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MANAGEMENT CONSULTANT AGREEMENT

This Management Consultant Agreement (the "Agreement") is made
and entered into effective as of the 21stday of March, 2006 (the
"Effective Date"), between TERRACE VENTURES INC., a Nevada corporation,
(the "Company") and HOWARD THOMSON (the Consultant).

WHEREAS:

A. ****The
Company is engaged in the business of mineral exploration.

B. ****The
Company desires to retain the Consultant to act as President, Secretary,
Treasurer, Chief Executive Officer and Chief Financial Officer of the Company
and to provide consultant services to the Company on the terms and subject to
the conditions of this Agreement.

C. ****The
Consultant has agreed to act as President, Secretary, Treasurer, Chief Executive
Officer and Chief Financial Officer of the Company and to provide consultant
services to the Company on the terms and subject to the conditions of this
Agreement.

THIS AGREEMENT WITNESSES THATin consideration of the
premises and mutual covenants contained in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:

1.        
DEFINITIONS

1.1 ****The
following terms used in this Agreement shall have the meaning specified below
unless the context clearly indicates the contrary:

| | (a) | "Consultant Fee"shall mean the consultant fee
      payable to the Consultant at the rate set forth in Section 5.1;                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                              
| | (b) | "Board"shall mean the Board of Directors of the
      Company;                                                                                                               
| |     |                                                                                                                                                                              
| | (c) | "Term"shall mean the term of this Agreement
      beginning on the Effective Date and ending on the close of business on the
      date of the termination of this Agreement.

2.        
ENGAGEMENT AS A CONSULTANT

2.1 ****The
Company hereby engages the Consultant as a consultant to provide the services of
the Consultant in accordance with the terms and conditions of this Agreement and
the Consultant hereby accepts such engagement.

3.         TERM OF
THIS AGREEMENT

3.1 ****The
term of this Agreement shall become effective and begin as of the Effective
Date, and shall continue until the close of business on March 21, 2008, unless
this Agreement is earlier terminated in accordance with the terms of this
Agreement or extended by the Board of Directors of the Company.

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4.        
CONSULTANT SERVICES

4.1**** The
Consultant agrees to act as President, Secretary, Treasurer, Chief Executive
Officer and Chief Financial Officer of the Company and to perform the following
services and undertake the following responsibilities and duties to the Company
as consulting services (the "Consulting Services"):

| | (a) | exercising general direction and supervision over the
      business and financial affairs of the Company;                                                                                                                                                                                                                                                                                                                                          
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | providing overall direction to the management of the
      Company;                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | reporting directly to board of directors of
    Company;                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | performing such other duties and observing such
      instructions as may be reasonably assigned from time to time by or on
      behalf of the board of directors of the Company in the Consultants
      capacity as President, Secretary, Treasurer, Chief Executive Officer and
      Chief Financial Officer, provided such duties are within the scope of the
      Companys business and implementation of the Companys business
    plan.

4.2**** The
Consultant shall devote such attention and energies to the business affairs of
the Company as may be reasonably necessary for the discharge of his duties as
President, Secretary, Treasurer, Chief Executive Officer and Chief Financial
Officer, provided, however, the Consultant may engage in reasonable investment
and other personal activities that do not interfere with the Consultant's
obligations hereunder.

4.3 ****The
Consultant will at all times be an independent contractor and the Consultant
will not be deemed to be an employee of the Company.

5.        
CONSULTANT FEE

5.1 ****During
the term of this Agreement, the Company shall pay the Consultant a consultant
fee in consideration of the provision of the Consulting Services equal $2,500 US
per month (the "Consultant Fee"). Notwithstanding the date of this Agreement,
the Consultant shall be entitled to receive the $2,500 Consultant Fee in respect
of the month of February, 2006.

6.         STOCK
OPTIONS

6.1 ****The
Consultant may be granted, subject to the approval of the Companys board of
directors, incentive stock options to purchase shares of the Companys common
stock in such amounts and at such times as the Board of Directors of the
Company, in their absolute discretion, may from time to time determine.

7.        
REIMBURSEMENT OF EXPENSES

7.1**** The
Company will pay to the Consultant, in addition to the Consultant Fee, the
reasonable travel and promotional expenses and other specific expenses incurred
by the Consultant in provision of the Consulting Services, provided the
Consultant has obtained the prior written approval of the Company.

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8.        
TERMINATION

8.1**** The
Company may terminate this Agreement: (i) at any time on three months notice;
or (ii) without notice upon the occurrence of any of the following events of
default (each an Event of Default):

| | (a) | the Consultants commission of an act of fraud, theft or
      embezzlement or other similar willful misconduct;
| | --- | ----------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                 
| | (b) | the neglect or breach by the Consultant of his material
      obligations or agreements under this Agreement; or
| |     |                                                                                                                 
| | (c) | the Consultants refusal to follow lawful directives of
      the Board,                                        

provided that notice of the Event of Default has been delivered
to the Consultant and provided the Consultant has failed to remedy the default
within thirty days of the date of delivery of notice of the Event of
Default.

8.2 ****The
Consultant may terminate this Agreement at any time upon thirty days
notice.

8.3 ****On
termination of this Agreement for any reason, all rights and obligations of each
party that are expressly stated to survive termination or continue after
termination will survive termination and continue in full force and effect as
contemplated in this Agreement.

9.        
PROPRIETARY INFORMATION AND DEVELOPMENTS

9.1 ****The
Consultant will not at any time, whether during or after the termination of this
Agreement for any reason, reveal to any person or entity any of the trade
secrets or confidential information concerning the organization, business or
finances of the Company or of any third party which the Company is under an
obligation to keep confidential, except as may be required in the ordinary
course of performing the Consultant Services to the Company, and the Consultant
shall keep secret such trade secrets and confidential information and shall not
use or attempt to use any such secrets or information in any manner which is
designed to injure or cause loss to the Company. Trade secrets or confidential
information shall include, but not be limited to, the Company's financial
statements and projections, expansion proposals, property acquisition
opportunities and business relationships with banks, lenders and other parties
not otherwise publicly available.

10.        RELIEF

10.1****The
Consultant hereby expressly acknowledges that any breach or threatened breach by
the Consultant of any of the terms set forth in Section 9 of this Agreement may
result in significant and continuing injury to the Company, the monetary value
of which would be impossible to establish, and any such breach or threatened
breach will provide the Company with any and all rights and remedies to which it
may be entitled under the law, including but not limited to injunctive relief or
other equitable remedies.

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11.        PARTIES
BENEFITED; ASSIGNMENTS

11.1****This
Agreement shall be binding upon, and inure to the benefit of, the Consultant,
his heirs and his personal representative or representatives, and upon the
Company and its successors and assigns. Neither this Agreement nor any rights or
obligations hereunder may be assigned by the Consultant.

12.      
 NOTICES

12.1****Any
notice required or permitted by this Agreement shall be in writing, sent by
registered or certified mail, return receipt requested, or by overnight courier,
addressed to the Board and the Company at its then principal office, or to the
Consultant at the address set forth in the preamble, as the case may be, or to
such other address or addresses as any party hereto may from time to time
specify in writing for the purpose in a notice given to the other parties in
compliance with this Section 12. Notices shall be deemed given when
delivered.

13.        GOVERNING
LAW

13.1****This
Agreement shall be governed by and construed in accordance with the laws of the
Sate of Washington and each party hereto adjourns to the jurisdiction of the
courts of the Sate of Washington.

14.       
REPRESENTATIONS AND WARRANTIES

14.1****The
Consultant represents and warrants to the Company that (a) the Consultant is
under no contractual or other restriction which is inconsistent with the
execution of this Agreement, the performance of his duties hereunder or other
rights of Company hereunder, and (b) the Consultant is under no physical or
mental disability that would hinder the performance of his duties under this
Agreement.

15.       
MISCELLANEOUS

15.1****This
Agreement contains the entire agreement of the parties relating to the subject
matter hereof.

15.2****This
Agreement supersedes any prior written or oral agreements or understandings
between the parties relating to the subject matter hereof.

15.3****No
modification or amendment of this Agreement shall be valid unless in writing and
signed by or on behalf of the parties hereto.

15.4 ****A
waiver of the breach of any term or condition of this Agreement shall not be
deemed to constitute a waiver of any subsequent breach of the same or any other
term or condition.

15.5 ****This
Agreement is intended to be performed in accordance with, and only to the extent
permitted by, all applicable laws, ordinances, rules and regulations. If any
provision of this Agreement, or the application thereof to any person or
circumstance, shall, for any reason and to any extent, be held invalid or
unenforceable, such invalidity and unenforceability shall not affect the
remaining provisions hereof and the application of such provisions to other
persons or circumstances, all of which shall be enforced to the greatest extent
permitted by law.

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15.6 ****The
headings in this Agreement are inserted for convenience of reference only and
shall not be a part of or control or affect the meaning of any provision
hereof.

15.7 ****The
Consultant acknowledges and agrees that O'Neill Law Group PLLC has acted solely
as legal counsel for the Company and that the Consultant has been advised to
obtain independent legal advice prior to execution of this Agreement.

15.8 ****This
Agreement may be executed in one or more counter-parts, each of which so
executed shall constitute an original and all of which together shall constitute
one and the same agreement.

IN WITNESS WHEREOF, the parties have duly executed and
delivered this Agreement as of the date first written above.

TERRACE VENTURES INC.by its authorized
signatory:



|/s/ Gordon F. Burley       | 
|-------------------------- | 
|GORDON F. BURLEY, DIRECTOR | 

|SIGNED, SEALED AND DELIVERED |  |                         
|---------------------------- |  | ------------------------
|BY HOWARD THOMSON            |  |                         
|in the presence of:          |  |                         
|                             |  |                         
|                             |  |                         
|/s/ Dianne
      Lum         |  | /s/
      Howard Thomson
|Signature                    |  | HOWARD THOMSON          
|                             |  |                         
|                             |  |                         
|Dianne Lum                   |  |                         
|Name                         |  |                         
|                             |  |                         
|                             |  |                         
|4035 Fir St.                 |  |                         
|Address                      |  |                         
|                             |  |                         
|                             |  |                         
|Burnaby, BC V5G
      2A9    |  |                         

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