Quaterra Acquires Gray Hills Property

Quaterra Resources
2006-10-03 News Release

Quaterra Resources Inc. reported today that the company has signed a “heads of agreement” for a lease with option to purchase the Gray Hills gold project in Lyon County Nevada.  The project includes 43 unpatented federal mining claims located 15 miles SE of Yerington, Nevada. The terms of the agreement include an initial payment of $15,000 and annual lease payments of $20,000/ $25,000/ $30,000 and $35,000 with each succeeding anniversary payment capped at $40,000.  The company has an option to purchase the mineral rights at any time for $500,000 subject to a  three percent royalty, two percent of which can be purchased by Quaterra for $1.0 million.Quaterra president, Dr. Thomas Patton, said, “the Gray hills project is an attractive target for a large tonnage, disseminated gold deposit”. A regional stream sediment survey consisting of 244 samples delineated a clustering of anomalous gold values assaying up to 1,380 ppb in the Gray Hills vicinity. Of 133 assays of rock samples previously taken from the property, 50 returned above 0.5 g/t Au and 13 samples contained more than 5 g/t Au. The highest grades were found in samples from several small north-south trending, poly-metallic veins on the prospect where gold assays returned up to 50.3 g/t. Additional sampling and detailed mapping is being conducted to define targets for a possible future drilling program.

Gold mineralization on the Gray Hills property occurs in relation to a 1,000 foot wide zone of strongly altered (albitized) and deformed granodiorite intrusive that outcrops within a one by three mile area of structurally anomalous and altered rocks along the northern flank of the Gray Hills.  Widespread hydrothermal alteration includes extensive areas having been affected by potassic, sodic and sodic­-calcic events. The central core of albitized granodiorite is bordered to the  north and south by overlapping zones of equally intense, magnetite-rich, potassic and calc-silicate alteration. The style of alteration appears similar to the Refugio Au porphyry in Chile or the Ridgeway Au/Cu porphyry in Australia.

Studies of rock samples from the property indicate the presence of disseminated gold both within limonite pseudomorphs after magnetite in brecciated intrusive rock and as oxidized pyrite in sericitized, silicified and calc-silicated granodiorite just south of the central abitite core. The extent and orientation of this material are not well-known as alluvial material mantles much of the area.  The auriferous zones generally do not form outcrops and are usually only seen at the surface in areas where they have been exposed in old dozer cuts or small prospects. In at least two places, the zones appear to be truncated at or near the surface by flat structures that dip shallowly northward. The project area has not been tested by drilling.


Eugene Spiering is the qualified person responsible for the preparation of this news release.

On behalf of the Board of Directors,
“Thomas Patton”
Thomas Patton, President Quaterra Resources Inc.

Expanded information on the company’s projects is described on our website at www.quaterraresources.com or contact Jay Oness at 1-888-456-1112, 604-681-9059 or email: corpdev@mnxltd.com

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. 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.