Mr. Brian Buchanan reports

TERRA FIRMA SIGNS MOU FOR GOLD AND COPPER PROPERTY IN SOUTH SULAWESI, INDONESIA

Terra Firma Resources Inc., through its wholly owned Indonesian subsidiary PT Terra Mineral Resources Indonesia, has entered into an memorandum of understanding (MOU) with PT Mutiara Surya Mallawa and Tirta Winata under which the company has the option to acquire 75 per cent of the issued and outstanding shares of Mutiara. Mutiara is an Indonesian mineral exploration company that holds a mineral exploration licence in respect of an initial 800-hectare property in south Sulawesi, Indonesia, which is prospective for gold and copper. In addition, Mutiara is expected to acquire an additional 10,000 hectares of prospective lands 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 $100,000 (U.S.) to the shareholders of Mutiara, $25,000 (U.S.) of which was paid on execution of the MOU and $75,000 (U.S.) 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 an NI 43-101 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 granting Terra Firma an option to acquire 75 per cent of the issued and outstanding shares of Mutiara. Terra Firma is required to pay an additional $100,000 (U.S.) 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 per cent of the outstanding shares of Mutiara, Terra Firma will be required to: (1) pay an additional $200,000 (U.S.) 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 the later 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) finance $1.75-million (U.S.) in exploration expenditures on the Mallawa property and the additional properties, including at least $250,000 (U.S.) in expenditures in the first year of the option agreement.

As part of the transaction, Terra Firma will pay a finder's fee of $32,000 (U.S.) and 40,000 common shares, representing 8 per cent 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 $25,000 (U.S.) 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, chief executive officer of Terra Firma, said: "We are excited to start our NI 43-101 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.

We seek Safe Harbor.