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Tanzanian Royalty Exploration Corp. Message Board

  • qinvestim qinvestim Jul 12, 2011 8:25 PM Flag

    Tanzanian Royalty Announces $25 Million Bought Deal Offering

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

    SOUTH SURREY, British Columbia--(BUSINESS WIRE)-- Tanzanian Royalty Exploration Corporation ( - News) (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.

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