Tanzanian Royalty Concludes Agreement With UK-Based Company for Luhala and Itetemia Gold Projects

Vancouver, Canada (ots/PRNewswire) - The Company is pleased to
announce that it has concluded an option agreement for its Luhala and
Itetemia Projects with a private United Kingdom based company, Sloane
Developments Ltd.

Under the option agreement, Tanzanian Royalty has granted Sloane
the right to earn a beneficial interest ranging from 90 to 100% in
ten prospecting licenses in the Lake Victoria greenstone belt of
Tanzania. Six of these licenses comprise the 76 square kilometres
Luhala Project (all 100%) while the remaining licenses constitute the
46 square kilometres Itetemia Project (all 90%) which is adjacent to
Barrick's Bulyanhula gold mine.

The earn-in portion of the agreement includes prescribed annual
cash payments, firm exploration expenditures and a minimum amount of
diamond drilling meterage over the life of the agreement. In
addition, Tanzanian Royalty will receive a sliding scale net smelter
royalty for any mineral discovery that achieves commercial
production.

The exploration component of the option agreement calls for a work
commitment of $US1 million within a two-year period of which
$US400,000 will be expendable in the first year and the remaining
amount in the second. Further provisions in the agreement call for
the completion of a bankable feasibility study and the announcement
of a production decision before the fifth anniversary of the
agreement and the achievement of commercial production before the
seventh anniversary.

Tanzanian Royalty Chairman and CEO, Jim Sinclair, welcomed Sloane
as a "valued addition to our list of high quality exploration
partners in Tanzania."

"These are seasoned veterans of the minerals industry whose track
records encompass exploration and discovery right through to mine
development and production," he added.

"The partnership with Sloane will provide us with the opportunity
to realize royalty income from any exploration successes produced
under the agreement, while freeing us up to concentrate our fiscal
resources on the Company's Kigosi Project which although at a
relatively early stage of exploration certainly has the hallmarks of
being a significant discovery."

Sloane Developments is a recently-formed, private UK mining
company focused on mineral exploration and development in Tanzania.
It was founded by Christian Schaffalitzky and Richard Speir who both
have wide experience managing mining and exploration projects,
especially in Africa.

Mr. Schaffalitzky has over 30 years experience in base and
precious metals, working as both an industry consultant and a
promoter. He led the discovery and development of the Lisheen
zinc-lead deposit in Ireland in 1990 and has subsequently been
involved with a number of resource companies in Europe, Africa, Asia
and Australia.

He is currently CEO of Eurasia Mining plc, an AIM-quoted UK
company developing precious metals projects in Russia. In addition,
he serves as a director of Petroceltic International plc, an Irish
oil and gas company - also AIM quoted - and Raspadskaya Coal Company,
the second largest Russian coking coal producer. Mr. Schaffalitzky is
a founder of the international consultancy, CSA Group, which he left
in 1994.

Richard Speir is an exploration specialist with over 25 years
experience in Tanzania and other countries in Africa. A former
consultant with CSA Group, he has also worked for major international
companies, mainly on base and precious metals.

Apart from working with Tanzanian Royalty, Sloane is also in a
joint venture with another local company, Safari Mining Limited,
exploring a 70 kilometre long belt of ultramafic rocks located in
central Tanzania, some 80 kilometres north of Dodoma. A number of
nickel showings, one with high grades of platinum group metals, have
been identified which have not been investigated in the last 40
years.

Currently financed by private mineral investors, Sloane expects to
list in the UK in the next few months.

Commenting on the agreement with Tanzanian Royalty, Mr.
Schaffalitzky said: "We are delighted to be joining Jim Sinclair and
his team in Tanzania. We welcome the opportunity to work with them by
building on their long experience on these two projects."

Respectfully Submitted,

"James E. Sinclair"

James E. Sinclair

Chairman and Chief Executive Officer

The Toronto Stock Exchange and American Stock Exchange have not
reviewed and do not accept responsibility for the adequacy or
accuracy of this release

Cautionary Note to U.S. Investors - The United States Securities
and Exchange Commission permits U.S. mining companies, in their
filings with the SEC, to disclose only those mineral deposits that a
company can economically and legally extract or produce. We use
certain terms on this news release, such as "measured", "indicated",
and "inferred" "resources" that the SEC guidelines strictly prohibit
U.S. registered companies from including in their filings with the
SEC. U.S. Investors are urged to consider closely the disclosure in
our Form 20-F, File No. 0-50634, which may be secured from us, or
from the SEC's website at http://www.sec.gov/edgar.shtml.

Trade Symbol: TSX: TNX, AMEX: TRE

Visit our website: www.TanzanianRoyaltyExploration.com

ots Originaltext: Tanzanian Royalty Exploration Corporation
Im Internet recherchierbar: http://www.presseportal.de

Contact:
For further information: Investor Relations at 1-800-811-3855; Visit
our website: www.TanzanianRoyaltyExploration.com