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Terrane Metals Corp.

TICKER: TRX: TSX.V

DESCRIPTION: Terrane Metals Corp. is a Canadian mineral development and exploration company. The cornerstone of its business plan is to develop large-scale mineral deposits with defined resources into operating mines. Key assets are the Mt. Milligan copper-gold project in central British Columbia and the Berg copper-molybdenum project in west central British Columbia. Mt. Milligan has open pit reserves of 1.6 billion lb contained copper and 4.6 million oz contained gold. Upon development the project will have an average annual production of 265,100 oz gold and 97 million lb copper for the first six years of a 15.3 year mine life. Goldcorp Inc. owns a 59% equity interest in Terrane on a fully diluted basis.
WEBSITE: http://terranemetals.com
MD&A (6/30/09)

The information below is based on the most recent information we have received from analysts and the companies participating in The Gold Report. We encourage you to visit the company's web site for updates.

"Terrane Metals announced that Goldcorp, owner of 350 million convertible preferred shares of Terrane, has made the decision not to convert its equity into a direct interest in the project. As part of the agreement Terrane's C$40 million Goldcorp guaranteed credit facility has been extended to May 2010. While Goldcorp allowed the conversion deadline to pass, they are still very interested in the project. There is still scope for some other form of deal with Goldcorp.

. . .Terrane is now assessing strategic financing alternatives to raise the financing required to advance Mt. Milligan through development. Development plans call for spending this year of $172 million as part of the estimated $915 million development cost. Financing alternatives include an off-take agreement with a metals trader or a smelter company, joint venture participation in the project from the same type of company or from another mining company, as well as various forms of equity and debt financing.

As confirmed by an updated feasibility study last fall, Mt. Milligan is expected to have annual production of 262,100 ounces of gold and 89 million pounds of copper for the first six years of a 22 year mine life. It would be an open-pit mine with 60,000 ton per day copper flotation plant."
- Resource Opportunities (01/15/10)

"Amid the uncertainty, there is always opportunity. Last week, when Goldcorp (G) passed on its one-time opportunity to convert its preferred share holding in Terrane into a 60% interest in the Mt. Milligan copper-gold project located in northern B.C., we asked the question: Could a new joint venture partner now step into to the fray on Mt. Milligan? According to a Bloomberg report yesterday, Terrane is now in talks with Japan's Mitsubishi Corp., Sumitomo Corp. and other metal producers to help finance a $900 million mine project. Total capital costs for the project are estimated to be $915 million. In addition to the Japanese mining giants, it is no secret that the Koreans and Chinese could also be on the prowl for world-class assets. Terrane is now considering financing alternatives for the recently approved $172 million 2010 construction budget. ERRATUM: On Monday, we said that if Goldcorp chose to convert its preferred share holding in Terrane into common shares, Goldcorp would own a 33% equity interest in Terrane. In fact, if Goldcorp fully converted its preferred shares, the company would own approximately 66% of the issued and outstanding shares of Terrane (59% on a fully-diluted basis)."
- Morning Coffee, Canaccord Capital (01/13/10)

"Really it's me, not you. Terrane will retain 100% of the Mt. Milligan copper-gold project located in northern B.C. The one-time opportunity for Goldcorp (G) to convert its preferred share holding in Terrane into a 60% interest in the Mt. Milligan project expired last Thursday. Wasn't the writing on the wall for Terrane? Goldcorp was busy with its bidding war with Minera Penmont (a joint venture between Newmont Mining and Fresnillo) for Canplats Resources (CPQ), plus it cut a deal with New Gold (NGD) for the El Morro project in Chile the same day its option expired for Mt. Milligan.

Goldcorp's preferred shares will now most likely be converted into common shares, giving Goldcorp a 33% equity interest in Terrane. . .Terrane obtained a $40 million ($17.5 million drawn) credit facility guaranteed by Goldcorp, which has been extended to May 7, 2010. Terrane will now consider financing alternatives for the recently approved $172 million 2010 construction budget. Total capital costs for the project are estimated to be $915 million.

Could a new joint venture partner now step into to the fray on Mt. Milligan? Sure. The El Morro transaction is a reflection of producers' 'stronger for longer' outlook on the copper market. The largest gold deposits in the world today are tied up with copper—if you want gold you'll have to take copper, too. The size of the Mt. Milligan project has been described as 'major' and 'world-class' by analysts. The project compares favorably to El Morro. While both are large, lower grade, long life, copper-gold projects. Mt. Milligan is at lower elevation and better situated to established infrastructure than El Morro."
- Morning Coffee, Canaccord Capital (01/11/10)

"Terrane is a Canadian gold play and the common shares went from a low of $0.11 to a high of $1.80 for a potential gain of 1,536%. But the warrants went from a low of $0.035 to a high of $0.90 for a potential gain of 2,471%. In this case the leverage was a mere 1.6 times but this would have been another great addition to your portfolio and I know that several of our subscribers are still in these warrants."
- Precious Metals Warrants (12/29/09)

"Terrane recently announced results of its 2009 Feasibility Update Study for Mt. Milligan. Gold reserves increased by 31% to 6.0 million oz, copper in reserves by 33% to 2.1 billion lb and mine life by 45% to 22.1 years with no significant change in project footprint or initial capital cost. Goldcorp (G) has a 66% interest in Terrane. In July 2008, Goldcorp and Terrane entered into an agreement which grants Goldcorp an option to convert its equity interest in Terrane into a participating joint venture interest in the Mt. Milligan Project. The decision from Goldcorp is expected at anytime, as the company's option expires on January 8, 2010."
- Morning Coffee, Canaccord Capital (12/15/09)

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