Quaterra Resources Inc. announced today it is planning a C$1.75 million non-brokered private placement of 5.0 million units at a price of $0.35 per unit.Each unit offering will include one common share and one half share purchase warrant, with one full warrant exercisable to purchase one additional common share at $0.50 per share for a period of two years. In the event that the company’s shares trade at a closing price of greater than $1.00 per share for a period of 20 consecutive days at any time after six months from closing, the company may accelerate the expiry date of the Warrants by providing notice to the shareholders thereof and in such case the Warrants will expire on the 30 th day after the date on which such notice is given by the Corporation. Finders fees may be payable.

Proceeds of the offering will be used to fund exploration/drilling programs on four separate projects over the next 90 days and for general working capital. These programs will include;

• Arizona/Utah Uranium projects: Complete evaluation and acquisition of collapse breccia pipes in Northern Arizona (see news release June 23/05) and additional uranium prospects in Utah and Wyoming. Conduct geologic mapping and air photo/satellite imagery interpretation.
• Duke Island , SE Alaska: A six to seven hole, 1500 m diamond drill program is scheduled to begin in August on ultramafic Cu-Ni-Pt and Pd targets identified by recently completed gravity and Mag/EM surveys. The drill program follows up on surface sampling that returned values ranging from anomalous up to 2.8% Cu, 0.25% Ni and 1 gpt Pt and Pd, and on four earlier widely spaced drill holes that intercepted disseminated semi-massive and massive sulphides over extensive lengths.
• Nieves Project, Mexico: Quaterra and a private US-based LLC investment partnership are planning a fall drilling program to follow up on high-grade intercepts (129.2opt Ag over 1.5m) on the Concordia-San Gregorio vein system. The 50 square mile property has potential for “Fresnillo-style” mineralization as the Concordia system has a one km strike length and more than 300 metres vertical extent.
• Los Crestones, Mexico: An initial drill program is scheduled for fall, 2005, to test this hot-spring related gold-silver prospect. It is located in the state of Durango, 12 km northwest of the Inde mining district. Surface sampling has yielded anomalous gold and silver values that will be further tested in this first ever drill probe of the project.

Quaterra also reported today that the company has granted, subject to regulatory approval, 1,650,000 incentive stock options to directors, officers, employees and consultants, each exercisable at $0.35 per share and for a period of five years.

As well, due to the merger of his accounting practice, the company’s auditor has changed from G.Ross McDonald, Chartered Accountant to Smythe Ratcliffe, Chartered Accountants.

Dr. Thomas Patton is the qualified person responsible for the preparation of this release.

On behalf of the Board of Directors,

“Thomas Patton”
Thomas Patton, President
Quaterra Resources Inc.

Contact Jay Oness at 1-888-456-1112, 604-681-9059 or email: corpdev@mnxltd.com

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management. Statements contained in this news release that are not historical facts are forward-looking statements as the term is defined in the private securities litigation reform act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Quaterra relies upon litigation protection for forward looking statements.