Tanzanian Gold Corporation (TSX:TNX) (NYSE American:TRX) (TanGold or the Company) today announced results for the second quarter of 2022 (“Q2 2022”). Financial results for Q2 2022 will be available on the Company’s website and will be filed on SEDAR and provided on EDGAR on April 14, 2022.

Q2 2022 was a significant milestone for the Company as, on account of gold sales, it was the first quarter in the Company’s history in which it recorded: (i) revenues; (ii) a significant gross profit margin; (iii) low cash cost1 of $796 per ounce of gold; and (iv) positive operating cash flow. These positive results, on just 1,812 ounces of gold sold, demonstrate the immense opportunity for the Buckreef Gold Project to generate significant revenues and cash flow as the Buckreef Gold Project continues to develop. It also sets the stage for the Company’s sustainable business plan in which cash flow from operations funds value creating activities, including exploration and sulphide project development.

Q2 Accomplishment and Highlights

  • Achieved Low Cash Costs and High Gross Margins: The Company achieved low cash cost1 of $796 per ounce of gold and a significant gross margin of 57%. TanGold was operating cash flow positive ($1.5 million) in the quarter, the first time in the Company’s history. This was achieved on just 1,812 ounces of gold sold.
  • Successful Processing Plant Expansion: The Company successfully ramped-up the first 360 tonne per day (tpd) mill installation at Buckreef Gold to nameplate capacity. This is the first phase of 360 tpd for the planned 1,000+ tpd processing plant. The 360 tpd expansion phase was completed on time and on budget (capital cost of $1.6 million). The Company continues to expect production to be 750-800 oz of gold per month2 at a total average cash cost1 of US$725-825/oz, in line with previous guidance, until the larger oxide ore processing plant is commissioned. The larger 1,000+ tpd oxide processing plant is expected to be completed in calendar Q3 2022 and is forecast to produce 15,000 – 20,000 oz of gold per year.
  • Advancement of Sulphide Development Project: Buckreef Gold has commenced the long-lead items for de-risking of the Sulphide Development Project, including: (i) geotechnical characterization to determine the ultimate pit slopes of the 2 km long open pit; and (ii) the variability metallurgical study for the first 5-7 years of potential production of the Sulphide Development Project. To date a total of 19 metallurgical holes (2,367 meters) have been completed along the entire strike of the Buckreef Main deposit and the holes have been logged and are in preparation for shipment for metallurgical testing.
  • Recommenced Exploration: Buckreef Gold has drilled 17 holes representing over 5,500 meters in the northeast extension of Buckreef Main Zone. Buckreef Gold has finalized the planning for a 10,000 meter (approximate) infill drill program to: (i) upgrade Mineral Resources currently in the Inferred category in Buckreef Main, and (ii) commence infill drilling at Buckreef West. This program is expected to start in Q3 2022. It is also the Company’s intention to begin exploration drilling at the newly discovered Anfield Zone this year.

“We are off to the races! The Q2 results demonstrate our ability to drive significant, profitable sustainable growth at Buckreef Gold, after achieving low cash costs and significant gross profit margins on just 1,812 ounces of gold sold. The processing plant is currently being expanded and will triple in size to 1,000+ tpd in the coming months. We have also started advancing the technical work for the much larger sulphide development project with the goal of exceeding all the metrics as outlined in the 2018 PFS, particularly yearly annual production. Exploration has recommenced in the Buckreef Main northeast extension and overall exploration activities will accelerate across the entire Buckreef Gold project over the next year. We are in the process of resetting the long-term vision for the Buckreef Gold project with the goal of a much larger project than was originally envisaged in the 2018 PFS. I would like to thank all of my colleagues on a great year and a milestone quarter,” noted Stephen Mullowney, Chief Executive Officer of TanGold.

Pictured Below: Buckreef Gold Open Pit, Drill Rig in Northeast Extension, 360 tpd Processing Plant and Two New 360 tpd Ball Mills Arriving at Buckreef Gold

About Tanzanian Gold Corporation

TanGold along with its joint venture partner, STAMICO is advancing a significant gold project at Buckreef in Tanzania. Buckreef is anchored by an expanded Mineral Resource published in May 2020. Measured Mineral Resource is 19.98 million tonnes (“MT”) at 1.99 grams per tonne (“g/t”) gold (“Au”) containing 1,281,161 ounces (“oz”) of gold and Indicated Mineral Resource is 15.89 MT at 1.48 g/t gold containing 755,119 oz of gold for a combined tonnage of 35.88 MT at 1.77 g/t gold containing 2,036,280 oz of gold. The Buckreef Gold Project also contains an Inferred Mineral Resource of 17.8 MT at 1.11g/t gold for contained gold of 635,540 oz of gold. The Company is actively investigating and assessing multiple exploration targets on its property. Please refer to the Company’s Updated Mineral Resources Estimate for Buckreef Gold Project, dated May 15, 2020 and filed under the Company’s profile on SEDAR and with the SEC on June 23, 2020 (the “Technical Report”), for more information. Buckreef is being advanced in a value accretive sustainable manner through:

Expanding Production Profile: A 360 tonne per day (“tpd”) processing plant is being expanded to 1,000+ tpd, enabling a near term production profile of 15,000 - 20,000 oz of gold per year. Positive operating cash flow will be utilized for value enhancing activities, including exploration and Sulphide Project Development.

Exploration: Continuing with a drilling program with the goal of expanding resources, discovering new resources and converting resources to reserves, by: (i) step-out drilling in the northeast extension of Buckreef Main; (ii) infill drilling to upgrade Mineral Resources currently in the Inferred category in Buckreef Main; (iii) infill drilling program of Buckreef West; (iv) developing an exploration program for the newly discovered Anfield Zone; (v) upgrading historical mineral resources at Bingwa and Tembo; (vi) identifying new prospects at Buckreef Gold Project, and in the East African region.

Sulphide Development Project: Unlocking the value of the Sulphide Project in which the ‘sulphide ore’ encompasses approximately 90% of the Resources. It is the goal of the Company to exceed all metrics as outlined in the Technical Report, including annual production and strip ratio.

For further information, please contact Stephen Mullowney, CEO, or Michael Leonard, CFO at IR@tangoldcorp.com, or visit the Company website at www.tangoldcorp.com

Andrew M. Cheatle, P.Geo., the Company’s COO and Director, is the Qualified Person as defined by the NI 43-101 who has reviewed and assumes responsibility for the technical content of this press release.

The Toronto Stock Exchange and NYSE American have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.

Endnotes

The Company has included certain non-IFRS measures in this news release. Refer to the Company’s MD&A for the three and six month periods ended February 28, 2022 (“Q2 2022 MD&A”) for an explanation, discussion and reconciliation of non-IFRS measures. The Company believes that these measures, in addition to measures prepared in accordance with International Financial Reporting Standards (“IFRS”), provide readers with an improved ability to evaluate the underlying performance of the Company and to compare it to information reported by other companies. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures presented by other issuers. Cash cost per ounce of gold sold was determined by dividing the cost of gold sold of $1.443 million for the three months ended February 28, 2022 calculated in accordance with the IFRS per the Company’s financial statements divided by the number of ounces of gold sold (1,812).

2 The 360 tpd Plant estimates have not been prepared in accordance with the results of the Company’s 2018 Pre-Feasibility Study, reflected in the Company’s May 15, 2020 Technical Report. The 18-month mining plan estimates are based upon an internal mine model reviewed by SGS Canada Inc and cost inputs as validated by actual mining and processing costs from the 120 tpd test plan over the 9 months ended May 31, 2021. No assurance can be given that the 18-month mining estimate (Monthly Average) will reflect actual results. See “Disclosure and Cautionary Statement Regarding Forward Looking Information” in the Q2 2022 MD&A.

Forward-Looking Statements

This press release contains certain forward-looking statements as defined in the applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as “expects”, “anticipates”, “believes”, “hopes”, “intends”, “estimated”, “potential”, “possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could” or “should” occur or be achieved. Forward-looking statements relate to future events or future performance and reflect TanGold management’s expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the continued operating cash flow, expansion of its process plant, estimation of mineral resources, recoveries, subsequent project testing, success, scope and viability of mining operations, the timing and amount of estimated future production, and capital expenditure.

Although TanGold believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance. The actual achievements of TanGold or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors. These risks, uncertainties and factors include general business, legal, economic, competitive, political, regulatory and social uncertainties; actual results of exploration activities and economic evaluations; fluctuations in currency exchange rates; changes in costs; future prices of gold and other minerals; mining method, production profile and mine plan; delays in exploration, development and construction activities; changes in government legislation and regulation; the ability to obtain financing on acceptable terms and in a timely manner or at all; contests over title to properties; employee relations and shortages of skilled personnel and contractors; the speculative nature of, and the risks involved in, the exploration, development and mining business. These risks are set forth in reports that Tanzanian Gold files with the SEC. You can review and obtain copies of these filings from the SEC's website at http://www.sec.gov/edgar.shtml .

The information contained in this press release is as of the date of the press release and TanGold assumes no duty to update such information.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/d0e9d3cc-b69e-4520-9fc7-fbb6aee55bbc

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