Vancouver, B.C., May 2nd, 2012 - Terra Firma Resources Inc. (TSX-V: TFR) (the "Company" or "Terra Firma") announces, that it has signed a Mineral Property Option Agreement (the "Option Agreement") with a group of four prospectors (the "Vendors") pursuant to which Terra Firma has been granted an option (the "Option") to earn a 100%-interest in the Lac des Iles East Graphite Property located in Quebec.

Lac des Iles East Graphite Property:

The Lac des Iles East Graphite Property (the "Property") consists of 71 claim blocks totalling 3980 Ha and borders the eastern boundary of the Timcal Lac des Iles property; only 1 kilometer east of TIMCAL's producing Lac des Iles Mine. TIMCAL's Lac des Iles Mine average grade is 7.5% Cg (Carbon Graphite) and is one of the only two Graphite producers in the country and has been in production for over 20 years.

The Lac des Iles East Graphite Property lies within the same geological environment as the TIMCAL Lac des Iles mine consisting of quartzofeldspathic rocks, quartzite, biotite gneiss, marble and locally pegmatitic quartzofeldspathic rocks. Graphite in the vicinity is present in marbles in contact with quartzite and biotite gneiss and in shear zones within gneisses where the graphite content usually ranges from 3% to 10% Cg. The Lac des Iles East Graphite Property is within three hours of Montreal by road and is easily accessible via numerous tertiary and forest roads. ** Property maps and details are available on the Terra Firma website, please click here.

The Company intends to conduct an aggressive exploration campaign on the Property commencing immediately, with a complete compilation of historic geologic work followed by an airborne electromagnetic survey, surface work follow up, stripping and trenching and diamond drilling. The exploration program will be under the supervision of EarthMetrix, a firm specialised in the field of structural geology, which has supervised over 600 projects in Canada and abroad for various mining companies for over 20 years.

R. Brian Buchanan CEO and Director of the Company states: "This latest Quebec acquisition will offer the Company even more opportunities within the emerging Graphite space. The Lac des Iles Graphite Property is well located in an attractive mining jurisdiction with excellent logistics. We are fortunate to add this asset to our property portfolio and will initiate exploration as soon as possible."

The Option Agreement:

Pursuant to the terms of the Option Agreement, Terra Firma has the option to acquire a 100% -interest in the Property by making the following cash payments on or before the dates indicated below:

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 |                                                    |Cash   |Shares |
 |--------------------------------------------------------------------|
 |On signing                                          |$25,000|0      |
 |--------------------------------------------------------------------|
 |Within seven days of TSX Venture Exchange acceptance|$50,000|750,000|
 |--------------------------------------------------------------------|
 |Six months from TSX Venture Exchange acceptance     |$40,000|375,000|
 |--------------------------------------------------------------------|
 |Eighteen months from TSX Venture Exchange acceptance|$35,000|375,000|
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A net smelter royalty "NSR" of 2% shall be payable to the Vendors on all metals produced from the Property. Terra Firma shall at any time have the right to buy back one per cent (1%) of the NSR from the Vendors for one million dollars ($1,000,000).

A finder's fee will be paid in connection with the transaction in accordance with the policies permitted by the TSX Venture Exchange. The transaction is subject to a number of conditions and approvals, including, but not limited to, required corporate approvals and TSX Venture Exchange acceptance.

This news release has been reviewed and approved by Alain Moreau, P. Geo., who supervised the preparation of the technical information in this news release. Alain Moreau is a Qualified Person as defined by National Instrument 43-101.

About Graphite:

The commercial market for Graphite is diverse worldwide. The Graphite industry is experiencing an increase in demand from numerous industrial sectors, spanning both developing and developed economies. Traditional uses of Graphite include steelmaking, electrodes in electric arc furnaces, brake linings, pebble bed reactor linings, and dry lubricants. There has been an escalation in the use of Graphite in clean energies such as lithium ion batteries and fuel cells, which power hybrid and electric vehicles. The outlook for high-quality Graphite demand is strong due to the development of new technologies, which use Graphite as an essential component. The United States, Europe and China have included graphite among a short list of critical materials.

About Terra Firma Resources Inc.

Terra Firma is a mineral exploration company and its objective is to develop a balanced portfolio of properties that exhibit good mineral indicators for Graphite and Precious Metals, through a combination of grassroots prospecting, property acquisitions and the formation of strategic relationships. The Company is currently investigating a number of potential Graphite prospects. The Company is currently setting up an exploration program on the Beidelmann-Lyall Graphite Property in Ontario, Canada. For more information on the Company and its projects please visit the Terra Firma website www.terrafirmaresources.com.

For further information please contact: Tom Steer, Investor Communications

Tel: (604) 681-5566 E-mail: tomsteer@terrafirmaresources.com

On Behalf of the Board,

Brian Buchanan, Chief Executive Officer and Director

This Terra Firma News Release contains certain "forward-looking" statements and information relating to Terra Firma that are based on the beliefs of Terra Firma's management as well as assumptions made by and information currently available to Terra Firma's management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, relationships with strategic partners, governmental regulation and supervision, seasonality, technological change, changes in industry practices, and one-time events. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results and forward-looking statements may vary materially from those described herein. Except as required by law, Terra Firma does not assume the obligation to update any forward-looking statement.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release