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333333333333333333 Minxcon Update National Instrument 43-101 Independent Technical Report on the Buckreef Project in Tanzania for Tanzanian Royalty Exploration Corporation F. Harper B.Sc. Hons (Geol.), Pr.Sci.Nat.; MGSSA. Mineral Industry Advisor D. Richards B.Sc.Hons (Geol), Pr.Sci.Nat, MGSSA, Orebody Analyst A.N.CLAY M.Sc. (Geol.), M.Sc. (Min. Eng.), Dip. Bus. M. Pr Sci Nat, MSAIMM, FAusIMM, FGSSA, MAIMA, M.Inst.D., AAPG Managing Director Reference No :- VMD1598 V1 Effective Date :- 24 February 2014 February 2014 i Update National Instrument 43-101 Independent Technical Report on the Buckreef Project in Tanzania for Tanzanian Royalty Exploration Corporation Synopsis NI 43-101 Item 1 Venmyn Deloitte (Proprietary) Limited (Venmyn Deloitte) was requested by Tanzanian Royalty Exploration Corporation (TRX) to prepare a Canadian National Instrument 43-101 (NI 43-101) Independent Technical Report (ITR) on the results of an update mineral resource modelling exercise for the Buckreef Gold Mine Re-development Project (Buckreef Project) in Tanzania. A press release confirming the definition of a new mineral resource estimate was published in January 2014 and this ITR is the supporting technical report providing the details of the estimation methodology and results. TRX is a gold exploration company publically traded on both the Toronto Stock Exchange (TSX, ticker - TNX:TO) and the New York Stock Exchange (NYSE, ticker - TRX). TRX is focused on the development of production revenue from gold exploration projects in the Lake Victoria Goldfields of Tanzania. The company’s unique business strategy is to form partnerships with exploration and mining companies to receive royalty income prior to and during commercial production, as well as undertaking active exploration on gold projects suitable for gold revenue production. In December 2010, TRX signed a binding heads of agreement with State Mining Corporation of Tanzania (Stamico) in terms of which TRX will have the right to earn a 55% interest in the Buckreef Project, with Stamico holding the remaining 45%. TRX has previously published NI43-101 ITRs on its gold assets and in 2012 reported the results of a Preliminary Economic Assessment (PEA) on the Buckreef Project. The PEA was undertaken as a pathfinder study, to evaluate the technical and economic parameters of the Buckreef Project as the precursor to and basis for a proposed Preliminary Feasibility Study (PFS). Venmyn Deloitte reported the results of the PEA in an NI43-101 ITR, VIP 21 August 2012. The Buckreef Project PEA was conducted at a gold prices of ranging from USD1,600/oz to USD1,400/oz and included the gold deposits from two geographically separated potential mining areas, namely the Buckreef Mining Area (BRMA) and the Buziba-Busolwa Mining Area (BZMA). The two mining areas comprised a number of individual gold deposits, termed ‘Prospects’ for the purposes of the PEA. The mining, infrastructure and processing trade-off studies in the PEA compared various mining and processing options and concluded that mining the higher grade Buckreef Prospect first and processing the run-of-mine material (RoM) through a conventional 150,000 tonne per month (tpm) beneficiation plant would provide the most positive economic outcomes. The PEA noted that the Buckreef Project benefits particularly from being an open pittable gold deposit, which can be brought rapidly into production. Subsequent to the publication of the PEA, TRX has strategically revised its business plan regarding the Buckreef Project in response to the following developments:- • the legal tenure of the BZMA at the time of reporting the PEA entailed a joint venture under negotiation with several local parties. Subsequent to the PEA, the rights to the portion of the BZMA not owned by the TRX-Stamico joint venture have been consolidated under the ownership of a single company. A Letter of Intent (LoI) has been signed between these new owners and TRX on 4 February 2014 that details the mutual intention to commence negotiations to conclude a definitive joint venture agreement. The BZMA joint venture has the formal approval of Stamico. Given that this joint venture arrangement was not yet in place at the time of the re-modelling exercise in 2013, TRX focused on the BRMA as a first priority, whilst the terms of the definitive joint venture agreement for the Buziba-Busolwa Prospects in the BZMA, are finalised. The re-modelling and mineral resource re-estimation of the BZMA deposits will be undertaken on conclusion of the joint venture; • changes in the gold market and gold price which necessitates re-evaluation of the processing and mining methodologies to capital and operational cost options that are as low and cost effective as possible; February 2014 ii • a material change in mineral resource estimate for the BRMA has occurred as a consequence of the inclusion of the results of additional exploration defining an extension of the Buckreef Prospect and declaration of a new mineral resource estimate for a newly defined prospect, namely the Eastern Porphyry Prospect; • a recognition that the PEA mining plan would have to be substantially altered to accommodate the new mineral resources and that the mineral reserves would have to be re-estimated at pay-limits appropriately reflecting the current and forecast gold prices; and • recent metallurgical testwork which supports the possibility of processing some of the deposits via heap leach technology which was not given detailed consideration in the PEA. The PEA of August 2012, whilst an accurate summation of the technical aspects of the Buckreef Project at the time of reporting, can no longer be considered a valid or appropriate summation of the economic aspects of the Buckreef Project in the light of the new development strategy devised by TRX and the changes to various project aspects as described above. The Buckreef Project as defined in the 2012 PEA comprised five gold deposits located within the BRMA and the BZMA. The BRMA, as defined for this ITR includes the Buckreef Prospect, the Bingwa Prospect, the Tembo Prospect and the Eastern Porphyry Prospects. The term Buckreef Project in this ITR is loosely defined as ultimately encompassing both BRMA and BZMA, but as the latter does not form part of the current mineral resource re-estimation exercise, it is generally not included in references to the Buckreef Project unless specifically stated. The technical information relating to the BZMA remains unchanged from the 2012 PEA and in accordance with Part 3, Section 3.5 of Definitions and Interpretation – National Instrument 43-101 Standards of Disclosure for Mineral Projects, the technical disclosure for the BZMA is not repeated in this ITR and the reader is referred to the “National Instrument 43-101 Preliminary Economic Assessment of Tanzanian Royalty Exploration Corporation’s Buckreef gold Mine Re- development project in Tanzania by Venmyn Independent Projects (Pty) Limited” (VIP21) dated August 2012 which has been filed on the System for Electronic Document Retrieval (SEDAR) and the TRX website. The PEA identified that the original geological and mineral resource block models created by Hellman and Schofield were incompatible with the Datamine™ NPV Scheduler used in the mine design and pit optimisation. The PEA recommended that the geological models and mineral resource block models be re-developed in an estimation system that would be entirely compatible with pit optimisation software, as the pit design would form the critical basic component of any future studies. The results of this re-modelling exercise are reported in this ITR. The purpose of the 2014 ITR will be to summarise and document the new exploration results, the technical parameters and methodologies of the new Mineral Resource estimation and present the preliminary heap leach results for the Buckreef Project. Given that the previous PEA mining studies, process flow design and economic analysis are outdated and no longer applicable to the project, TRX recognises that a new PEA will be required in the future which encompasses the project status changes and revised development strategies. The current re-estimation of the Buckreef Project Mineral Resource estimate provides the basis for such a future PEA. Property Description, Terms of Reference and Ownership The Buckreef Project is defined as an exploration gold project located within the prospective Rwamagaza Greenstone Belt, which forms part of the Lake Victoria Goldfield. The Lake Victoria Goldfield was discovered in 1894 and significant exploitation began in the 1930s at the Geita Gold Mine. The historic Buckreef Gold Mine was an underground mine developed within the BRMA and operated by the Tanzanian State during the late 1980s. Iamgold Tanzania (Iamgold) held the rights to the Buckreef Project prior to July 2009 and in 2010 TRX entered a joint venture with Stamico with respect to the project. The project comprises prospecting licences 33.2km2 in extent and a special mining licence of 16.04km2. In addition, within these licences are small-scale artisanal gold operations, which comprise 53 Primary Mining Licences, held mostly by local parties. Geology and Mineralisation The BRMA gold deposits are classified as low to medium grade (1.0g/t Au to 2.7g/t Au) orogenic gold deposits developed in Archaean supracrustal sequences and related to, syn- and post, regional thermo-tectonic events. The deposits are associated with a major steeply dipping, northeast-southwest trending brittle-ductile shear zone and subsidiary shears.