Tanzanian Royalty Reports Discovery of Higher Grade Zone at Luhala Gold Project

Vancouver, Canada (ots/PRNewswire) - The Company [TSX:TNX;
AMEX:TRE] is pleased to report that the Phase 7 drill program was
completed on its Luhala Gold Project in August. According to
Tanzanian Royalty Chairman and CEO, Jim Sinclair, "The latest results
confirm our most optimistic expectations for Luhala and leave open
the opportunity to expand known zones of gold mineralization down
dip and along strike."

"Clearly, we are entering a new phase of exploration at Luhala
which, coupled with our exploration successes elsewhere in the Lake
Victoria Greenstone Belt, points to a banner year for the company."

The Phase 7 program consisted of nine diamond drill holes
representing ome 991 metres of drilling, all of which tested the
eastern limb of the Kisunge Main Zone.

Final assay results for these holes are presented below:

Kisunge Main Zone Eastern Limb:

------------------------------------------------------------------------
Hole From To Intercept Gold Including
(m) (m) (m) (grams/tonne)
------------------------------------------------------------------------
LKD-08 45.20 66.65 21.45 0.60 1.50m @ 2.07 g/t
------------------------------------------------------------------------
LKD-09 48.25 49.25 1.00 2.34
------------------------------------------------------------------------
LKD-10 54.80 60.30 5.50 1.14 1.30m @ 3.22 g/t
63.00 67.50 4.50 1.97 2.40m @ 2.77 g/t
------------------------------------------------------------------------
LKD-11 - - - -
------------------------------------------------------------------------
LKD-12 54.00 63.10 9.10 1.22 2.44 @ 3.90 g/t
------------------------------------------------------------------------
LKD-13 15.00 18.00 3.00 1.05
42.30 50.70 8.40 4.35 3.0m @ 7.89 g/t
------------------------------------------------------------------------
LKD-14 118.50 123.50 5.00 0.56
------------------------------------------------------------------------
LKD-15 36.60 39.67 3.07 6.87 1.44m @ 10.95 g/t
------------------------------------------------------------------------

The true width varies from 70-100% of intercept length.

Holes LKD-08, 9, 10, 11 and 14 were drilled to test a thick, high
grade zone intersected previously in shallow RC holes and obtain an
azimuth and plunge to the mineralized shoot. Drilling has indicated
that this gold shoot has a shallow plunge with a northerly azimuth.
Hole LKD-09 defines the southern cut-off to the mineralization, and
LKD-11 marks the northern cut- off, suggesting a strike length of at
least 150 metres.

Drill holes LKD-12, 13, 15 and 16 were drilled south of the
above-noted mineralization in an area where RC drill rig access was
not possible due to the steepness of the hill. Higher grade gold
intersections (between 3.90g/t and 10.95g/t) were obtained along a
strike of some 150 metres, with the zone being open in both
northerly and southerly directions. The trend of this mineralization
appears to be north-south but the plunge is unknown.

Drill hole LKD-16 was collared at the same location as LKD-13 but
with a vertical dip. The purpose of this hole was to obtain the dip
to the mineralization which was determined to be quite shallow at
approximately -10 degrees to the east.

Invaluable structural information was obtained from this diamond
drilling program and due to the shallow dip to the gold-bearing body
the Company is planning an additional RC drill program that will
commence in the next few weeks. This program will test the depth
extensions to this higher-grade zone obtained in this drilling on
the Kisunge Main Zone eastern limb, as well as the depth extensions
to the southern limb of the Main Zone.

Holes are also planned to test the depth extensions of known
mineralization on the Shilalo West and Shilalo South hills. The new
Kiginga Anomaly is also now accessible and will also be further
drill tested.

The RC drill is currently testing aeromagnetic anomalies in the
Lunguya, Ushirombo and Ushirombo West Project Areas as part of our
kimberlite exploration program. This work is expected to be
completed by mid-September 2006.

Qualified Person

The Company's Qualified Person is Mr. John Deane, the President of
Tanzanian Royalty Exploration Corporation Limited. He has an M.Sc.
from the University of Cape Town (1993) and is a registered
scientist with SACNASP (Reg. No.400005/05).

Analysis

Fire assay with flame AAS finish was conducted by Humac Laboratory
in Mwanza, Tanzania. Standards were inserted in the sample stream
sent to Humac. Duplicates of selected pulps from the mineralized
zones have been forwarded to SGS laboratory in Mwanza, and results
are pending. Results from the Standards indicate that 95% of the
standards fall within 10% standard deviation limits.

Respectfully Submitted,

"James E. Sinclair"
James E. Sinclair
Chairman and Chief Executive Officer

Please see a diagram of the Luhala Project Area - Kisunge Hill by
clicking below:

http://files.newswire.ca/508/Luhala_Gold_Project.pdf

Visit our website: www.TanzanianRoyaltyExploration.com

The Toronto Stock Exchange and American Stock Exchange 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 permits U.S. mining companies, in their
filings with the SEC, to disclose only those mineral deposits that a
company can economically and legally extract or produce. We use
certain terms on this news release, such as "measured", "indicated",
and "inferred" "resources" that the SEC guidelines strictly prohibit
U.S. registered companies from including in their filings with the
SEC. U.S. Investors are urged to consider closely the disclosure in
our Form 20-F, File No. 0-50634, which may be secured from us, or
from the SEC's website at http://www.sec.gov/edgar.shtml.

ots Originaltext: Tanzanian Royalty Exploration Corporation
Im Internet recherchierbar: http://www.presseportal.de

Contact:
For further information: Investor Relations at +1-800-811-3855