Tanzanian Royalty Announces $25 Million Bought Deal Offering to Expedite Development of Buckreef Gold Project in Tanzania

Tanzanian Royalty Exploration Corporation (TSX: TNX; NYSE-Amex: TRX)
(the 'Company?) is pleased to announce that it has entered into an
underwriting agreement with Casimir Capital Ltd. (the 'Underwriter?)
whereby the Underwriter has agreed to purchase 4,237,289 units (the
'Units?) of the Company on a bought deal basis at a price of US$5.90 per
Unit, for sale to the public in Canada and the United States. The
offering is expected to provide the Company with aggregate gross
proceeds of US$25 million.

The primary use of the funds will be for the completion of a full
Feasibility Study on the Company′s advanced stage Buckreef Gold Project
in Tanzania which hosts approximately 2.0 million ounces of 43-101
compliant resources at a 0.5 g/t cut-off grade. (See April 15, 2011 News
Release for details).

The Company is currently in discussions with international consulting
firms with respect to a turnkey price for the construction of plant and
mine-related facilities at the Buckreef Project, said the Company′s
President and CEO, James E. Sinclair. 'We are not looking at a Cadillac
operation - more of a Ford in fact - that will generate the returns that
shareholders expect and deserve from such a robust gold mining project.?

According to Sinclair, 'Buckreef is licensed for mining and in fact saw
some commercial production as an underground producer during the 1980s.
The permitting risk for Buckreef is minimal which is highly unusual for
a project of this scope in this day and age,? he added.

In addition to the Buckreef Feasibility Study, some of the funds will be
allocated to plant and equipment purchases for the mining of surface
gravels at Buckreef and on the Company′s Kigosi and Lunguya prospects
where gravel deposits of commercial interest are also indicated,
Sinclair said. 'If these projects unfold as expected they could be major
cash generators to further development work at Buckreef? he suggested.

A major priority for the Company will be the initiation of exploration
work along established mineral trends within the Buckreef Project area.
Of particular interest is the Buckreef Eastern Porphyry area where the
potential to establish additional resources along a continuous
mineralized zone that is known to extend for at least 300 metres has yet
to be fully evaluated.

Significant drill intercepts reported by previous operators within the
Eastern Porphyry area included 3.0 metres grading 22 g/t gold from RAB
drilling. RC drilling at an average depth of 115 metres returned a peak
grade of 18 metres averaging 6.58 g/t gold, 4.0 metres averaging 2.07
g/t gold, 3.0 metres grading 2.18 g/t gold, 2.0 metres averaging 8.81
g/t gold, and 5.0 metres grading 1.35g/t gold.

Each Unit consists of one common share ('Common Shares?) of the Company
and one Common Share purchase warrant ('Warrants?) exercisable at a
price of US$7.00 per warrant share for a period of two years following
closing of the Offering. The Units will be offered by way of a short
form prospectus in the Provinces of British Columbia, Ontario and
Alberta and will be offered in the United States pursuant to a
registration statement filed under the multi-jurisdictional disclosure
system. The Offering is expected to close on July 18, 2011, and is
subject to regulatory and listing approval.

In consideration for the services to be rendered by the Underwriter
under the Offering, the Underwriter will receive a cash commission of 7%
of the gross proceeds of the Offering and compensation warrants
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.

A registration statement relating to these securities has been filed
with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold, nor may offers to buy be
accepted, prior to the time the registration statement becomes
effective. This release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities, in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.

Qualified Person

The Company′s Qualified Person, Mr. Peter Zizhou, has reviewed and
approved the contents of this news release. Mr. Zizhou is the
Exploration Manager of Tanzanian Royalty Exploration Corporation
Limited. He has a Master of Science (Exploration Geology) degree from
the University of Zimbabwe (2000) and is a registered scientist with
SACNASP (Reg. No. 400028/08).

Respectfully submitted,

'Joseph Kahama?

Joseph Kahama

President

For further information, please contact Investor Relations at
1-800-811-3855 or visit our website: www.TanzanianRoyalty.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.

This news release contains certain forward-looking statements and
forward-looking information. All statements, other than statements of
historical fact, included herein are forward-looking statements and
forward-looking information that involve various risks and
uncertainties. There can be no assurance that such statements will prove
to be accurate, and actual results and future events could differ
materially from those anticipated in such statements. Important factors
that could cause actual results to differ materially from the Company's
expectations are disclosed in the Company's documents filed from
time-to-time with the British Columbia, Alberta and Ontario provincial
securities regulatory authorities.

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

Investor Relations:

David Duval,
1-800-811-3855

Visit our website: www.TanzanianRoyalty.com

or

Connecticut
Office:

Tel: (860) 364-1830

Fax: (860) 364-0673

Email:
investors@TanzanianRoyalty.com

Website:
www.TanzanianRoyalty.com

or

South
Surrey Office:

Toll Free: 1-800-811-3855

Tel: (604)
536-7873

Fax: (604) 536-2529