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.