Tanzanian Royalty Exploration Corporation

Tanzanian Royalty Enters Into Exclusivity Agreement With Company From the People's Republic of China

    Vancouver, Canada (ots/PRNewswire) - Tanzanian Royalty Exploration (AMEX: TRE/TSX: TNX) ("TRE") is pleased  to announce that it has signed a letter of intent with a company from the  People's Republic of China (the "PRC company") to enter into negotiations  with a view to concluding a definitive option agreement providing for the exploration, development and production of mineral products from a portfolio of properties held by TRE in the Republic of Tanzania.

    The PRC company was approved by the China-Africa Business Council whose President, the Hon. Minister Hu Deping, witnessed the signing.

    Following a series of preliminary discussions that culminated in high  level meetings in Beijing, China between Tanzanian Royalty Chairman and CEO , James E. Sinclair and executives from the PRC company, TRE granted the  company an exclusivity period of 150 days to evaluate the properties in  question within the context of concluding an option agreement acceptable to  both parties.

    Any definitive agreement with the PRC company would cover properties  held by TRE that are currently not the subject of option agreements with  other parties. The licenses under consideration for exploration and  production of mineral products will include but not be limited to nickel,  gold and diamonds.

    During the exclusivity period, TRE has agreed not to solicit or engage  in negotiations, or enter into any agreement or understanding with any  third party regarding the granting of option rights in connection with  nickel mineral products from the Kabanga Nickel Belt or any other nickel- prospective areas held by TRE in Tanzania. With respect to mineral products  other than nickel, TRE has agreed to grant the company the right of first  offer to enter into definitive agreements under similar commercial terms  and conditions if any third party proposes to enter into a definitive  agreement with TRE to explore, develop and produce such mineral products.

    The letter of intent is a non-binding proposal with respect to the basis upon which the parties intend to enter into negotiations, and the  parties are not legally bound to conclude any transaction in connection  with the properties unless and until they sign a binding Definitive  Agreement.

    In addition to the above, TRE and the PRC company have both expressed  an interest in jointly pursuing other minerals-related opportunities in  Tanzania, including the acquisition of new licenses. At some point, both  parties have also agreed to actively consider cooperative opportunities in  capital markets as well as cross-board representation possibilities.

    Tanzanian Royalty Exploration is a unique, publicly-traded, financial  minerals exploration company whose business strategy is to develop royalty  income under partnership arrangements from its world class gold, diamond  and nickel assets in the Lake Victoria Greenstone and Kabanga/Kagera Nickel  Belts of Tanzania.

    Respectfully Submitted,

    "James E. Sinclair"

    James E. Sinclair

    Chairman and Chief Executive Officer

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

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

    Certain information presented in this release may constitute "forward- looking statements" within the meaning of the Private Securities Litigation  Reform Act of 1995. Such forward-looking statements are based on numerous  assumptions, and involve known and unknown risks, uncertainties and other  factors, including risks inherent in mineral exploration and development,  which may cause the actual results, performance, or achievements of the  Company to be materially different from any projected future results,  performance, or achievements expressed or implied by such forward-looking statements. Investors are referred to our description of the risk factors  affecting the Company, as contained in our Form 20-F, File No. 0-50634, for  a more information concerning these risks, uncertainties, and other factors.

ots Originaltext: Tanzanian Royalty Exploration Corporation
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