over the years. . .most observers believe there is significant potential for the discovery of a Hollister (~4 Moz.) or Midas (7.6 Moz.) type mine. Deeper drilling may identify high-grade and perhaps bonanza gold and silver ore shoots. The Almaden resource appears to be similar to mines in northern Nevada that have the potential to host bonanza-grade gold zones in feeder zones below the disseminated gold discovered to date. So the real value of this transaction is not necessarily in the measured, indicated and inferred resources that currently exist at Almaden. It is instead in the potential for much higher-grade, larger ore shoots that may be the feeder systems for this resource."

   The Gold Report Interview with Michael Berry (10/25/10)

"[CEO] Todd Hilditch is one of the new young stars in the mining industry and the natural resource space in Canada. He put together Salares Lithium, which, as I mentioned, was taken out by Talison Lithium for $430 million. So there's a lot of confidence in Todd's abilities.

Our Discovery Investing model has a 10-point grid on which we rate companies, and one of the most critical things that we look at is management strength. So Todd Hilditch right now has garnered a lot of confidence in the marketplace. A lot of people believe that he will make Terraco Gold into a Mature discovery name. He's got two or three properties, and one, Moonlight, sits right above Midway Gold's Spring Valley property near Lovelock, Nevada. Midway Gold has discovered over 2 million ounces (Moz.) of gold. So they will be drilling soon at Terraco's Moonlight. Todd held back during the bleak days of 2008 and 2009 and waited for the Midway situation to develop, which it has. He also has the confidence of the Canadian investment banking community, who believe in Terraco. . .I think Terraco is an up-and-coming gold play that will do very well."