F-10/A

As filed with the Securities and Exchange Commission on August 15, 2011

Registration Statement No. 333-175560

United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1 TO
FORM F-10

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

		Tanzanian Royalty Exploration Corporation
(Exact name of Registrant as specified in its charter)
Alberta			1041	N/A
(Province or other jurisdiction of incorporation or organization)			(Primary Standard Industrial Classification Code Number (if applicable))	(I.R.S. Employer Identification Number (if applicable))
Suite 404 - 1688 152nd Street, South Surrey, BC  V4A 4N2 604-536-7873 (Address and telephone number of Registrant’s principal executive offices)
Corporation Service Company 2711 Centerville Road, Suite 400 Wilmington, DE  19808 888-690-2882 (Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)
Rosalind Morrow Borden Ladner Gervais LLP 40 King Street West, Toronto, ON Canada M5H 3Y4 416-367-6019			James E. Sinclair Chief Executive Officer Tanzanian Royalty Exploration Corporation Suite 404 - 1688 152nd Street South Surrey, BC Canada V4A 4N2 604-536-7873		Daniel B. Eng Locke Lord Bissell & Liddell LLP 44 Montgomery Street, Suite 2400 San Francisco, CA  94104 415-318-8803
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the Registration Statement becomes effective.
	Canada
(Principal jurisdiction regulating this offering (if applicable))

It is proposed that this filing shall become effective (check appropriate box)

A.

 Q

upon filing with the Commission, pursuant to Rule 467(a) (if in connection with an offering being made contemporaneously in the United States and Canada).

B.

 *

at some future date (check the appropriate box below)

1.  *

pursuant to Rule 467(b) on (date) at (time) (designate a time not sooner than 7 calendar days after filing).

2.  *

pursuant to Rule 467(b) on (date) at (time) (designate a time 7 calendar days or sooner after filing) because the securities regulatory authority in the review jurisdiction has issued a receipt or notification of clearance on (date).

3.  *

pursuant to Rule 467(b) as soon as practicable after notification of the Commission by the Registrant or the Canadian securities regulatory authority of the review jurisdiction that a receipt or notification of clearance has been issued with respect hereto.

4.  *

after the filing of the next amendment to this Form (if preliminary material is being filed).

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to the home jurisdiction’s shelf prospectus offering procedures, check the following box.  *

1

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum  offering price per security	Proposed maximum aggregate offering price	Amount of registration fee
Units, each Unit consisting of one Common Share and a Warrant to purchase a Common Share at $6.25 per Common Share	5,263,158 Units	$5.70	$30,000,000	*
Common Share included as part of the Unit	5,263,158 Common Shares	-	-
Warrant included as part of the Unit	5,263,158 Warrants	-	-	-
Common Shares underlying Warrant	5,263,158 Common Shares	$6.25	$32,894,738	*
Underwriter Warrants	368,421 Warrants	$5.91	$2,177,368	*
Common Shares underlying Underwriter Warrants	368,421 Common Shares	-	-	(1)
Total				$8021.88(2)

(1)

No fee pursuant to Rule 457(g)

(2)

$6,549.32 previously paid.

*             See Fee Total

(continued on next page)

PART I — INFORMATION REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.  See “Plan of Distribution”.

Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of Tanzanian Royalty Exploration Corporation., at its registered office, 1688 152^nd Street, Suite 404, South Surrey, British Columbia Canada V4A 4N2, telephone 604-536-7873, and are also available electronically at www.sedar.com.

New Issue August 10, 2011

SHORT FORM PROSPECTUS

U.S.$30,000,000

5,263,158 Units

This short form prospectus qualifies the distribution (the “Offering”) of 5,263,158 units (each a “Unit”) in the capital of Tanzanian Royalty Exploration Corporation (“Tanzanian Royalty” or the “Company”) at a price of U.S.$5.70 per Unit (the “Offering Price”).  Each Unit consists of one common share of the Company (each, a “Common Share”) and one Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Common Share (a “Warrant Share”) at an exercise price of U.S.$6.25 for a period of two (2) years following the Closing Date (as hereinafter defined). The Units will separate into Common Shares and Warrants immediately upon issue.  See “Description of Share Capital”.

The Units will be offered and sold pursuant to an underwriting agreement dated as of July 11, 2011, as amended by an amendment dated as of August 10, 2011 (collectively, the “Underwriting Agreement”) entered into between the Company and Casimir Capital Ltd. (the “Underwriter”).  The Offering Price was determined by negotiation between the Company and the Underwriter.  The closing of the Offering (the “Closing”) is expected to occur on August 11, 2011 but in any event no later than August 31, 2011 (the “Closing Date”).  See “Plan of Distribution”.

Price: U.S.$5.70 per Unit

	Price to the Public	Underwriter’s Fee(1)	Net Proceeds to the Company(2)
Per Unit	U.S.$5.70	U.S.$0.399	U.S.$5.301
Total (3)	U.S.$30,000,000	U.S.$2,100,000	U.S.$27,900,000

Notes:

(1)

The Company has agreed to pay the Underwriter a cash fee (the “Underwriter’s Fee”) equal to 7% of the gross proceeds of the Offering, less U.S.$60,000 previously paid to the Underwriter in connection with financial advisory services provided to the Company relating to the Offering.  The Company will also issue to the Underwriter Compensation Options (as defined herein) equal to 7% of the total number of Units sold under the Offering.  Each Compensation Option will entitle the holder thereof to acquire one Common Share at a price of U.S.$5.91 for a period of two (2) years after the Closing Date.  See “Plan of Distribution”.

(2)

After deducting the Underwriter’s Fee (before deducting the U.S.$60,000 previously paid to the Underwriter) but before the expenses of the Offering (including listing fees) estimated to be approximately U.S.$1,120,000, which will be paid from the proceeds of the Offering.

3

(continued from cover)

The following table sets out the number of Compensation Options that may be issued by the Company to the Underwriter.

Underwriter’s Position	Maximum Size or Number of Securities Available	Exercise Period or Acquisition Date	Exercise Price or Average Acquisition Price
Compensation Options(1)	368,421	Up to two (2) years after the closing of the Offering	U.S.$5.91
Total securities under option issuable to Underwriter	368,421	Up to two (2) years after the closing of the Offering	U.S.$5.91

Notes: (1)

This short form prospectus also qualifies the issue by the Company of the Compensation Options.  See ‘‘Plan of Distribution’’.

                This Offering is made by the Company, a foreign private issuer, under United States (“U.S.”) securities laws and is permitted, under a multi-jurisdictional disclosure system (“MJDS”) adopted by the U.S. and Canada, to prepare this short form prospectus in accordance with Canadian disclosure requirements.  Prospective investors should be aware that such requirements are different from those of the U.S.  The financial statements incorporated herein by reference have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) and are subject to Canadian auditing and auditor independence standards, and thus may not be comparable to the financial statements of U.S. companies.  Information regarding the impact upon the Company’s financial statements of significant differences between Canadian and U.S. GAAP is contained in Note 14 entitled “Reconciliation between Canadian and U.S. generally accepted accounting principles” to the audited consolidated financial statements for years ended August 31, 2010, 2009 and 2008, which are incorporated by reference into this short form prospectus.

Prospective investors should be aware that the acquisition or disposition of the securities described herein may have tax consequences both in the United States, Canada and elsewhere.  Such consequences may not be described fully herein.  Prospective investors should consult their own tax advisors with respect to such tax considerations.

The enforcement by investors of civil liabilities under U.S. federal securities laws may be affected adversely by the fact that the Company is incorporated under the laws of a foreign country, that many of the Company’s officers and directors and experts named in this short form prospectus are residents of Canada or elsewhere outside of the United States, and that a substantial portion of the Company’s assets and the assets of such persons are located outside the United States.  See “Enforcement of Civil Liabilities”.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS SHORT FORM PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

The disclosure in this short form prospectus, including the documents incorporated by reference herein, uses mineral resource classification terms and contains mineral resource estimates that comply with reporting standards in Canada that differ significantly from the requirements of the U.S. Securities and Exchange Commission.  Accordingly, the information contained in this short form prospectus and the documents incorporated by reference herein describing the Company’s mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws (see the discussion under the heading, “Cautionary Note to United States Investors Regarding Estimates of Reserves and Measured, Indicated and Inferred Resources,” for more information).

The issued and outstanding Common Shares of the Company are listed on the Toronto Stock Exchange (“TSX”) under the trading symbol “TNX”, and on the NYSE Amex Equities (“AMEX”) under the trading symbol “TRX”. On August 9, 2011, the last trading day before the filing of this short form prospectus, the closing price of the Common Shares was Cdn. $5.90 on the TSX and U.S. $6.00 on the AMEX.  The Company has applied to list (i) the Common Shares included in the Units, and (ii) the Common Shares issuable pursuant to the exercise of the Warrants included in the Units and the Compensation Options, on the TSX and the AMEX.  Listing will be subject to the Company fulfilling all of the listing requirements of the TSX and the AMEX, respectively.

An investment in the securities offered hereunder is speculative and involves a high degree of risk. An investment in the Units should only be made by persons who can afford the total loss of their investment. The risk factors identified under the headings “Risk Factors” and “Cautionary Note Regarding Forward-Looking Information and Statements” in this short form prospectus should be carefully reviewed and evaluated by prospective subscribers before purchasing any securities being offered hereunder.

4

(continued from cover)

Currently, there is no market through which the Warrants may be sold and no such market is expected to develop.  Purchasers may not be able to resell the Warrants comprising part of the Units purchased under this short form prospectus. This may affect the pricing of the Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the Warrants, and the extent of issuer regulation. See “Risk Factors”. The Company does not intend to apply to list the Warrants distributed under this short form prospectus on the TSX or the AMEX.

Although the Company expects that the net proceeds from the Offering will allow it to meet its mine development requirements, mineral property acquisition opportunities and working capital requirements to the end of 2012, additional financing may be required, including without limitation, mining investment decisions in the normal course of business.  See “Use of Proceeds” and “Risk Factors”.

The Underwriter offers to purchase, on a bought deal basis, the Units, in accordance with the conditions contained in the Underwriting Agreement referred to under “Plan of Distribution”, subject to the approval of certain legal matters on behalf of the Company by Borden Ladner Gervais LLP and on behalf of the Underwriter by Norton Rose OR LLP.  Subscriptions will be received subject to rejection, in whole or in part, and the right is reserved to close the subscription books at any time without prior notice.

On the Closing Date, the Common Shares will be available for delivery in book based form either through CDS Clearing and Depository Services Inc. (“CDS”) or its nominee and will be deposited with CDS, or through the Depository Trust & Clearing Corporation (“DTCC”) and will be deposited with DTCC.  Purchasers will receive only a customer confirmation from the registered dealer that is a CDS participant or DTCC participant and from or through which the Units are purchased.  On the Closing Date, the Warrants will be issued in registered form.

In connection with the Offering, the Company will issue to the Underwriter non-transferable compensation options (the “Compensation Options”) entitling the Underwriter to purchase, in the aggregate, that number of Common Shares that is equal to 7% of the aggregate number of Units sold pursuant to the Offering. Each Compensation Option will be exercisable to acquire one Common Share at a price of U.S.$5.91 at any time prior to 5:00 pm (Toronto time) on the date which is two (2) years from the Closing Date.  

Investors should rely only on the information contained or incorporated by reference in this short form prospectus. The Company has not authorized any person to provide different information. The Units may be sold only in those jurisdictions where offers and sales are permitted. This short form prospectus is not an offer to sell or a solicitation of an offer to buy Units in any jurisdiction where it is unlawful. The information contained in this short form prospectus is accurate only as of the date of this short form prospectus regardless of the time of delivery of this short form prospectus or of any sale of the Units, except in the case of documents incorporated or deemed to be incorporated by reference into the short form prospectus subsequent to the date hereof.  Information contained on the Company’s website shall not be deemed to be a part of this short form prospectus or incorporated by reference herein and may not be relied upon by prospective investors for the purpose of determining whether to invest in the securities qualified for distribution under this short form prospectus.

Unless otherwise indicated, all information in this short form prospectus assumes that none of the Company’s outstanding restricted share units or other securities convertible into or exchangeable for Common Shares are exercised.

5

TABLE OF CONTENTS
	Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS	1
CURRENCY AND EXCHANGE RATE INFORMATION	2
DOCUMENTS INCORPORATED BY REFERENCE	2
ENFORCEABILITY OF CIVIL LIABILITIES	4
CAUTIONARY NOTE TO UNITED STATES INVESTORS REGARDING ESTIMATES OF RESERVES AND MEASURED, INDICATED AND INFERRED RESOURCES	4
TANZANIAN ROYALTY EXPLORATION CORPORATION	5
DESCRIPTION OF SHARE CAPITAL	14
CONSOLIDATED CAPITALIZATION	15
PRIOR SALES	16
TRADING PRICE AND VOLUME OF THE COMMON SHARES	17
USE OF PROCEEDS	18
PLAN OF DISTRIBUTION	18
RISK FACTORS	20
UNITED STATES INCOME TAX CONSEQUENCES	28
LEGAL MATTERS	28
INTEREST OF EXPERTS	28
AUDITORS, REGISTRAR AND TRANSFER AGENT	28
STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION	29
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT	29
AUDITORS' CONSENT	F-1
CERTIFICATE OF THE COMPANY	C-1
CERTIFICATE OF THE UNDERWRITER	C-2

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements contained in this short form prospectus, including the documents incorporated herein by reference, constitute forward-looking information or forward-looking statements within the meaning of applicable Canadian securities laws and United States securities laws which are based upon the Company’s current internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements of information, including, among other things, assumptions with respect to exploration, royalty revenues, future capital expenditures and cash flow.  All statements other than statements of historical fact may be forward-looking statements.  Forward-looking statements are often, but not always identified by the use of words such as “seeks”, “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking statements.  By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. These statements appear in a number of places in this short form prospectus and in the documents incorporated herein by reference and include, but are not limited to, statements and information relating to the following:

§

the Company’s current intent, belief or expectations primarily with respect to its business objectives and plans;

§

future trends in the Company’s industry;

§

estimates and types of mineral resources and mineral reserves;

§

realization of mineral resource estimates;

§

timing and amount of estimated future exploration, permitting and production;

§

costs of exploration, permitting and production;

§

future production costs and volumes;

§

capital expenditures;

§

mineral grades;

§

exploration and expansion plans;

§

expected market fundamentals and prices;

§

availability of equipment and supplies;

§

success of mining operations;

§

the Company’s processing technologies;

§

global economic growth and industrial demand;

§

environmental risks;

§

unanticipated reclamation expenses;

§

title disputes or claims;

§

limitations on insurance coverage;

§

production of gold concentrates by the Company’s operations;

§

future gold prices and charges;

§

future royalties;

§

changes in global gold inventories;

§

changes to the political and/or economic conditions of Tanzania;

§

currency exchange rates;

§

costs of energy, materials and supplies;

§

future effective tax rates; and

§

future benefits costs.

Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, the following assumptions:

§

future prices for gold and other precious metals;

§

future currency and exchange rates;

§

the Company’s ability to generate sufficient cash flow from operations and access capital markets to meet its future obligations;

§

the absence of material changes to the regulatory framework representing royalties, taxes and environmental matters in Tanzania;

§

gold and other precious metal exploration and future production levels; and

§

the Company’s ability to obtain and retain qualified staff and equipment in a timely and cost-efficient manner to meet the Company’s demand.

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The Company believes that the expectations reflected in the forward-looking statements are reasonable but readers are cautioned that it would be unreasonable to rely on any such forward-looking statements as creating any legal rights, and that the forward-looking statements are not guarantees and may involve known and unknown risks and uncertainties, and that actual results are likely to differ (and may differ materially) and objectives and strategies may differ or change from those expressed or implied in the forward-looking statements as a result of various factors.  Such risks and uncertainties include but are not limited to risks relating to the Company, the mining industry, the market, the securities of the Company and the Offering and other factors referenced under the “Risk Factors” section in this short form prospectus and in the Company’s Annual Report on Form 20-F for the fiscal year ended August 31, 2010 as filed with the United States Securities and Exchange Commission (“SEC”) on November 29, 2010.  Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this short form prospectus.

All written and oral forward-looking statements or information attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements.

Forward-looking statements speak only as of the date the statements are made. You should not put undue reliance on any forward-looking statements. The Company assumes no obligation to update publicly or otherwise revise any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements.

CURRENCY AND EXCHANGE RATE INFORMATION

Unless otherwise specified, in this short form prospectus all dollar amounts are stated in United States dollars and all references to “dollars”, “$” or “U.S. $” are to United States dollars.  All references to “Cdn. $” are to Canadian dollars.

On August 9, 2011 the noon buying rate for one Canadian dollar in United States dollars specified by the Bank of Canada was U.S. $1.0108.  

DOCUMENTS INCORPORATED BY REFERENCE

The following documents, which the Company has filed with the various securities commissions or similar authorities in Canada and the United States, are specifically incorporated by reference and form an integral part of this short form prospectus:

§

The Company’s annual information form dated November 29, 2010 (in the form of an Annual Report on Form 20-F, as amended by Form 20-F/A dated July 12, 2011, excluding the annual audited consolidated financial statements for the years ended August 31, 2010, 2009 and 2008) for the fiscal year ended August 31, 2010 (the “Annual Information Form”);

§

The audited annual consolidated financial statements of the Company as at August 31, 2010 and 2009 and for each of the years in the three-year period ended August 31, 2010, together with the notes thereto and the auditors’ report thereon;

§

The management’s discussion and analysis of financial condition and results of operations of the Company for the year ended August 31, 2010;

§

The unaudited interim consolidated financial statements of the Company for the nine months ended May 31, 2011 and 2010, together with the notes thereto (excluding the notice on the cover page thereof);

§

Amended and restated management’s discussion and analysis of financial condition and results of operations of the Company for the nine months ended May 31, 2011, filed on August 9, 2011;

§

Material change report of the Company dated December 21, 2010 in respect of the successful bid for Buckreef Gold Mine Re-Development Project in Northern Tanzania;

§

Material change report of the Company dated April 15, 2011 in respect of the increase in the Buckreef Gold Project Resource Base;

§

Management Information Circular of the Company dated January 13, 2011 distributed in respect of the Annual Meeting of Shareholders held on February 22, 2011;   

§

Revised Statement of Executive Compensation pursuant to National Instrument 51-102F6 for the financial year ended August 31, 2010, filed on August 3, 2011; and  

§

Technical report effective June 30, 2011 entitled “National Instrument 43-101 Technical Report on Tanzanian Royalty Exploration Corporation’s Buckreef Gold Project in Tanzania” prepared by Venmyn Rand (Pty) Limited and compiled by Fiona Harper, Andrew Neil Clay and Nicholas J. Johnson (the “Buckreef Technical Report”) in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects adopted by the Canadian Securities Administrators (“NI 43-101”).

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Any annual information form, annual or interim financial statements and related management’s discussion and analysis, material change report (other than a confidential material change report), business acquisition report, information circular or disclosure document or report of foreign issuer filed pursuant to an undertaking to a Canadian securities regulatory authority filed by the Company with any securities commission or similar regulatory authority in Canada or filed with or furnished to the SEC subsequent to the date of this short form prospectus and prior to the termination of this Offering shall be deemed to be incorporated by reference into this short form prospectus, as well as any other document so filed by the Company which expressly states it to be incorporated by reference into this short form prospectus.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded, for purposes of this short form prospectus, to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or replaces such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed in its unmodified or superseded form to constitute part of this short form prospectus.

Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Corporate Secretary of Tanzanian Royalty Exploration Corporation, at 1688 152^nd Street, Suite 404, South Surrey, British Columbia, Canada, V4A 4N2, telephone (604) 536-7873. These documents are also available on SEDAR at www.sedar.com under the Company’s profile.

In addition to the Company’s continuous disclosure obligations under the securities laws of certain of the provinces of Canada, the Company is subject to the information requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) and in accordance therewith the Company files with or furnishes to the SEC reports and other information.   These reports and other information that the Company files with or furnishes to the SEC may be prepared in accordance with the disclosure requirements of Canada, which differ in certain respects from those in the United States.  Copies of any documents that the Company has filed with the SEC may be read and copied at the SEC’s public reference room at Room 1500, 100F Street N.E., Washington, D.S., 20549.  Copies of the same documents may also be obtained from the public reference room of the SEC by paying a fee.  Please call the SEC at 1-800-SEC-0330 or access its website at www.sec.gov for further information about the public reference rooms.  The SEC’s EDGAR Internet site also contains reports and other information about the Company and any public documents that the Company files electronically with the SEC.  The EDGAR site can be accessed at www.sec.gov.  

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ENFORCEABILITY OF CIVIL LIABILITIES

The Company is a corporation incorporated and governed by the Business Corporations Act (Alberta).  Some of the Company’s officers and directors, and experts named in this short form prospectus, are residents of Canada or elsewhere outside of the United States, and a substantial portion of the Company’s assets and the assets of such persons are located outside the United States.  As a result, it may be difficult for investors in the United States to effect service of process within the United States upon such directors, officers and representatives of experts who are not residents of the United States or to enforce against them judgments of a U.S. court predicated solely upon civil liability under U.S. federal securities laws or the securities laws of any state within the United States.  

CAUTIONARY NOTE TO UNITED STATES INVESTORS REGARDING ESTIMATES OF RESERVES AND MEASURED, INDICATED AND INFERRED RESOURCES

The disclosure in this short form prospectus, including the documents incorporated by reference herein, uses mineral resource classification terms that comply with reporting standards in Canada, and certain mineral resource estimates are made in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all reserve and resource estimates contained in or incorporated by reference in this short form prospectus have been prepared in accordance with NI 43-101. These standards differ significantly from the requirements of the SEC, and reserve and resource information contained herein and incorporated by reference herein may not be comparable to similar information disclosed by U.S. companies.

This short form prospectus includes mineral reserve estimates that have been calculated in accordance with NI 43-101, as required by Canadian securities regulatory authorities. For United States reporting purposes, SEC Industry Guide 7 (under the Exchange Act), as interpreted by the staff of the SEC, applies different standards in order to classify mineralization as a reserve. As a result, the definitions of proven and probable reserves used in NI 43-101 differ from the definitions in SEC Industry Guide 7. Under SEC standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Among other things, all necessary permits would be required to be in hand or issuance imminent in order to classify mineralized material as reserves under the SEC standards. Accordingly, mineral reserve estimates contained in this short form prospectus may not qualify as “reserves” under SEC standards.

In addition, this short form prospectus uses the terms “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” to comply with the reporting standards in Canada. The Company advises prospective investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into SEC defined mineral reserves.

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TANZANIAN ROYALTY EXPLORATION CORPORATION

Company History

The Company was originally incorporated under the corporate name “424547 Alberta Ltd.” in the Province of Alberta on July 5, 1990, under the Business Corporations Act (Alberta). The name of the Company was changed to “Tan Range Exploration Corporation” on August 13, 1991. The name of the Company was again changed to “Tanzanian Royalty Exploration Corporation” on February 28, 2006. On March 7, 2008, the Company amended its articles to increase the maximum number of directors from nine (9) to eleven (11). The Company is also registered in the Province of British Columbia as an extra provincial company under the Business Corporations Act (British Columbia).

Inter-corporate Relationships

Summary Description of the Company’s Business

The Company is a mineral resource company with exploration stage properties, which engages in the acquisition of interests in and the exploration of natural resource properties. The Company commits its own resources to the initial evaluation of mineral properties and in select situations, if and when warranted, the Company enters into joint venture agreements with other corporations to further the exploration of such properties, in exchange for annual rental/option payments and post-production royalty payments. At present, the Company’s natural resource activities do not generate any income from production.

The Company’s main area of interest has been in the exploration of gold properties, with a primary focus on exploring for gold properties in Tanzania. Tanzania remains the focus of the Company’s exploration activities.

In the Company’s view, its use of a joint venture and royalty strategy in addition to direct exploration and development offers investors leverage to precious and base metal prices with lower risk and shareholder dilution. Future production royalties from any producing properties discovered by the Company’s joint venture partners would provide the Company with a direct interest in the mine’s cash flow, with exposure to any benefits from new discoveries and production growth, but without the capital obligations, and environmental and social liabilities, associated with direct ownership.

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Recent Developments

On December 21, 2010, the Company announced it was the successful bidder for the Buckreef Gold Mine Re-development Project in northern Tanzania (the “Buckreef Project”).  Under the definitive joint venture agreement expected to be signed in due course with the State Mining Corporation of Tanzania (“Stamico”), the Company will hold a 55% interest in the Buckreef Project and pursuant to the terms of the heads of agreement dated December 16, 2010, the Company paid U.S.$3,000,000 to Stamico in consideration of the transaction.  The Company plans to initiate a Preliminary Economic Assessment on the Buckreef Project with a view to proceeding to a Definitive Feasibility Study.  See “Mineral Properties”.

On February 24, 2011, the Company announced changes at the executive level, with James E. Sinclair being appointed to the positions of President and Chief Executive Officer, while Joseph K. Kahama, formerly President of the Company, was appointed to the position of Chairman and Chief Operating Officer (Tanzania).  Mr. Steven van Tongeren was appointed as Chief Financial Officer, replacing Regina Kuo-Lee who was appointed to the newly created executive position of Corporate Controller.  In addition, Dr. Abdulkarim Hamisi Mruma joined the Company’s board of directors.

Mineral Properties

The following discussion regarding the Buckreef Project in Tanzania is summarized from the Buckreef Technical Report, which is incorporated herein by reference.  The Buckreef Project is the Company’s only material property.  

Property, Ownership and Location

The Company is the holder of numerous gold mineral assets in the Tanzanian goldfields, two of which include the, Kigosi and Lunguya eluvial gold deposits. In December 2010, the Company signed a binding heads of agreement with Stamico. The Company will have the right to earn a 55% interest in the Buckreef Project, with Stamico holding the remaining 45%. A definitive joint venture agreement governing ownership and management of the Buckreef Project is expected to be signed in due course. The Technical Report will review and document the techno-economic parameters for the Buckreef Project only.

The Buckreef Project is located in north central Tanzania immediately to the south of Lake Victoria, in the Mwanza Provincial District. The Buckreef Project is situated 110km southwest of Mwanza, in the Geita District and is accessed by ferry across Smiths Sound and then via unpaved roads and an airstrip. The project comprises the dormant Buckreef Gold Mine and four prospects with known mineralisation namely, Buckreef, Buziba, Tembo and Bingwa.

Geology and Mineralisation

The Buckreef and Buziba gold deposits are classified as medium grade orogenic gold deposits hosted by mafic volcanic sequences of the eastwest trending Archaean Rwamagaza Greenstone Belt (“RGB”) within the Lake Victoria Goldfields (“LVG”) of the Tanzanian Craton. The Buckreef deposit is hosted by a steeply dipping, northeast-southwest trending brittle-ductile shear zone with an early phase of iron rich carbonate alteration, re-brecciation, felsite intrusion and a later phase of auriferous quartz veining.

The Buziba deposit is located 25km east of the Buckreef prospect in the Rwamagaza greenstone belt. The principal host lithologies include magnesium rich basalt, comagmatic dolerite and a suite of quartz-albite felsic porphyries that have intruded the mafic sequence. Gold mineralization is associated with quartz vein arrays that occur in altered shear zones in mafic lithologies and as extensive stockworks in the felsic porphyries.

Regional Geological Setting

The Buckreef Project is situated within the LVG of northern Tanzania, which consists of a number of eastwest trending, linear, Archaean greenstone belts, which are separate granite-gneiss terrains within the Tanzanian Craton of east Africa. The LVG is the third largest gold producing region of Africa, surpassed only by the Witwatersrand Basin in South Africa and the Tarkwa region of Ghana. Numerous gold occurrences have been identified in the LVG, and new discoveries continue to be made. Since 1998, when the first mine, Golden Pride was commissioned, four additional large scale mines namely, Geita, Bulyanhulu, North Mara, and Tuluwaka have come into production. Geita and Bulyhanulu are considered world-class deposits, together representing in excess of 35Moz of gold resources.

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The greenstone belts comprise mafic volcanics, pyritic sediments, tuffs, iron formation, chert, and felsic volcanics, collectively known as the Nyanzian Group. The metamorphic grade of the Nyanzian Group is lower to middle greenschist facies, and two major deformational episodes have been identified. Amphibolite facies metamorphic rocks are exposed in the western portions of the belt near Tulawaka Mine, but in general higher grade metamorphic complexes are rare.

The greenstone belt sequences have geological and structural similarities to major gold districts in the Canadian Shield (Val d´Or, Kirkland Lake) and the Yilgarn Craton in Western Australia (Kalgoorlie, Laverton, Leonora, Kambalda and Southern Cross).

Gold mineralisation within the LVG occurs in a number of styles including:-

§

quartz veins within minor brittle lineaments, most commonly worked on a small scale by artisanal workers, due to their limited extent and erratic gold distribution;

§

mineralisation within major ductile shear zones;

§

mineralisation associated with replacement of iron formation and ferruginous sediments; and

§

felsic (porphyry) hosted mineralisation, such as within the Rwamagaza Greenstone Belt.

Regardless of the geological environment, it is accepted that structural control on the emplacement of the mineralisation is critical. The following structural features have proven to be important foci of gold mineralisation:-

§

structural lineaments trending at 120º;

§

flexures and splays to the 120º trend (such as at Golden Pride);

§

structural lineaments at 70º (such as at Golden Ridge); and

§

granite-greenstone contacts (such as at the Ushirombo and RGB).

Local Geological Setting

The Buckreef Project area covers the eastern portion of the eastwest trending RGB, which forms part of the Sukumaland Greenstone Belt. The Sukumaland Greenstone Belt is oval shaped and is defined by two intermittently exposed belts of meta-volcanic and meta-sedimentary rocks that surround a core of granitoids and gneisses. The inner belt comprises an older, Lower Nyanzian sequence characterised by basaltic and andesitic lavas and tuffs, whilst the outer, younger, Upper Nyanzian succession consists of iron formation and tuffs. The understanding of the geology in the region has been hampered by the lack of outcrop (less than 2%). Isotopic dating suggests that the sequences are approximately 2.6Ga in age and although no contact between the outer and inner belts is exposed, a general trend of younging outwards is considered valid.

Within the Sukumaland Greenstone Belt, the RGB consists of a sequence of poorly outcropping basaltic flows with well preserved volcanic features such as varioles, pillows, and flow top breccias. The mafic sequences consist of komatiitic basalts to the south and tholeitic basalts in the north, separated by the Rwamagaza Shear Zone. Aeromagnetic data and minor outcrop, indicate the presence of a number of elongate discontinuous, serpentinised, sheared ultramafic bodies parallel to the flow stratigraphy, which could represent either intrusive bodies or the cumulate portions of thick, magnesium rich basaltic lava flows.

Large batholithic granites intrude the RGB and the possibility exists that the RGB forms part of a much larger belt that has been dissected by the intrusions. Aeromagnetic surveys over Buckreef indicate the presence of granites at depth.

The mafic-ultramafic sequence is strained to varying degrees, with the highest strain occurring in the central area of the tenements, where the belt is thinnest. In this area, the dominant rock type is mafic schist. Toward the thicker (less attenuated) eastern and western parts, the schists forms thinner more discrete zones of high strain separating areas of relatively unstrained ultramafic lithologies. The granitoids are generally unstrained and hence assumed to be post peak deformation. A large portion of the basalts to the southeast of Nyarugusu are hornfelsed, suggesting the presence of granite at shallow depths beneath them.

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The tectonic evolution of the RGB is very poorly understood. Aeromagnetic data reveals several generations of crosscutting, late stage, brittle-ductile faults and shears, which offset flow stratigraphy and have locally been intruded by the felsic porphyries and by a late stage dolerite dykes. Early formed ductile structures are not easily defined in aeromagnetic data and there is evidence of shear zones that parallel the stratigraphy.

The RGB has been subjected to a phase of laterite development, with formation of predominantly iron rich ferricrete caps, which were subsequently extensively eroded and only isolated remnants of laterite remain in situ. Furthermore, these remnants are largely re-cemented transported laterites. As a consequence of this period of erosion, the weathering profile across the belt is relatively shallow across both Buckreef and Buziba Prospects. Major zones of secondary enrichment are therefore not developed at either Buckreef or Buziba, but there is evidence of localised enrichment in the shallow oxidation profiles in both areas. The RGB in general is covered by a thin layer of elluvial regolith, which is amenable to standard soil sampling techniques.

The prospect host rocks comprise meta-basalt, which are generally un-deformed but metamorphosed to lower greenschist facies grades. At Buckreef interflow units of predominantly pelitic and cherty sediments occur, as well as a variety of porphyritic textured, dyke and vein like felsic intrusions along crosscutting structures or sub-parallel to flow stratigraphy.

A non-penetrative deformation fabric is developed at Buziba, which dips steeply to the south, sub-parallel to the stratigraphy. Individual zones in which this fabric is well developed cannot be traced for distances of more than a few hundred metres on drill sections but a number of such zones occur throughout the 200m of thickness of stratigraphy, which hosts the mineralisation.

Exploration Concept

The Buckreef Gold Mine was an underground mine operated by the Tanzanian State during the late 1980s.  Apart from the state, several previous owners of the project undertook numerous exploration programmes including aeromagnetic, helicopter borne IP, ground magnetic and soil geochemistry surveys, as well as extensive Reverse Circulation (“RC”), Aircore (“AC”) and diamond drilling programmes.

Iamgold Corporation (“Iamgold”), the most recent owner of the project, verified the historic drilling data, undertook additional exploration and defined JORC compliant Mineral Resources in 2006. In total, the exploration programme included approximately 30,000 soil samples, 202,000m of RC drilling, 124,000m of AC drilling and 28,000m of diamond core drilling. An unconfirmed estimate for the historic exploration expenditure is U.S. $23 million.

Metallurgical testwork programs were undertaken on both the Buckreef and Buziba mineralisation types. The testwork on Buckreef mineralisation indicated that oxide and transitional mineralisation types were amenable to treatment using typical carbon-in-leach (“CIL”) processing techniques and fresh mineralisation may benefit from flotation and a finer grind with recoveries anticipated to be in the low 90%s. The testwork results for Buziba mineralisation indicated that it is amenable to treatment using gravity and CIL processing techniques. Metallurgical recoveries for Buziba mineralisation were anticipated to be in the low to mid 90%s. Heap leaching testwork indicated that, at a 25mm-50mm crushing size fraction in oxide mineralisation, a 75% recovery could be anticipated, whilst transitional and fresh mineralisation recoveries were lower, at 35% to 50%.

Status of Exploration

The Company has not undertaken exploration on Buckreef to date as it only recently acquired the licences in December 2010. The Company plans to initiate a Preliminary Economic Assessment (“PEA”) and contingent on the successful outcome of the PEA, to undertake a definitive feasibility study as part of the process to fast track the project to production.

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Since December 2010, the Company has completed a preliminary due diligence of previous exploration work, completed preliminary planning on expansion and follow-up exploration programs and has commenced undertaking further exploration activities on the Buckreef Project as briefly summarized for each prospect below.

Eastern Porphyry Prospect

The Eastern Porphyry Prospect is located on the strike extension of the ENE-WSW trending, 5-30m wide, brittle-ductile fault zone within relatively undeformed mafic volcanics immediately east of the main Buckreef Mine. Previous wide-spaced exploration drilling defined the presence of finely disseminated pyrite and quartz veining slivers of persistent but discontinuous sub parallel zones of quartz porphyry units hosted in the main fault zone.

An additional 2,400m of RC and 600m of diamond core drilling are planned to commence in October 2011.

Tembo Prospect

Tembo Prospect, located in an adjacent but sub-parrallel shear zone to the regional ENE-WSW trending Rwamagaza main shear zone, lies approximately 3km south-west of the main Buckreef Mine. Gold mineralisation at Tembo is hosted within grey quartz stringers, veinlets and boudins all tightly constrained by east-west shears hosted in basaltic volcanic units.

An additional 1,500-2,000m of RC and 180m of diamond core drilling are planned to commence in November 2011. The RC drilling is planned to test the strike and down-dip extension to the east of the main Tembo deposit while the core drilling is to accommodate additional metallurgical and specific gravity analytical test-work.

Bingwa Prospect

Bingwa lies at the northern margin of the RGB adjacent to a sheared contact with a granitic intrusive and approximately 4km east of Buckreef. Gold mineralisation, associated with quartz veining in strongly foliated and altered greenstone in a shear zone abutting the granitoid contact, has been identified by drilling over a strike length of 350m and up to 100m below surface with the main zone of mineralisation occurring over a strike length of 150m.

The majority of the mineralisation defined to date lies in the oxide zone, which extends to 40 to 60m below surface. An additional 1,500m of RC and 180m of diamond core drilling are planned to commence in mid-November 2011. The RC drilling is planned to test the SW strike and potential down-dip extension of the main Bingwa deposit while the core drilling is to accommodate additional metallurgical and specific gravity analytical test-work.

Buziba Prospect

The Buziba Prospect is located approximately 20km east of Buckreef and the gold mineralisation is also similarly hosted in pillowed mafic rocks intruded by a suite of feldspar porphyry dyke slivers. Of immediate interest to the Company is the presence of a surficial laterite-cemented quartz rubble deposit previously targeted by artisinal miners.

The Company commenced a pitting and bulk sampling program in June 2011. The program is ongoing and it is planned to complete bulk sampling of a total of 50 pits to effectively assess the potential tonnage and grade distribution of this potentially economic resource.

Development and Operations

Apart from historic mining on the Buckreef Project, no mining operations or development have yet commenced by the Company.

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Buckreef Main Prospect

The Buckreef Mine was developed on an ENE-WSW trending, 5-30m wide, brittle-ductile fault zone within relatively undeformed mafic volcanics. The fault zone contains early, pervasive iron carbonate alteration which has undergone later brittle fracturing and brecciation with re-cementation by multiple events of grey to white quartz veining. Finely disseminated pyrite occurs in halos surrounding the zones of quartz veining. The degree of quartz veining is directly related to the tenor of gold mineralisation. Deep drilling implies higher grade shoots plunging steeply to the north.

The mineralised structure at Buckreef has been clearly but not exhaustively defined geologically in terms of alteration and deformation styles and the resources are well constrained. Buckreef North and Main Zones comprise by far the largest portion of the known resource. The Main Zone strikes for 600m dips steeply to the west and is known to extend to at least 400m below surface. The Buckreef North Zone extends for 250m, also dips steeply to the west and has been intercepted in drilling 400m below surface.

Gold mineralisation at Buckreef is non-refractory in both fresh and oxide material and is associated with small amounts of fine grained pyrite within the grey quartz veining. The Company has invited tenders from several reputable organisations to initiate a Bankable Feasibility Study as part of the process to fast track the project to production in the next 18-24 months.

Buckreef Tailings Retreatment Project

As part of the due diligence conducted at Buckreef, the Company established the presence of serviceable and functional slurry tailings processing pits that were part of the main ore processing plant when Buckreef Mine was briefly operational in the 1980’s. The Company has subsequently commenced a detailed inventory of the grade and tonnage of the existing tailings dump at Buckreef Mine and also several third party tailings dumps within a 20km radius of the mine. The Company plans to augment the existing tailings stockpile at its Buckreef yard through outright purchasing and accumulate a suitable tonnage of around 600,000 tonnes after which a gold tailings retreatment program is planned to commence operations by December 2011.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Buckreef Project is situated in the Geita district, approximately 110km southwest of Mwanza, in the Lake Victoria region of Tanzania. The hinterland northwest of Dar es Salaam is connected by a poorly maintained bitumen road, unreliable train service and several daily commercial flights. Mwanza is the nearest major population centre to the project, approximately 60km northeast of Buckreef, and is the second largest city in Tanzania with a population of one million people.

Access to the project area is via ferry from Mwanza across Smiths Sound, then via sealed road through the township of Geita. Alternative access is via sealed road through Shinyanga and Kahama, and subsequently via gravel road north to Bulyanhulu and then west to Nyarugusu.

The project can also be accessed by scheduled light aircraft flights (Coastal Air Services) from Mwanza to the airstrips located at Bulyanhulu or Geita Gold Mines, or more directly by charter to the bush airstrips located at Buckreef Mine or Nyarugusu Village.

Access to Buziba, is on the Nyarugusu track turning south at the Main Reef Mine junction to Nyarugusu Village, which is located 25km east of Buckreef Mine.

The infrastructure at the Buckreef project area is generally poor and unpaved roads are poorly maintained rendering access during the rainy season difficult. The project area is densely populated with individual kraals and agglomerations of dwellings related to transient artisanal gold mining activities.

Exploration logistics, supplies and labour are largely provided from Mwanza and where possible, sourced locally from the villages of Rwamgasa and Nyarugusu and Geita township. Local small pastoral villages are poor sources of logistical support and communication in the area is provided by a modern cell phone network, which has coverage in virtually all sectors of the LVG.

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The surface rights are sufficient for future mining operations, processing plant, waste sites and tailing storage facility sites. Power and water availability are adequate for current requirements and will be upgradable to meet future mining requirements. In December 2007, Lorax Environmental was requested to conduct a study to identify suitable dam sites for a dam dedicated to supply water to the proposed Buckreef Mine site. In total 11 sites were identified and will be further investigated as the project progresses to pre-feasibility study stage.

Climate, Vegetation and Physiography

The Buckreef Project area consists of gently rolling low hills at an average elevation of 1,210m to 1,250mamsl, with flat alluvium deposits and black cotton (Mbuga) soil filled valleys. The original vegetation has been modified by subsistence farming and tree clearing (mainly for charcoal), to mixed crops and open grassland. Certain areas have been damaged by overgrazing.

The climate is temperate, with sub-humid moderate temperatures all year round. There are two rainy seasons, the minor wet season occurs in November whilst the main wet season peaks in April. The water table varies markedly from season to season which can have an effect on drilling conditions. Consequently the dry season, occurring between May and September is preferable for drill programs and field operations. During the wet seasons access is limited across Mbuga soils.  See “Risk Factors”.

History

The LVG was discovered in 1894 by German explorers and significant exploitation began in the 1930s at the Geita Gold Mine. Several small gold mines exploiting near surface reefs, operated throughout the RGB, particularly near the village of Rwamagaza. By 1940, Tanzania was producing 4.5tpa of gold (Au).

Gold bearing quartz veins were reported from the current Buckreef Mine area in 1945 and reports from the 1950s attest to ongoing production at a number of localities near Rwamagaza, including the Buckreef area. The extent of the small scale local and colonial mining activities is evident from the numerous pits and adits covering the entire Buckreef tenement, however no production figures are available.

An airborne geophysical survey was flown during 1959 over the RGB, in a joint effort between the United Nations and the Tanzanian Mineral Resources Division, with a ground magnetic survey follow-up between 1965 to 1968. The Buckreef quartz vein hosted deposit was rediscovered in 1965 and followed-up by drilling by the Tanzanian Mineral Resources Division.

The Buckreef Mine was an underground mine exploited in the name of the Buckreef Gold Mining Company approved by Stamico in 1972 and the exploration and mining activities during this period are summarised in the table below. The mining ceased in 1990 due to a number of operational reasons and the mine flooded. Approximately 100,000t of Run of Mine (RoM) ore was mined at a diluted grade of approximately 3g/t Au to 4g/t Au. In 1994, the Buckreef Redevelopment Agreement was signed between the State of Tanzania and East Africa Mines Limited (“EAM”) and additional surface and subsurface gold resources were identified.

Post 1990, a new phase of modern exploration focused on potential Archaean deposits in the Lake Victoria region and the LVG developed after significant gold discoveries.

EAM explored 40km of contiguous strike length of the RGB. During that time (2003) Spinifex Gold, the original parent company to East Africa Mines, merged with Gallery Gold Limited of Australia (“Gallery Gold”). Gallery Gold then became the parent company of East Africa Mines. Iamgold Corporation acquired Gallery Gold in March 2006 and held the Buckreef project until July 2009.

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Summary Buckreef Exploration and Mining between 1960 and 2003

DATE	EXPLORATION UNDERTAKEN
1960	13 diamond drill holes by UNDP (12 in current database, UNBR01-12) identified a “possible ore zone 107m long, 8m wide and extending to 122m depth.
1968	13 diamond drill holes by Tanzanian Mineral Resources Division (MRD01-13).
1970s	Early 1970s Underground development on 30m and 61m levels by Williamson Diamonds Ltd. Indicated ore reserve of 106,000t @ 8.7g/t Au between 23m and 76m levels using minimum mining width of 1.5m
1972	Tanzanian government approved investment decision and Buckreef Gold Mining Company (BGMC)
1973-1979	Further underground development and 3 diamond drill holes (BGMDD01-03) by BGMC.

1978-1981 Treatment plant and other facilities established with financial assistance from Swedish International Development Agency

1982-1988 Gold production commenced but reached only 25-40% of forecast targets.
Production figure unavailable.

1988 Review of operations by British Mining Consultants Ltd who found Buckreef assay laboratory assays 65% higher than overseas check assays

1990 Mining ceased and workings flooded. Total ore extracted estimated at approximately100,000t @ 3-4g/t Au

1992	Aircore, RC and diamond drilling by East African Mining Corporation (now East Africa Gold Mines Ltd)
Source : Hellman and Schofield 2007.

Ownership

Prior Ownership

Originally, the Buckreef Project was an advanced exploration project held by Iamgold Tanzania (“IAGT”) prior to July 2009. The Agreement to Redevelop the Buckreef Gold Mine (“ARBGM”) between Iamgold and the Ministry for Energy and Minerals included at that point, a single Mining Licence and 12 Prospecting Licences covering 98.19km².

In July 2009, IAGT applied to surrender all licenses relating to the ARBGM, effective October 25, 2009 and the Commissioner for Minerals withdraw all license applications relating to the ARBGM.

The Company’s Interest

In 2010, the Company was invited by Stamico (for the Ministry of Energy and Minerals), to tender for the opportunity to negotiate a joint venture agreement with respect to the Buckreef Project. The Company was awarded the tender, as confirmed in a letter from the Director General of Stamico dated December 16, 2010. In December 2010, the Company signed a binding heads of agreement with Stamico, and the Company will hold a 55% interest in the Buckreef Project, with Stamico holding the remaining 45%.  A definitive joint venture agreement governing ownership and management of the Buckreef Project is expected to be signed in due course.  See “Risk Factors”.

The Prospecting Licences and Mining Licence were awarded to the Company as part of the joint venture.   In addition, within these tenements are small scale artisanal gold operations, which comprise 53 Primary Mining Licences (PML) or “claims”, held mostly by local parties.

The Buckreef Project comprises a hilly area over which the surface and mineral rights are vested in the State.  There are no obligations on the Company to relocate local residents with respect to this project. The Tanzanian Mining Act requires consultation with landowners for access and a written authorisation is required for access and construction (2010 Act, Part VII 95 and 96). Appropriate compensation for any damages incurred during the exploration process or relocation, is negotiated with Local Government Authorities and Village Council (Mining Act Part VIII 102). All disputes are settled by the Commissioner.

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Material Agreements

The Tanzanian Mining Act makes provision for a development agreement between the Ministry of Energy and Minerals and mineral rights owners, the terms of which are valid for the Life of the Mine (LoM) and are constrained by the provisions of the Mining Act 2010.

A binding heads of agreement between Stamico and the Company has been entered into, and a definitive joint venture agreement governing ownership and management of the Buckreef properties is expected to be signed in due course.  The continued right to the Prospecting and Mining Licences will be subject to the conditions to be negotiated in the definitive joint venture agreement.

Conclusions and Recommendations

The Buckreef Technical Report contains the following conclusion and recommendations:

Hellman & Schofield (Pty) Ltd (Hellman and Schofield) was retained by the Company to undertake the Mineral Resource estimation for the Buckreef Project. The Mineral Resource estimates were based partially on a historic dataset that has been verified and deemed suitable for Mineral Resource estimation (Hellman and Schofield 2007), as well as Iamgold exploration data, which is similarly of a standard compliant with National Instrument and JORC reporting requirements. The Mineral Resources were estimated using Multiple Indicator Kriging techniques in GS3 software produced by Hellman and Schofield. The model estimates resources into panels, which approximate the drillhole sample spacing throughout the majority of the study area. The Mineral Resource estimates within each panel were classified according to the distribution of sampling in the kriging neighbourhood and took into account the uncertainty in the estimates related to the proximity and distribution of the informing composites.

The NI 43-101 compliant Mineral Resource estimate for the Buckreef Project updated effective June 30,2011 is summarized as follows:

Summary NI 43-101 Compliant Mineral Resources of the Buckreef Project (0.5 g/t Au Cut-off) – June 2011

Source: Hellman and Schofield 2007

Estimates over variable widths to 3m to 40m

Bulk Density ranges 2.0g/cm³ to 2.8g/cm³

Inconsistencies in totals are due to rounding

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability

55% attributable to the Company

Cut-off grade 0.5g/t Au

The geological continuity and grade distribution of the Buckreef mineralisation is well constrained and definite upside potential to define additional Mineral Resources in extensions of the known mineralisation has been confirmed through drilling. The Mineral Resource base maybe increased through implementing changes in the cut-off grades as the gold price improves.

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The Company decided to publish the Mineral Resource statement at a 0.5g/t Au cut-off grade, to reflect the current and forecast dynamics of the global gold market.   In addition, the mineralisation below the 1.100mRL at Buckreef Prospect was included in the estimate as the Company considers the mineralisation below this level to have reasonable prospects for eventual economic extraction.  The 1,100mRL level is the anticipated maximum depth which could potentially be economically mined by open pit.

The exploration potential of the RGB has not been fully realised and the Company is well positioned to benefit when the full extent of the prospectivity of the greenstone belt is determined. Furthermore, the Buckreef Project benefits particularly from being an open pittable gold deposit, which can be brought rapidly into production to benefit from the current favourable gold market conditions. The definite upside potential to define further Mineral Resources serves to provide focus for future development of the project.

DESCRIPTION OF SHARE CAPITAL

The Company’s authorized capital consists of an unlimited number of Common Shares.  The Board subsequently resolved that the Company authorize for issuance up to a maximum of 105,000,000 common shares, subject to further resolutions of the Company’s board of directors.

As of August 4, 2011, there were 94,495,595 Common Shares issued and outstanding, 250,813 restricted stock units outstanding pursuant to the Company’s Restricted Stock Unit Plan, and 585,340 warrants outstanding.  Each restricted stock unit represents an entitlement to one Common Share of the Company, upon vesting.  Each outstanding warrant is exercisable for one Common Share.  In addition, an aggregate of 659,427 common shares are issuable on the conversion of previously issued convertible promissory notes.

Common Shares

The Common Shares are listed on the TSX under the symbol “TNX”, and on the AMEX under the symbol “TRX”.

The holders of Common Shares are entitled to vote, to receive dividends and to receive, subject to the right of holders of any other class of shares, the remaining property of the Company upon liquidation, dissolution or winding up of the Company.

Warrants

The Warrants will be issued in registered form.  Each Warrant will entitle the beneficial holder thereof (a “Warrantholder”) to purchase one Warrant Share at a price of U.S.$6.25 at any time up to 5:00 p.m. (Vancouver time) on the date which is two years following the Closing Date (the “Expiry Date”).  Warrants may be exercised on or before the Expiry Date, by the completion of a subscription notice and payment of the exercise price for the number of Warrant Shares for which the Warrants are being exercised.

The certificates representing the Warrants will provide for adjustment in the number of Warrant Shares issuable upon the exercise of the Warrants and/or the exercise price per Warrant Share upon the occurrence of certain events, including:

(a)

the issuance of Common Shares or securities exchangeable for or convertible into Common Shares to all or substantially all of the holders of the Common Shares by way of a stock dividend or other distribution;

(b)

the subdivision, re-division or change of the Common Shares into a greater number of shares;

(c)

the consolidation, reduction or combination of the Common Shares into a lesser number of shares;

(d)

the issuance to all or substantially all of the holders of the Common Shares of rights, options or warrants under which such holders are entitled, during a period expiring not more than 45 days after the record date for such issuance, to subscribe for or purchase Common Shares, or securities exchangeable for or convertible into Common Shares, at a price per share to the holder (or at an exchange or conversion price per share) of less than 95% of the “current market price” for the Common Shares on such record date; or

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(e)

the issuance or distribution to all or substantially all of the holders of the Common Shares of securities of the Company including rights, options or warrants to acquire shares of any class or securities exchangeable or convertible into any such shares or cash, property or assets and including evidences of indebtedness, or any cash, property or other assets (other than a dividend paid in the ordinary course).

The certificates representing the Warrants will also provide for adjustment in the class and/or number of securities issuable upon the exercise of the Warrants and/or exercise price per security in the event of the following additional events:

(a)

reclassification of the Common Shares;

(b)

consolidations, amalgamations, arrangements or mergers of the Company with or into any other Company or other entity (other than consolidations, amalgamations, arrangements or mergers which do not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other shares); or

(c)

the transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity.

No adjustment in the exercise price or the number of Warrant Shares issuable upon exercise of the Warrants will be required to be made unless such adjustment would result in a change of at least 1% in the exercise price or a change in the number of Common Shares purchasable upon exercise by at least one-one hundredth of a Common Share, as the case may be.

There is no market through which the Warrants may be sold and purchasers may not be able to resell the Warrants purchased under this short form prospectus. The Company does not intend to apply to list the Warrants on the TSX or the AMEX.

The foregoing is a summary of the material provisions of the Warrants, but is not, and does not purport to be, a complete summary of the provisions of the Warrants.

CONSOLIDATED CAPITALIZATION

The following table sets forth the Company’s consolidated capitalization as at May 31,2011 both before and after giving effect to the Offering (in thousands of dollars).

	May 31, 2011 before giving effect to the Offering (Cdn. $’000)	May 31, 2011 after giving effect to the Offering(1)(2) (Cdn. $’000)
Long-term debt (convertible debt)	2,945	2,945
Shareholders’ equity:
Capital stock	88,083	109,420
Contributed surplus	751	751
Warrants	852	6,177
Deficit	(47,688)	(47,688)
Total shareholders’ equity	41,998	68,660
Total capitalization	44,943	71,605

Notes:

(1)

Based on the issuance of 5,263,158 Units for total gross proceeds of U.S.$30,000,000 less the Underwriter’s Fee of U.S.$2,100,000  and expenses of the Offering estimated to be U.S.$1,120,000.

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Other than as described above, since May 31,2011, there has not been any other material change to the consolidated capitalization of the Company.

PRIOR SALES

The following table summarizes the details of Common Shares and securities convertible into Common Shares issued by the Company within the 12 months prior to the date of this short form prospectus.

Date Issued/ Granted	Number of Securities	Security	Price per Security
August 17, 2010	-	3-year convertible promissory note (1)	-
August 17, 2010	22,166	Common Shares	Cdn. $4.286
September 7, 2010	144,430	Common Shares	Cdn. $5.539
September 23, 2010	-	3-year convertible promissory note (2)	-
October 4, 2010	-	3-year convertible promissory note (3)	-
October 7, 2010	6,205	Common Shares(4)	Cdn. $5.54
October 7, 2010	8,952	Common Shares(4)	Cdn. $3.84
November 5, 2010	800,000	Common Shares	Cdn. $6.052
November 5, 2010	200,000	Warrants	Cdn. $7.309
November 5, 2010	64,000	Common Shares	Cdn. $6.052
November 23, 2010	851,209	Common Shares	Cdn. $5.874
November 23, 2010	212,802	Warrants	Cdn. $7.05
November 23, 2010	68,097	Common Shares	Cdn. $5.874
January 31, 2011	690,150	Common Shares	Cdn. $5.867
January 31, 2011	172,538	Warrants	Cdn. $6.903
January 31, 2011	58,663	Common Shares	Cdn. $5.867
March 8, 2011	20,006	Common Shares(5)	U.S.$4.99
April 1, 2011	247,173	Common Shares (6)	Cdn. $4.501
May 20, 2011	51,670	Common Shares(4)	Cdn. $5.54
June 2, 2011	69,581	Common Shares(4)	Cdn. $4.69

(1)

On August 17, 2010, the Company completed a private placement with an arm’s length third party and issued a three-year convertible promissory note to an arm’s length third party in the principal amount of Cdn. $1,095,000 bearing interest at 3% and convertible into 255,484 Common Shares at a price of Cdn. $4.286 per Common Share.

(2)

On September 23, 2010, the Company completed a private placement with an arm’s length third party and issued a three-year convertible promissory note in the principal amount of Cdn. $1,000,000 bearing interest at 3% and convertible into 221,337 Common Shares at a price of Cdn. $4.518 per Common Share.

(3)

On October 4, 2010, the Company completed a private placement with arm’s length third parties and issued three-year convertible promissory notes in the aggregate principal amount of Cdn. $1,060,000 bearing interest at 3% and convertible into 204,772 Common Shares at Cdn. $5.1765 per Common Share.

(4)

Common Shares issued pursuant to the Company’s Restricted Stock Unit Plan.

(5)

On March 8, 2011 the second of two tranches pursuant to the Purchase and Sale Agreement with Ashanti Goldfields (Cayman) Limited (“Ashanti”) dated September 26, 2006 with respect to the purchase of the Dongo property, was satisfied by the issuance to Ashanti of 20,006 Common Shares of the Company.

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(6)

On April 1, 2011, the Company received notice of the conversion of a promissory note dated May 11, 2010 in the principal amount of Cdn. $1,000,000, into 222,173 Common Shares at a price of $4.501 per Common Share, plus 25,000 Common Shares for converting prior to October 11, 2011.

TRADING PRICE AND VOLUME OF THE COMMON SHARES

The Company’s outstanding Common Shares are listed for trading under the symbol “TNX” on the TSX and under the symbol “TRX” on the AMEX. The following table sets forth the high and low prices at which a board lot of the Company’s Common Shares were traded and the trading volumes of the Company’s Common Shares for the 12-month period before the date of this short form prospectus.

	TSX				AMEX
Period	High (Cdn. $)	Low (Cdn. $)	Close (Cdn. $)	Volume (Shares)	High (U.S. $)	Low (U.S. $)	Close (U.S. $)	Volume (Shares)
2010
August	5.98	5.10	5.89	1,017,477	5.63	5.00	5.51	7,446,722
September	7.79	5.74	7.40	2,158,077	7.51	5.46	7.21	13,796,458
October	7.64	6.80	7.05	1,237,093	7.489	6.62	6.98	10,024,020
November	7.43	6.32	6.70	1,487,415	7.41	6.21	6.56	9,821,403
December	7.39	6.52	7.28	1,375,759	7.40	6.589	7.30	11,543,306
2011
January	7.04	5.93	6.40	1,485,305	7.34	5.95	6.43	9,129,876
February	7.14	6.27	6.73	1,562,524	7.26	6.27	6.98	9,514,865
March	6.87	5.91	6.19	1,680,364	7.03	5.95	6.33	11,197,598
April	6.87	5.88	6.87	1,219,835	7.26	6.10	7.26	8,673,820
May	7.40	6.02	7.33	1,405,139	7.48	6.20	7.46	9,870,703
June	7.55	5.83	6.26	1,799,396	7.82	5.94	6.55	12,090,253
July	6.56	5.81	5.94	978,591	6.84	6.09	6.18	5,027,183
August 1- 9	6.09	5.61	5.90	504,620	6.36	5.71	6.00	2,254,700

On August 9, 2011, the last trading day prior to the filing of this short form prospectus, the closing price of the Common Shares was Cdn. $5.90 on the TSX and U.S. $6.00 on the AMEX.

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USE OF PROCEEDS

The net proceeds to the Company from the sale of the Units hereunder will be $27,900,000 after deducting the Underwriter’s Fee of $2,100,000 (before deducting the U.S.$60,000 previously paid to the Underwriter) but before deducting the estimated expenses of the Offering of $1,120,000.  See “Plan of Distribution”.

The Company intends to use approximately $3 million of the net proceeds of the Offering to undertake a preliminary economic assessment on the Buckreef Project, and subject to a successful outcome, to proceed to a definitive feasibility study.  The Company expects to allocate the net proceeds as follows:

Use of Proceeds	Total Funds
Buckreef Mine:
Preliminary Economic Assessment	$  1,700,000
Definitive Feasibility Study	$  1,300,000
Unallocated(1)	$17,000,000
General working capital	$  7,900,000
Total	$27,900,000

Note:

⁽¹⁾

These funds will be held in general working capital pending the results of the preliminary economic assessment and the definitive feasibility study.  The Company expects to allocate these funds to the development of the Buckreef Project in accordance with the recommendations and budget set out in the definitive feasibility study.  If, as a result of the preliminary economic assessment, the Company does not proceed to definitive feasibility study, the Company will allocate the funds to future exploration opportunities that may present themselves.

The Company intends to use $3 million of the net proceeds of the Offering to initiate a preliminary economic assessment and, subject to the successful outcome, to proceed to a definitive feasibility study, as recommended in the Buckreef Technical Report. The Company proposes to allocate approximately $17,000,000 of the net proceeds of the Offering to the development of the Buckreef Project, with the objective of allocating such costs in accordance with the recommendations and budget set out in the preliminary economic assessment and the definitive feasibility study.  These funds will be held in general working capital pending the results of the preliminary economic assessment and definitive feasibility study.  If, as a result of the preliminary economic assessment, the Company does not proceed to definitive feasibility study, the Company will allocate the funds to future exploration opportunities that may present themselves.

While the Company intends to use the net proceeds for the stated purposes, the timing, amount and allocation of the Company’s actual expenditures will be based on many factors including proposals from mining consultants, completion of final feasibility study and other mining investment decisions initiated in the normal course of business.  Pending use of the net proceeds of the Offering, they will be invested in highly liquid investments with high credit quality institutions.  Potential investors are cautioned that notwithstanding the Company’s current intentions regarding the use of the net proceeds of the Offering, there may be circumstances where a reallocation of the net proceeds may be advisable for business reasons that management believes are in the Company’s best interests.  See “Risk Factors”.

The Company had negative operating cash flow for its most recent interim financial period and financial year.  To the extent the Company has negative cash flows in future periods, the Company may use a portion of its general working capital to fund such negative cash flow.

PLAN OF DISTRIBUTION

Pursuant to the Underwriting Agreement dated as of July 11, 2011, as amended by an amendment dated as of August 10, 2011, entered into between the Company and the Underwriter, the Company has agreed to issue and sell an aggregate of 5,263,158 Units to the Underwriter at a price of $5.70 per Unit, for aggregate gross proceeds of $30,000,000, and the Underwriter has agreed to purchase (or arrange for the purchase of) all of the Units on or about August 11, 2011 or such other date as may be agreed to by the Company and the Underwriter, but in any event no later than August 31, 2011.  The Offering Price of the Units was determined by negotiation between the Company and the Underwriter. Delivery of the Units is conditional upon payment at closing of $5.70 per Unit by the Underwriter to the Company.  

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In consideration for the services to be performed by the Underwriter, the Underwriting Agreement provides that the Company shall pay the Underwriter the Underwriter’s Fee equal to 7% of the gross proceeds of the Offering, less U.S.$60,000 previously paid by the Company to the Underwriter in respect of the Underwriter providing financial advisory services to the Company in connection with the Offering.  

As additional compensation, the Company will issue to the Underwriter that number of non-transferable Compensation Options equal to 7% of the total number of Units sold under the Offering.  Each Compensation Option will be exercisable for one Common Share at a price of $5.91 for a period of two (2) years after the Closing Date.  Upon completion of the Offering, the Company will grant the Underwriter an aggregate of 368,421 Compensation Options.

In addition to the Common Shares and Warrants comprising the Units, this short form prospectus also qualifies the Compensation Options for distribution.

The Company has applied to list (i) the Common Shares included in the Units, and (ii) the Common Shares issuable pursuant to the exercise of the Warrants included in the Units and the Compensation Options, on the TSX and the AMEX.  Listing will be subject to the Company fulfilling all of the listing requirements of the TSX and the AMEX, respectively.

There is currently no market through which the Warrants may be sold and no such market is expected to develop after the completion of the Offering.  Purchasers may not be able to resell Warrants purchased under this short form prospectus. This may affect the pricing of the Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of the Warrants, and the extent of issuer regulation. See “Risk Factors”. The Company does not intend to apply to list the Warrants distributed under this short form prospectus on the TSX or the AMEX or any other exchange or published market.

The Offering is being made in the provinces of British Columbia, Alberta and Ontario and in the United States. The Units will be offered in the provinces of British Columbia, Alberta and Ontario through the Underwriter or its affiliates who are registered to offer the Units for sale in such provinces and such other registered dealers as may be designated by the Underwriter.  Subject to applicable law the Underwriter may offer the Units outside of Canada.

The obligations of the Underwriter under the Underwriting Agreement may be terminated upon the occurrence of certain stated events.  The Underwriter is, however, obligated to take up and pay for all of the Units, if any of the Units are purchased under the Underwriting Agreement.  The Underwriter is entitled under the Underwriting Agreement to indemnification by the Company against certain liabilities and expenses.

Following the Closing, all of the Common Shares and Warrants comprising the Units sold pursuant to the Offering will be freely tradeable without restriction or further registration under applicable securities laws in the provinces of British Columbia, Alberta and Ontario, subject to restrictions applicable to control blocks.

On the Closing Date, the Common Shares qualified for distribution under this short form prospectus will be available for delivery in book based form through either CDS or its nominee or DTCC or its nominee and will be deposited with CDS or DTCC.  Purchasers of Units will receive only a customer confirmation from the registered dealer that is a CDS participant or a DTCC participant and from or through which the Units are purchased.  On the Closing Date, the Warrants comprising the Units will be issued in registered form.

The Company has agreed to indemnify the Underwriter and its affiliates, and the respective directors, officers, employees, agents and shareholders thereof against certain civil liabilities and expenses and to contribute to payments that the Underwriter may be required to make in respect thereof.

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Pursuant to the rules and policy statements of certain Canadian securities regulators, the Underwriter may not, throughout the period of distribution under this short form prospectus, bid for or purchase any of the Company’s Common Shares. The foregoing restriction is subject to certain exceptions, including: (a) a bid or purchase permitted under the by-laws and rules of applicable regulatory authorities and stock exchanges, including the Universal Market Integrity Rules for Canadian Marketplaces administered by the Investment Industry Regulatory Organization of Canada, relating to market stabilization and passive market-making activities; (b) a bid or purchase made for and on behalf of a customer where the order was not solicited during the period of distribution; (c) a bid or purchase to cover a short position entered into prior to the distribution; and (d) transactions in compliance with U.S. Federal securities laws. Any such trades are permitted only on the condition that the bid or purchase is not engaged in for the purpose of creating actual or apparent active trading in or raising the price of the Company’s Common Shares. Subject to the foregoing and applicable laws in connection with the Offering, the Underwriter may over-allot the Common Shares or effect transactions intended to stabilize or maintain the market price of the Common Shares at a higher level than that which might otherwise prevail on the open market. Such transactions, if commenced, may be discontinued at any time during the Offering.

RISK FACTORS

The acquisition of the Units involves a high degree of risk and should be considered speculative. You should carefully consider the following risks set out below and other information contained in or incorporated by reference in this short form prospectus and the documents incorporated by reference before purchasing any of the Units. If any event arising from these risks occurs, the Company’s business, prospects, financial condition, results of operations or cash flows could be adversely affected, the trading price of Common Shares could decline and all or part of any investment may be lost.

The operations of the Company are highly speculative due to the high-risk nature of its business, which include the acquisition, financing, exploration and development of mineral properties.  The risks and uncertainties set out below and incorporated by reference herein are not the only ones facing the Company.  Additional risks and uncertainties not currently known to the Company, or that the Company currently deems immaterial, may also impair the Company’s operations.  If any of the risks actually occur, the Company’s business, financial condition and operating results could be adversely affected.  As a result, the trading price of the Common Shares could decline and investors could lose part or all of their investment. The Company’s business is subject to significant risks and past performance is no guarantee of future performance.

Risks relating to the Company

The Company has incurred net losses since its inception and expects losses to continue.

The Company has not been profitable since its inception. For the fiscal year ended August 31, 2010, the Company had a net loss of Cdn. $3,427,655 and an accumulated deficit on August 31, 2010 of Cdn. $43,884,125. The Company has never generated revenues and does not expect to generate revenues from operations until one or more of its properties are placed in production. There is a risk that none of the Company’s properties will be placed in production, and that the Company’s operations will not be profitable in the future.

The Company’s exploration activities are highly speculative and involve substantial risks.

The Company’s exploration activities are highly speculative and involve substantial risks.  All of the Company’s properties are in the exploration stage and no proven mineral reserves have been established. The Company’s exploration work may not result in the discovery of mineable deposits of ore in a commercially economical manner. There may be limited availability of water, which is essential to milling operations, and interruptions may be caused by adverse weather conditions. The Company’s operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air quality standards, pollution and other environmental protection controls. The Company’s exploration activities are subject to substantial hazards, some of which are not insurable or may not be insured for economic reasons.

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The Company has uninsurable risks.

The Company may be subject to unforeseen hazards such as unusual or unexpected formations and other conditions. The Company may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure. The payment of such liabilities may have a material adverse effect on the Company’s financial position.

The Company depends on key management personnel.

The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of its management including James E. Sinclair, President and Chief Executive Officer, and Steve van Tongeren, Chief Financial Officer.  Investors must be willing to rely to a significant extent on their discretion and judgment. The Company does not have employment contracts with the President and Chief Executive Officer or the Chief Financial Officer. The Company maintains key-man life insurance on the President and Chief Executive Officer but not on the Chief Financial Officer of the Company.

Failure to maintain effective internal controls could have a material adverse effect on the Company’s operations.

The Company is required to document and test its internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of the United States, which requires annual management assessments of the effectiveness of the Company’s internal controls over financial reporting, and a report by the Company’s independent auditors addressing these assessments. During the course of the Company’s testing, the Company may identify material weaknesses which the Company may not be able to remediate for its annual compliance with the requirements of Section 404. If the Company fails to achieve and maintain the adequacy of its internal controls, as such standards are modified, supplemented or amended from time to time, the Company may not be able to ensure that the Company can conclude on an ongoing basis that the Company has effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for the Company to produce reliable financial reports and are important to help prevent financial fraud. If the Company cannot provide reliable financial reports or prevent fraud, the Company’s business and operating results could be harmed, investors could lose confidence in the Company’s reported financial information, and the trading price of the Company’s stock could drop significantly.  Management identified, for the fiscal year ended August 31, 2010, a material weakness in internal controls affecting financial reporting of certain matters, which matters were corrected prior to management finalizing the financial statements for the period.  See management’s discussion and analysis of the financial condition and results of operations of the Company for the year ended August 31, 2010, as incorporated herein by reference.  The Company believes it has fully remediated the weakness previously identified, with full operating effectiveness control documentation and testing, including auditor attestation, to be completed at year end.

The Company has requirements for and there is an uncertainty of access to additional capital.

At May 31, 2011, the Company had cash and marketable securities of Cdn $7,480,599 and working capital of Cdn. $7,608,767.  The Company will continue to incur exploration costs to fund its plan of operations and intends to fund its plan of operations from working capital and equity subscriptions from the Company’s President and Chief Executive Officer. Ultimately, the Company’s ability to continue its exploration activities depends in part on the Company’s ability to commence operations and generate revenues or to obtain financing through joint ventures, debt financing, equity financing, production sharing agreements or some combination of these or other means.

The Company has no cash flow from operations and depends on equity financing for its operations.

The Company’s current operations do not generate any cash flow. Any work on the Company’s properties may require additional equity financing. If the Company seeks funding from existing or new joint venture partners, its project interests will be diluted. If the Company seeks additional equity financing, the issuance of additional shares will dilute the current interests of the Company’s current shareholders.  The Company may not be able to obtain additional funding to allow the Company to fulfill its obligations on existing exploration properties.  The Company’s failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and the possible partial or total loss of the Company’s potential interest in certain properties or dilution of the Company’s interest in certain properties.

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Conflicts of interest may arise among the Company’s board of directors.

Anton Esterhuizen and Norman Betts, directors of the Company, are also directors, officers, or shareholders of other companies that are similarly engaged in the business of acquiring, developing, and exploiting natural resource properties. Mr. Esterhuizen is the Managing Director of Pangea Exploration (Pty.) Ltd., a South African company exploring for minerals in Africa and South America. He is also a Director of NWT Uranium Corp. Dr. Betts serves as Chair of the Board of Directors of Starfield Resources Inc. and as a director and member of the Audit Committee of Adex Mining Inc. Such associations may give rise to conflicts of interest from time to time if the Company were to enter into negotiations to acquire an interest in a mineral project in which their other companies hold an interest, or the Company were to enter into negotiations to sell or joint venture an interest in its mineral properties to any of these companies. The directors of the Company are required to act honestly and in good faith with a view to the best interests of the Company and disclose any interest which they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such matter.

International Financial Reporting Standards (“IFRS”)

The Canadian Accounting Standards Board has announced that Canadian publicly accountable enterprises must adopt IFRS effective for fiscal years beginning on or after January 1, 2011.  The Company will therefore commence in the first quarter of its 2012 fiscal year with comparative figures. The Company is in the process of proceeding with the transition and is also assessing the impact on the Company's internal controls over financing reporting and on the Company's disclosure controls and procedures. The Company has not yet completed the design and implementation of the new controls and has not yet tested them.  As a result, the Company may not be ready to convert to IFRS prior to its changeover date of September 1, 2011.  The financial reporting impact of the transition to IFRS requires further investigation by the Company and cannot be reasonably estimated at this time.

Risks relating to the Mining Industry

The Company cannot accurately predict whether commercial quantities of ores will be established.

Whether an ore body will be commercially viable depends on a number of factors beyond the control of the Company, including the particular attributes of the deposit such as size, grade and proximity to infrastructure, as well as mineral prices and government regulations, including regulations relating to permitting, prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The Company cannot accurately predict the exact effect of these factors, but the combination of these factors may result in a mineral deposit being unprofitable. The Company has no mineral producing properties at this time.  Although the mineralized material estimates included herein have been carefully prepared by the Company, or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only and there is a risk that a particular level of recovery of gold or other minerals from mineralized material will not in fact be realized or that an identified mineralized deposit, if any, will ever qualify as a commercially mineable or viable reserve.

The exploration for and development of mineral deposits involves significant risks.

Mineral resource exploration is a speculative business and involves a high degree of risk. The Company has recently completed a detailed review of historical diamond drilling results on the Buckreef Main, South and North Prospects which form the core of the Buckreef Project.  The Company is reviewing historical data for the Buckreef Project and evaluating previous drill results in the context of establishing the economic significance of the deeper resources at the Buckreef Project using current gold prices.  However, the exploration for and development of mineral deposits involves significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. Although the discovery of a resource may result in substantial rewards, few explored properties are ultimately developed into producing mines.  Significant expenditures may be required to locate and establish reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site.

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The Company may not be able to establish the presence of minerals on a commercially viable basis.

The Company’s ability to generate revenues and profits is expected to occur through exploration of its existing properties as well as through acquisitions of interests in new properties. The Company will need to incur substantial expenditures in an attempt to establish the economic feasibility of mining operations by identifying mineral deposits and establishing ore reserves through drilling and other techniques, developing metallurgical processes to extract metals from ore, designing facilities and planning mining operations. The economic feasibility of a project depends on numerous factors beyond the Company’s control, including the cost of mining and production facilities required to extract the desired minerals, the total mineral deposits that can be mined using a given facility, the proximity of the mineral deposits to a user of the minerals, and the market price of the minerals at the time of sale. The Company’s existing or future exploration programmes or acquisitions may not result in the identification of deposits that can be mined profitably.

The Company depends on consultants and engineers for its exploration programmes.

The Company has relied on and may continue to rely upon consultants for exploration development, construction and operating expertise. Substantial expenditures are required to construct mines, to establish ore reserves through drilling, to carry out environmental and social impact assessments, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the exploration infrastructure at any suite chosen for exploration. The Company may not be able to discover minerals in sufficient quantities to justify commercial operation, and the Company may not be able to obtain funds required for exploration on a timely basis.

The Company may not have clear title to its properties.

Acquisition of title to mineral properties is a very detailed and time-consuming process, and the Company’s title to its properties may be affected by prior unregistered agreements or transfers, or undetected defects. Several of the Company’s prospecting licenses are currently subject to renewal by the Ministry of Energy and Minerals of Tanzania. There is a risk that the Company may not have clear title to all its mineral property interests, or they may be subject to challenge or impugned in the future.  Although the Company believes that a definitive joint venture agreement governing ownership and management of the Buckreef Project is expected to be signed in due course, no assurance can be given that such agreement will be entered into or if entered into, that such agreement will contain terms favourable to the Company.  See “Mineral Properties – Ownership”.

Mining exploration, development and operating activities are inherently hazardous.

If the Company experiences mining accidents or other adverse conditions, the Company’s mining operations could be materially adversely affected.  The Company’s exploration activities may be interrupted by any or all of the following mining accidents such as cave-ins, rock falls, rock bursts, pit wall failures, fires or flooding.  In addition, exploration activities may be reduced if unfavourable weather conditions, ground conditions or seismic activity are encountered, ore grades are lower than expected, the physical or metallurgical characteristics of the ore are less amenable than expected to mining or treatment, dilution increases or electrical power is interrupted.  Occurrences of this nature and other accidents, adverse conditions or operational problems in future years may result in the Company’s failure to achieve current or future exploration and production estimates.

The Company cannot guarantee when its projects will be placed into production.

The Company’s ability to place its projects into production will be dependent upon using the services of appropriately experienced personnel or contractors and purchasing additional equipment, or entering into agreements with other major resource companies that can provide such expertise or equipment. There can be no assurance that the Company will have available the necessary expertise or equipment when and if the Company places its mineral deposit properties into production. If the Company is unable to successfully retain such expertise and equipment, its development and growth could be significantly curtailed.

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Upon commencing production, the Company may not achieve its production estimates.

The Company is currently reviewing the levels of gold present at the Buckreef Project.  Though the Company identified a potentially economic, sub-surface, high grade gold-bearing quartz rubble bed, any potential production and revenues based on production from this area are estimates only. Estimates are based on, among other things, mining experience, resource estimates, assumptions regarding ground conditions and physical characteristics of ores (such as hardness and presence or absence of certain metallurgical characteristics) and estimated rates and costs of mining and processing. The Company’s actual production from the Buckreef Project, if it ever achieves production, may be lower than its production estimates.  Each of these factors also applies to future development properties not yet in production at the Company’s other projects.  In the case of mines the Company may develop in the future, it does not have the benefit of actual experience in its estimates, and there is a greater likelihood that the actual results will vary from the estimates. In addition, development and expansion projects are subject to unexpected construction and start-up problems and delays.

The Company’s exploration activities are subject to various federal, state and local laws and regulations.

Laws and regulation govern the development, mining, production, importing and exporting of minerals; taxes; labor standards; occupational health; waste disposal; protection of the environment; mine safety; toxic substances; and other matters. The Company requires licenses and permits to conduct exploration and mining operations. Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a substantial adverse impact on the Company. Applicable laws and regulations will require the Company to make certain capital and operating expenditures to initiate new operations. Under certain circumstances, the Company may be required to close an operation once it is started until a particular problem is remedied or to undertake other remedial actions.

The Company’s mineral interests in Tanzania are held under prospecting licenses granted pursuant to the Mining Act, 1998 (Tanzania) for a period of up to three years, and are renewable two times for a period of up to two years each.  There are initial preparation fees and annual rental fees for prospecting licenses based on the total area of the license. Renewals of prospecting licenses can take many months and possibly even years to process by the regulatory authority in Tanzania and there is no guarantee that they will be granted. With each renewal, at least 50% of the licensed area must be relinquished and if the Company wishes to keep the relinquished one-half portion, it must file a new application for the relinquished portion.  There is no guarantee on the timing for processing the new application and whether it will be successful.

Risks relating to the Market

The Company’s competition is intense in all phases of the Company’s business.

The Company competes with many companies possessing greater financial resources and technical facilities than itself for the acquisition of mineral interests, as well as for the recruitment and retention of qualified employees.

The Company is subject to the volatility of metal and mineral prices.

The economics of developing metal and mineral properties are affected by many factors beyond the Company’s control including, without limitation, the cost of operations, variations in the grade ore or resource mined, and the price of such resources. The market prices of the metals for which the Company are exploring are highly speculative and volatile. Depending on the price of gold or other resources, the Company may determine that it is impractical to commence or continue commercial production. The price of gold has fluctuated widely in recent years. The price of gold and other metals and minerals may not remain stable, and such prices may not be at levels that will make it feasible to continue the Company’s exploration activities, or commence or continue commercial production.

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The Company’s business activities are conducted in Tanzania.

The Company’s principal exploration properties are currently located in the United Republic of Tanzania, Africa.  Though the government of Tanzania is a stable, multi-party democracy, there is no guarantee that this will continue.  Tanzania is surrounded by unstable countries enduring political and civil unrest, and in some cases, civil war.  There is no guarantee that the surrounding unrest will not affect the Tanzanian government and people, and therefore, the Company’s mineral exploration activities.  Any such effect is beyond the control of the Company and may materially adversely affect its business.

The Company may be affected in varying degrees by political stability and government regulations relating to the mining industry and foreign investment in Tanzania. The government of Tanzania may institute regulatory policies that adversely affect the exploration and development (if any) of the Company’s properties. Any changes in regulations or shifts in political conditions in this country are beyond the control of the Company and may materially adversely affect its business. Investors should assess the political and regulatory risks related to the Company’s foreign country investments.  The Company’s operations in Tanzania are also subject to various levels of economic, social and other risks and uncertainties that are different from those encountered in North America.  The Company’s operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, restrictions on foreign exchange and repatriation, income taxes, expropriation of property, environmental legislation and mine safety.  Other risks and uncertainties include extreme fluctuations in currency exchange rates, high rates of inflation, labour unrest, risks of war or civil unrest, government and civil unrest, regional expropriation and nationalization, renegotiation or nullification of existing concessions, licences, permits and contracts, illegal mining, corruption, hostage taking, civil war and changing political conditions and currency controls.  Infectious diseases (including malaria, HIV/AIDS and tuberculosis) are also major health care issues where the Company operates.

Mineral exploration in Tanzania is affected by local climatic and economic conditions.

The Company’s properties have year round access, although seasonal winter rains from December to March may result in flooding in low lying areas, which are dominated by mbuga, a black organic rich laustrine flood soils. Further, most lowland areas are under active cultivation for corn, rice, beans and mixed crops by subsistence farmers. As a result, the area has been deforested by local agricultural practices for many years. The seasonal rains and deforested areas can create a muddy bog in some areas, which can make access more difficult, and could impede or even prevent the transport of heavy equipment to the Company’s mineral properties at certain times of the year between December and March.

Commodity prices are subject to fluctuation.

The Company’s future earnings, if any, are directly related to commodity prices as revenues are derived from rental/option payments on its mineral properties and post-production royalties received on the sales of gold. Gold prices fluctuate widely and are affected by numerous factors beyond the Company’s control, including central bank purchases and sales, producer hedging and de-hedging activities, expectations of inflation, the relative exchange rate of the U.S. dollar with other major currencies, interest rates, global and regional demand, political and economic conditions, production costs in major gold-producing regions, speculative positions taken by investors or traders in gold and changes in supply, including worldwide production levels. The aggregate effect of these factors is impossible to predict with accuracy. In addition, the price of gold has on occasion been subject to very rapid short-term changes because of speculative activities. Fluctuations in gold prices may materially adversely affect the Company’s financial performance or results of operations.

The Company’s operations are subject to issues relating to security and human rights.

Civil disturbances and criminal activities such as trespass, illegal mining, theft and vandalism may cause disruptions at the Company’s operations in Tanzania which may result in the suspension of operations.  There is no guarantee that such incidents will not occur in the future.  Such incidents may halt or delay exploration, increase operating costs, result in harm to employees or trespassers, decrease operational efficiency, increase community tensions or result in criminal and/or civil liability for the Company or its employees and/or financial damages or penalties. The manner in which the Company’s personnel respond to civil disturbances and criminal activities can give rise to additional risks where those responses are not conducted in a manner that is consistent with international standards relating to the use of force and respect for human rights. The failure to conduct security operations in accordance with these standards can result in harm to employees or community members, increase community tensions, reputational harm to the Company and its partners or result in criminal and/or civil liability for the Company or its employees and/or financial damages or penalties. It is not possible to determine with certainty the future costs that the Company may incur in dealing with the issues described above at its operations.

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Risks relating to the Securities of the Company

Current global financial conditions.

Following the onset of the credit crisis in 2008, global financial conditions were characterized by extreme volatility. While global financial conditions subsequently stabilized, there remains considerable risk in the system given the extraordinary measures adopted by government authorities to achieve that stability.  Global financial conditions could suddenly and rapidly destabilize in response to future economic shocks, as government authorities may have limited resources to respond to future crises. Future economic shocks may be precipitated by a number of causes, including a continued rise in the price of oil, geopolitical instability and natural disasters. Any sudden or rapid destabilization of global economic conditions could impact the Company’s ability to obtain equity or debt financing in the future on terms favorable to the Company. In such an event, the Company’s operations and financial condition could be adversely impacted.

As a foreign private issuer, the Company is subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to U.S. shareholders.

The Company is a foreign private issuer under applicable U.S. federal securities laws and, therefore, is not required to comply with all the periodic disclosure and current reporting requirements of Exchange Act.  As a result, the Company does not file the same reports that a U.S. domestic issuer would file with the SEC, although the Company will be required to file with or furnish to the SEC the continuous disclosure documents that the Company is required to file in Canada under Canadian securities laws. In addition, the Company’s officers, directors, and principal shareholders are exempt from the reporting and “short swing” profit rules of Section 16 of the Exchange Act. Therefore, shareholders may not know on as timely a basis when the Company’s officers, directors and principal shareholders purchase or sell Common Shares, as the reporting periods under the corresponding Canadian insider reporting requirements are longer. In addition, as a foreign private issuer the Company is exempt from the proxy rules under the Exchange Act.

The Company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

In order to maintain the Company’s current status as a foreign private issuer, a majority of its Common Shares must be either directly or indirectly owned by non-residents of the United States, unless the Company also satisfies one of the additional requirements necessary to preserve this status.  The Company may in the future lose its foreign private issuer status if a majority of its Common Shares is held in the United States and it fails to meet the additional requirements necessary to avoid loss of foreign private issuer status.  The regulatory and compliance costs under U.S. federal securities laws as a U.S. domestic issuer may be significantly more than the costs incurred as a Canadian foreign private issuer eligible to use the MJDS. If the Company is not a foreign private issuer, it would not be eligible to use the MJDS or other foreign issuer forms and would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. In addition, the Company may lose the ability to rely upon exemptions from NASDAQ corporate governance requirements that are available to foreign private issuers.

United States investors may not be able to obtain enforcement of civil liabilities against the Company.

The enforcement by investors of civil liabilities under the United States federal or state securities laws may be affected adversely by the fact that the Company is governed by the Business Corporations Act (Alberta), that the some of the Company’s officers and directors and some of the experts named in this short form prospectus are residents of Canada or otherwise reside outside the United States, and that all, or a substantial portion of their assets and a substantial portion of the Company’s assets, are located outside the United States. It may not be possible for investors to effect service of process within the United States on certain of the Company’s directors and officers or the experts named in this short form prospectus or enforce judgments obtained in the United States courts against the Company, certain of its directors and officers or the experts named in this short form prospectus based upon the civil liability provisions of United States federal securities laws or the securities laws of any state of the United States.

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There is some doubt as to whether a judgment of a United States court based solely upon the civil liability

Provisions of United States federal or state securities laws may not be enforceable in Canada against the Company, its directors and officers or the experts named in this short form prospectus. There is also doubt as to whether an original action could be brought in Canada against the Company or its directors and officers or the experts named in this short form prospectus to enforce liabilities based solely upon United States federal or state securities laws.

Risks relating to the Offering

Common Share prices will likely be highly volatile, and investment could decline in value or the entire investment may be lost.

The market price of the Common Shares is likely to be highly volatile and may fluctuate significantly in response to various factors and events, many of which the Company cannot control. The stock market in general, and the market for mining company stocks in particular, has historically experienced significant price and volume fluctuations. Volatility in the market price for a particular issuer’s securities has often been unrelated or disproportionate to the operating performance of that issuer. Market and industry factors may depress the market price of the Company’s securities, regardless of operating performance. Volatility in the Company’s securities price also increases the risk of securities class action litigation.

Future sales of the Company’s currently outstanding Common Shares could cause the market price of the Common Shares to decrease significantly, even if the Company’s business is doing well.

Sales of a significant number Common Shares, or the perception that these sales could occur, particularly with respect to sales by affiliates, directors, executive officers or other insiders, could materially and adversely affect the market price of the Company’s Common Shares and impair the Company’s ability to raise capital through the sale of additional equity securities.

Risk of dilution from further equity financings or exercise of Compensation Options and Warrants.

If the Company raises additional funding by issuing additional equity securities, such financing may substantially dilute the interests of the Company’s shareholders and reduce the value of their investment. Such additional financing may result in a substantial dilution to the Company’s shareholders and decrease the value of the Company’s securities.

No Market for Warrants.

There is currently no market through which the Warrants may be sold and no such market is expected to develop.  Purchasers may not be able to resell Warrants comprising part of the Units purchased under this short form prospectus. There can be no assurance that an active trading market will develop for the Warrants after completion of the Offering, or if developed, that such a market will be sustained at the price level of the Offering.

Fluctuations in the market price of the Common Shares can significantly affect the value of the Warrants, and such fluctuations may render the Warrants valueless in the event that the market price of the Common Shares is below the exercise price on the expiry date of the Warrants.

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UNITED STATES INCOME TAX CONSEQUENCES

The income tax consequences of acquiring, holding or disposing of the Common Shares and Warrants which are part of the Units will vary according to the status of the investor, the jurisdiction in which he or she resides or carries on business and his or her own particular circumstances.  Each investor should seek independent advice regarding such tax consequences based on his or her own particular circumstances.

LEGAL MATTERS

Certain legal matters relating to the Offering will be passed upon by Borden Ladner Gervais LLP, on the Company’s behalf, and by Norton Rose OR LLP on behalf of the Underwriter. As at the date hereof, the partners and associates of Borden Ladner Gervais LLP, as a group and Norton Rose OR LLP, as a group, own, directly or indirectly, less than 1% of the Common Shares.

INTEREST OF EXPERTS

All technical and scientific disclosure as described or incorporated by reference in this short form prospectus is derived from the following Technical Reports, which reports were prepared by the following firm or persons:

§

National Instrument 43-101 Technical Report on Tanzanian Royalty Exploration Corporation’s Buckreef Gold Project in Tanzania by Venmyn Rand (Pty) Limited compiled by Fiona Harper, Andrew Neil Clay and Nicholas J. Johnson effective June 30, 2011;  

§

Report on the Lunguya Mineral Exploration Property of Tanzanian Royalty Exploration Corporation in the Kahama District, Shinyanga Region of the United Republic of Tanzania, East Africa” dated February 8, 2010; Report on the Ushirombo Mineral Exploration Property of Tanzanian Royalty Exploration Corporation in the Bukombe District, Shinyanga Region of the United Republic of Tanzania, East Africa dated August 31, 2009; and Report on the Kibara Mineral Exploration Property of Tanzanian Royalty Exploration Corporation in the Bunda District, Mara Region of the United Republic of Tanzania, East Africa dated October 31, 2009 prepared by Martin J. Taylor;

§

Report on 2001 - 2008 Exploration Programs Kigosi Project Area, Ushirombo District, Shinyanga Region, in the United Republic of Tanzania, East Africa by J. G. Deane Pr. Sci. Nat and P. Zizhou Pr. Sci. Nat dated April 9, 2009;

and have been included in reliance on the expertise of such firm or individual.

Each of the individuals referenced above is a qualified person as such term is defined in NI 43-101. None of the persons referenced above, and their directors, officers, employees and partners, received or will receive a direct or indirect interest in the Company’s property or in the property of any of the Company’s associates or affiliates. As at the date hereof, each of the persons referenced above, and their directors, officers, employees and partners, beneficially own, directly or indirectly, less than 1% of any outstanding class of the Company’s securities.  

AUDITORS, REGISTRAR AND TRANSFER AGENT

The auditors of the Company are KPMG LLP, Chartered Accountants, PO Box 10426, 777 Dunsmuir Street, Vancouver, British Columbia V7Y 1K3.  KPMG LLP has advised the Company that they are independent of the Company within the rules of professional conduct of the Institute of Chartered Accountants of British Columbia, Canada.  

The registrar and transfer agent for the Common Shares to be issued under this short form prospectus is Computershare Trust Company of Canada, 510 Burrard Street, 3rd Floor, Vancouver BC V6C 3B9.

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STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal adviser.

DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT

The Company has filed with the SEC a registration statement (the “Registration Statement”) on Form F-10 under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) with respect to the Common Shares and Warrants.  This short form prospectus, including the documents incorporated by reference herein, which forms a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain parts of which are contained in the exhibits to the Registration Statement as permitted by the rules and regulations of the SEC.   For further information with respect to the Company and Common Shares and Warrants, reference is made to the Registration Statement and the exhibits thereto.   Statements contained in this short form prospectus, including the documents incorporated by reference herein, as to the contents of certain documents are not necessarily complete and, in each instance, reference is made to the copy of the document filed as an exhibit to the Registration Statement.  Each such statement is qualified in its entirety by such reference.  The Registration Statement can be found on the SEC’s website, www.sec.gov.  

The following documents have been filed with the SEC as part of the Registration Statement of which this short form prospectus is a part insofar as required by the SEC’s Form F-10:

·

the documents set forth under “Documents Incorporated by Reference” in this short form prospectus;

·

the consent of KPMG LLP, the Company’s independent registered public accounting firm;

·

the consent of J.G. Deane, Pr.SciNat;

·

the consent of Peter Zizhou, Pr.SciNat;

·

the consent of Martin J. Taylor, P.Geo.;

·

the  consent of Venmyn Rand (Pty) Limited; and

·

the consent of Hellman and Schofield.

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Auditors’ Consent

We have read the short form prospectus of Tanzanian Royalty Exploration Corporation (the “Company”) dated August 10, 2011 relating to the distribution of common shares and common share purchase warrants of the Company. We have complied with Canadian generally accepted standards for an auditor’s involvement with offering documents.

We consent to the incorporation by reference in the above mentioned prospectus of our report to the shareholders of the Company on the consolidated balance sheets of the Company as at August 31, 2010 and 2009 and the consolidated statements of operations, comprehensive loss and deficit, and cash flows for each of the years in the three-year period ended August 31, 2010.  Our report is dated November 24, 2010.

We also consent to the incorporation by reference in the above mentioned prospectus of our report to the board of directors of the Company on the consolidated balance sheets of the Company as at August 31, 2010 and 2009 and the consolidated statements of operations, comprehensive loss and deficit, and cash flows for each of the years in the three-year period ended August 31, 2010. Our report is included in the Company’s Annual Report on Form 20-F filed with the SEC and is dated November 24, 2010.

Chartered Accountants

Vancouver, Canada

August 10, 2011

- F-1 -

Certificate of the Company

Dated:  August 10, 2011

This short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of the Provinces of British Columbia, Alberta and Ontario.

(signed) James E. Sinclair James E. Sinclair Chief Executive Officer	(signed) Steve van Tongeren  Steve van Tongeren Chief Financial Officer
On behalf of the Board of Directors
(signed) Norman Betts Norman Betts Director	(signed) Ulrich E. Rath  Ulrich E. Rath Director

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CERTIFICATE OF THE UNDERWRITER

Dated: August 10, 2011

To the best of our knowledge, information and belief, this short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of the Provinces of British Columbia, Alberta and Ontario.

CASIMIR CAPITAL LTD.

(signed) Riley Keast

By: Riley Keast

- C-2-

PART II — INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS

Indemnification

Under the Business Corporations Act (Alberta), Tanzanian Royalty Exploration Corporation (the “Company”) may indemnify a director or officer, a former director or officer, or a person who acts or acted at the Company’s request as a director or officer or a body corporate of which the Company is or was a shareholder or creditor, and the director’s or officer’s heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by the individual in respect of any civil, criminal or administrative action or proceeding to which the individual is involved because of that association with the Company or other entity, and the Company may advance moneys to such an individual for the costs, charges and expenses of such a proceeding. The Company may not indemnify such an individual unless the individual acted honestly and in good faith with a view to the best interests of the Company, or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the Company’s request, and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that the individual’s conduct was lawful. In addition, the individual must repay any moneys advanced by the Company if the individual has not fulfilled the conditions set out in the preceding sentence.  Such indemnification or advance of moneys may be made in connection with a derivative action only with court approval. Such an individual is entitled to indemnification from the Company as a matter of right if the individual was not judged by the court or other competent authority to have committed any fault or omitted to do anything that the individual ought to have done, and the individual fulfilled the conditions set forth above.

In accordance with and subject to the Business Corporations Act (Alberta), the by-laws of the Company provide that the Company shall indemnify a director or officer, a former director or officer, or a person who acts or acted at the Company’s request as a director or officer, or a body corporate of which the Company is or was a shareholder or creditor, and the director’s or officer’s heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the Company or other entity if he acted honestly and in good faith with a view to the best interests of the Company or, as the case may be, to the best interests of the other entity for which he acted as a director or officer at the Company’s request, and, in the case of a criminal or administrative action or proceeding that is enforced by monetary penalty, he had reasonable grounds for believing that his conduct was lawful. The Company shall also indemnify such person in such other circumstances as the Business Corporations Act (Alberta) permits or requires.

The Company maintains a directors’ & officers’ insurance policy for the benefit of the directors and officers of the Company and its subsidiaries against liability incurred by them in their official capacities for which they become obligated to pay to the extent permitted by applicable law.

Insofar as indemnification for liabilities arising under the U.S. Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling the Corporation pursuant to the foregoing provisions, the Corporation has been informed that, in the opinion of the U.S. Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Exhibits	Description
3.1	Underwriting Agreement
3.2	Amendment to Underwriting Agreement
4.1	The 2010 Annual Report on Form 20-F of the Company for the year ended August 31, 2010 (excluding the annual audited consolidated financial statements for the years ended August 31, 2010, 2009 and 2008). (Incorporated by reference to the Company’s Form 20-F filed with the Commission on November 29, 2010).
4.2	The audited annual consolidated financial statements of the Company for the years ended August 31, 2010 and 2009, together with the notes thereto and the auditors’ reports thereon.  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on November 29, 2010).
4.3	The management’s discussion and analysis of the financial condition and results of operations of the Company for the year ended August 31, 2010.  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on November 29, 2010).
4.4	The unaudited interim consolidated financial statements of the Company for the nine months ended May 31, 2011 and 2010, together with the notes thereto.  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on July 15, 2011).
4.5	The management’s discussion and analysis of the financial condition and results of operations of the Company for the nine month period ended May 31, 2011.  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on  August 10, 2011).
4.6	Material change report of the Company dated December 21, 2010 in respect of the successful bid for Buckreef Gold Mine Re-Development Project in Northern Tanzania.  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on December 22, 2010).
4.7	Material change report of the Company dated April 15, 2011 in respect of the increase in the Buckreef Gold Project Resource Base.  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on April 19, 2011).
4.8	Notice of Meeting dated January 25, 2011 in respect of the Annual Meeting of Shareholders held on February 22, 2011, together with the Management Information Circular of the Company dated January 13, 2011 distributed in respect of such meeting.  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on January 25, 2011).
4.9	Technical report effective June 30, 2011 entitled “National Instrument 43-101 Technical Report on Tanzanian Royalty Exploration Corporation’s Buckreef Gold Project in Tanzania” prepared by Venmyn Rand (Pty) Limited . (Incorporated by reference to the Company’s Form 6-K filed with the Commission on August 12, 2011).
4.10	Amendment No. 1 to Form 20-F for the year ended August 31, 2010 (Incorporated by reference to the Company’s Amendment No. 1 to Form 20-F filed with the Commission on July 12, 2011).
4.11	Revised Statement of Executive Compensation pursuant to National Instrument 51-102F6 for the financial year ended August 31, 2010  (Incorporated by reference to the Company’s Form 6-K filed with the Commission on August 11, 2011)
5.1	The consent of KPMG LLP, the Company’s independent registered public accounting firm.
5.2	The consent of J.G. Deane, Pr.SciNat
5.3	The consent of P.Zizhou, Pr.SciNat
5.4	The consent of Martin J. Taylor, P.Geo.
5.5 5.6 5.7 6.1	The consent of Venmyn Rand (Pty) Limited-Fiona Harper The consent of Venmyn Rand (Pty) Limited-Andrew Clay The consent of Hellman and Schofield Power of Attorney (set forth on signature page to the Registration Statement previously filed with the Commission on July 14, 2011).

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PART III — UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

Item 1. Undertaking.

The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities registered pursuant to Form F-10 or to transactions in said securities.

Item 2. Consent to Service of Process.

The Registrant has previously filed with the Commission a written irrevocable consent and power of attorney on Form F-X.

Any change to the name and address of agent for service of the Registrant will be communicated promptly to the Commission by amendment to Form F-X referencing the file number of this Registration Statement.

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SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-10 and has duly caused this amendment number 1 to registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of South Surrey, Country of Canada, on 9 August, 2011.

Registrant:  Tanzanian Royalty Exploration Corporation

By

/s/ James E. Sinclair

James E. Sinclair,

Chief Executive Officer (Principal Executive Officer)

By

/s/ Steve van Tongeren

Steve van Tongeren ,

Chief Financial Officer (Principal Financial and  Accounting Officer)

- 4 -

Pursuant to the requirements of the Securities Act, this amendment number 1 to  registration statement has been signed by the following persons in the capacities and on the dates indicated.

(Signature)

/s/ James E. Sinclair

James E. Sinclair, Director

(Date) August 9, 2011

(Signature)

/s/ Dr. Norman Betts

Dr. Norman Betts, Director

(Date) August 10, 2011

(Signature)

/s/ Anton Esterhuizen

Anton Esterhuizen, Director

(Date) August 9, 2011

(Signature)

/s/ Dr. William Harvey

Dr. William Harvey, Director

(Date) August 9, 2011

(Signature)

/s/ Joseph Kahama

Joseph Kahama, Chairman

(Date) August 10, 2011

(Signature)

/s/ Rosalind Morrow

Rosalind Morrow, Director

(Date) August 10, 2011

(Signature)

/s/ Abdulkarim H. Mruma

Abdulkarim H. Mruma, Director

(Date) August 10, 2011

(Signature)

/s/ Ulrich E. Rath

Ulrich E. Rath, Director

(Date) August 10, 2011

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EX-3.1

EXECUTION VERSION

UNDERWRITING AGREEMENT

July 11, 2011

Tanzanian Royalty Exploration Corporation
Suite 404
1688 152nd Street
South Surrey, British Columbia
V4A 4N2

Attention:

Mr. James Sinclair
President and CEO

Dear Sirs:

Casimir Capital Ltd. (the “Underwriter”) hereby offers to purchase from Tanzanian Royalty Exploration Corporation (the “Corporation”) an aggregate of 4,237,289 units of the Corporation (each, a “Unit”) at a price of US$5.90 per Unit (the “Offering Price”) and by its acceptance hereof, the Corporation accepts such offer and agrees to sell the Units to the Underwriter on the Closing Date (as defined herein).  Each Unit consisting of one common share in the capital of the Corporation (each a “Common Share”) and one Common Share purchase warrant (each, a “Warrant”).  Each Warrant shall entitle the holder thereof to purchase an additional Common Share (a “Warrant Share”) for a period of 24 months from the Closing Date (as defined herein) at a price of US$7.00 per Warrant Share.  The aggregate of 4,237,289 Units being purchased by the Underwriter as described in the first sentence of this paragraph are referred to herein as the “Firm Units”.  The Units, Common Shares, the Warrants and the Warrant Shares, and the Common Shares issuable upon exercise of the Compensation Options (as defined herein), are collectively referred to herein as the “Underlying Securities”.

The Corporation will prepare and file, as soon as practicable after the execution of this Agreement, under and as required by Canadian Securities Laws (as hereinafter defined) a preliminary short form prospectus with each of the Canadian Securities Commissions (as hereinafter defined) relating to the distribution of the Underlying Securities (such preliminary short form prospectus, including the Documents Incorporated by Reference (as hereinafter defined), the “Initial Canadian Preliminary Prospectus”) and will obtain a Dual Prospectus Receipt (as hereinafter defined) therefor.  In addition, the Corporation will file, as soon as practicable after the execution of this Agreement, with the United States Securities and Exchange Commission (the “SEC”) a registration statement on Form F-10 registering the Underlying Securities under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and the rules and regulations of the SEC thereunder, in connection with the offers and sales contemplated hereby, including the Initial Canadian Preliminary Prospectus which forms part of the registration statement thereof (with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the SEC) (such registration statement, including the exhibits and any schedules thereto, the Documents Incorporated by Reference and the documents otherwise deemed under applicable rules and regulations of the SEC to be a part thereof or included therein, the “Initial Registration Statement”).

The Corporation will prepare and file forthwith after any comments with respect to the Initial Canadian Preliminary Prospectus have been received from, and have been resolved with, the Commission (as hereinafter defined), and on a basis acceptable to the Underwriter, acting reasonably, and on the terms set out below, under and as required by Canadian Securities Laws with each of the Canadian Securities Commissions a (final) short form prospectus (such short form prospectus, including the Documents Incorporated by Reference, the “Canadian Final Prospectus”) and all other required documents, including any document incorporated by reference therein that has not previously been filed, in order to qualify for distribution to the public the Underlying Securities in the provinces of British Columbia, Alberta and Ontario (the “Qualifying Jurisdictions”) through the Underwriter or any other investment dealer or broker registered to transact such business in the applicable Qualifying Jurisdictions contracting with the Underwriter and obtain a Dual Prospectus Receipt therefor. The Corporation will also,immediately after the filing of the Canadian Final Prospectus and on a basis acceptable to the Underwriter, acting reasonably, file with the SEC a pre-effective amendment to the Initial Registration Statement, including the Canadian Final Prospectus (with such deletions therefrom and additions thereto as are permitted or required by Form F-I0 and the applicable rules and regulations of the SEC) (such amended registration statement, including the exhibits and any schedules thereto, the Documents Incorporated by Reference and the documents otherwise deemed under applicable rules and regulations of the SEC to be a part thereof or included therein, the “Amendment No. 1 to the Registration Statement”) and cause the Amendment No. 1 to the Registration Statement to become effective under the U.S. Securities Act unless it became effective automatically upon filing the Initial Registration Statement, as amended at the time it becomes effective, including the exhibits and any schedules thereto, the Documents Incorporated by Reference and the documents otherwise deemed under applicable rules and regulations of the SEC to be a part thereof or included therein (the “Registration Statement”).

1

The Corporation shall also prepare and file with the SEC an appointment of agent for service of process upon the Corporation on Form F-X (the “Form F-X”) in conjunction with the filing of the Initial Registration Statement.

The Corporation and the Underwriter agree that any offers or sales of the Underlying Securities in the United States will be conducted through the Underwriter, or one or more affiliates of the Underwriter, duly registered as a broker-dealer in compliance with applicable U.S. Securities Laws and the requirements of the Financial Industry Regulatory Authority (FINRA) and any state in which the Underlying Securities will be sold.

In consideration of the agreement on the part of the Underwriter to purchase the Units and in consideration of the services rendered and to be rendered by the Underwriter (including but not limited to: acting as advisor to the Corporation; assisting in the preparation of the Offering Documents (as hereinafter defined), and the related documentation in order to qualify the Common Shares, Warrants and Warrant Shares for Distribution (as hereinafter defined); and performing administrative work in connection with the Distribution of the Units), the Corporation agrees to pay to the Underwriter on behalf of the Underwriter, at the Closing Time (as hereinafter defined), a fee of US$0.413 per Unit (the “Underwriting Fee”), which is equal to 7% of the gross proceeds per Unit in the Offering.  The Underwriting Fee shall be reduced by an amount equal to US$60,000, being the aggregate amount previously paid by the Corporation to the Underwriter in connection with the Underwriter acting as placement agent for the Corporation.  The payment of such fee will be reflected by the Underwriter making payment of the gross proceeds of the sale of the Firm Units: (a) to the Corporation, an amount equal to the gross proceeds of the sale less the amount of the Underwriting Fee and expenses outlined in Section 15 (net of the previously paid placement agent fee of US$60,000); and (b) to the Underwriter on behalf of the Underwriter, at the Corporation’s direction, of an amount equal to the Underwriting Fee.

Subject to regulatory approval, where any such approval is required, the Underwriter will receive at closing, options (the “Compensation Options”) exercisable at any time up to 24 months following the closing to purchase Common Shares in an amount equal to 7.0% of the number of Units sold in connection with the Offering. The Compensation Options shall be exercisable at a price of US$5.90 per Common Share.

This Agreement shall be subject to the following terms and conditions:

TERMS AND CONDITIONS

SECTION 1 – Interpretation

1.1

Definitions

Where used in this Agreement or in any amendment hereto, the following terms shall have the following meanings, respectively:

“Agreement” means the agreement resulting from the acceptance by the Corporation of the offer made by the Underwriter by this letter;

“Amendment No.1 to the Registration Statement” has the meaning given to it in the fourth paragraph of this Agreement;

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“Applicable Securities Laws” means the Canadian Securities Laws and the U.S. Securities Laws;

“Beneficiaries” has the meaning given to it in Section 10.4;

“Canadian Final Prospectus” has the meaning given to it in the third paragraph of this Agreement;

“Canadian Offering Documents” means each of the Canadian Preliminary Prospectus, the Canadian Final Prospectus, and any Canadian Prospectus Amendment, including the Documents Incorporated by Reference;

“Canadian Preliminary Prospectus” means the Initial Canadian Preliminary Prospectus, including the Documents Incorporated by Reference;

“Canadian Prospectus Amendment” means any amendment to the Canadian Preliminary Prospectus or the Canadian Final Prospectus, including the Documents Incorporated by Reference;

“Canadian Securities Commissions” means the securities regulatory authorities in each of the Qualifying Jurisdictions;

“Canadian Securities Laws” means all applicable securities laws of each of the Qualifying Jurisdictions and the respective rules and regulations under such laws together with applicable published national, multilateral and local policy statements, instruments, notices, blanket orders and rulings of the securities regulatory authorities in the Qualifying Jurisdictions;

“Closing Date” means July 18, 2011 or such earlier or later date as may be agreed to in writing by the Corporation and the Underwriter;

“Closing Time” means 8:00 a.m. E.S.T. on the Closing Date;

“Commission” means the British Columbia Securities Commission;

“Common Shares” means the common shares in the capital of the Corporation;

“Corporation” means Tanzanian Royalty Exploration Corporation;

“Distribution” means “distribution” or “distribution to the public” as those terms are defined in the Applicable Securities Laws;

“Documents Incorporated by Reference” means all interim and annual financial statements, management’s discussion and analysis, business acquisition reports, management information circulars, annual information forms, material change reports and other documents that are or are required by Canadian Securities Laws or U.S. Securities Laws to be incorporated by reference into the Offering Documents, as applicable;

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“Dual Prospectus Receipt” means the receipt issued by the Commission, which is deemed to also be a receipt of the other Canadian Securities Commissions (other than the Ontario Securities Commission) and which will evidence the receipt of the Ontario Securities Commission pursuant to Multilateral Instrument 11-102 - Passport System and National Policy 11-202 - Process for Prospectus Reviews in Multiple Jurisdictions, for the Canadian Preliminary Prospectus, the Canadian Final Prospectus and any Canadian Prospectus Amendment, as the case may be;

“Effective Time” means the time the Registration Statement is declared or becomes effective;

“Environmental Laws” has the meaning given to it in Section 8.1(z);

“Financial Statements” means the annual financial statements of the Corporation included in the Documents Incorporated by Reference, including the notes to such statements and the related auditors’ report on such statements, where applicable and including the Corporation’s Reconciliation to United States GAAP in respect of such financial statements and the auditors’ report thereon;

“Firm Units” has the meaning given to it in the first paragraph of this Agreement;

“Form F-X” has the meaning given to it in the fifth paragraph of this Agreement;

“Governmental Licenses” has the meaning given to it in Section 8.1(y);

“Hazardous Materials” has the meaning given to it in Section 8.1(z);

“Indemnified Party” has the meaning given to it in Section 9.3;

“Indemnifying Party” has the meaning given to it in Section 9.3;

“Initial Canadian Preliminary Prospectus” has the meaning given to it in the second paragraph of this Agreement;

“Initial Registration Statement” has the meaning given to it in the second paragraph of this Agreement;

”Issuer Free Writing Prospectus” means an “issuer free writing prospectus” as defined in Rule 433 under the U.S. Securities Act relating to the Units that (i) is required to be filed with the SEC by the Corporation, (ii) is a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the SEC or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Units or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the SEC or, if not required to be filed, in the form retained in the Corporation’s records pursuant to Rule 433(g);

“Material Adverse Effect” has the meaning given to it in Section 8.1(j);

“material change” means a material change in or relating to the Corporation for the purposes of Applicable Securities Laws or any of them, or where undefined under the Applicable Securities Laws of an Offering Jurisdiction means a change in or relating to the business, operations or capital of the Corporation and the Material Corporate Entities taken as a whole that would reasonably be expected to have a significant effect on the market price or value of any securities of the Corporation and includes a decision to implement such a change made by the board of directors of the Corporation or by senior management who believe that confirmation of the decision by the board of directors of the Corporation is probable;

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“Material Corporate Entities” means collectively, Tancan Mining Company Limited and Tanzania American International Development Corporation 2000 Limited and Buckreef Gold Company Limited;

“material fact” means a material fact for the purposes of Applicable Securities Laws or any of them, or where undefined under the Applicable Securities Laws of an Offering Jurisdiction means a fact that would reasonably be expected to have a significant effect on the market price or value of any securities of the Corporation;

“Mining Properties” means the mining projects and properties of the Corporation and its Material Corporate Entities as described in the Offering Documents;

“misrepresentation” means a misrepresentation for the purposes of the Applicable Securities Laws of an Offering Jurisdiction or any of them, or where undefined under the Applicable Securities Laws of an Offering Jurisdiction means: (i) an untrue statement of a material fact, or (ii) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances in which it was made;

“NI 43-101” means National Instrument 43-101 -Standards for Disclosure for Mineral Projects;

“NI 44-101” means National Instrument 44-101 -Short Form Prospectus Distributions;

“NI 51-102” means National Instrument 51-102 -Continuous Disclosure Obligations;

“NYSE” means the NYSE Amex Equities;

“Offering” means the offer and sale of Units pursuant to this Agreement;

“Offering Documents” means the Canadian Offering Documents and the U.S. Offering Documents;

“Offering Jurisdictions” means the United States and the Qualifying Jurisdictions;

“Offering Price” has the meaning given to it in the first paragraph of this Agreement;

“Permitted Free Writing Prospectus” has the meaning given to it in Section 11.2;

“Qualifying Jurisdictions” has the meaning given to it in the third paragraph of this Agreement;

“Registration Statement” has the meaning given to it in the fifth paragraph of this Agreement;

“SEC” means the United States Securities and Exchange Commission;

“Selling Firm” has the meaning given to it in Section 3.1;

“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder;

“Terminating Underwriter” has the meaning given to it in Section 12.1;

“TSX” means the Toronto Stock Exchange;

“Underwriter” has the meaning given to it in the first paragraph of this Agreement;

“Underwriter’s Matters” has the meaning given to it in Section 9.1(a);

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“Underwriting Fee” has the meaning given to it in the seventh paragraph of this Agreement;

“U.S. Amended Prospectus” means a prospectus included in any U.S. Registration Statement Amendment;

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

“U.S. Final Prospectus” means the Canadian Final Prospectus with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the SEC, included in the Registration Statement at the time it becomes effective, including the Documents Incorporated by Reference;

“U.S. Offering Documents” means the Initial Registration Statement, the Amendment No.1 to the Registration Statement, the Registration Statement, any U.S. Registration Statement Amendment, the U.S. Preliminary Prospectus, the U.S. Final Prospectus and any U.S. Amended Prospectus;

“U.S. Preliminary Prospectus” means, as of any time prior to the Effective Time, the Canadian Preliminary Prospectus with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the SEC, which forms part of the Initial Registration Statement as amended at such time, including the Documents Incorporated by Reference therein;

“U.S. Registration Statement Amendment” means any amendment to the Registration statement (other than Amendment No. 1 to the Registration Statement) and any post-effective amendment to the Registration Statement filed with the SEC during the distribution of the Units;

“U.S. Securities Act” has the meaning given to it in the second paragraph of this Agreement;

“U.S. Securities Laws” means all applicable United States federal securities laws, including, without limitation, the U.S. Securities Act, the U.S. Exchange Act and the rules and regulations promulgated thereunder; and

“United States” means the United States of America, its territories and possessions, any State of the United States and the District of Columbia.

1.2

Capitalized terms used but not defined herein have the meanings ascribed to them in the Canadian Preliminary Prospectus.

1.3

Any reference in this Agreement to a Section or Subsection shall refer to a section or subsection of this Agreement.

1.4

All words and personal pronouns relating thereto shall be read and construed as the number and gender of the party or parties referred to in each case required and the verb shall be construed as agreeing with the required word and/or pronoun.

1.5

Any reference in this Agreement to “$” or to “dollars” shall refer to the lawful currency of Canada, unless otherwise specified.

1.6

The following are the schedules to this Agreement, which schedules are deemed to be a part hereof and are hereby incorporated by reference herein:

Schedule “A” – Matters to be Addressed in the Corporation’s Canadian and U.S. Counsel Opinion

Schedule “B” – Matters to be Addressed in the Corporation’s Foreign Counsel Opinion

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SECTION 2 – FILING OF PROSPECTUS

2.1

The Corporation shall, all on a basis which meets the time requirements below and is otherwise satisfactory to the Underwriter, acting reasonably:

(a)

not later than July 18, 2011, have obtained a Dual Prospectus Receipt with respect to the Initial Canadian Preliminary Prospectus;

(b)

forthwith after any comments with respect to the Canadian Preliminary Prospectus have been received from, and have been resolved with, the Commission, have obtained a Dual Prospectus Receipt with respect to the Canadian Final Prospectus or otherwise fulfilled all legal requirements to enable the Units to be offered and sold to the public in the Qualifying Jurisdictions through the Underwriter or any other investment dealer or broker registered to transact such business in the applicable Qualifying Jurisdictions contracting with the Underwriter; and

(c)

immediately after filing of the Canadian Final Prospectus referenced in subparagraph (b) above, file the Amendment No. 1 to the Registration Statement with the SEC, which shall become effective upon filing pursuant to Rule 467(a) under the U.S. Securities Act.

SECTION 3 – DISTRIBUTION OF THE UNITS

3.1

Each Underwriter shall be permitted to appoint additional investment dealers or brokers (each, a “Selling Firm”) as its agents in the Offering and each the Underwriter may determine the remuneration payable to such Selling Firm. The Underwriter may offer the Units, directly and through Selling Firms or any affiliate of an Underwriter, in the Offering Jurisdictions for sale to the public (subject to Section 7 hereof) only as permitted in accordance with Applicable Securities Laws and in any jurisdiction outside of the Offering Jurisdictions to purchasers permitted to purchase the Units in accordance with applicable securities laws in such jurisdiction, and upon the terms and conditions set forth in the Offering Documents and in this Agreement and in accordance with Applicable Securities Laws in the Offering Jurisdictions and with applicable securities laws in any such other jurisdiction.  The Underwriter shall not make use of any “green sheet” or information memorandum in respect of the Corporation that has not first been approved by the Corporation.  Each Underwriter shall require any Selling Firm appointed by the Underwriter to agree to the foregoing and the Underwriter shall be severally responsible for the compliance by such Selling Firm with the provisions of this Agreement.

3.2

For purposes of this Section 3, the Underwriter shall be entitled to assume that the Underlying Securities are qualified for Distribution in any Qualifying Jurisdiction where a Dual Prospectus Receipt shall have been obtained following the filing of the Canadian Final Prospectus, unless otherwise notified in writing by the Corporation.

3.3

The Underwriter shall use all reasonable best efforts to complete and to cause the other Selling Firms to complete the Distribution of the Units as soon as possible after the Closing Time.

3.4

The Underwriter shall promptly notify the Corporation when, in their opinion, they have completed the Distribution of the Underlying Securities and will provide to the Corporation, as soon as practicable after the Distribution of the Underlying Securities has terminated, a breakdown of the number of Units distributed in each of the Qualifying Jurisdictions where such breakdown is required for the purpose of calculating fees payable to the Canadian Securities Commissions, and if applicable, in the United States.

3.5

The Underwriter acknowledge that the Corporation is not taking any steps to qualify the Underlying Securities for Distribution outside of the Offering Jurisdictions.

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SECTION 4 – PREPARATION OF PROSPECTUS; DUE DILIGENCE

4.1

During the period of the Distribution of the Underlying Securities, the Corporation shall co-operate in all respects with the Underwriter to allow· and assist the Underwriter to participate fully in the preparation of, and allow the Underwriter to approve the form and content of, the Offering Documents and shall allow the Underwriter to conduct all “due diligence” investigations which the Underwriter may reasonably require to fulfil the Underwriter’ obligations under Applicable Securities Laws as underwriter and, in the case of the Canadian Preliminary Prospectus, the Canadian Final Prospectus and any Canadian Prospectus Amendment, to enable the Underwriter responsibly to execute any certificate required to be executed by the Underwriter.

SECTION 5 – MATERIAL CHANGES

5.1

During the period from the date of this Agreement to the completion of the Distribution of the Underlying Securities the Corporation covenants and agrees with the Underwriter that it shall promptly notify the Underwriter of:

(a)

any material change or anticipated, contemplated or threatened material change, in or relating to the Corporation and the Material Corporate Entities taken as a whole that is not otherwise referred to in the Offering Documents;

(b)

any material fact which has arisen or been discovered and would have been required to have been stated in any of the Offering Documents [or any Issuer Free Writing Prospectus] had that fact arisen or been discovered on or prior to the date of such document;

(c)

any change in any material fact (which for purposes of this Agreement shall be deemed to include the disclosure of any previously undisclosed material fact) contained in the Canadian Offering Documents, as they exist immediately prior to such change, which fact or change is, or may reasonably be expected to be, of such a nature as to render any of the Canadian Offering Documents, as they exist taken together in their entirety immediately prior to such change, misleading or untrue in any material respect or which would result in the Canadian Offering Documents, as they exist taken together in their entirety immediately prior to such change, containing a misrepresentation or which would result in the Canadian Offering Documents, as they exist taken together in their entirety immediately prior to such change, not complying with the Applicable Securities Laws or which change would reasonably be expected to have a material effect on the market price or value of any of the Underlying Securities; and

(d)

the occurrence of any event as a result of which (i) the Initial Registration Statement, the Amendment No. 1 to the Registration Statement, the Registration Statement, or any U.S. Registration Statement Amendment, in each case as amended immediately prior to such occurrence, would include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or (ii) the U.S. Preliminary Prospectus, the U.S. Final Prospectus, any U.S. Amended Prospectus or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances in which they are made, not misleading.

5.2

The Underwriter agrees, and will require each Selling Firm to agree, to cease the Distribution of the Underlying Securities, including any solicitations to sell the Underlying Securities, upon the Underwriter receiving written notification of any change or material fact with respect to any Offering Document contemplated by this Section 5 and to not recommence the Distribution of the Underlying Securities in any Offering Jurisdiction until a Canadian Prospectus Amendment or U.S. Registration Statement Amendment disclosing such change is filed in such Offering Jurisdiction.

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5.3

The Corporation shall, to the reasonable satisfaction of the Underwriter’ counsel, promptly comply with all applicable filing and other requirements under Applicable Securities Laws whether as a result of such change, material fact or otherwise. In addition, if during the Distribution of the Underlying Securities there is any change in any Applicable Securities Laws, which, in the reasonable opinion of the Underwriter, results in a requirement to file a Canadian Prospectus Amendment or U.S. Registration Statement Amendment, the Corporation shall, to the reasonable satisfaction of the Underwriter’ counsel, make any such filing under Applicable Securities Laws as soon as possible.

5.4

The Corporation shall in good faith discuss with the Underwriter any fact or change in circumstances (actual, anticipated, contemplated or threatened, financial or otherwise) which is of such a nature that there is reasonable doubt whether written notice need be given under this Section 5.

5.5

If a material change, material fact or a change in a material fact contemplated by this Section 5 occurs subsequent to the filing of the Canadian Final Prospectus and the Registration Statement but prior to the Closing Time, then, subject to Section 12, the Closing Date shall be, unless the Corporation and the Underwriter otherwise agree in writing, the fifth business day following the later of:

(a)

the date on which all applicable filings or other requirements of the Applicable Securities Laws with respect to such material change, material fact or change in a material fact have been complied with in all Offering Jurisdictions and any appropriate receipts obtained for such filings and notice of such filings from the Corporation or the Corporation’s counsel have been received by the Underwriter; and

(b)

the date upon which the commercial copies of any Canadian Prospectus Amendment or U.S. Prospectus Amendment have been delivered in accordance with Section 6(2);

however, in no event shall the Closing Date be later than August 31, 2011.

SECTION 6 – DELIVERIES TO THE UNDERWRITER

6.1

The Corporation shall deliver or cause to be delivered to the Underwriter, forthwith after the preparation thereof:

(a)

copies of the Canadian Preliminary Prospectus, in the English language, duly signed as required by the laws of all of the Qualifying Jurisdictions;

(b)

copies of the Initial Registration Statement signed as required by the U.S. Securities Act and the rules and regulations of the SEC thereunder and any documents included as exhibits to the Initial Registration Statement, as amended;

(c)

copies of the Canadian Final Prospectus, in the English language, duly signed as required by the laws of all of the Qualifying Jurisdictions;

(d)

copies of any Canadian Prospectus Amendment, in the English language, required to be filed under Section 5 hereof, in each case duly signed as required by the laws of all of the Qualifying Jurisdictions; and

(e)

any U.S. Registration Statement Amendment signed as required by the U.S. Securities Act and the rules and regulations of the SEC thereunder and any documents included as exhibits to the U.S. Registration Statement Amendment required to be filed under Section 5 hereof.

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6.2

The Corporation shall forthwith cause to be delivered to the Underwriter in such cities in the Offering Jurisdictions as they may reasonably request, without charge, such numbers of commercial copies of the Canadian Preliminary Prospectus and Canadian Final Prospectus and the U.S. Preliminary Prospectus and U.S. Final Prospectus, excluding in each case the Documents Incorporated by Reference, as the Underwriter shall reasonably require. The Corporation shall similarly cause to be delivered to the Underwriter commercial copies of any Canadian Prospectus Amendment or U.S. Amended Prospectus, excluding in each case the Documents Incorporated by Reference. The Corporation agrees that such deliveries shall be effected as soon as possible and, in any event, (i) in Toronto and New York not later than 12:00 noon E.S.T. on the business day (which shall be any day, other than a Saturday or Sunday, on which banks are open for business in Toronto, Ontario) following the delivery by the Commission of the Dual Prospectus Receipt for the Canadian Preliminary Prospectus and the U.S. Preliminary Prospectus, and in all other cities by 12:00 noon local time, on the next business day, and (ii) in Toronto and New York with respect to the Canadian Final Prospectus and the U.S. Final Prospectus, by 12:00 noon E.S.T. on the business day (which shall be any day, other than a Saturday or Sunday, on which banks are open for business in Toronto, Ontario) following the delivery by the Commission of the Dual Prospectus Receipt for the Canadian Final Prospectus, and in all other cities by 12:00 noon local time, on the next business day, provided that the Underwriter has given the Corporation written instructions as to the number of copies required and the places to which such copies are to be delivered not less than 24 hours prior to the time requested for delivery. Such delivery shall also confirm that the Corporation consents to the use by the Selling Firms of the Offering Documents in connection with the Distribution of the Underlying Securities in compliance with the provisions of this Agreement.

6.3

The Corporation shall also deliver or cause to be delivered to the Underwriter at the time of the filing of the Canadian Final Prospectus by the Corporation’s auditors a comfort letter addressed to the Underwriter dated and delivered at the Effective Time (with the requisite procedures to be completed by such auditor within two business days of the date of such letter) in form and substance satisfactory to the Underwriter, acting reasonably, and covering financial and accounting information relating to the Corporation and its material subsidiaries and affiliates contained in the Offering Documents.

SECTION 7 – REGULATORY APPROVALS

7.1

The Corporation will make all necessary filings, obtain all necessary consents and approvals (if any) and pay all filing fees required to be paid in connection with the transactions contemplated by this Agreement. The Corporation will cooperate with the Underwriter in connection with the qualification of the Underlying Securities for offering and sale under the Applicable Securities Laws of the Offering Jurisdictions and such other jurisdictions as the Underwriter may designate and in maintaining such qualifications in effect for so long as required for the Distribution of the Underlying Securities; provided, however, that (i) the Corporation shall not be obligated to make any material filing, file any prospectus, registration statement or similar document, consent to service of process, or qualify as a foreign corporation or as a dealer in securities in any of such other jurisdictions, or to subject itself to taxation in respect of doing business in any of such other jurisdictions in which it is not otherwise so subject, or become subject to any additional statutory liabilities in respect of the Offering Documents, or become subject to any additional periodic reporting or continuous disclosure obligations, and (ii) the Underwriter and the Selling Firms shall comply with the applicable laws in any such designated jurisdiction in making offers and sales of Underlying Securities therein.

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SECTION 8 – REPRESENTATIONS AND WARRANTIES

8.1

The Corporation represents and warrants to the Underwriter that as of the date hereof, as at the respective dates of the filing of the Canadian Final Prospectus and the U.S. Final Prospectus and as at the Closing Time (with the same force and effect as if made on and as at such times):

(a)

Each of the Documents Incorporated by Reference complied or will comply when so filed in all material respects with Canadian Securities Laws and, to the extent applicable, with the requirements of the U.S. Exchange Act and the rules and regulations of the SEC promulgated under the U.S. Exchange Act.

(b)

Each of the Canadian Offering Documents at the time such document was filed or at such time as such document will be filed complied or will comply in all material respects with the requirements of Canadian Securities Laws.

(c)

At the time it becomes effective the Registration Statement will, and at the Effective Time the U.S. Final Prospectus will, conform in all material respects to the applicable requirements of the U.S. Securities Act and the rules and regulations of the SEC thereunder.

(d)

The Canadian Offering Documents do not contain or, with respect to Canadian Offering Documents to be filed after the date hereof, will not contain any misrepresentation (as defined under Canadian Securities Laws) and constitute or, with respect to Canadian Offering Documents to be filed after the date hereof, will constitute full, true and plain disclosure of all material facts relating to the Corporation and the Material Corporate Entities, taken as a whole, and to the Underlying Securities, as required by Canadian Securities Laws to be stated therein; provided, however, that this representation and warranty shall not apply to the Underwriter’s Matters.

(e)

The Registration Statement, at the time it becomes effective, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the U.S. Final Prospectus, as of the Effective Time and as of the Closing Time, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Underwriter’s Matters.

(f)

As of the Effective Time and as of the Closing Time, the U.S. Final Prospectus, when considered together with each Issuer Free Writing Prospectus, if any, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(g)

Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent times through the completion of the Distribution of the Underlying Securities, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, the U.S. Preliminary Prospectus or the U.S. Final Prospectus.

(h)

The Corporation is eligible to file a prospectus in the form of Form 44-101 F1 - Short Form Prospectus under NI 44-101 of the Canadian Securities Administrators and, at the time of filing of the Canadian Final Prospectus, there will be no documents required to have been filed under the Canadian Securities Laws in connection with the Distribution of the Underlying Securities at or prior to such time that will not have been filed as required.

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(i)

The Corporation is subject to Section 13(a) or 15(d) of the U.S. Exchange Act, and the Corporation meets the general eligibility requirements for use of Form F-10.

(j)

Each of the Material Corporate Entities and the Corporation has been duly incorporated and is validly subsisting under the laws of its jurisdiction of incorporation with corporate power and authority to own, lease and operate its properties and to conduct its business as now conducted by it and the Corporation and each of the Material Corporate Entities is duly qualified as a foreign or extra-provincial corporation, as the case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a material adverse effect on the business, general affairs, management, condition, financial position, shareholders’ equity, results of operations, properties of the Corporation and its consolidated interest in the Material Corporate Entities, taken as a whole (a “Material Adverse Effect”); and except as otherwise disclosed in the Offering Documents, all of the issued and outstanding share capital of each of the Material Corporate Entities has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Corporation, directly or indirectly, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim.

(k)

The Corporation has all necessary corporate power and authority and all authorizations, approvals, consents, orders, licenses, certificates and permits to enter into, deliver and perform this Agreement and to issue the Units.

(l)

The Corporation has an authorized capitalization as set forth in the Offering Documents of which, as of July 5, 2011, 94,495,595 Common Shares have been duly and validly authorized and issued and are fully paid and non-assessable.

(m)

At the Closing Time, the Common Shares and Warrants comprising the Units and the Compensation Options shall be validly created and duly authorized for issuance, sale and delivery to the Underwriter pursuant to this Agreement and, when issued and delivered by the Corporation against payment of the consideration set forth herein, the Common Shares will be validly issued and fully paid and non-assessable and will conform to the description thereof contained in the Offering Documents and the Warrants and Compensation Options will be validly issued; when issued and delivered by the Corporation against payment of the consideration set forth in the Warrants, the Warrant Shares shall be validly issued and fully paid and non-assessable; when issued and delivered by the Corporation against payment of the consideration set forth in the Compensation Options, the Common Shares issuable on exercise of the Compensation Options shall be validly issued and fully paid and non-assessable;  the issuance of the Underlying Securities is not subject to the preemptive or similar rights of any person.

(n)

Except as disclosed in the Offering Documents, no person has any agreement or option, or right or privilege (whether pre-emptive or contractual) capable of becoming an agreement or an option (including convertible or exchangeable securities or warrants) for the purchase, subscription for or issuance of securities of any kind of the Corporation, other than pursuant to this Agreement.

(o)

Neither the execution, delivery or performance of this Agreement by the Corporation nor the consummation of any of the transactions contemplated hereby will give rise to a right to terminate or accelerate any payment due under, or conflict with or result in the breach of any term or provision of, or constitute a default under, or require any consent or waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon any properties or assets of the Corporation or any of the Material Corporate Entities pursuant to the terms of any indenture, mortgage, deed or trust or other agreement or instrument to which the Corporation or any of the Material Corporate Entities is a party or by which any of them or any of their respective properties or businesses is bound, or any franchise, license, permit, judgment, decree, order, law, statute, rule, regulation or by-law applicable to the Corporation or any of the Material Corporate Entities, except where such right, conflict, breach, default, consent or waiver requirement, execution or imposition would not have a Material Adverse Effect, or violate any provisions of the articles, by-laws or other constating documents of the Corporation or any of the Material Corporate Entities.

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(p)

This Agreement has been duly authorized, executed and delivered by the Corporation and is a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms subject to bankruptcy, insolvency, creditor arrangement laws and laws affecting creditors’ rights generally and equitable relief and except as rights to indemnity and contribution may be limited by applicable laws.

(q)

The audited financial statements of the Corporation as at August 31, 2010 and for the years ended 2009 and 2008 incorporated by reference in the Offering Documents have been prepared in accordance with Canadian generally accepted accounting principles applied on a basis consistent with those of previous periods, unless otherwise noted, and such audited consolidated financial statements have been reconciled to generally accepted accounting principles in the United States in accordance with Item 17 of Form 20-F under the U.S. Exchange Act and present fairly:

(i)

the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the consolidated financial position of the Corporation as at August 31, 2010; and

(ii)

the consolidated earnings and retained earnings and the changes in consolidated cash resources of the Corporation for the periods then ended.

(r)

Other than as set forth in or incorporated by reference in the Offering Documents, there are no claims, actions, suits, investigations, notices or proceedings (including, without limitation, by aboriginal groups) pending or, to the best of the Corporation’s knowledge, threatened by or against or affecting the Corporation or any of the Material Corporate Entities in any court or before or by any federal, provincial, state, municipal or other governmental department, commission, board or agency, domestic or foreign, which would have a Material Adverse Effect or which would affect or may affect the Distribution of the Units.

(s)

The Corporation does not believe that it is a “passive foreign investment company”, as such term is defined in the United States Internal Revenue Code of 1986, as amended.

(t)

KPMG LLP, who have audited the Financial Statements and have audited the Corporation’s management’s assessment of the Corporation’s internal control over financial reporting, are independent within the meaning of the Rules of Professional Conduct/Code of Ethics of the various provincial institutes/ordre, the Canada Business Corporations Act, the U.S. Securities Act and the applicable rules and regulations thereunder adopted by the SEC and the Public Company Accounting Oversight Board (United States) (PCAOB).

(u)

The Corporation maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the U.S. Exchange Act) that complies in all material respects with the requirements of the U.S. Exchange Act and has been designed by the Corporation’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in Canada. Management of the Corporation assessed internal control over financial reporting of the Corporation as of August 31, 2010 and identified a material weakness in internal controls affecting financial reporting of certain matters, which matters were corrected prior to management finalizing the financial statements for the period.  The Corporation believes it has remediated the weakness previously identified and full operating effectiveness control documentation and testing, including auditor attestation, are expected to be completed at year end.

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(v)

The Corporation maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the U.S. Exchange Act) that comply in all material respects with the requirements of the U.S. Exchange Act; such disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Corporation in the reports that it files or submits under the U.S. Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; as a result of the identified material weakness in internal control over financial reporting for the year ended August 31, 2010, such disclosure controls and procedures were not effective as of August 31, 2010.  

(w)

Neither the Corporation nor any of the Material Corporate Entities has taken, nor will the Corporation or any Material Entity take, directly or indirectly, any action which is designed to or which has constituted, or which might reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Corporation in connection with the Offering.

(x)

Neither the Corporation nor any of its subsidiaries nor, to the knowledge of the Corporation, any director, officer, agent, employee, affiliate or other person acting on behalf of the Corporation or any of its subsidiaries is aware of or has (i) made any unlawful contribution to any candidate for non-United States or Canadian office, or failed to disclose fully any such contribution in violation of law, or (ii) made any payment to any federal or state governmental· officer or official, or other person charged with similar public or quasi-public duties, other than payments required or permitted by the laws of the United States or Canada of any jurisdiction thereof. Without limiting the generality of the foregoing, none of the Corporation, its subsidiaries or, to the knowledge of the Corporation, any director, officer, agent, employee or affiliate of the Corporation or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Canadian Corruption of Foreign Public Officials Act or the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively the “Foreign Corruption Laws”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to payor authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the Foreign Corruption Laws) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the Foreign Corruption Laws; and the Corporation and each of its subsidiaries have conducted their businesses in compliance with the Foreign Corruption Laws and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. The operations of the Corporation and each of its subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the U.S. Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Corporation or any Subsidiary with respect to the Money Laundering Laws is pending or, to the best knowledge of the Corporation, threatened.

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(y)

The Corporation and the Material Corporate Entities possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate federal, state, provincial, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect; the Corporation and the Material Corporate Entities are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect; and neither the Corporation nor any of the Material Corporate Entities has received any notice of proceedings relating to the revocation or modification of, failure to renew or imposition of a burdensome restriction under any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavourable decision, ruling or finding, would result in a Material Adverse Effect.

(z)

Except as described in the Offering Documents and except such matters as would not result in a Material Adverse Effect, (A) neither the Corporation nor any of the Material Corporate Entities is in violation of any federal, state, provincial, local or foreign statute, law, rule, regulation, ordinance, legal code, or any legally binding judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mould (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Corporation and the Material Corporate Entities have all permits, authorizations and approvals required under any applicable Environmental Laws for their respective businesses as presently conducted and are each in substantial compliance with their requirements, (C) there are no pending or, to the Corporation’s knowledge, threatened administrative, regulatory or judicial actions, suits, claims, liens, actions concerning any noncompliance or violation, investigations or adversarial legal proceedings pursuant to any Environmental Law against the Corporation or any of the Material Corporate Entities, (D) there are no orders for clean-up or remediation, or actions, suits or proceedings by any private party or governmental body or agency, against or affecting the Corporation or any of the Material Corporate Entities alleging releases of Hazardous Materials or any violation of Environmental Laws, and (E) there has been no disposal, discharge, emission contamination or other release of any kind at, onto or from any property now or previously owned, operated, used or leased by the Corporation or any Material Entity or into the environment surrounding any such property of any Hazardous Materials with respect to which the Corporation or any Material Entity has knowledge, except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or as set forth in the Canadian Final Prospectus or the U.S. Final Prospectus, or any of the Documents Incorporated by Reference (exclusive of any supplement thereto).

(aa)

With respect to information set forth in the Offering Documents: (i) information relating to the Corporation’s estimates of mineral reserves and mineral resources contained in the Offering Documents has been reviewed and verified by the Corporation or independent consultants to the Corporation for consistency with the Corporation’s most recently prepared mineral resource estimates; (ii) the mineral resource estimates have been prepared in all material respects in accordance with NI 43-101 by or under the supervision of a qualified person as defined therein; (iii) the methods used in estimating the Corporation’s mineral resources are in accordance with accepted mineral resource estimation practices; and (iv) the Corporation has duly filed with the applicable Canadian Securities Commissions in compliance with applicable Canadian Securities Laws all technical reports required by NI 43-101 to be filed with the Canadian Securities Commissions and all such reports (as amended) comply in all material respects with the requirements thereof.

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(bb)

Except as disclosed in the Offering Documents, the Corporation has not since August 31, 2010, completed any acquisition that is a “significant acquisition” for the purpose of Part 8 of NI 51-102, nor is it proposing to complete any acquisition that has progressed to a state where a reasonable person would believe that the likelihood of the Corporation completing the acquisition is high and such acquisition would be a “significant acquisition” for the purposes of Part 8 of NI 51-102 if completed as of the date of the Canadian Final Prospectus.

(cc)

Since August 31, 2010, except as disclosed in the Offering Documents, neither the Corporation nor any of the Material Corporate Entities has incurred any indebtedness that is material to the Corporation on a consolidated basis for borrowed money, or guaranteed the repayment thereof, except for such indebtedness or guarantees incurred in the ordinary course of business.

(dd)

The Corporation is a “reporting issuer” not in default of any requirement under the Canadian Securities Laws of the Qualifying Jurisdictions and has filed in each of the Qualifying Jurisdictions its Annual Information Form for the year ended August 31, 2010 under NI 44-101. In particular, without limiting the foregoing, no material change relating to the Corporation has occurred with respect to which the requisite material change report has not been filed on a non-confidential basis with all relevant securities regulatory authorities (unless originally filed on a confidential basis and subsequently made non-confidential).

(ee)

Neither the Commission, the SEC, any other securities regulatory authority, any stock exchange nor any similar regulatory authority has issued any order which is currently outstanding preventing or suspending trading in any securities of the Corporation.

(ff)

The Corporation’s Common Shares that are currently issued and outstanding are listed and posted for trading on the TSX and are listed on the NYSE and the Corporation is not in default of its listing requirements on the TSX or the NYSE.

(gg)

Except as disclosed in the Offering Documents, each of the Corporation and the Material Corporate Entities holds title to its properties and assets as described in the Offering Documents, including, without limitation, mineral licenses, mineral leases, surface rights or leases, mining rights or claims or other conventional proprietary interests or rights recognized in the jurisdiction in which a particular property is located, free and clear of all liens, encumbrances and defects, except such as (i) are described therein, (ii) have been created in the ordinary course of business in connection with financing arrangements, (iii) do not materially affect the value of such properties or assets and do not materially interfere with the use made and proposed to be made of such properties and assets by the Corporation or such Material Entity, or (iv) are not material to the Corporation and its subsidiaries taken as a whole. Except as disclosed in the Offering Documents, and except as would not have a Material Adverse Effect: (i) no other property rights are necessary for the conduct of the Corporation’s business as presently conducted or as proposed to be conducted by the Corporation as described in the Offering Documents, and (ii) there are no material restrictions on the ability of the Corporation and the Material Corporate Entities to use or otherwise exploit any existing property rights. Neither the Corporation nor any Material Entity has received any notice of any claim adverse to its ownership of any such properties or assets or of any claim against the continuedpossession of any such properties or assets, whether owned or held under lease or sublease by the Corporation or any Material Entity, except as could not have a Material Adverse Effect.

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(hh)

The Corporation is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Offering Documents under the heading “Use of Proceeds,” will not be required to be registered as an investment company under the Investment Company Act of 1940, as amended.

(ii)

No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Corporation of its obligations hereunder or in connection with the offering, issuance or sale of the Underlying Securities or the consummation of the transactions contemplated by this Agreement, except (i) such as have been obtained or as may be required under the U.S. Securities Laws (including state “blue sky” securities laws) and (ii) such as have been obtained or as may be required under the Canadian Securities Laws.

(jj)

Neither the Corporation nor, to the knowledge of the Corporation, any director, officer, agent, employee, affiliate or person acting on behalf of the Corporation is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Corporation will not directly or indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(kk)

Except as would not, individually or in the aggregate, have a Material Adverse Effect, no labour disturbance by or dispute with employees of the Corporation or any of the Material Corporate Entities exists or, to the knowledge of the Corporation, is contemplated or threatened, and the Corporation is not aware of any existing or imminent labour disturbance by, or dispute with, the employees of any of its or the Material Corporate Entities’ principal suppliers, contractors or customers.

(ll)

The Corporation and the Material Corporate Entities are insured by recognized insurers, all of which insurance is in full force or effect, or are self insured against such losses and risks and in such amounts as are reasonable and consistent with sound business practice.

(mm)

Neither the Corporation nor any Material Corporate Entities has sustained, since the date of the latest audited Financial Statements included or incorporated by reference in the Offering Documents, any loss or interference with its business or properties from fire, explosion, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any labour dispute or any legal or governmental proceeding, other than as set forth in the Offering Documents that would be material to the Corporation on a consolidated basis.

(nn)

The material agreements to which the Corporation or a Material Corporate Entity is a party in relation to the Mining Properties are in good standing and there has been no default under any such agreements (except for minor and temporary arrears and other similar temporary defaults which occur in the ordinary course of business or which would not, individually or in the aggregate, constitute or result in a Material Adverse Effect).

(oo)

Computershare Trust Company of Canada, through its offices in the city of Toronto, Ontario has been duly appointed as the Canadian registrar and transfer agent for the Common Shares.

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(pp)

The Corporation and each of the Material Corporate Entities has duly and timely paid all taxes thereon and all assessments received by it to the extent required to be paid and not being contested in good faith, except where the failure to do so would not have a Material Adverse Effect; and to the Corporation’s knowledge, except as otherwise disclosed in the Offering Documents, there is no tax deficiency that has been asserted in writing against the Corporation or any of the Material Corporate Entities or any of their respective properties or assets that if ultimately upheld would have a Material Adverse Effect.

(qq)

All outlooks or projections disclosed in the Offering Documents including any of the Documents Incorporated by Reference, have been prepared based upon reasonable assumptions in the circumstances and, with respect to financial outlooks or projections, using accounting principles consistent with the audited financial statements of the Corporation for the year ended August 31, 2010.

SECTION 9 – INDEMNIFICATION

9.1

The Corporation agrees to and shall protect and indemnify the Underwriter, their respective affiliates and each of the directors, officers and employees of the Underwriter and their respective affiliates and each person, if any, who controls the Underwriter or any of their respective affiliates from and against all losses (other than losses of profits), claims, reasonable costs, damages and liabilities, to which the Underwriter, their respective affiliates and such director, officer and employee of the Underwriter and their respective affiliates and such person, if any, who controls the Underwriter or any of their respective affiliates, may become subject that is caused by or arises by reason of:

(a)

any information or statement (except any statement relating solely to the Underwriter as provided in writing to the Corporation by the Underwriter for use in the Offering Documents (collectively, the “Underwriter’s Matters”)) contained in this Agreement, in the Canadian Offering Documents, the U.S. Preliminary Prospectus, the U.S. Final Prospectus, any U.S. Prospectus Amendment or any Issuer Free Writing Prospectus which at the time and in the light of the circumstances under which it was made contains or is alleged to contain an untrue statement of a material fact;

(b)

any information or statement (except the Underwriter’s Matters) contained in the Initial Registration Statement, the Amendment No. 1 to the Registration Statement, the Registration Statement or any U.S. Registration Amendment which at the time it was made contains or is alleged to contain an untrue statement of a material fact;

(c)

any omission or alleged omission to state in the Canadian Offering Documents, the U.S. Preliminary Prospectus, the U.S. Final Prospectus, any U.S. Prospectus Amendment or any Issuer Free Writing Prospectus or any certificate of the Corporation delivered pursuant to this Agreement, any fact regarding the Corporation or its Material Corporate Entities and their respective business and affairs (except the Underwriter’s Matters) required to be stated in such document or necessary to make any statement in such document not misleading in the light of the circumstances under which it was made;

(d)

any omission or alleged omission to state in the Initial Registration Statement, the Amendment No. 1 to the Registration Statement, the Registration Statement or any U.S. Registration Amendment any fact regarding the Corporation or its Material Corporate Entities and their respective business and affairs (except the Underwriter’s Matters) required to be stated in such document or necessary to make any statement in such document not misleading;

(e)

the Corporation not complying with any requirement of the Applicable Securities Laws; or

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(f)

any order made or inquiry, investigation or proceeding commenced or threatened by any securities regulatory authority or other competent authority based upon any untrue statement, omission or misrepresentation or alleged untrue statement, omission or misrepresentation (except Underwriter’s Matters) in the Offering Documents or any Issuer Free Writing Prospectus preventing or restricting trading in the Underlying Securities or any of them or the Distribution of the Underlying Securities in any of the Offering Jurisdictions; and will reimburse the parties entitled to indemnification hereunder for all reasonable costs, charges and expenses (including reasonable legal expenses), as incurred, which any of them may pay or incur in connection with investigating or disputing any such claim or action. This indemnity is in addition to any liability which the Corporation may otherwise have.

9.2

The Underwriter agrees to and shall protect and indemnify the Corporation and each of the directors, officers and employees of the Corporation from and against all losses (other than loss of profit), claims, costs, damages and liabilities, to which the Corporation, and such director, officer and employee of the Corporation, may become subject that is caused by or arises by reason of:

(a)

any information or statement relating to the Underwriter’s Matters contained in the Canadian Offering Documents, the U.S. Preliminary Prospectus, the U.S. Final Prospectus, any U.S. Prospectus Amendment or any Issuer Free Writing Prospectus which at the time and in the light of the circumstances under which it was made contains or is alleged to contain an untrue statement of a material fact;

(b)

any information or statement relating to the Underwriter’s Matters contained in the Initial Registration Statement, the Amendment No. 1 to the Registration Statement, the Registration Statement or any U.S. Registration Amendment which at the time it was made contains or is alleged to contain an untrue statement of a material fact;

(c)

any omission or alleged omission to state in the Underwriter’ Matters contained in the Canadian Offering Documents, the U.S. Preliminary Prospectus, the U.S. Final Prospectus, any U.S. Prospectus Amendment or any Issuer Free Writing Prospectus, any fact or information relating to the Underwriter required to be stated therein or necessary to make any of the information or statements contained the Underwriter’ Matters not misleading in the light of the circumstances in which they are made;

(d)

any omission or alleged omission to state in the Underwriter’ Matters contained in the Initial Registration Statement, the Amendment No. 1 to the Registration Statement, the Registration Statement or any U.S. Registration Amendment any fact or information relating to the Underwriter required to be stated therein or necessary to make any of the information or statements contained in the Underwriter’ Matters not misleading; and

(e)

the Underwriter or the Selling Firms not complying with Applicable Securities Laws, or any other applicable securities laws in connection with their marketing and selling activities in the offering and sale of the Underlying Securities.

The Underwriter will reimburse the parties entitled to indemnification hereunder for all reasonable costs, charges and expenses (including reasonable legal expenses), as incurred, which any of them may pay or incur in connection with investigating or disputing any such claim or action. This indemnity is in addition to any liability which the Underwriter may otherwise have.

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9.3

If any claim contemplated by this Section 9 shall be asserted against any of the parties entitled to indemnification under this Section 9, or if any potential claim contemplated by this Section 9 shall come to the knowledge of any of the parties entitled to indemnification under this Section 9 in respect thereof, such party will notify the Corporation and the Underwriter in writing as soon as possible of the nature of such claim (provided that any failure to so notify in respect of any potential claim shall not affect the liability of the Corporation or the Underwriter, as the case may be, under this Section 9 and provided further that any failure to so notify in respect of any actual claim shall affect the liability of the Corporation or the Underwriter, as the case may be, under this Section 9 only to the extent that the Corporation or the Underwriter, as the case may be, are prejudiced by such failure). The party liable to make indemnification pursuant to this Section 9 (the “Indemnifying Party”) shall be entitled to participate in the defence of any claim so asserted and, after written notice to the party or· parties claiming indemnification (the “Indemnified Party”), to assume the defence thereof. No Indemnifying Party shall, without the written consent of the Indemnified Party, such consent not to be unreasonably withheld, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Party. If the Indemnifying Party does not elect to participate in or assume the defence of such claim, the Indemnified Party shall have the right to employ counsel and the Indemnifying Party shall bear the reasonable fees, costs and expenses of such counsel. If the Indemnifying Party does elect to participate in or assume the defence of such claim, the Indemnified Party shall have the right to participate in the defence of such claim and have separate counsel at its own expense provided that, if the Indemnified Party has reasonably concluded that there may be legal defences available to it which are different from or additional to those available to the Indemnifying Party, the Indemnifying Party shall bear the reasonable fees, costs and expenses of such separate counsel with respect to such different or additional defences or, if the Indemnified Party has reasonably concluded that the representation of the Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate due to actual or potential differing interests between them, the Indemnifying Party shall bear the reasonable fees, costs and expenses of such separate counsel with respect to the entire defence. It is understood, however, that the Indemnifying Party shall· not, in connection with anyone action or separate but substantially similar or related actions in the same jurisdiction, be liable for the reasonable fees, costs and expenses of more than one separate law firm (in addition to any local counsel) for all such Indemnified Parties unless, in the opinion of counsel to any such Indemnified Parties, representation of all or any of such Indemnified Parties by the same counsel would be inappropriate due to actual or potential differing interests between any of them.

SECTION 10 – CONTRIBUTION

10.1

In order to provide for just and equitable contribution as between the Corporation and the Underwriter in circumstances in which the indemnity provided in Section 9 would otherwise be available in accordance with its terms but is, for any reason, held to be unavailable to or unenforceable by the Underwriter or the Corporation or any of their respective affiliates, directors, officers, employees and agents or controlling persons, or enforceable otherwise than in accordance with its terms, the Corporation and the Underwriter shall contribute to the aggregate of all claims, expenses, costs and liabilities and all losses (other than loss of profits) of the nature contemplated in Section 9 and suffered or incurred by them (which, in the case of the Underwriter, shall include any such claims, expenses, costs, liabilities and losses paid or incurred to the Corporation pursuant to any claim for contribution or indemnity by the Corporation or any of its directors, officers, employees or agents against the Underwriter) on the basis that the Underwriter shall be responsible in the aggregate for that portion represented by the percentage that the aggregate fees payable by the Corporation to the Underwriter hereunder bears to the purchase price paid by the Underwriter for the Underlying Securities and the Corporation shall be responsible for the balance, provided that:

(a)

the Underwriter shall not in any event be liable to contribute, in the aggregate, any amount in excess of such aggregate fee or any portion thereof actually received; and

(b)

no person guilty of misrepresentation as defined in the Applicable Securities Laws that is fraudulent shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

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The rights to contribution provided in this Section 10 shall be in addition to and not in derogation of any other right to contribution which the Indemnified Parties may have by statute or otherwise at law. If an Indemnified Party has reason to believe that a claim for contribution may arise, it shall give other parties hereto notice thereof in writing, but failure to give such notice shall relieve a party of any obligation which it may have to theIndemnified Party under this Section 10 only to the extent that it is materially prejudiced

as a result.

10.2

The indemnity and contribution agreement contained in Section 9 and Section 10 hereof shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter, acceptance by the Underwriter of any of the Underlying Securities and payment therefor, or any termination of this Agreement.

10.3

If any provision of Section 9 or Section 10 hereof is determined to be void, voidable or unenforceable, in whole or in part, such determination shall not affect or impair or be deemed to affect or impair the validity of any other provision of this Agreement and such void, voidable or unenforceable provision shall be severable from this Agreement.

10.4

The Corporation hereby acknowledges and agrees that, with respect to Section 9 and Section 10 hereof, the Underwriter are contracting on their own behalf and as agents for their respective affiliates, directors, officers, employees and controlling persons (collectively, the “Beneficiaries”). In this regard, each of the Underwriter shall act as trustee for the Beneficiaries of the Corporation’s covenants under Section 9 and Section 10 hereof with respect to the Beneficiaries and accepts these trusts and shall hold and enforce the covenants on behalf of the Beneficiaries.

SECTION 11 – COVENANTS OF THE CORPORATION

11.1

The Corporation covenants and agrees with the Underwriter that:

(a)

the Corporation will advise the Underwriter, promptly after receiving notice thereof, of the time when each Offering Document has been filed and any Dual Prospectus Receipt has been obtained, and will provide evidence satisfactory to the Underwriter of each· such filing and a copy of each such Dual Prospectus Receipt;

(b)

between the date hereof and the date of completion of the Distribution of the Underlying Securities, the Corporation will advise the Underwriter, promptly after receiving notice or obtaining knowledge thereof, of:

(i)

the issuance by any Canadian Securities Commission or the SEC of any order suspending or preventing the use of any of the Offering Documents, including without limitation the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement, or, to the knowledge of the Corporation, the threatening of any such order;

(ii)

the issuance by any Canadian Securities Commission, the SEC, the TSX or the NYSE of any order having the effect of ceasing or suspending the Distribution of the Underlying Securities or the trading in any securities of the Corporation, or of the institution or, to the knowledge of the Corporation, threatening of any proceeding for any such purpose; or

(iii)

any requests made by any Canadian Securities Commission or the SEC for amending or supplementing any of the Offering Documents or for additional information;

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and the Corporation will use its best efforts to prevent the issuance of any order referred to in subparagraph (b)(i) above or subparagraph (b)(ii) above and, if any such order is issued, to obtain the withdrawal thereof at the earliest possible time;

(c)

the Corporation will use its best efforts to obtain the conditional listing of the Underlying Securities on the TSX by the Closing Time, subject only to the official notice of issuance, and the Corporation will use its best efforts to have the Underlying Securities listed and admitted and authorized for trading on the NYSE by the Closing Time;

(d)

as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the U.S. Securities Act), the Corporation will make generally available to its security holders and to the Underwriter an earnings statement or statements of the Corporation and its subsidiaries which will satisfy the provisions of Section 11(a) of the U.S. Securities Act and Rule 158 under the U.S. Securities Act; and

(e)

the Corporation will use the net proceeds from the Offering as described in the Initial Canadian Preliminary Prospectus.

11.2

The Corporation agrees that, unless it obtains the prior consent of the Underwriter, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Corporation, not to be unreasonably withheld, it has not made and will not make any offer relating to the Underlying Securities that would constitute an “issuer free writing prospectus,” as defined in Rule 433 under the U.S. Securities Act, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the U.S. Securities Act, required to be filed with the SEC. Any such free writing prospectus consented to by the Corporation and the Underwriter is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Corporation represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433 under the U.S. Securities Act, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the SEC where required, legending and record keeping.

11.3

The Corporation will not, without the prior written consent of the Underwriter, such consent not to be unreasonably withheld, during the period from the date hereof and ending 90 days following the Closing Date, issue, offer, pledge, sell, contract to sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer, lend or dispose of directly or indirectly, any Common Shares, or any securities convertible into or exchangeable for Common Shares; provided that the Corporation may (i) issue Common Shares or securities convertible into or exchangeable for Common Shares pursuant to any equity incentive plan, stock ownership or purchase plan, dividend reinvestment plan or other equity plan in effect on the date hereof, (ii) issue Common Shares issuable upon the conversion, exchange or exercise of convertible or exchangeable securities or the exercise of warrants or options outstanding on the date hereof, or (iii) issue Common Shares or other securities convertible into Common Shares in connection with an acquisition of a business or entity, a consolidation, merger, combination or plan of arrangement, or a transaction or series of transactions entered into in response to an unsolicited bid by a third party to engage in any of the foregoing transactions provided that, except in the circumstances of an unsolicited bid, any such securities issued may not be subsequently disposed of until 60 days after the date of this Agreement.

SECTION 12 – TERMINATION BY UNDERWRITER

12.1

At the election of the Underwriter (the Underwriter being hereafter in this Section 12 referred to as the “Terminating Underwriter”), the obligations of such Terminating Underwriter under this Agreement may be terminated and cancelled, without liability on their part, if, at any time prior to the Closing Time:

22

(a)

any inquiry, action, suit, investigation or other proceeding (whether formal or informal) is threatened, announced or commenced or any order or ruling is issued under or pursuant to any statute of Canada or the United States or of any province or territory of Canada, or state of the United States (including, without limitation, the Commission, the securities regulatory authority in each of the other Qualifying Jurisdictions, the TSX, NYSE or the SEC), which in the reasonable opinion of such Terminating Underwriter(s) would be expected to operate to prevent or materially restrict trading in or distribution of the Underlying Securities or any other securities of the Corporation;

(b)

if there should develop, occur or come into effect or existence any event, action, state, circumstance, condition or major financial occurrenceof national or international consequence, catastrophe, accident, natural disaster, public protest, war or act of terrorism or other occurrence of national or international consequence or any law or regulation which, in any such case, in the reasonable opinion of the Underwriter, seriously adversely affects, or involves, or will, or could reasonably be expected to, seriously adversely affect, or involve, the financial markets in Canada or internationally or the business, operations or affairs of the Corporation;

(c)

any order to cease or suspend trading in any securities of the Corporation, or prohibiting or restricting the distribution of the Underlying Securities, is made, or proceedings are announced or commenced for the making of any such order, by any securities commission, stock exchange or listing authority, and has not been rescinded, revoked or withdrawn; or

(d)

it comes to the knowledge of the Terminating Underwriter(s) that any of the material representations or warranties of the Corporation in this Agreement was untrue or inaccurate or misleading in any material respect when made or that any of the material representations or warranties of the Corporation has ceased to be true or accurate in any material respect or has become misleading in any material respect by reference to the facts and circumstances from time to time subsisting, and such breach has not been remedied within three business days of notification to the Corporation of the breach by the Terminating Underwriter(s) or by the Closing Time whichever is the earlier,

by the Terminating Underwriter(s) giving the Corporation written notice to that effect not later than the Closing Time.

12.2

The foregoing rights of termination are in addition to any other rights or remedies the Underwriter may have in respect of any default, act or failure to act or non-compliance by the Corporation in respect of any of the matters contemplated by this Agreement.  If the Underwriter terminates its obligations hereunder pursuant to this Section 12 or, unless as a result of a default within the control of the Corporation, Section 14, the Corporation’s liability hereunder to the Underwriter or Underwriter shall be limited to its obligations under Section 9, Section 10 and Section 16 hereof, as applicable.

SECTION 13 – CLOSING

13.1

The closing of the purchase and sale of the Firm Units herein provided for shall be completed at 8:00 a.m. (E.S.T.), July 18, 2011, or such other date and/or time not later than August 31, 2011 as may be agreed upon in writing (respectively, the “Closing Time” and the “Closing Date”), at the Toronto offices of Borden Ladner Gervais LLP. In the event that the Closing Time has not occurred on or before August 31, 2011, this Agreement shall, subject to the last sentence of Section 12(2) hereof, terminate.

23

SECTION 14 – CONDITIONS OF CLOSING

14.1

The obligations of the Underwriter under this Agreement are subject to the accuracy of the representations and warranties of the Corporation contained in this Agreement both as of the date of this Agreement and as of the Closing Time, the performance by the Corporation of its obligations under this Agreement and receipt by the Underwriter of, at the Closing Time:

(a)

a favourable legal opinion, dated the Closing Date, from Borden Ladner Gervais LLP, the Corporation’s Canadian counsel, and Locke Lord Bissell & Liddell LLP, the Corporation’s U.S. counsel, as to matters of Canadian federal and provincial law and as to matters of New York law and United States federal law respectively, (who may rely on the opinions of local counsel acceptable to them and to the Underwriter’ counsel as to matters governed by the laws of jurisdictions in Canada or the U.S.), addressed to the Underwriter and the Underwriter’s counsel relating to such matters as set out in the attached Schedule A;

(b)

a favourable legal opinion, dated the Closing Date, from the Corporation’s counsel in the country of Tanzania, in form and substance satisfactory to the Underwriter, with respect to the matters set forth in Schedule B;

(c)

a favourable legal opinion, dated the Closing Date, from Underwriter’s Canadian counsel, Norton Rose OR LLP (who may rely on the opinions of Canadian counsel to the Corporation and on the opinions of local counsel acceptable to them as to matters governed by the laws of jurisdictions other than the Province of Ontario), containing such opinions relating to the Offering as the Underwriter may reasonably require;

(d)

a favourable legal opinion, date the Closing Date, from Underwriter’s U.S. counsel, Todtman, Nachamie, Spizz & Johns, P.C., containing such opinions relating to the Offering as the Underwriter may reasonable require;

(e)

certificates representing, in the aggregate, the Common Shares and Warrants represented by one or more global certificates in the name of CDS & CO. or its nominee or in such other name(s) as the Underwriter, shall have directed;

(f)

the auditor’s comfort letter dated the Closing Date updating the comfort letter referred to in Section 6.3 above with such changes as may be necessary from the comfort letter delivered previously to bring the information therein forward to a date which is within two business days of the Closing Date;

(g)

the Underwriting Fee paid in accordance with the seventh paragraph of this Agreement;

(h)

evidence satisfactory to the Underwriter that the Underlying Securities shall have been (A) listed and admitted and authorized for trading on the NYSE, and (B) conditionally approved for listing on the TSX, subject only to the official notice of issuance;

(i)

a certificate, dated the Closing Date and signed on behalf of the Corporation, but without personal liability, by the President and Chief Executive Officer and by the Chief Financial Officer of the Corporation, or such other officers of the Corporation as may be reasonably acceptable to the Underwriter, certifying that: (i) the Corporation has complied with all covenants and satisfied all terms and conditions hereof to be complied with and satisfied by the Corporation at or prior to the Closing Time; (ii) all the representations and warranties of the Corporation contained herein are true and correct as of the Closing Time with the same force and effect as if made at and as of the Closing Time after giving effect to the transactions contemplated hereby; (iii) to the knowledge of such officers, there has been no material change relating to the Corporation and its Material CorporateEntities, on a consolidated basis, since the date hereof which has not been generally disclosed, except for the offering of the Underlying Securities, and with respect to which the requisite material change statement or report has not been filed and no such disclosure has been made on a confidential basis; and (iv) that, to the best of the knowledge, information and belief of the persons signing such certificate, after having made reasonable inquiries, no order, ruling or determination having the effect of ceasing or suspending trading in the Common Shares or any other securities of the Corporation has been issued and no proceedings for such purpose are pending or are contemplated or threatened; and

24

(j)

the Underwriter and counsel for the Underwriter shall have been furnished with such further certificates and documents as they may have reasonably requested; provided however that the Underwriter or its counsel shall request such certificate or document within a reasonable period prior to the Closing Time.

SECTION 15 – EXPENSES

15.1

Whether or not the transactions contemplated hereby shall be completed, except as provided below, all reasonable expenses of or incidental to the delivery and sale of the Units and of or incidental to all other matters in connection with the transactions herein set out shall be borne by the Corporation including, without limitation, filing fees and other expenses payable in connection with the qualification of the Units for sale to the public in the Offering Jurisdictions, the direct costs of the Corporation, the fees and expenses of the Corporation’s counsel, including U.S. counsel, and of the external auditors of the Corporation directly applicable to the Offering, the costs incurred in connection with the preparation, printing and delivery of this Agreement, the Offering Documents including commercial copies thereof, and of the definitive certificate(s) representing the Common Shares and Warrants and any stock exchange listing fees. The fees and disbursements of the Underwriter’ counsel and the Underwriter “out-of-pocket” expenses (other than those referred to above) shall be borne by the Underwriter except that the “out-of-pocket” accountable expenses (including the fees and disbursements of the Underwriter’ counsel) actually incurred by the Underwriter will be reimbursed by the Corporation to the Underwriter if the Offering is not completed, other than by reason of a default by the Underwriter.

SECTION 16 – NO ADVISORY OR FIDUCIARY RELATIONSHIP

16.1

The Corporation acknowledges and agrees that (a) the purchase and sale of the Units pursuant to this Agreement, including the determination of the Offering Price of the Units and any related discounts and commissions, is an arm’s-length commercial transaction between the Corporation, on the one hand, and the Underwriter, on the other hand, (b) in connection with the Offering and the process leading to such transaction the Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Corporation or its shareholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favour of the Corporation with respect to the Offering or the process leading thereto (irrespective of whether the Underwriter has advised or is currently advising the Corporation on other matters) and no Underwriter has any obligation to the Corporation with respect to the Offering except the obligations expressly set forth in this Agreement, (d) the Underwriter and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Corporation, and (e) the Underwriter have not provided any legal, accounting, regulatory or tax advice with respect to the Offering and the Corporation has consulted its own legal, accounting, regulatory and tax advisors to the extent it deems appropriate.

25

SECTION 17 – NOTICES

Any notice or other communication to be given hereunder shall, in the case of notice to the Corporation, be addressed to the Corporation, Suite 404, 1688 152nd Street, South Surrey, British Columbia, V4A 4N2 Attention: Mr. James Sinclair, Telecopier No. (604) 536-2529 and, in the case of notice to the Underwriter, be addressed to: Casimir Capital Ltd., 145 Adelaide St West, Suite 200, Toronto, ON, M5H 4E5  Attention: Mr. Riley Keast, Telecopier No. (647) 344-3901. Any such notice or other communication shall be in writing, and unless delivered personally to a responsible officer of the addressee, shall be given by courier service or by facsimile and shall be deemed to have been received, if given by facsimile, on the day of sending (if such day is a business day or, if not, on the next day following the sending thereof which is a business day) and if given by courier service, on the next business day following the sending thereof.

SECTION 18 – WAIVER, ETC.

18.1

All terms and conditions of the Agreement shall be construed as conditions and any breach or failure by the Corporation to comply with any such terms and conditions shall entitle the Underwriter, without limitation of any other remedies of the Underwriter, to terminate the Underwriter’s obligations to purchase the Units by giving written notice to that effect to the Corporation at or prior to the Closing Time. It is understood that the Underwriter may waive in whole or in part, or extend the time for compliance with, any of such terms and conditions without prejudice to the Underwriter’s rights in respect of any other such terms and conditions or any other or subsequent breach or non-compliance, provided that to be binding on the Underwriter any such waiver or extension must be in writing.

SECTION 19 – SURVIVAL

19.1

The representations, warranties, obligations and agreements of the Corporation and of the Underwriter contained herein or delivered pursuant to this Agreement shall survive the purchase by the Underwriter of the Units and shall continue in full force and effect notwithstanding any subsequent disposition by the Underwriter of the Units and the Underwriter shall be entitled to rely on the representations and warranties of the Corporation contained in or delivered pursuant to this Agreement notwithstanding any investigation which the Underwriter may undertake or which may be undertaken on the Underwriter’ behalf for a period of two years from the Closing Date.

SECTION 20 – ENTIRE AGREEMENT

20.1

Any and all previous agreements with respect to the purchase and sale of the Units, whether written or oral, are terminated and this Agreement constitutes the entire agreement between the Corporation and the Underwriter with respect to the purchase and sale of the Units.

SECTION 21 – GOVERNING LAW

21.1

This Agreement shall be governed by and construed in accordance with the laws in force in the Province of Ontario and the federal laws of Canada applicable therein and the parties hereby attorn to the non-exclusive jurisdiction of the courts of the Province of Ontario.

SECTION 22 – TIME OF THE ESSENCE

22.1

Time shall be of the essence of this Agreement. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument.

26

- REMAINDER OF PAGE INTENTIONALLY BLANK -

27

If the foregoing is in accordance with your understanding and is agreed to by you, will you please confirm your acceptance by signing the enclosed copies of this letter at the place indicated and returning the same to us on or before July 11, 2011.

Yours truly,

CASIMIR CAPITAL LTD.
Per:	(signed) “Riley Keast”
	Name:  Riley Keast
	Title:     President & Chief Executive Officer

28

The foregoing is in accordance with our understanding and is accepted by us.

TANZANIAN ROYALTY EXPLORATION CORPORATION
Per:	(signed) “James Sinclair”
	Name:  James Sinclair
	Title:     President and Chief Executive Officer
Per:	(signed) “Steven van Tongeren”
	Name:  Steven van Tongeren
	Title:     Chief Financial Officer

29

SCHEDULE “A”

MATTERS TO BE ADDRESSED IN THE CORPORATION’S
CANADIAN AND U.S. COUNSEL OPINIONS

Canadian Counsel Opinion

(i)

The Corporation is a corporation existing under the laws of Alberta. There are no restrictions on the corporate power and capacity of the Corporation to own and lease its property and assets and to carry on business. There are no restrictions on the corporate power and capacity of the Corporation to enter into this Agreement or to carry out its obligations under this Agreement.

(ii)

The authorized capital of the Corporation is as described in the Canadian Final Prospectus and the U.S. Final Prospectus.

(iii)

The Corporation is qualified or registered to carry on business as an extra-provincial corporation in the Provinces of Ontario and British Columbia.

(iv)

The Corporation is not a party to, bound or affected by or subject to any provision in its constating documents or by-laws which is violated, contravened or breached by the execution and delivery by it of this Agreement or the performance by it of any of the terms thereof. The Corporation is not .bound or affected by or subject to any statutory law or regulation of the Province of Alberta, the Province of Ontario or the federal laws of Canada applicable in such province to which the Corporation is subject which is violated, contravened or breached by the execution and delivery by it of this Agreement or the performance by it of any of the terms thereof.

(v)

The execution and delivery of, and the performance of its obligations under, this Agreement have been duly authorized by all necessary corporate action on the part of the Corporation.

(vi)

The execution and delivery by the Corporation of each of the Initial Canadian Preliminary Prospectus and the Canadian Final Prospectus and the filing thereof with the Canadian Securities Commissions and the filing of the Registration Statement with the SEC have been duly authorized by all necessary corporate action on the part of the Corporation.

(vii)

This Agreement has been duly executed and delivered by the Corporation and is a valid and legally binding obligation of the Corporation, enforceable against the Corporation in accordance with its terms (which opinion will be subject to the usual qualifications with respect to laws of general application relating to creditors’ rights and equitable principles and the usual qualification with respect to rights to indemnity and contribution).

(viii)

No consent, authorization, approval, license or order of, or filing, registration or qualification by the Corporation with any court or governmental or regulatory agency or body in the Province of Ontario under the laws of the Province of Ontario or the federal laws of Canada applicable therein is necessary or required in connection with the execution and delivery by the Corporation of, and performance by the Corporation of its obligations under, this Agreement, except for such as may be required under Canadian Securities Laws.

(ix)

The listing of the Common Shares and the Warrant Shares on the TSX has been approved by the TSX, subject only to the filing of documents in accordance with the requirements of the TSX on or before the date specified by the TSX.

A-1

(x)

The issuance of the Firm Units has been duly authorized by the Corporation and, upon receipt by the Corporation of consideration therefor in accordance with the terms of this Agreement, the Firm Units will be validly issued, fully-paid and non-assessable shares of the Corporation.

(xi)

All necessary documents have been filed, all necessary proceedings have been taken and all necessary authorizations, approvals, permits, consents and orders have been obtained under Canadian Securities Laws to qualify the Underlying Securities for distribution and sale in the Qualifying Jurisdictions by or through investment dealers or brokers duly registered under the applicable Canadian Securities Laws who comply with the relevant provisions of such laws and the terms of such registration;

(xii)

The provisions of the Units conform, in all material respects, with the description thereof contained under the heading “Description of Securities” in the Canadian Final Prospectus and the U.S. Prospectus.

(xiii)

The form of the definitive share certificate and warrant certificates representing the Units to be delivered at the Closing Time complies in all material respects with the provisions of the Alberta Business Corporations Act and has been authorized and approved by the Corporation.

U.S. Counsel Opinion

(xiv)

The Registration Statement is effective under the U.S. Securities Act. Based solely upon the oral advice of a member of the staff of the SEC, no stop order suspending the effectiveness of the Registration Statement has been issued, and to such counsel’s knowledge no proceedings for that purpose have been initiated or are pending or threatened by the SEC;

(xv)

Based solely on the letter from the NYSE, the Common Shares and the Warrant Shares have been approved for listing on the New York Stock Exchange subject to notice of issuance;

(xvi)

No consent, approval, authorization or order of, or filing, registration or qualification with (collectively, “Consents”), any Governmental Authority is required by the Corporation under any Applicable Law for the issuance or sale of the Units or the performance by the Corporation of its obligations under this Agreement except such as have been obtained or made under the U.S. Securities Act and except that we express no opinion as to any such Consents that may be required to be obtained from or made to the United States Financial Industry Regulatory Authority. For the purposes of this opinion, the term “Governmental Authority” means any executive, legislative, judicial, administrative or regulatory body of the State of New York or the United States of America. For the purposes of this opinion, the term “Applicable Law” means those laws, rules and regulations of the State of New York (but not including any statutes, ordinances, administrative decisions, rules or regulations of any political subdivision of the State of New York) and the federal laws of the United States of America, in each case which in such counsel’s experience are normally applicable to the transactions of the type contemplated by this Agreement, except that “Applicable Law” does not include the anti-fraud provisions of the securities laws of any applicable jurisdiction or any state securities or blue sky laws of the various states;

(xvii)

The execution and delivery of this Agreement by the Corporation and the performance by the Corporation of any of the terms hereof, including issuance and sale of the Units by the Corporation, will not violate Applicable Law, except that we express no opinion in this clause (v) with respect to the indemnity and contributions provisions contained in the Agreement. For the purposes of this opinion, the term “Applicable Law” means those laws, rules and regulations of the State of New York (but not including any statutes, ordinances, administrative decisions, rules or regulations of any political subdivision of the State of New York) and the federal laws of the United States of America, in each case which in such counsel’s experience are normally applicable to the transactions of the type contemplated by this Agreement, except that “Applicable Law” does not include the anti-fraud provisions of the securities laws of any applicable jurisdiction or any state securities or blue sky laws of the various states; and

(xviii)

The Corporation is not, and, after giving effect to the Offering and the application of the proceeds thereof as described in the Canadian Final Prospectus and the U.S. Final Prospectus under the heading “Use of Proceeds,” will not be, required to be registered as an investment company under the United States Investment Company Act of 1940, as amended.

A-2

SCHEDULE “B”

MATTERS TO BE ADDRESSED IN THE CORPORATION’S
FOREIGN COUNSEL OPINIONS

Opinions are to include the following:

1.

Incorporation and existence; and

2.

Qualification to carry on business.

C-1

EX-3.2

AMENDMENT TO UNDERWRITING AGREEMENT

This Amendment (this “Agreement ”) to the Underwriting Agreement (as defined below) is entered into as of the 10thday of August, 2011, among Tanzanian Royalty Exploration Corporation  (the “Corporation”) and Casimir Capital Ltd. (the “Underwriter”) (the Corporation and the Underwriter each being a “Party” and collectively the “Parties”) in order to amend the underwriting agreement originally entered into as of the 11thday of July, 2011, among the Parties (the “Underwriting Agreement”).

R E C I T A L S

WHEREAS pursuant to the terms of the Underwriting Agreement, the Underwriter offered to purchase from the Corporation an aggregate of 4,237,289 units of the Corporation (each, a “Unit”) at a price of US$5.90 (the “Offering Price”) per Unit for gross proceeds of US$25,000,005.00 (the “Offering”);

AND WHEREAS each Unit consists of one common share in the capital of the Corporation (each, a “Common Share”) and one Common Share purchase warrant (each, a “Warrant”);

AND WHEREAS by its acceptance of the Underwriting Agreement, the Corporation accepted such offer and agreed to sell the Units to the Underwriter on the Closing Date on the terms and conditions of the Underwriting Agreement;

AND WHEREAS the Underwriter and the Corporation wish to amend the Underwriting Agreement such that (i) each Unit shall be offered at a price of US$5.70 per Unit and each Warrant shall entitle the holder thereof to purchase an additional Warrant Share at a price of US$6.25 per Warrant Share, (ii) the size of the Offering shall be increased from 4,237,289 Units for gross proceeds of US$25,000,005.00 to 5,263,158 Units for gross proceeds of US$30,000,000.60, (iii) the options received by the Underwriter at closing (the “Compensation Options”) shall be exercisable at a price of US$5.70 per Common Share and (iii) the expenses of the Underwriter, including those of the Underwriter’s legal counsel, are borne by the Corporation;  

NOW THEREFORE, in consideration of the premises and the mutual covenants and promises of the parties contained herein, the parties agree as follows:

1.

Definitions.  In this Agreement, unless defined elsewhere in this Agreement, capitalized terms shall bear the meanings set out in the Underwriting Agreement.

2.

Amendment to the First Paragraph of the Underwriting Agreement. The first paragraph of the Underwriting Agreement is hereby deleted in its entirety and replaced with the following:

Casimir Capital Ltd. (the “Underwriter”) hereby offers to purchase from Tanzanian Royalty Exploration Corporation (the “Corporation”) an aggregate of 5,263,158 units of the Corporation (each, a “Unit”) at a price of US$5.70 per Unit (the “Offering Price”) and by its acceptance hereof, the Corporation accepts such offer and agrees to sell the Units to the Underwriter on the Closing Date (as defined herein).  Each Unit consisting of one common share in the capital of the Corporation (each a “Common Share”) and one Common Share purchase warrant (each, a “Warrant”).  Each Warrant shall entitle the holder thereof to purchase an additional Common Share (a “Warrant Share”) for a period of 24 months from the Closing Date (as defined herein) at a price of US$6.25 per Warrant Share.  The aggregate of 5,263,158 Units being purchased by the Underwriter as described in the first sentence of this paragraph are referred to herein as the “Firm Units”.  The Units, Common Shares, the Warrants and the Warrant Shares, and the Common Shares issuable upon exercise of the Compensation Options (as defined herein), are collectively referred to herein as the “Underlying Securities”.

3.

Amendment to the Sixth Paragraph of the Underwriting Agreement. The sixth paragraph of the Underwriting Agreement is hereby deleted in its entirety and replaced with the following:

In consideration of the agreement on the part of the Underwriter to purchase the Units and in consideration of the services rendered and to be rendered by the Underwriter (including but not limited to: acting as advisor to the Corporation; assisting in the preparation of the Offering Documents (as hereinafter defined), and the related documentation in order to qualify the Common Shares, Warrants and Warrant Shares for Distribution (as hereinafter defined); and performing administrative work in connection with the Distribution of the Units), the Corporation agrees to pay to the Underwriter on behalf of the Underwriter, at the Closing Time (as hereinafter defined), a fee of US$0.399 per Unit (the “Underwriting Fee”), which is equal to 7% of the gross proceeds per Unit in the Offering.  The Underwriting Fee shall be reduced by an amount equal to US$60,000, being the aggregate amount previously paid by the Corporation to the Underwriter in connection with financial advisory services provided to the Corporation by the Underwriter relating to the Offering.  The payment of such fee will be reflected by the Underwriter making payment of the gross proceeds of the sale of the Firm Units: (a) to the Corporation, an amount equal to the gross proceeds of the sale less the amount of the Underwriting Fee and expenses outlined in Section 15 (net of the previously paid financial advisory services fee of US$60,000); and (b) to the Underwriter on behalf of the Underwriter, at the Corporation’s direction, of an amount equal to the Underwriting Fee.

4.

Amendment to the Seventh Paragraph of the Underwriting Agreement. The seventh paragraph of the Underwriting Agreement is hereby deleted in its entirety and replaced with the following:

Subject to regulatory approval, where any such approval is required, the Underwriter will receive at closing, options (the “Compensation Options”) exercisable at any time up to 24 months following the closing to purchase Common Shares in an amount equal to 7.0% of the number of Units sold in connection with the Offering. The Compensation Options shall be exercisable at a price of US$5.91 per Common Share.

5.

Amendment to the definition of “Closing Date” in the Underwriting Agreement. The definition of Closing Date in section1.1 of the Underwriting Agreement is hereby deleted in its entirety and replaced with the following:

“Closing Date” means August 11, 2011 or such earlier or later date as may be agreed to in writing by the Corporation and the Underwriter;

6.

Amendment to Section 15.  Section 15 of the Underwriting Agreement is hereby deleted in its entirety and replaced with the following:

15.1

Whether or not the transactions contemplated hereby shall be completed, except as provided below, all reasonable expenses of or incidental to the delivery and sale of the Units and of or incidental to all other matters in connection with the transactions herein set out shall be borne by the Corporation including, without limitation, filing fees and other expenses payable in connection with the qualification of the Units for sale to the public in the Offering Jurisdictions, the direct costs of the Corporation, the fees and expenses of the Corporation’s counsel, including U.S. counsel, and of the external auditors of the Corporation directly applicable to the Offering, the costs incurred in connection with the preparation, printing and delivery of this Agreement, the Offering Documents including commercial copies thereof, and of the definitive certificate(s) representing the Common Shares and Warrants and any stock exchange listing fees. The fees and disbursements of the Underwriter’s counsel and the Underwriter’s “out-of-pocket” expenses shall be borne by the Corporation and such “out-of-pocket” accountable expenses (including the fees and disbursements of the Underwriter’s counsel) actually incurred by the Underwriter will be reimbursed by the Corporation to the Underwriter if the Offering is not completed (other than by reason of a default by the Underwriter).

7.

 Confirmation.  All the terms and conditions of the Underwriting Agreement, except only insofar as the same are amended by the express provisions of this Agreement, are confirmed and ratified in all respects and shall hereafter continue in full force and effect, as amended hereby.

8.

Multiple Counterparts; Facsimile Signature.  This Agreement may be executed by facsimile or other electronic signature in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.

Governing Law.  This Agreement shall be construed and interpreted and the rights of the parties governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.

10.

Invalidity.  If any provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.  To the extent permitted by applicable law, the Parties agree that any provision hereof that renders any other term or provision invalid or unenforceable in any respect shall be modified, but only to the extent necessary to avoid rendering such other term or provision invalid or unenforceable, and such modification shall be accomplished in the manner that most nearly preserves the benefit of all Parties' bargain hereunder.

11.

Time Essence.  Time is of the essence of this Agreement.

[REMAINDER OF PAGE IS INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date and year first above written.

TANZANIAN ROYALTY EXPLORATION CORPORATION
Per:	/s/ James Sinclair
	Name: James Sinclair
	Title: President and Chief Executive Officer
Per:	/s/ Steven van Tongeren
	Name: Steven van Tongeren
	Title: Chief Financial Officer
CASIMIR CAPITAL LTD.
Per:	/s/ Riley Keast
	Name: Riley Keast
	Title: President and Chief Executive Officer

EX-5.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Tanzanian Royalty Exploration Corporation

We consent to the use of our reports dated November 24, 2010, with respect to the consolidated balance sheets of Tanzanian Royalty Exploration Corporation as of August 31, 2010 and 2009, and the related consolidated statements of operations, comprehensive loss and deficit, and cash flows for each of the years in the three-year period ended August 31, 2010, and the effectiveness of internal control over financial reporting as of August 31, 2010, incorporated herein by reference and to the reference to our firm under the heading "Auditors, Registrar and Transfer Agent"  in the prospectus..

//s// KPMG LLP

Chartered Accountants

Vancouver, Canada

August 10, 2011

EX-5.2

CONSENT OF QUALIFIED PERSON

VIA SEDAR

British Columbia Securities Commission

Alberta Securities Commission

Ontario Securities Commission

United States Securities and Exchange Commission

Dear Sirs/Mesdames:

Re:

Tanzanian Royalty Exploration Corporation (the “Company”)

Short Form Prospectus dated August 10, 2011 (the “Prospectus”)

Registration Statement on Form F-10

This letter is being filed as the consent of the undersigned to being named in the Prospectus and to the use of and inclusion of reference in the Prospectus to the technical report entitled “Report on 2001 - 2008 Exploration Programs Kigosi Project Area, Ushirombo District, Shinyanga Region, in the United Republic of Tanzania, East Africa by J. G. Deane Pr. Sci. Nat and P. Zizhou Pr. Sci. Nat” dated April 9, 2009 (the “Technical Report”). I also consent to any extracts from or a summary of the Technical Report in the Prospectus or included by reference in the Prospectus of the Company.

I, John G. Deane, hereby confirm that I have read the Prospectus and have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that are: (a) derived from the Technical Report; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report.

I consent to the public filing of the Technical Report and to extracts from and summaries from the Technical Report being included in the Prospectus as filed.  I certify that I have read the Prospectus being filed by the Company and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

In addition, I hereby consent to the use of my name in Tanzanian Royalty Exploration Corporation’s registration statement on Form F-10, and any amendments thereto filed under the Securities Act of 1933, as amended (the “Registration Statement”), to the inclusion and incorporation by reference in the Registration Statement of information derived from the Technical Report.

Dated this 10 day of August, 2011.

     /s/ John G. Deane                

John G. Deane

EX-5.3

CONSENT OF QUALIFIED PERSON

VIA SEDAR

British Columbia Securities Commission

Alberta Securities Commission

Ontario Securities Commission

United States Securities and Exchange Commission

Dear Sirs/Mesdames:

Re:

Tanzanian Royalty Exploration Corporation (the “Company”)

Short Form Prospectus dated August 10, 2011 (the “Prospectus”)

Registration Statement on Form F-10

This letter is being filed as the consent of the undersigned to being named in the Prospectus and to the use of and inclusion of reference in the Prospectus to the technical report entitled “Report on 2001 - 2008 Exploration Programs Kigosi Project Area, Ushirombo District, Shinyanga Region, in the United Republic of Tanzania, East Africa by J. G. Deane Pr. Sci. Nat and P. Zizhou Pr. Sci. Nat” dated April 9, 2009 (the “Technical Report”), and to the written disclosure filed in the material change report and press release of the Company dated December 21, 2010 in respect of the successful bid for the Buckreef Gold Mine Re-Development Project in Northern Tanzania and the material change report and press release of the Company dated April 15, 2011 in respect of the increase in the Buckreef Gold Project Resource Base (the “Material Change Reports”).  I also consent to any extracts from or a summary of the Technical Report and the Material Change Reports in the Prospectus or included by reference in the Prospectus of the Company.

I, Peter Zizhou, hereby confirm that I have read the Prospectus and have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that are: (a) derived from the Technical Report and the Material Change Reports; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report and the Material Change Reports.

I consent to the public filing of the Technical Report and to extracts from and summaries from the Technical Report being included in the Prospectus as filed. I certify that I have read the Prospectus being filed by the Company and that it fairly and accurately represents the information in the sections of the Technical Report and the Material Change Reports for which I am responsible.

In addition, I hereby consent to the use of my name in Tanzanian Royalty Exploration Corporation’s registration statement on Form F-10, and any amendments thereto filed under the Securities Act of 1933, as amended (the “Registration Statement”), to the inclusion and incorporation by reference in the Registration Statement of information derived from the Technical Report.

Dated this 10day of August, 2011.

    /s/ Peter Zizhou             

Peter Zizhou

EX-5.4

CONSENT OF QUALIFIED PERSON

VIA SEDAR

British Columbia Securities Commission

Alberta Securities Commission

Ontario Securities Commission

United States Securities and Exchange Commission

Dear Sirs/Mesdames:

Re:

Tanzanian Royalty Exploration Corporation (the “Company”)

Short Form Prospectus dated August 10, 2011 (the “Prospectus”)

Registration Statement on Form F-10

This letter is being filed as the consent of the undersigned to being named in the Prospectus and to the use of and inclusion of reference in the Prospectus to the technical reports entitled: (i) “Report on the Lunguya Mineral Exploration Property of Tanzanian Royalty Exploration Corporation in the Kahama District, Shinyanga Region of the United Republic of Tanzania, East Africa” dated February 8, 2010; (ii) “Report on the Ushirombo Mineral Exploration Property of Tanzanian Royalty Exploration Corporation in the Bukombe District, Shinyanga Region of the United Republic of Tanzania, East Africa” dated August 31, 2009; and (iii) “Report on the Kibara Mineral Exploration Property of Tanzanian Royalty Exploration Corporation in the Bunda District, Mara Region of the United Republic of Tanzania, East Africa” dated October 31, 2009 (collectively, the “Technical Reports”). I also consent to any extracts from or a summary of the Technical Reports in the Prospectus or included by reference in the Prospectus of the Company.

I, Martin J. Taylor, hereby confirm that I have read the Prospectus and have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that are: (a) derived from the Technical Reports; or (b) within my knowledge as a result of the services I performed in connection with the Technical Reports.

I consent to the public filing of the Technical Reports and to extracts from and summaries from the Technical Reports being included in the Prospectus as filed. I certify that I have read the Prospectus being filed by the Company and that it fairly and accurately represents the information in the sections of the Technical Reports for which I am responsible.

In addition, I hereby consent to the use of my name in Tanzanian Royalty Exploration Corporation’s registration statement on Form F-10, and any amendments thereto filed under the Securities Act of 1933, as amended (the “Registration Statement”), to the inclusion and incorporation by reference in the Registration Statement of information derived from the Technical Reports.

Dated this 10 day of August, 2011.

      /s/ Martin J. Taylor                

Martin J. Taylor

EX-5.5

CONSENT OF QUALIFIED PERSON

VIA SEDAR

British Columbia Securities Commission

Alberta Securities Commission

Ontario Securities Commission

United States Securities and Exchange Commission

Dear Sirs/Mesdames:

Re:

Tanzanian Royalty Exploration Corporation (the “Company”)

Short Form Prospectus dated August 10, 2011 (the “Prospectus”)

Registration Statement on Form F-10

This letter is being filed as the consent of the undersigned to being named in the Prospectus and to the use of and inclusion of reference in the Prospectus to the technical report entitled the “National Instrument 43-101 Technical Report on Tanzanian Royalty Exploration Corporation’s Buckreef Gold Project in Tanzania by Venmyn Rand (Pty) Limited” dated June 30, 2011 (the “Technical Report”). I also consent to any extracts from or a summary of the Technical Report in the Prospectus or included by reference in the Prospectus of the Company.

I, Fiona Harper, hereby confirm that I have read the Prospectus and have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that are: (a) derived from the Technical Report; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report.

I consent to the public filing of the Technical Report and to extracts from and summaries from the Technical Report being included in the Prospectus as filed. I certify that I have read the Prospectus being filed by the Company and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

In addition, on behalf of Venmyn Rand (Pty) Limited, I hereby consent to the use of Venmyn Rand (Pty) Limited’s name in Tanzanian Royalty Exploration Corporation’s registration statement on Form F-10, and any amendments thereto filed under the Securities Act of 1933, as amended (the “Registration Statement”), to the inclusion and incorporation by reference in the Registration Statement of information derived from the Technical Report.

Dated this 10 day of August, 2011.

       /s/ Fiona Harper           

Fiona Harper

EX-5.6

CONSENT OF QUALIFIED PERSON

VIA SEDAR

British Columbia Securities Commission

Alberta Securities Commission

Ontario Securities Commission

United States Securities and Exchange Commission

Dear Sirs/Mesdames:

Re:

Tanzanian Royalty Exploration Corporation (the “Company”)

Short Form Prospectus dated August 10, 2011 (the “Prospectus”)

Registration Statement on Form F-10

This letter is being filed as the consent of the undersigned to being named in the Prospectus and to the use of and inclusion of reference in the Prospectus to the technical report entitled the “National Instrument 43-101 Technical Report on Tanzanian Royalty Exploration Corporation’s Buckreef Gold Project in Tanzania by Venmyn Rand (Pty) Limited” dated June 30, 2011 (the “Technical Report”). I also consent to any extracts from or a summary of the Technical Report in the Prospectus or included by reference in the Prospectus of the Company.

I, Andrew Neil Clay, hereby confirm that I have read the Prospectus and have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that are: (a) derived from the Technical Report; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report.

I consent to the public filing of the Technical Report and to extracts from and summaries from the Technical Report being included in the Prospectus as filed. I certify that I have read the Prospectus being filed by the Company and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

In addition, on behalf of Venmyn Rand (Pty) Limited, I hereby consent to the use of Venmyn Rand (Pty) Limited’s name in Tanzanian Royalty Exploration Corporation’s registration statement on Form F-10, and any amendments thereto filed under the Securities Act of 1933, as amended (the “Registration Statement”), to the inclusion and incorporation by reference in the Registration Statement of information derived from the Technical Report.

Dated this 10 day of August, 2011.

     /s/ Andrew Neil Clay_____

Andrew Neil Clay

EX-5.7

CONSENT OF QUALIFIED PERSON

VIA SEDAR

British Columbia Securities Commission

Alberta Securities Commission

Ontario Securities Commission

United States Securities and Exchange Commission

Dear Sirs/Mesdames:

Re:

Tanzanian Royalty Exploration Corporation (the “Company”)

Short Form Prospectus dated August 10, 2011 (the “Prospectus”)

Registration Statement on Form F-10

This letter is being filed as the consent of the undersigned to being named in the Prospectus and to the use of and inclusion of reference in the Prospectus to the technical report entitled the “National Instrument 43-101 Technical Report on Tanzanian Royalty Exploration Corporation’s Buckreef Gold Project in Tanzania by Venmyn Rand (Pty) Limited” dated June 30, 2011 (the “Technical Report”). I also consent to any extracts from or a summary of the Technical Report in the Prospectus or included by reference in the Prospectus of the Company.

I, Nicholas J. Johnson, hereby confirm that I have read the Prospectus and have no reason to believe that there are any misrepresentations in the information contained in the Prospectus that are: (a) derived from the Technical Report; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report.

I consent to the public filing of the Technical Report and to extracts from and summaries from the Technical Report being included in the Prospectus as filed. I certify that I have read the Prospectus being filed by the Company and that it fairly and accurately represents the information in the sections of the Technical Report for which I am responsible.

In addition, on behalf of Hellman & Schofield (Pty) Ltd, I hereby consent to the use of Hellman & Schofield (Pty) Ltd’s name in Tanzanian Royalty Exploration Corporation’s registration statement on Form F-10, and any amendments thereto filed under the Securities Act of 1933, as amended (the “Registration Statement”), to the inclusion and incorporation by reference in the Registration Statement of information derived from the Technical Report.

Dated this 10 day of August, 2011.

     /s/ Nicholas J. Johnson        

Nicholas J. Johnson

Hellman & Schofield (Pty) Ltd