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Jacob Willoughby | VP, Equity Research Analyst

[email protected]

Tanzanian Gold Corp. (TSX:TNX) A Well-positioned Late-stage African Gold Developer

Initiating Coverage July 9, 2020

We are launching coverage on Tanzanian Gold Corp (TSX:TNX) with a BUY rating and a C$1.80 target price. Tanzanian Gold is advancing the Buckreef gold project in Tanzania partnered with Tanzanian State Mining Company (STAMICO), where TNX is operating the project with 55% ownership and STAMICO retaining 45% interest. Through a two phased approach, we expect Buckreef to be producing 8k oz by year end until FY2023E (Phase 1) followed by a ramp up to ~170koz by FY2024E (Phase 2). As the company is partnered with the government, we view minimal execution risk associated with the fully permitted sulphide expansion. We expect delivery of small-scale production and key development updates on the sulphide expansion to drive a near-term re-rating. Investment Thesis:

Feasibility study underway to define a moderate-scale open pit sulphide operation. Phase 1 of oxide ore production commenced in April at the company’s oxide plant on-site. That plant is set to ramp up by end of FY2020E to 8k oz a year at AISC of $737/oz and cash costs of $630/oz and can assist in funding the ongoing development work for Phase 2. The company is in the process of completing a feasibility study for the Phase 2 gold sulphide operation at Buckreef, which we expect to be in production by 2023E ramping up to steady state of ~170k oz a year at AISC of $1,062/oz and cash costs of ~$875.

Bulk-mineable underground potential is likely. Drill testing high-grade structures have recently returned intervals as high as 5.2g/t Au over 38.7m (L19.5-1). While we have not accounted for an underground operation in our mine plan, we are very confident this operation will eventually go that route. Further reflecting underground potential at Buckreef is the recently completed geotechnical assessment by SGS Canada demonstrating the viability of long hole longitudinal stoping.

A long history of local gold mining allows for exceptionally low capital intensity compared to African peers. Buckreef is in Tanzania’s Lake Victoria Goldfield, next door to large and profitable gold mines including Bulyanhulu (Barrick, ~300k oz/year) and Geita (AngloGold Ashanti, ~600k oz/year). Additionally, infrastructure from historic production at Buckreef has allowed TNX to advance to Phase 1 oxide production with existing infrastructure on site, which we expect to allow for low capital intensity associated with Phase 2 compared to African peers.

Valuation: An increasing gold price plus mine development updates to drive near-term re-rating. Our target price of C$1.80 is based on 0.80x times our base case NAV estimate of C$2.26. We expect the stock to progressively re-rate as the company continues operating Phase 1 and advances Phase 2. Upcoming Catalysts include: 1) Phase 1 ramp-up (FQ4 2020E), 2) Drilling (ongoing) and 3) Feasibility study (FQ1 2021E).

(Currency is C$ unless noted otherwise)

Closing Price (C$/sh) $1.44Rating BUYTarget (C$/sh) $1.80Return to Target 25%52 Week Low / High (C$/sh)CAPITALIZATION Basic Diluted Shares Outstanding (M) 160.4 172.0 Market Capitalization (C$M) $230.9Enterprise Value (C$M) $224.9Cash (C$M) $6.0Debt (C$M) $0.0STOCK CHART

PRODUCTION FORECAST

VALUATION (C$M) (C$/sh)

Buckreef (55%), Tanzania C$676 C$2.87

Taxes -C$242 -C$1.03Other Assets C$47 C$0.20Corporate Adjustments C$51 C$0.21NAVPS C$532 C$2.26

Target Multiple 0.80 xTarget Price C$1.80

MAJOR SHAREHOLDERS

DISCLOSURE CODE: 3(Please refer to the disclosures listed at the end of the report)

Source: RCS estimates, Company Information, Capital IQ

Company Description

$0.55 / $1.54

Management (4.34%)

Tanzanian Gold Corporation engages in the exploration anddevelopment of mineral property interests in the United Republic of Tanzania. The company primarily explores for gold deposits. Itholds interest in the Buckreef project located in north-centralTanzania; the Kigosi project situated within the Kigosi-Miyabi andUshirombo greenstone belts in northwestern Tanzania; and theItetemia gold project located to southwest of Mwanza in NorthernTanzania.

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July 9, 2020 1 A Well-positioned Late-stage African Gold Developer


FINANCIAL DATA STOCK CHART

Ticker TSX:TNX

Current Price (C$/sh) C$1.44

52 Week Low / High (C$/sh) $0.55 / $1.54

Target (C$/sh) $1.25

Shares Outstanding (M) 160.4Market Capitalization (C$M) $230.9Cash & Cash Equivalents (C$M) $6.0

Total Debt (C$M) $0.0

Enterprise Value (C$M) $224.9

FINANCIAL DATA

Capital Structure Shares

MillionsShares Outstanding 160.4 TECHNICAL ASSUMPTIONS

Options 7.4 2019A 2020E 2021E 2022E 2023E 2024E

Warrants 4.3 Gold Price (US$/oz) $1,396 $1,672 $1,700 $1,700 $1,700 $1,700

Fully Diluted Shares 172.0 C$ : US$ fx rate $0.75 $0.72 $0.71 $0.71 $0.71 $0.71

RESOURCE ESTIMATE

Ownership Shares O/S (M) % O/S Kigosi (0.5g/t COG) (85%)

Sinclair, James E. 3.3 2.0% Itetemia (0.5g/t COG) (90%)

Rath, Ulrich E. G. 1.2 0.7% Luhala (1.0g/t COG) (100%)

Duval, Jeffrey R. 1.1 0.7% Buckreef (0.4g/t COG) (55%)

Morrow, Rosalind 0.8 0.5% M&I

Estate Of Barbara M. Sinclair 0.6 0.4% Inferred

Integrated Advisors Network Llc 0.4 0.3% Total

Financial Summary (C$) Global Resource

Year-end August 31st 2019A 2020E 2021E 2022E 2023E 2024E Attributabe Resources

Shares O/S (M) 144.6 160.4 223.7 223.7 223.7 223.7 RESERVE ESTIMATE

EBITDA (C$M) -$5 -$1 $9 $9 $66 $192 Buckreef (0.38g/t COG) (55%)

FCF (CFO+CFI) (C$M) -$8.0 -$7.7 -$83.7 -$156.3 -$45.2 $119.8 Proven

EPS (C$/sh) -$0.05 -$0.02 -$0.07 -$0.07 $0.08 $0.44 Probable

CFPS (C$/sh) -$0.04 -$0.02 -$0.06 -$0.06 $0.13 $0.56 Global Reserves

EV/EBITDA (49.4)x (152.0)x 26.1x 26.2x 3.4x 1.2x Attributable Reserves

P/CFPS (40.6)x (80.0)x (22.5)x (22.9)x 11.2x 2.6x Buckreef (RCS Model)

Income Statement (C$M) NET ASSET VALUE

Revenue $0.0 $4.8 $20.2 $20.2 $149.8 $365.3 Discount Rate (C$M) (C$/Sh)

Operating Expenses $0.0 $1.8 $7.1 $7.1 $79.7 $168.8 Buckreef (55%), Tanzania 5% 676$ 2.87$

Depreciation $0.0 $0.1 $0.3 $0.9 $10.8 $26.8 Taxes 5% (242)$ (1.03)$

General & Admin $4.1 $4.1 $4.0 $4.0 $4.0 $3.9 Other Assets in-situ 47$ 0.20$

Net Income -$6.9 -$3.8 -$12.2 -$14.9 $18.0 $98.0 Corporate Adjustments 5% 51$ 0.21$

Balance Sheet (C$M) Total NAV 532$ 2.26$

Cash & Equivalents $3.3 $3.8 $237.0 $80.6 $35.5 $84.9 Target Multiple Value

Debt $6.2 $6.7 $6.7 $6.7 $6.7 $6.7 Target Price 0.80x $1.80Cash Flow (C$M) COMPARABLES

Operating CF -$4.9 -$2.4 -$11.8 -$14.1 $28.8 $124.8 Company Ticker Price MC EV EV/ozFinancing CF $10.8 $8.2 $316.9 $0.0 $0.0 -$70.4 C$ C$M C$M US$Investing CF -$3.1 -$5.4 -$71.8 -$142.3 -$73.9 -$5.0 Cardinal Resources Limited ASX:CDV $0.59 $319 $344 $34 0.53x

Change in Cash $2.9 $0.5 $233.2 -$156.3 -$45.2 $49.4 West African Resources LimitedASX:WAF $0.96 $840 $1,000 $225 0.80x

Orezone Gold Corporation TSXV:ORE $0.96 $250 $225 $30 0.45x

PRODUCTION PROFILE Integra Resources Corp. TSXV:ITR $5.08 $607 $580 $107 1.60x

Pure Gold Mining Inc. TSXV:PGM $2.20 $954 $915 $267 1.06x

Belo Sun Mining Corp TSX:BSX $0.81 $357 $329 $36 0.56x

Ascot Resources Ltd. TSX:AOT $1.23 $347 $349 $75 0.55x

Marathon Gold Corporation TSX:MOZ $1.94 $416 $394 $71 0.61x

Average $96 0.74x

Tanzanian Gold Corp. TSX:TNX $1.44 $231 $225 $69 0.64xNAVPS SENSITIVITIES

Priced as of market close on July 8, 2020.

Source: RCS Estimates, Company Reports, Capital IQ, S&P Global Market Intelligence

10.6

9.9 0.63 0.20

55.1 1.35 2.39

3.671.35

1.9 1.87 0.11

45.9 1.59

Financial and Operating Summary: Tanzanian Gold Corporation

4.5 2.96 0.43

55.8 1.42 2.55

83.9

1.54 0.95

2.35

Tonnes (Mt)

21.8

AuEq (g/t)

0.81 0.59

AuEq (koz)

0.43

P/NAV

1.54 0.52

Tonnes (Mt) AuEq (g/t) AuEq (koz)

9.5

9.7

1.72

1.36

0.53

2.35

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45.9 1.59

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CA

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RESOURCE ESTIMATE

Kigosi (0.5g/t COG) (85%)

Itetemia (0.5g/t COG) (90%)

Luhala (1.0g/t COG) (100%)

Buckreef (0.4g/t COG) (55%)

M&I

Inferred

Total

Global Resource

Attributabe Resources

17.8 1.11 0.64

54.0 1.44 2.47

3.801.44

1.9 1.87 0.11

35.9 1.77

4.5 2.96 0.43

53.7 1.55 2.68

81.8

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Table of Contents

Executive Summary 2

Investment Thesis 3

Valuation and Financial Analysis 8

Relative Valuation 10

Sensitivity Analysis 13

Buckreef 14

Project Ownership 14

Infrastructure and Accessibility 14

Project History 15

Geology & Mineralization 17

Metallurgy 19

Operating Assumptions 20

Risks 24

Appendix A: Tanzania 25

Appendix B: Management 28

Appendix B: Directors 29

Executive Summary We believe Tanzanian Gold Corp (TSX:TNX) is conservatively worth C$1.80 per share representing 25% upside to the current share price. Our target price of C$1.80 is based on 0.80x times our base case NAV estimate of C$2.26. We view Tanzanian Gold primarily as an undervalued gold developer and small-scale producer that is posed to re-rate as it ramps up production via its small-scale oxide plant and advances its moderate-scale sulphide expansion. With significant experience operating in Africa and specifically in Tanzania, we believe the Tanzanian Gold team partnered with STAMICO are well-positioned to advance Buckreef to mid-tier gold production by FY2023E at which point we expect steady state (attributable) production of 94k oz/year (55% of 169koz/y) at AISC of $1,062/oz and cash costs of $876/oz.

Upcoming Catalysts 1) Phase 1 ramp-up (FQ4 2020E) 2) Drilling (ongoing) 3) Feasibility study (FQ1 2021E)

Figure 1: Projected Production Profile

Source: Red Cloud Securities Estimates, Company Reports

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Investment Thesis Small scale oxide gold producer partnered with government to pave the way for a larger ~170k oz/year project. Tanzanian Gold is advancing the fully permitted Buckreef gold project in Tanzania partnered with Tanzanian State Mining Company (STAMICO), where TNX is operating the project with 55% ownership and STAMICO retaining 45% interest. Through a two phased approach, we expect Buckreef to be producing 63k oz by FY2023E and 175k oz by FY2024E. Phase 1 of oxide ore production commenced in April with the first ore extracted from the open pit and processed by the recently commissioned oxide plant on-site, which is set to ramp up by end of FY2020E to 8k oz/year at AISC of $737/oz and cash costs of $634/oz which can assist funding for the ongoing development work for Phase 2.

Source: Company Reports

Feasibility study underway to define much larger-scale open pit sulphide operation. The company is in the process of completing a feasibility study for the Phase 2 gold sulphide operation at Buckreef. Phase 2 accounts for most of our NAV for TNX, which we expect to be in production by 2023E and ramping up to steady state of ~170k oz/year at AISC of $1,062/oz and $876/oz cash costs. The feasibility study is expected to be completed in H1 of calendar 2021 and builds upon an earlier pre-feasibility study completed in 2018 that looked at the oxide/sulphide operation. On a positive note, we expect the feasibility to look at a much larger development scenario for Buckreef (4.0Mtpa versus 1.5Mtpa) owing to the company’s continued exploration success, which has grown the M&I resource base to 2.68M oz Au from 1.0Moz used in the prefeasibility study.

Starting small with oxides then moving big with sulphides



Figure 3: History of resource expansion at Buckreef


Exploration success continues to add scale to Buckreef. As seen in Figure 3, the company has been hard at work both infilling and expanding the resource base at Buckreef. The effort has paid off with TNX increasing the M&I resource base by 65% over the last 2 years to 2.04M oz grading 1.77 g/t Au (M&I at a 0.4 g/t cut-off) with a discovery cost of only $6/ oz with a further 635.5k oz of Au in inferred resources grading 1.11 g/t Au. The recently updated M&I resource forms the basis of our Phase 2 mine plan, which we expect to be expanded as the company continues drilling along strike and testing depth extensions. The 2019 drill program (19,625m) has extended the Buckreef shear zone by 300m along strike to the northeast to a total of 1,200m in continuous Au mineralization, which remains open to the north-east and down dip.

A history of resource expansion at Buckreef



Figure 4: Deep Exploration Target beneath PFS pit limits


High-grade depth extensions suggest bulk-mineable underground resource may be ahead. A Phase 3 drill program commenced in February 2020 to test high-grade structures that have returned intervals as high as 5.2 g/t Au over 38.7m from 464.3m downhole (Phase 2 Hole L19.5-1, September 2019). While we have not accounted for an underground operation in our mine plan, we are confident this operation will eventually go that route. Tanzanian Gold has demonstrated continuous mineralization below the open pit that is currently being drilled and could provide significant resource upside beyond the 2.3M oz that we have modelled. Further supporting the underground potential at Buckreef is the recently completed geotechnical assessment by SGS Canada demonstrating the potential for unsupported long hole longitudinal stoping.

Depth extensions point to underground potential



Figure 5: Map of Buckreef project location compared to neighbouring peers

Source: Company Reports, S&P MI

A long history of gold mining allows for low upfront capital. Buckreef is located in Tanzania’s Lake Victoria Goldfield, which consists of Archean greenstones currently hosting large and very profitable gold mines including Bulyanhulu (Barrick, ~300k oz/year) and Geita (AngloGold Ashanti, ~600k oz/year). Historic small-scale production at Buckreef combined with decades of mining in the Geita district from Bulyanhulu and Geita has allowed TNX to advance to Phase 1 oxide production with existing infrastructure on site, which we expect to allow for low capital intensity associated with Phase 2 compared to African peers (Figure 6). These attributes give us comfort that the capital intensity of the large sulphide Buckreef project should be on the very low end of the spectrum for African gold projects (Figure 6, below).

Neighboring Tanzania’s largest gold mines



Figure 6: Capital intensity (US$/t ore) for studies on comparable African gold projects

Source: RCS Estimates, Company Reports, S&P MI

Recent amendments to Tanzania’s mining code. Over 2017-2019, the government of Tanzania has announced substantial changes to the existing 2010 Mining Code, which affected major gold producers, notably Acacia Mining (now Barrick Gold, ABX-T, Not covered). Mining policy reforms have sought to increase state participation in the country’s mineral wealth, which includes an increase in the government’s free-carried interest, an increase in royalty rates and several additional amendments to ensure the equal distribution of benefits between company’s and government (up to 50%). Barrick recently come to an agreement with the government to share 50% of economic benefits, which is discussed in greater detail in Appendix A of this report. Figure 7: 2020 Political Risk Map

Source: Control Risks (2020)

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Tanzanian Gold’s political risk minimized by government partnership. With state-owned STAMICO retaining a 45% free carried interest in addition to royalties and taxes, the government’s share of project benefits far exceeds 50%, which substantially reduces the political and regulatory risks experienced by TNX compared to its Tanzanian peers. This was confirmed by the company in 2017 when it indicated that the JV agreement in place since 2010 is “in total compliance with all new mining standards”. Following the changes to the mining code, TNX proceeded to secure a special mining license (SML) covering the Buckreef project area, which is the same license held by nearby large gold mines Geita (AngloGold) and Bulyanhulu (Barrick) and applies to large projects whose capital investment is greater than $100M.

Valuation and Financial Analysis Phase 1 operational success and Phase 2 mine development updates to drive near-term re-rating. Our target price of C$1.80 is based on 0.80x times our base case 5% NAV estimate of C$2.26. Based on our NAV and last close on July 8th, 2020, the company is trading at a 0.64x P/NAV multiple. This represents a substantial discount to global gold developer peers currently trading at 0.74x P/NAV (Figure 10), which could imply a value of C$1.67 for Tanzanian Gold (16% upside). Buckreef oxide/sulphide open pit mine drives our NAV. As seen in Figure 8, our valuation for the company’s 55%-owned Buckreef open pit project is derived using a discounted cash flow (DCF) model with a 5% discount rate, which we believe accurately reflects the risk level of an operating oxide operation and the limited execution risk associated with Phase 2 sulphide operation following the results of the upcoming feasibility study. Outside the M&I resources included in our mine plan, we have added an in-situ valuation for the company’s remaining inferred resources and 2.1Moz exploration target ($20/oz) to account for additional mine life extensions and underground expansion potential. We view the company’s Kigosi (85% owned), Itetemia (90% owned) and Luhala (100% owned) assets as non-core as the company focuses its attention on Phase 2 at Buckreef. We have ascribed $12.4M in value based on an in-situ valuation of $10/oz for non-core assets.



Figure 8: NAV Summary

Source: Company Reports, RCS Estimates

Cash flowing oxide operation to fund development activities. By utilising existing infrastructure on site, the company has begun mining the Buckreef open pit and commissioning its oxide plant where we expect the cash flowing oxide operation to fund ongoing development activities for Phase 2 and carry the company to a construction decision. Following a positive construction decision, we expect a larger project finance package for the mine build to be comprised of 60%/40% debt/equity. Figure 9: Tanzanian Gold Capital Structure

Source: Company Reports, S&P Global Market Intelligence

Our fully financed 5% NAV of C$2.26 per share is based on the following financing assumptions: To fund ongoing exploration and development efforts and 100% of the construction cost (60/40 debt to equity) to build Phase 2 at Buckreef, we model:

Project financing package in 2022E to include an equity financing of C$127M (US$90M) (63M shares at C$2.00) and debt financing of $135M bearing interest at 10%.

Operating Properties 0% 3% 5% 8% 10%Buckreef (55%), Tanzania $1,086.8 $814.6 $675.9 $514.2 $429.9

Current Taxes ($351.7) ($279.1) ($241.5) ($197.1) ($173.6)Total Mine Site After-Tax NPV $735.2 $535.6 $434.4 $317.1 $256.3

Other Assets and/or Liabilities Buckreef Exploration (in-situ) $33.1 $33.1 $33.1 $33.1 $33.1Kigosi (in-situ) $7.0 $7.0 $7.0 $7.0 $7.0Other Exploration Assets $5.4 $5.4 $5.4 $5.4 $5.4

Total $47.1 $47.1 $47.1 $47.1 $47.1

Corporate adjustmentsCorporate G&A ($29.9) ($26.3) ($24.3) ($21.7) ($20.3)Working capital (less equity investments) ($3.9) ($3.9) ($3.9) ($3.9) ($3.9)Interest income net of financing expense ($63.6) ($61.1) ($59.4) ($56.9) ($55.3)Cash Flow from Financing $105.6 $126.4 $138.2 $153.4 $162.1

Total Corporate Adjustments $8.2 $35.0 $50.6 $70.9 $82.6

Total NAV (C$M) $790.5 $617.8 $532.1 $435.1 $386.1Total NAVPS (C$/share) $3.36 $2.62 $2.26 $1.85 $1.64

Shares (M)

Current Shares Outstanding 160.4

Options Outstanding 7.4

Warrants Outstanding 4.3

Partially Diluted Shares Outstanding 172.0

Current Fully Diluted Shares Outstanding 172.0

Partially Diluted & Fully Financed Shares Outstanding 235.4



Relative Valuation Substantial discount to gold developer peers. Based on our NAV estimates of C$2.26, Tanzanian Gold is trading at a 0.64x P/NAV, a substantial discount to global gold developer peers currently trading at 0.74x NAV (Figure 10) implying a value of C$1.67/sh for Tanzanian Gold (16% upside). Figure 10: Developer P/NAV Comparable Companies

Source: RCS Estimates, Capital IQ

Exploration target of 1.2-2.2M oz widens the discount to peers and reflects underground mining potential. As seen in Figure 11, the company trades at a significant discount to trading peers and transaction peers on an EV/oz resources and an even larger discount if we account for the additional potential for resource expansion at Buckreef, specifically at the deep exploration target. If we add the company’s 55% attributable ownership of the 1.2-2.2Moz exploration target, the company trades at $41-48/oz, which we believe captures the underground mining potential that was demonstrated during Phase 3 drilling and with the subsequent exploration target.

Trading at a substantial discount to global gold developer peers



Figure 11: Current EV/oz valuations and precedent transaction comparable values


Undervalued as a developer as well as a producer. While we consider Tanzanian Gold to be a gold developer given the limited production profile of



Figure 12: FY 2023E EV/EBITDA comparable companies


Figure 13: Enterprise Value versus 2019A gold production




Sensitivity Analysis Rising gold price environment bodes well for Buckreef. With government stimulus being continually injected to avoid a crushing global recession caused from the COVID-19 shutdowns, interest rates expected to remain at all-time lows. This bodes extremely well for gold prices that already approaching $1,800/oz. As seen in Figure 14, Buckreef provides significant leverage to a rising gold price environment with the current spot gold price already demonstrating ~14% upside to our base case NAV of C$2.26. Figure 14: NAV sensitivity analysis - CAD:USD and gold price

Source: RCS Estimates

We feel that the major uncertainty associated with our estimates is the initial capex for the sulphide expansion with the sulphide processing plant being the largest capital item. While we are confident the upcoming feasibility should demonstrate initial capex in the range of ~$200M (RCS est.), sensitivity of our NAV to changes in initial capex is illustrated below in Figure 15. We also note that the strip ratio is another major project input with uncertainty at present that will be determined definitively in the feasibility study.

Figure 15: NAV Sensitivity Analysis – capex and stripping ratio

Source: RCS Estimates

US$2 $1,400 $1,450 $1,500 $1,550 $1,600 $1,700 $1,800 $1,900 $2,000 $2,100 $2,200$0.46 $2.07 $2.32 $2.49 $2.74 $2.98 $3.37 $3.86 $4.21 $4.69 $5.16 $5.64$0.51 $1.88 $2.11 $2.26 $2.49 $2.71 $3.06 $3.50 $3.82 $4.25 $4.68 $5.10$0.56 $1.74 $1.94 $2.08 $2.29 $2.49 $2.81 $3.21 $3.50 $3.89 $4.28 $4.67$0.61 $1.61 $1.80 $1.93 $2.12 $2.30 $2.60 $2.96 $3.23 $3.59 $3.94 $4.30$0.66 $1.51 $1.68 $1.80 $1.97 $2.14 $2.41 $2.75 $3.00 $3.33 $3.66 $3.99$0.71 $1.41 $1.58 $1.69 $1.85 $2.01 $2.26 $2.57 $2.80 $3.11 $3.42 $3.73$0.76 $1.34 $1.49 $1.59 $1.74 $1.89 $2.13 $2.42 $2.63 $2.92 $3.21 $3.50$0.81 $1.27 $1.41 $1.51 $1.65 $1.79 $2.01 $2.28 $2.49 $2.75 $3.02 $3.29$0.86 $1.21 $1.34 $1.43 $1.56 $1.70 $1.91 $2.16 $2.35 $2.61 $2.86 $3.11$0.91 $1.15 $1.28 $1.37 $1.49 $1.62 $1.81 $2.06 $2.24 $2.48 $2.72 $2.96$0.96 $1.10 $1.23 $1.31 $1.43 $1.54 $1.73 $1.96 $2.13 $2.36 $2.59 $2.81

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US$2 $100 $125 $150 $175 $200 $225 $250 $275 $300 $325 $3505.0:1 $3.03 $2.97 $2.95 $2.83 $2.72 $2.68 $2.56 $2.52 $2.41 $2.37 $2.255.5:1 $2.95 $2.89 $2.88 $2.76 $2.72 $2.60 $2.56 $2.45 $2.41 $2.29 $2.256.0:1 $2.88 $2.82 $2.80 $2.68 $2.64 $2.53 $2.49 $2.37 $2.33 $2.21 $2.176.5:1 $2.86 $2.74 $2.73 $2.61 $2.57 $2.45 $2.41 $2.29 $2.25 $2.13 $2.097.0:1 $2.79 $2.67 $2.65 $2.53 $2.49 $2.37 $2.33 $2.21 $2.17 $2.05 $2.017.5:1 $2.72 $2.60 $2.58 $2.46 $2.41 $2.30 $2.25 $2.21 $2.09 $2.04 $1.938.0:1 $2.64 $2.52 $2.50 $2.38 $2.34 $2.29 $2.17 $2.13 $2.01 $1.96 $1.908.5:1 $2.57 $2.45 $2.43 $2.38 $2.26 $2.21 $2.09 $2.05 $1.93 $1.88 $1.829.0:1 $2.49 $2.47 $2.35 $2.30 $2.18 $2.13 $2.02 $1.97 $1.92 $1.80 $1.739.5:1 $2.42 $2.40 $2.28 $2.23 $2.11 $2.06 $2.00 $1.89 $1.84 $1.77 $1.65

10.0:1 $2.35 $2.32 $2.20 $2.15 $2.03 $1.98 $1.93 $1.81 $1.76 $1.69 $1.62

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Sensitivity analysis demonstrates Buckreef’s leverage to gold



Buckreef Gold Project (55%) Project Ownership Partnered with Tanzanian government. Tanzanian Gold is currently partnered with the Tanzanian State Mining Company (STAMICO) in advancing the Buckreef project as operator (55%) with STAMICO retaining free carried interest of 45%, which has been in place since 2010. As well, a 6% royalty on all production is payable to the government in addition to a 1.3% district council service levy. The Buckreef project area is fully permitted for large scale mining activities with a special mining license (SML). Additional details on the history of mining in Tanzania, the concentrate export ban and recent amendments to Tanzania’s Mining Code can be seen in Appendix A. Figure 16: Map of Buckreef project location compared to neighbouring peers


Infrastructure and Accessibility Past producing project with significant infrastructure. Buckreef is past-producing mine located in the Geita district ~110km SW of Mwanza (population of 2.8M – 2012 est.), which is the second largest city in Tanzania and the nearest major population center serving the project. Directly to the north of Buckreef lies the Geita township, which is an established mining community that has serviced AngloGold’s Geita mine (~600koz/y) since the early 1930’s. As seen in Figure 16, the project is located ~30km from two world class gold mines, AngloGold’s Geita and Barrick’s Bulyanhulu, which, over decades of continued mining operation have developed significant infrastructure and have helped build the Lake Victoria region into an established mining district. The Buckreef project area can be accessed by ferry from Mwanza then via sealed road through Geita township or alternatively it can be accessed by the airstrips at the Bulyanhulu or Geita mines. From Geita township, the project area can be accessed via a wide tarred road and a dirt all-

Partnered with the government of Tanzania



weather road that links emerging townships Katoro (12km away) and Rwamagaza (5km away) directly to the Buckreef mine. As a past-producing gold mine, project infrastructure includes a defunct vertical shaft, open-pit and waste rock dump, borehole for domestic water sources, pumps and waterlines, 110kV power sub-station, defunct heap leach pads, 10tph Carbon-in Column process plant, 200tph crusher unit with scrubbers plus mine buildings including offices and residential houses for workers. Existing infrastructure has allowed the company to commence Phase 1 of its open pit mining operations. Project History 1945: Gold bearing quartz veins were reported from the current Buckreef Mine area. 1950-1960’s: Small-scale local and colonial mining activities evident from pits and adits covering the Buckreef tenement. In the 1960’s the United Nations funded a 13-hole drill program defining a 107m long by 8m wide mineralized zone down to a depth of 122m. An additional 13 holes were completed by the Tanzania Mineral Resources department (now STAMICO) in 1968. 1970: Williamson Diamonds Ltd sunk the Buckreef Main shaft to a depth of 75m and developed two drifts at depths of 30m and 60m to target an ore reserve estimate of 106kt grading 8.9 g/t Au. Production did not meet expectations and the mine was closed and returned to STAMICO. 1973-1977: State-owned, Buckreef Gold Mining Company (BGMC), was established as project owner, which carried out additional exploration and development activities. 1978-1990: Swedish International Development Agency (SIDA) financed construction of a carbon-in-pulp (CIP) process plant and other mine infrastructure facilities which were used for underground production restart, which again failed to meet expectations and only ~100kt grading ~3-4 g/t Au was extracted. The mine closed again in 1990. 1992-1994: By this time, major gold producers Barrick and AngloGold had entered the Lake Victoria region. At Buckreef, East Africa Mines Ltd. entered into an exploration agreement with STAMICO to engage in exploration activities aimed at drilling out the Buckreef main shear structure. East Africa and STAMICO signed the first Buckreef Redevelopment Agreement (BRDA). 1996-2010: A series of acquisitions took place during this period, including Spinifex Gold acquiring East Africa Mines, Gallery Gold acquiring Spinifex Gold and IAMGOLD acquiring Gallery Gold. IAMGOLD entered into the second BRDA with STAMICO and undertook a comprehensive 4 year exploration program ($12.4M), which included 65,000m of exploration and reconnaissance drilling and 70,000m of resource definition drilling that culminated in a 2009 PFS. By 2010, IAMGOLD returned the project to STAMICO to focus on its Mali assets. October 2010: Tanzanian Royalty Exploration signed a Memorandum of Understanding (MOU) with STAMICO and commenced negotiating a JV on the BRDA. Tanzam2000, a 100% owned subsidiary of the company



signed a substantive JV agreement with STAMICO with regards to the Buckreef Project. Through this JV agreement, a Tanzanian registered JV company, Buckreef Gold Company Limited, was formed with an equity holding of 55% Tanzam2000 and 45% STAMICO. In 2019, Tanzanian Royalty changed its name to Tanzanian Gold. The JV agreement with STAMICO still stands today with Tanzam2000 as operator with 55% ownership. In 2019, Tanzanian Royalty changed its name to Tanzanian Gold. 2012: Venmyn completed a NI 43-101 compliant PEA for Buckreef with an open pit mine plan operating at 100k oz/y (1.8Mt/year) at a cut-off of 0.5 g/t Au for 12 years. 2014: Buckreef was awarded the environmental impact assessment certificate. The company completed an updated resource estimate (M&I: 1.2M oz grading 1.56 g/t & Inf: 0.4M oz grading 1.36 g/t Au) and signed a JV agreement with ARL Gold to develop the Buziba-Busolwa area at Buckreef. Figure 17: A history of resource expansion at Buckreef


2015: Tanzanian Gold constructed four leach pads and began mining of the South pit with 113.8kt grading 1.89 g/t Au (6.9k oz) had been extracted from the South pit and placed onto three of the heap leach pads by FY end. The mine plan involved pilot mining of the oxide and transition ores at Buckreef South pit to be followed by mining the oxide/transition ores from Bingwa, Tembo and finally Buckreef Main deposits. 2016: The pilot CIC process plant would be de-commissioned and assimilated into a more flexible CIL process plant designed with the aim to start full-scale commercial gold production in H2 2016. 2017: Tanzanian Gold announced that it was not affected by the new laws in Tanzania. See Appendix A on the new mining laws in Tanzania. Due to changes in the ministry and the new mining laws, the project was placed on care and maintenance as it waited for a special mining license (SML).

Tanzanian Gold unaffected by amendments to Tanzanian mining code



2018: Tanzanian Gold announces PFS supporting a 16-year oxide/transition/sulphide operation producing 51koz/y with initial capex of $76.5M, an after-tax NPV of $198M and an IRR of 132% using a gold price of $1,500/oz. The 2018 PFS is the latest economic study completed on the property and will be discussed further in this report. 2019: 60-hole (~17,650m) drilling program targeting both oxide and primary sulphide mineralization. Figure 18: March 2020 Resource Update at Buckreef


2020: Substantial resource expansion to 2.68M oz grading 1.55 g/t Au at a discovery cost of ~$6/oz (Figure 18). Phase 1 open pit mining of oxide resource commenced in May to continue to generate cash flow for continued de-risking of the project for the larger Phase 2 sulphide operation. Geology & Mineralization Located in prolific goldfield. The Buckreef project is located within the Lake Victoria Goldfield (LVG), which is the third largest gold producing region of Africa, only behind the Witwatersrand (South Africa) and Tarkwa (Ghana) regions. The LVG has many geological and structural similarities to major gold districts in the Canadian Shield and Yilgarn Craton of Western Australia. The LVG consists of eight Archean greenstone belts with three major stratigraphic groups including the Lower Nyanzian, Upper Nyanzian and Kavirondian. The project area covers the eastern portion of the Rwamagaza Greenstone Belt, considered to be a segment of the larger Sukumaland greenstone belt, which is one of the eight greenstone belts in northern Tanzania (Figure 19 – labelled SU). As seen in Figure 19, the Sukumaland greenstone belt also hosts the world class Geita (AngloGold) and Bulyanhulu (Barrick) mines.

Buckreef is hosted by same greenstone belt as Geita and Bulyanhulu



Figure 19: Map of Buckreef concessions in Tanzania’s greenstone belts


The Rwamagaza Greenstone Belt is bisected by an E-W trending shear zone referred to as the Rwamagaza shear zone. There are two deformation events that have been associated with gold mineralization at Buckreef. The first phase of deformation, D1 is considered to be weakly prospective for gold mineralization and the second and main phase, D2, is associated with the significant gold mineralization. The Buckreef mineralization is found in a shear zone hosted deposit with non-refractory fresh and oxide material that has been delineated over a 1.5km strike length. Several lateritization events have resulted in weathering to depths of up to 40m with the oxidation profile deepening above the Main and North Zones. The deposit has an average overburden depth of 3-4m and the base of the oxidation zone occurs at depths ranging from 15-40m with an average of 30m. Deeper drilling has tested higher-grade extensions of the Main and Northeast zones, supporting the potential for a higher-grade underground deposit. The company has defined non-NI 43-101 exploration targets of 1.2-2.2Moz to reflect the potential of the mineralized structures at depth.



Figure 20: Buckreef regional geology


Metallurgy Operating oxide plant recently commissioned. The company is currently ramping up production at its oxide plant that was recently commissioned in June to 300tpd by the end of this year. TNX has been able to use existing heap leach equipment on-site to reduce costs of starting up the oxide operation where the flowsheet includes conventional gravity and cyanide leaching CIL. Previous metallurgical testing has indicated 92% recoveries for oxide materials to be processed at the oxide plant. Figure 21: Oxide plant including the crushing and grinding circuit at Buckreef




As discussed, Tanzanian Gold engaged SGS Lakefield to conduct metallurgical testing for the final feasibility sulphide plant design. Previous metallurgical testing for the sulphide material indicated recoveries of 85% with no evidence of any deleterious elements that would affect gold recovery in a leach circuit. However, the company has sent the core from three metallurgical holes to Lakefield, which could demonstrate improved recoveries for the new plant. TNX has announced that Lakefield is considering two potential flowsheets: Gravity Separation with Gravity Tailings Cyanidation, or Gravity Separation followed by sulphide flotation of the gravity tailings, with regrinding and cyanide leaching of the sulphide concentrate. We expect both flowsheets to be low cost and high recovery alternatives, but to remain conservative we are assuming gold recovery of 85% as highlighted in the 2018 PFS. Operating Assumptions

Resource expansion accompanied by a larger production scenario. We have made a number of assumptions on the operating parameters of both the oxide (operating) and sulphide (development) operations at Buckreef, which include assumptions for operating costs, capital costs and production schedule. Following significant exploration success expanding the Buckreef deposit to 2.68M oz, we envision a much different operation compared to the oxide/sulphide operation considered in the 2018 PFS. Capital Cost Estimates The 2018 PFS provides useful historical information of the existing infrastructure in the project area, including surface infrastructure, camp facilities, etc. Major capital items such as processing plant and mining fleet (owner-operated) have been benchmarked against NI 43-101 technical reports for comparable gold projects in Africa. Given the existing infrastructure in place currently servicing Tanzanian Gold’s oxide operation and the favourable location of Buckreef next door to Geita and Bulyanhulu, we view there to be minimal additional infrastructure required for the project compared to African peers, which is reflected by the lower capital intensity highlighted by the 2018 PFS compared to other projects (Figure 22).

Exceptionally low capital intensity demonstrated by both our estimates and 2018 PFS

Larger operation envisioned at Buckreef compared to 2018 PFS



Figure 22: Capital intensity (US$/t ore) for studies on comparable African gold projects


We anticipate total power requirements to be in the range of 30MW to be powered by both a diesel power plant and existing grid power supply (servicing current operations), whereby the existing Buckreef mine substation and TANESCO power transmission line are expected to be upgraded for the larger sulphide processing facility. Water supplied to the operation is expected to be sourced from old workings of the underground and the nearby Nyamazovu dam. Based on owner-operated open pit projects with comparable mining rates, such as Yaoure (Perseus) and Hounde (Endeavour Mining), we have estimated a mining fleet capital cost of $40M, which far exceeds the PFS estimate of $17.5M but was based on a smaller production rate.

Figure 23: Process plant capex for studies on comparable African gold projects


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While metallurgical testing is still underway at SGS Lakefield, the company has announced that it is considering two potential flowsheets: Gravity Separation with Gravity Tailing Cyanidation, or Gravity Separation followed by sulphide flotation of the gravity tailing, with regrinding and cyanide leaching of sulphide concentrate. We anticipate either flowsheet to be a low cost processing alternatives and we have therefore estimated 4Mt/year process plant capital at $90M, which is comparable to OreCorp’s 4Mt/year Nyanzaga Project in Tanzania ($92M) and lies in the middle of the range of estimates seen in Figure 23 for comparable projects.

Figure 24: Red Cloud estimates for Phase 2 sulphide expansion at Buckreef


As seen in Figure 24, we have accounted for an additional $10M in site infrastructure on top of what is already on-site and $15M in owner’s costs. To account for the accuracy of cost estimates, a 30% contingency has been added, which brings total estimated initial capex to $201.5M. We expect an upcoming sulphide feasibility study to provide more accurate estimates of upfront capital for the sulphide operation. Operating Cost We have conservatively estimated on-site operating costs for the operating oxide project at $3.50/t mining ore, $3.25/t mining waste, $15.00/t processing and $5.00/t G&A. Once the larger sulphide plant has been constructed, we anticipate the steady state oxide and sulphide operation to achieve LOM average on-site costs of $2.25/t mining ore, $2.00/t mining waste, $10.00/t processing and $2.50/t G&A. As seen in Figure 25, these estimates compare favourably to African gold peers and are slightly lower than the costs highlighted in the 2018 PFS.

Parameter Value (US$M)Direct Costs

Mining (Fleet) $40.0Processing Plant $90.0Site Infrastructure $10.0Sub-Total Direct Costs $140.0

Indirect CostsOwner's Costs $15.0Contingency (30%) $46.5Sub-Total Indirect Costs $61.5

Total Initial Capital Costs $201.5



Figure 25: On-site costs (US$/t milled) for studies on comparable African gold projects


Mine Model We have used the above capital and operating assumption in our Buckreef mine model, which is comprised of a oxide only operation at 300tpd (currently ramping up from 120tpd) to be joined by a sulphide operation that is expected to operate in parallel for a 9 year period at 10,700tpd. We anticipate the current oxide operation to generate sufficient FCF to fast track the sulphides to production by FQ3 2023 (end February 2023) following a 24-month pre-production period. Figure 26: Mine Model Summary


We have assumed total mineable resources of 45.88Mt grading 1.6 g/t Au corresponding to the projects recently updated M&I resource estimate at a 0.4 g/t cut-off, which we believe reflects the potential for additional exploration success and resource to reserve conversion. We have conservatively maintained a high stripping rate in our mine plan

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Years of Production Years 16.0 3.0 11.8Annual Throughput Mt 1.50 0.10 4.00Stripping Ratio waste:ore 9.5 : 1 5.0 : 1 8.5 : 1Mineral Reserves Mt 19.20 0.30 45.58Gold Grade g/t 1.54 2.60 1.58Gold Recovery % 86% 92% 85%

Mining cost per tonne of ore US$/t 1.89 3.50 2.25Mining cost per tonne of waste US$/t 1.65 3.25 2.00Processing cost per tonne milled US$/t 11.53 15.00 10.00G&A cost per tonne milled US$/t 1.98 5.00 2.50

Development capital US$M 76.5 0.0 201.5Sustaining capital US$M 27.5 2.8 40.0

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compared to the 2018 PFS, however, we await an updated pit shell optimization, which we expect may demonstrate a lower strip for the pit-constrained sulphides.

Risks

Our view is based on publicly available information and conversations with management. We note that our estimates and view are not without political, social, technical, geological or financing risks typical for mining companies. For Tanzanian Gold, three risks are of note.

1. Political – Our estimates for Tanzanian Gold assume the company is able to continue operating its Phase 1 oxide operation and execute on its Phase 2 sulphide expansion without interruption. While we do view regulatory risk to be substantially lower than the company’s Tanzanian peers due to its partnership with STAMICO, we view the looming general election in October as an event that could adversely impact the country’s mining sector and therefore the project’s operating status. Any interruptions to the production of gold at Buckreef would negatively impact our estimates.

2. Technical – Our estimates are largely based on estimates published in the company’s 2018 PFS and benchmarking work completed on African gold peers. We note that the 2018 PFS is currently outdated and only serves as a conservative baseline for our estimates. Should the upcoming feasibility study demonstrate project economics different from what has been assumed in our estimates, particularly for the sulphide plant capex, our estimates would be materially impacted.

3. Financial – Our estimates assume that Tanzanian Gold is able to

finance ongoing development efforts and fully-fund 100% of the construction cost of the sulphide expansion, which we estimate requires US$201.5M in funding and substantial dilution to existing shareholders. Should the company be unable to finance the construction of Buckreef, our estimates could be materially impacted.

As new information becomes available, we plan to refine our numbers.



Appendix A: Gold Mining in Tanzania History Gold mining in Tanzania has taken place since the early 20th century during the German colonial period, which began within the Lake Victoria region with the Sekenke Gold Mine producing gold at ~15.4 g/t Au by 1909 (property later held by Barrick). Gold production continued to ramp up in the country until World War II, at which point production declined to zero by the mid 1970’s. Figure 27: Map of gold deposits in Tanzania


Miners and prospectors focused on the Archean greenstone belts around Lake Victoria targeting gold mineralization occurring near surface. When industrial scale gold mining started in the 1990’s, major players such as Barrick and AngloGold began acquiring large land packages in the Lake Victoria gold belt. In 2001, AngloGold acquired 50% of the world class Geita mine and later merged with Ashanti to consolidate 100% ownership. Geita is Tanzania’s largest gold mine still operating at 600k oz per year (2019A). When Barrick entered Tanzania the company quickly amassed a 7,200km2 land package in the Lake Victoria gold belt to include the past producing Sekenke Gold Mine and a portfolio of assets acquired from Sutton Resources. Barrick acquired the Bulyanhulu gold project from Sutton with 3.6Moz in reserves, which grew quickly to 12M oz in reserves by the time it reached commercial production in 2001. At reserve grade of 15 g/t Au and cash costs of ~$300/oz, Bulyanhulu continued producing through the low gold price environment with little interruption until 2017 when the project was held by Barrick spin-out, Acacia Mining (Figure 28). Acacia also operated the North Mara and Buzwagi mines.



Figure 28: Historical gold production at Bulyanhulu


Concentrate Export Ban On March 3rd, 2017, the government of Tanzania announced a ban on exporting mineral concentrates. This hit Acacia particularly hard with accusations of tax evasion following a probe launched by Tanzanian President, John Magufuli, which discovered that the value of concentrates in containers at the port city of Dar es Salaam was more than 10 times the amount declared by Acacia. The export ban was then imposed on Acacia and has only just been resolved by Barrick (acquired Acacia in 2019). In January 2020, Barrick agreed to a payment of $300M to settle outstanding tax disputes, which lifted the export ban. On May 25th, 2020, after resuming exports, Barrick announced the initial $100M payment to the government had been made to be followed by five annuals $40M payments. Amendments to Mining Code Outside of the export ban imposed on Acacia, all Tanzanian gold companies have been adjusting to the changes to the Mining Act of 2010, which were passed by the government in July 2017 and have since been amended in 2018 and 2019. The changes aim to increase state participation in the country’s mineral wealth, which includes at least a 16% free-carried interest, which may be increased up to 50% to match the value of historical tax benefits granted to mining companies, as well as increasing royalty rates for metallic minerals from 4% to 6% (includes gold). While international arbitration procedures are currently underway for a number of mining companies operating in Tanzania (e.g. AngloGold Ashanti), Barrick Gold has recently come to an agreement with the government. Economic benefits of Barrick’s three mines (Bulyanhulu, North Mara and Buzwagi) will be shared with the government of Tanzania on a 50%/50% basis, which is to be provided in the form of taxes, royalties, clearing fees and a new 16% free carried interest. An annual true-up mechanism will also be put in place to maintain the 50%/50% split.

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Changes also include Regulation 21 of the Mineral Rights Regulations (published January 2018), which cancels all retention licenses issued prior to January 10, 2018. A retention license is granted to holders of a prospecting license after they identify a mineral deposit within the prospecting area which is potentially of commercial significance but cannot be immediately developed due to technical constraints, adverse market conditions or other economic factors. This included eleven retention licenses that were transferred from several mining companies back to the government of Tanzania. On December 19th, 2019, the Mining Commission of Tanzania announced a public invitation to tender for the joint development of areas previously covered by these retention licenses. Continued uncertainty in mining policy is expected until Tanzania’s general election in October 2020. Fitch Solutions Sub-Saharan Africa Country Risk team foresees risk of civil unrest in the run-up to elections. The looming election will also likely stall any investment decisions made by the government prior to the election in October. Status of Buckreef Project Tanzanian Gold is currently partnered with the Tanzanian State Mining Company (STAMICO) in advancing the Buckreef project as operator (55%) with STAMICO retaining free carried interest of 45%, which has been in place since 2010. Therefore, with 45% free carried interest, a 6% royalty to the government, a 1.3% district council service levy and 30% corporate tax, we believe the 50% share of project benefits will be provided to the government and therefore leaves Buckreef unaffected by the changes. The company currently holds a special mining license covering the Buckreef project area, which is the same license held by nearby gold mines Geita (AngloGold) and Bulyanhulu (Barrick). A special mining license in the Tanzanian mining code means a licence for large scale mining operation, whose capital investment is not less than $100M or its equivalent in Tanzanian shillings. Therefore, we view minimal regulatory risk to the company in advancing Buckreef to large scale production by FY 2023E with $201.5M in initial capital.



Appendix B: Management

Jeffrey Duval, Acting Chief Executive Officer

Mr Duval is a licensed General Engineering Contractor with over a quarter-century of experience working with several construction firms in the US south-west. His experience in corporate executive management, project development and project management, excavation, movement of material, earthworks, and related skills will be a valuable asset to the Company as it aggressively moves to monetise the in-ground assets on its various licenses. His management skills, efforts and involvement were instrumental in the Company obtaining the Special Mining License (SML) for the Buckreef Project from the Ministry of Energy and Minerals in Tanzania with a renewal term of ten years. Among Mr Duval’s numerous achievements and contributions to the Company, led the team overseeing the design, planning and development of the new Gravity/Carbon-In-Leach process plant presently planned at the Buckreef Project.

Marco Guidi, B.Com (Hons), CA, Chief Financial Officer

Mr. Guidi is a Chartered Accountant and holds an Honours Bachelor degree in Business Administration from Wilfrid Laurier University. Mr Guidi began his career with an accounting firm where he was as an audit supervisor specializing in serving the audit and tax needs of clients in a variety of industries. He has worked with publicly listed junior mining companies, technology companies, and privately-owned and entrepreneurial companies. In 2010, Marco transitioned out of public accounting and is currently serving as Chief Financial Officer, Controller and Accountant for a number of junior mining companies.

Donna M. Moroney, Corporate Secretary

Donna Moroney is President of Wiklow Corporate Services Inc., a Vancouver company that provides corporate secretarial services and other services to public companies. She has over 30 years of extensive experience in regulatory and corporate compliance in both Canada and the United States, and as a senior officer for various public companies, and has instructed and provided training in regulatory compliance. Ms. Moroney has over 30 years of experience in regulatory and corporate compliance in both Canada and the United States, and as a senior officer of various public companies. As President and owner of Wiklow Corporate Services Inc. since 2008, she assists companies in the resource, financial and technology sectors in maintaining the securities and exchange demands on public companies, as well as keeping them up-to-date on relevant issues, policies and working practices.



Appendix C: Directors

Jim Sinclair, Executive Chairman and Director

Mr. Sinclair provides Tanzanian Gold Corporation with the strategy for its corporate growth and is primarily responsible for providing the leadership necessary for the Company to complete its evolution into a gold producer and royalty company. His past experience includes that of the founder of the Sinclair Group of Companies (1977), which offered full brokerage services in stocks, bonds, and other investment vehicles. The companies, which operated branches in New York, Kansas City, Toronto, Chicago, London and Geneva, were sold in 1983. Mr Sinclair served as a Precious Metal Advisor to Hunt Oil and the Hunt family from 1981 to 1984 for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by the Chairman of the Federal Reserve, Paul Volker. Mr Sinclair was a general partner and member of the executive committee of two New York Stock Exchange firms and President of Sinclair Global Clearing Corporation (Commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies). Mr Sinclair was President of James Sinclair Financial Research SARL in Luxembourg. Mr Sinclair held the position of Chairman of Sutton Resources from 1989 to 1995.

Dr Norman Betts, PhD, FCA, Director

Dr Betts is an associate professor, Faculty of Business Administration, University of New Brunswick (UNB) and a Chartered Accountant Fellow (FCA). Dr Betts serves as a Chair of the board of directors of Starfield Resources Inc. and as a director and member of the audit committees of Tembec Inc., New Brunswick Power Corporation, Export Development Canada and Adex Mining Inc. He is also a co-chair of the board of trustees of the UNB Pension Plan for Academic Employees. He is a former Finance Minister and Minister of Business New Brunswick with the Province of New Brunswick. He was awarded a PhD in Management from the School of Business at Queen’s University in 1992.

Dr William Harvey, PhD, FCA, Director

Dr Harvey is a Clinical Psychologist, who for over thirty years has served as a consultant and technical expert on matters relating to substance abuse prevention and mental health promotion to a wide variety of private and governmental programs and agencies in the United States. These include the National Institute of Drug Abuse, the National Institute of Alcoholism and Alcohol Abuse, the Office of Juvenile Justice & Delinquency Prevention, and the National Mental Health Association. He was an Adjunct Professor in the Department of Sociology at Washington University, and a Senior Research Scientist at the Missouri Institute of Mental Health, University of Missouri. He continues to be involved in the formulation of new programs and policies aimed at the betterment of society. Dr Harvey will continue to expand the role which the Company has at the local level to ensure that stakeholder interests are addressed.



Ulrich Rath B.Sc.(Hon), M.Sc.(Geol), Director

Mr. Rath has a wide range of experience in the mining industry and has specific experience in North America, South America including Argentina, Chile and Peru and in South Africa. Mr Rath was until recently the President and CEO and Director of Chariot Resources Ltd., a junior resource company focused on the exploration, acquisition and development of copper and precious metal mineral deposits in the Andes region of Latin America. He was formerly CEO and director of Compania Minera Milpo a medium-sized Peruvian zinc mining company. Mr Rath was also formerly Vice-President, Corporate Development, for Rio Algom Ltd. from December 1992 to October 1998. Mr Rath has a B.Sc. (Hon) from Concordia University.

Rosalind Morrow, B.A., B.Ed., A.R.C.T., LL.B., Director

A graduate of Trinity College, Toronto, the Royal Conservatory of Music of Toronto and the University of Toronto Law School, Ms Morrow specializes in corporate and securities law with a particular emphasis on financings, including government and structured finance, corporate governance and mergers and acquisitions. She has advised Canadian and international corporations on a number of major projects in the financial, communications and resource sectors. Ms Morrow is a former member of the Securities Advisory Committee to the Ontario Securities Commission. A past president of the Women’s Law Association of Ontario and recipient of its President’s Award, Ms Morrow currently serves on the Board of Governors of Trent University. She is also Vice Chair of The Living City, the foundation arm of the Toronto and Region Conservation Authority, one of the largest environmental organizations in North America, dedicated to the preservation of a green environment in the Toronto region.



Jacob Willoughby | VP, Equity Research Analyst Taylor Combaluzier | Research Associate Paul Kostuik | Research Associate Red Cloud Securities 105 King Street East, 2nd Floor Toronto ON, M5C 1G6 [email protected] www.redcloudsecurities.com/research-home Disclosure Requirement Red Cloud Securities Inc. is registered as an Investment Dealer in Ontario, Quebec, Alberta and British Columbia and is a member of the Investment Industry Organization of Canada (IIROC). Part of Red Cloud Securities Inc.'s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services. Red Cloud Securities Inc. has prepared this document for general information purposes only. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided has been derived from sources believed to be accurate but cannot be guaranteed. This document does not take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud Securities Inc. will not treat recipients of this document as clients by virtue of having viewed this document. Red Cloud Securities Inc. takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment decisions based on the content of this report. Company Specific Disclosure Details

Company Name Ticker Symbol Disclosures Tanzanian Gold Corp. TSX:TNX 3

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Dissemination Red Cloud Securities Inc. distributes its research products simultaneously, via email, to its authorized client base. All research is then available on www.redcloudsecurities.com via login and password. Analyst Certification The Red Cloud Securities Inc. Analyst named on the report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of this report; or any companies mentioned in the report that are also covered by the named analyst. In addition, no part of the research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report. This is an updated report from the one previously published on July 9, 2020.

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