Tanzanian Royalty Agrees to Private Placement

Tanzanian Royalty Exploration Corporation advises that it has reached
agreement in principle for a private placement of up to $1,250,000. The
private placement will consist of a three-year note in the principal
amount bearing interest at 3% and convertible into up to 241,453 common
shares at the price of $5.177 per share, representing the five-day
weighted average trading price of the common shares on the Toronto Stock
Exchange for the period ended September 3, 2010, less a discount of 15%.
The funds will be utilized for the purchase of equipment and for general
corporate expenses. The proposed private placement is subject to
regulatory approval.

Further to the Company′s release also dated September 7, 2010, the
number of shares into which the $1,000,000 note is convertible is
221,337 common shares at a price of $4.518 per share.

In addition, Tanzanian Royalty announces that the $800,000 private
placement with Mr. James E. Sinclair announced August 26, 2010 has
closed.

Respectfully submitted,

For further information, please contact Investor Relations at
1-800-811-3855

Visit our website: www.TanzanianRoyaltyExploration.com

The Toronto Stock Exchange and NYSE Amex Equities 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 limits disclosure for U.S. reporting purposes to
mineral deposits that a company can economically and legally extract or
produce. We use certain terms on this news release, such as 'reserves?,
'resources?, 'geologic resources?, 'proven?, 'probable?, 'measured',
'indicated', or 'inferred' which may not be consistent with the reserve
definitions established by the SEC.U.S. Investors are urged to
consider closely the disclosure in our Form 20-F, File No. 001-32500.You can review and obtain copies of these filings 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. 001-32500, for more information concerning these
risks, uncertainties, and other factors.

Tanzanian Royalty Exploration Corporation

Connecticut Office:

Tel:
860-364-1830

Fax: 860-364-0673

or

South Surrey Office:

Toll
Free: 1-800-811-3855

Tel: 604-536-7873

Fax: 604-536-2529

investors@TanzanianRoyaltyExploration.com

www.TanzanianRoyaltyExploration.com