Disclosure (Communications) Policy

TANZANIAN ROYALTY EXPLORATION CORPORATION
(the “Corporation”)


DISCLOSURE (COMMUNICATIONS) POLICY
(January 2013)

Overview

Both the Toronto Stock Exchange (the “TSX”) and the various provincial securities commissions encourage companies to adopt their own internal communications policies (the “Policy”). To facilitate this, the TSX and the Canadian Securities Administrators (the “CSA”) have issued guidelines, the TSX under Part IV “Maintaining a Listing – General Requirements” under subsection B “Timely Disclosure”, and the CSA under National Policy 51-201, “Disclosure Standards”. This Policy, which is current as of January 2012, incorporates these TSX and CSA guidelines.

This Policy has been approved by the Board of Directors of Tanzanian Royalty Exploration Corporation (the “Corporation”) and must be presented for reading by all
directors, officers, employees and consultants of the Corporation and its subsidiaries with access to strategic or material non-public information involving the corporation and its affairs.

The Policy covers all employees of the Corporation, its Board of Directors, consultants, those authorized to speak on its behalf and all other insiders. It covers disclosures in documents filed with the securities regulators, financial and non-financial disclosure, including management’s discussion and analysis (“MD&A”) and written statements made in the Corporation’s annual and quarterly reports, press releases, letters to shareholders, presentations by senior management and information contained on the Corporation’s web site and other electronic communications. It extends to oral statements made in meetings and telephone conversations with analysts and investors, interviews with the media as well as speeches, press conferences and conference calls.

This document will explain the Corporation’s policies with respect to confidentiality of information and rules that must be followed when buying or selling the Corporation shares. This document is only a summary of specific rules and regulations. If you have any questions on any issues discussed in this Policy or how you may be affected by the various securities laws, please contact the Chief Executive Officer (“CEO”), or in his or her absence, the Chief Financial Officer (“CFO”).

The onus for complying with the Policy and the relevant insider trading and other rules is on each director, officer, employee and insider of the Corporation. It is fundamental to the reputation and ongoing success of the Corporation that its directors, officers, employees, consultants and insiders respect and adhere to the rules and procedures outlined in this Policy. Members of the families of the directors, officers, employees, consultants and insiders of the Corporation and others living with them are expected to comply with this Policy, as if they themselves were directors, officers, employees, consultants or insiders of the Corporation. It is in your interest that the rules and procedures outlined in this Policy are complied with fully. Failure to comply with these rules and procedures may result in disciplinary action up to and including immediate termination of employment.

1.         DISCLOSURE OF MATERIAL INFORMATION

A.        Policy

To comply with the requirements of provincial securities regulators and the TSX, and in the interests of developing and maintaining the confidence
of the investing public, and in assisting the public in making informed investment decisions based on equal access to information, it is the policy
of the Corporation to promptly disclose to the investing public, and to its other public constituencies, all material information concerning the
operations and financial results of the Corporation other than such information as may be lawfully withheld from disclosure and only for
such time as it may be lawfully withheld from disclosure.

B.        Procedure

(I)       Information is deemed “material” and will require prompt disclosure when such information, if made public, would reasonably be expected to result in a significant change in the market price or value of any of the Corporation’s listed securities. It is also defined as anything that a reasonable investor would consider important in assessing the Corporation as a potential investment. Material information consists of both material facts and material changes. Examples of material information would include quarterly results, acquisition of new assets, senior management changes, equity or debt issues, commencement or update of co-development programs, etc.

In addition, the declaration of any dividend, conditional or unconditional, will be disclosed immediately upon the conclusion of the Board meeting at which the decision to declare the dividend was made, and quarterly financial statements will be disclosed immediately after the Board meeting at which they were approved.
The release of information pertaining to dividends and quarterly financial statements will be addressed by the CFO of the Corporation upon the Board’s approval of such statements and dividends without further instructions or authority.

The Corporation’s Technical Committee shall review and approve technical information contained in news releases prior to release of that information.

The Corporation shall endeavor to include, where appropriate, in its press releases and other disclosure documents (i) appropriate cautionary information, especially in reference to forward-looking statements, (ii) specific time references, e.g., ”as of (specific time and date rather than indefinite time references such as ‘currently’)
no merger discussions have taken place” to minimize the duty to update, and (iii) information sufficient to answer likely questions to minimize further inquiry.

(II)      Except as mentioned in the preceding paragraph, the CEO shall determine whether or not any information pertaining to the Corporation is material, and whether and when it will be disclosed. In making this determination, the CEO should obtain the advice and counsel of the Board of Directors and of the Corporation’s securities counsel. In the event of the absence or unavailability of the CEO, the responsibility for determining whether or not information is material, and whether and when it will be disclosed, will be assumed by the CFO with the advice and counsel of the Corporation’s securities counsel.

(III)     The CEO and CFO (the “Responsible Officers”) may appoint designated spokespersons (the “Designated Spokespersons”) authorized to disclose or discuss information concerning the Corporation to specific groups such as the media, analysts, institutional investors and other market professionals. All other directors, officers, employees and consultants approached by these, or other parties for such information shall refer such inquiries to one or more of the Responsible Officers.

(IV)     In the event that a Responsible Officer determines that material information should be disclosed, the Responsible Officer shall cause a news release to be issued disclosing all material facts and, if the TSX is open for trading, shall advise the Market Surveillance branch of the TSX (“Market Surveillance”) of the details of the release and the proposed method of dissemination. In the event that a Designated Spokesperson believes that material information should be disclosed, he or she should inform a Responsible Officer immediately. Where an announcement is to be made after the TSX has closed for trading, Market Surveillance should be advised of this information before trading opens the next trading day. Market Surveillance shall determine whether a halt in trading is necessary. After consulting with Market Surveillance, the Responsible Officer shall send the news release to Canada News Wire or other news distribution service, with a copy to Market Surveillance. Immediately following the issuance of the news release, the Responsible Officer shall seek the advice and counsel of the Corporation’s securities counsel regarding possible filing requirements (i.e., material change reports) with the appropriate securities regulatory authorities.

(V)     In the event that material information which would otherwise be required to be promptly disclosed must, for any reason, be kept secret for any length of time, the Responsible Officer, on the advice and counsel of the Corporation’s securities counsel, shall so advise Market Surveillance and explain the reasons for suchrequest. The Corporation should also discuss with securities counsel whether or not a confidential material change report should be filed. Release of the information shall thereafter be made as soon as possible, consistent with the instructions of Market Surveillance. If material information is being withheld, the Corporation is under a duty to take precautions to keep such information confidential (see Item #2 of this Policy – “Maintaining Confidentiality of Information”). In the event that such information or rumours thereof is divulged (other than in the necessary course of business), the Corporation shall immediately disclose the information to the general public in a news release prepared in accordance with this Policy.

(VI)     In making material disclosure and preparing the text and content of news  releases and other disclosure documents, the  Responsible Officer shall observe that:

(a)       Half-truths  are  misleading;  disclosure  must  include  any information which, if omitted, would make the rest of the disclosure misleading;

(b)       Unfavourable information must be disclosed as  promptly and completely as favourable information;

(c)       No disclosure of previously undisclosed information should be made to selected individuals or groups such as analysts, major shareholders or other market professionals including members of the financial press. If such selective disclosure is    made    through    inadvertence,    immediate    general disclosure  should  immediately  be  made  of  the  subject information through a news release prepared in accordance with this Policy;

(d)       Disclosure must be updated if earlier disclosure has become misleading as a result of intervening events;

(e)       The CEO will determine in advance what information is to be disclosed at meetings with analysts, and shall brief those officers    in    attendance    accordingly.         No    material information concerning the  finances or  prospects of  the Corporation is to be disclosed to  analysts  (in response to questioning or otherwise) before it has been released to the stock exchanges and  to  Filing  Services Canada, Inc.  or other news distribution service.   If material information is to be announced at an analyst or shareholder meeting or a press conference, its  announcement must be coordinated with a general public announcement by a news release; and

(f)        The  Corporate  Secretary  shall  maintain  a  record  of  all public records concerning the Corporation, including news releases, analyst research reports, reports in the  press  and debriefings following meetings, conference calls  or other interactions with analysts.  The materials in the record shall be available to the management of the Corporation and will assist the Responsible Officers in determining whether any particular information is material.

2.         MAINTAINING CONFIDENTIALITY OF INFORMATION

A.        Policy

No director, officer, employee or consultant in possession of non-public information concerning the technology, finances, affairs and prospects of the Corporation that, if generally known, could be reasonably expected to cause a significant change in the market price of the Corporation’s stock (“Confidential Information”) shall disclose such information to any person outside the Corporation, unless such person has been designated under this Policy, or by the CEO, to make such disclosure. In addition, no director, officer, employee or consultant shall disclose any such information to any person within the Corporation whose job duties do not require the
possession of such information.

Employees of the Corporation are permitted to disclose Confidential Information, if required to do so in the necessary course of business. This exemption from the prohibition against disclosing material non-public information, however, is not available for communications made to the media, securities analysts, institutional investors or other market professionals.

B.        Procedure

(I)        If any ambiguity exists as to whether or not information should be confidential, it should be discussed with the  Corporation’s CEO, CFO or securities counsel.

(II)      To  limit  the  number  of  people  who  know  about  Confidential Information, the  Corporation should limit  access to  only  those parties   who,   as   a   function   of   their   employment   with   the Corporation, are required to know the information.    Documents containing  confidential  information  should  be   clearly   marked “Confidential”, be stored in a secure place and code words should be used where practicable for material projects that have not been generally disclosed to the public.

(III)     Confidential matters should not be discussed in places  where the discussion may be overheard.  Confidential documents should not be read or displayed in public places and should be discarded via secure  shredder  service  whenever practicable.  Employees  must ensure they maintain the confidentiality of  information in their possession  outside  of  the  office  as  well  as  inside  the  office. Transmission of documents by electronic means, such as by fax or directly from one computer to another, should be made only where it is reasonable to believe that the  transmission can be made and received under secure conditions.

(IV)     Before  a  meeting  with  other  parties  at  which   Confidential Information may be imparted, the other parties should be told that they must not divulge that information to any other  party, other than in the necessary course of business, and that  they may not trade  in  the  Corporation’s  securities  until  the   information  is generally disclosed (see  Item #3  of  this  Policy  –  “Trading by Insiders and Employees”). In addition, other parties are required to sign a copy of  the Corporation’s Confidentiality  Agreement or Non-Disclosure and Non-Competition Agreement.

(V)      Confidential Information may be disclosed if this disclosure takes place as  part of  the necessary course of  business  with, and is pertinent  to,  the  ongoing  business   relationship  between  the Corporation and such parties as:

(a)       vendors and suppliers;

(b)       employees, consultants, directors and officers;

(c)       lenders, legal counsel and auditors;

(d)       parties to Confidentiality Agreements;

(e)       parties to negotiations;

(f)        labour unions and industry associations;

(g)       governmental and non-governmental regulators; and

(h)       credit-rating agencies.

In the event that there is an ambiguity as to whether or not the disclosure of certain Confidential Information is considered to be in the necessary course of business, the party responsible for the disclosure should consult the CEO or CFO, who may seek the further advice and counsel of the Corporation’s securities counsel.

(VI)     All employees who  are or  who  may be aware of  Confidential Information (including clerical staff) must be explicitly warned to keep it confidential. More specifically:

(a)       Employees  are  required  to  sign  the  Corporation’s   Non- Disclosure      and      Non-Competition      Agreement      upon commencement of their employment with the Corporation; and

(b)       Employees  must  not  disclose  Confidential   Information  to anyone, except in the necessary course of business; Employees must not discuss Confidential Information in situations where they may be overheard; and

(c)       Employees  must  not  participate  in  discussions  with  others about investments in the Corporation.

(VII)   Directors, officers, employees and consultants of the Corporation should not comment on draft reports submitted to them by analysts other than identifying inaccuracies, omissions or publicly disclosed factual information that may affect an  analyst’s  model.   Those parties  appointed  to  speak  to  the  media,  analysts,  institutional investors  and  other  market  professionals  should  be  briefed  in advance  to   review   what   information  is   material  and   what information has not been publicly disclosed.  Voice recordings of quarterly analyst conference calls shall be kept available for public access on a call-in basis for seven days after the call in question.

3.         TRADING BY INSIDERS AND EMPLOYEES

A.        Policy

Trading  in  the  securities  of  the  Corporation  (including  dealings  with options, futures, rights and all other securities) or the provision to other parties of information to facilitate a possible trade (“tipping”) by any director, officer  or  employee with  knowledge of  undisclosed material information about the Corporation is strictly prohibited.   In addition, in circumstances where a director, officer, employee or consultant becomes aware  of  undisclosed  material  information  concerning  another  public company as a result of their employment with the Corporation, trading in the securities of such other company is similarly prohibited.

B.        Procedure

(I)        It is an offence for any person in a “special relationship” with the Corporation  to  trade  securities  of  the  Corporation   while  in possession of material non-public information that, if made public, could reasonably be expected to cause a significant change in the price   of   the   Corporation’s   stock.      Persons   in   a   “special relationship” with the Corporation include all  directors, officers, employees and  consultants of  the  Corporation,  plus  all  parties (“tippees”) who learn of material  information from any director, officer  or  employee  of  the  Corporation  (“tippers”),  where  the tippee knows or reasonably  ought to have known that the tipper was  in  a  special  relationship  with the  Corporation.   Directors, officers,  employees  and consultants are also deemed to be in a special     relationship     with     another     company     (and     are correspondingly prohibited from trading in the securities of said other company), if they become aware of  undisclosed material information concerning the  other  company as  a  result  of  their employment with the Corporation.

(II)      Insiders are considered to have a “special relationship”  with the Corporation on an ongoing basis.  For the purpose of this Policy, the definition of “Insider” includes all directors, senior officers and greater than 10% shareholders of the Corporation.    In  order to prevent   insider   trading   violations   or   any    appearance   of impropriety, any Insider that proposes to make a trade that may be prohibited  under  this  Policy  should  obtain   from  the  CEO  a determination as to whether or not the undisclosed information that he or she possesses is material or whether a trade may be made.  If any  ambiguity  exists  as  to  whether  or  not  a  director,  officer, employee or consultant  should  be permitted to make a trade, the matter  should  be   discussed  with  the  Corporation’s  securities counsel.

Insiders of the Corporation will be required to complete and file an insider trading report within 5 days of the date that such Insider purchased or  sold  securities of  the  Corporation.   Insiders  are personally responsible for filing accurate and timely insider trading reports.   Insiders are required to provide a copy of all insider  reports  to  the  Corporate  Secretary,  or  other  designated person, concurrent with their filing to regulatory authorities. There now exists a web-based on-line filing system for Insider reports (www.sedi.ca).   Failure of an Insider to file an insider trading report on a timely basis may result in a fine of up to $1 million, imprisonment for  a  term  of  up  to  three  years,  or  both.    Any questions regarding filing insider trading reports should be taken up with the Corporate Secretary as early as possible.

(III)     Certain circumstances will give rise to periods of time (“Black- out Periods”) during which no trading of securities is to take place at all by directors, officers, employees and  consultants who are routinely (or in the special circumstances at hand) in possession  of  undisclosed  material  information  (“Restricted Persons”).     The  imposition  of  Black-out   Periods   is  to  be determined and announced by the CEO and shall include periods from five days before the release of the  first, second, third and fourth  fiscal  quarter financial  information,  and  shall  remain in effect until the second calendar day following release of the related financial information.  A  Black-out Period shall also be declared by   the   CEO   pending   the   announcement   of   any   material undisclosed development  affecting the Corporation or following the   crystallization   of   a    material   transaction   involving   the Corporation. Black-out  Periods  shall  remain in  effect  until  the second calendar day following release of the material information concerned. In declaring a Black-out Period, the CEO may stipulate whether any particular class of Restricted Person is to be fully or partially excused from the application of the Black-out Period, and the CEO  may determine whether any particular reason is to be given for the imposition of a Black-out Period.

(IV)    Persons involved in the negotiation of material transactions will be held to a higher standard than other Restricted Persons as a result of  their  more  intimate  knowledge  of  a  particular  transaction. Accordingly,   such    persons    should    cease    trading    in    the Corporation’s  securities  when  any  material   transaction  comes under serious negotiation, rather than upon  the  imposition of a Black-out Period. If any ambiguity exists as to whether or when a transaction  has  come  under  “serious   negotiation”,  the  matter should be discussed with the Corporation’s securities counsel.

(V)      Breaches of this Policy may constitute violation of securities laws and  can  cause  acute  embarrassment to  the  Corporation. If  the Corporation discovers  that  a  director,  officer  or  employee  has violated applicable securities laws, it  will refer the matter to the appropriate  regulatory  authorities.   Disciplinary  action  may  be brought against a party who violates this Policy, which could result in termination of employment with the Corporation.

4.         FORWARD-LOOKING INFORMATION

It  is  the  Corporation’s policy to  provide forward-looking information to  enable the investment  community  to  better  evaluate  the  Corporation  and  its  prospects.  The Corporation will make statements and respond to inquiries with respect to, for example: revenue  projections,  income  or  loss  projections,  pricing  and  profit  margin  trends, significant new developments, projected demand or market potential for products. In certain  circumstances,  however,  the  Corporation  will  refrain  from  making  specific quantifiable projections or disclosing information with respect to, for example: pricing, margins, customer identities or other information for competitive reasons. Moreover, all statements  will  be  accompanied  by  meaningful  cautionary  statements  identifying important factors that could cause actual results to differ materially from those projected in the statement.

The Corporation will observe the following guidelines with respect to forward-looking statements:

•  The information will be clearly identified as forward looking;

• The Corporation will identify the material assumptions used  in the preparation of the forward-looking information;

•  The  information  will  be  accompanied  by  a  statement   that identifies, in specific terms, the risks and uncertainties that may cause the actual results to differ materially from those projected in the statement; and

• The information will be accompanied by a statement that  the information is stated as of the current date and subject to change after that date, and the Corporation disclaims any  intention to update or revise this statement of forward-looking information, whether  as  a  result  of  new  information,  future   events  or otherwise.

Example:

Certain  information  included  in  this  news  release  is  forward- looking and is subject  to  important risks and uncertainties.   The results   or   events   predicted  in   these   statements  may   differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other  things: the  impact  of  price  and  product competition; the ability of the Corporation to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; the impact of  consolidations in the telecommunications industry and  stock  market  volatility.    For  additional  information  with respect to certain of these and other factors, see the reports filed by the  Corporation  with  the  B.C.  Securities  Commission.     The Corporation  disclaims any  intention or  obligation  to  update  or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

5.         ELECTRONIC DISCLOSURE

A.        Policy

All information disclosed by the Corporation electronically shall comply with the National Policy 51-201’s electronic communications guidelines (sec. 6.12) to ensure that such information is timely, accurate and up-to- date.

B.        Procedure

(I)        The  Corporation  should  ensure  that  its  investor   relations information is  available through  its  website.    However, the Corporation  must  not  disclose  material  information  on  its website,  or  distribute  it  by  e-mail,  or  any  other  electronic manner,  before  it  is  disseminated  in   a  news  release  in accordance with this Policy.  Information is not considered to be generally disclosed to the public, if it  only appears on the Corporation’s website. The Corporation shall furthermore review and update its electronic security systems  on a regular basis and shall monitor the integrity of its website to ensure that the site is accessible and has not been altered and  shall regularly review, correct and update information on its website over time.  It is not sufficient, for purposes of this Policy, if the information has been corrected or updated elsewhere.

(II)      The CEO is responsible for overseeing the Corporation’s policies on   electronic   communications   and   should   ensure    that   all information on the Corporation’s website or published  elsewhere electronically complies  with  applicable  securities  laws  and  the internal policies of the Corporation.  The  Corporation should not post any information on its website that is authored by a third party unless the information was prepared on behalf of the Corporation or is of a general nature and is not specific to the Corporation.

(III)     Employees of the Corporation must not engage in internet chat rooms   and   news   groups   in   discussions   relating   to   the Corporation, its securities or any actions taken or proposed to be taken by the Corporation.  All employee e-mail addresses are considered, for purposes of this Policy, to be corporate addresses of the Corporation and all correspondence received and sent via e- mail is considered, for  purposes of this Policy, to be corporate correspondence of the Corporation.

(IV)     The  Corporation  should  not  directly  respond  to   rumours posted in news groups or chat rooms, but instead should issue a news release in accordance with the terms of this Policy.  If any  director,  officer  or  employee  of  the  Corporation  becomes aware of a rumour in a chat room or news group or other source that may have a material impact on the price of the Corporation’s stock, he or she should immediately contact the CEO or the CFO, who  will,  with  the  assistance  of   the  Corporation’s  securities counsel, decide the appropriate course of action.

6.         PROCEDURE FOR REPORTING OF FRAUD AND  MISCONDUCT OR CONTROL WEAKNESSES

Each employee is expected to report situations in which he or her suspects fraud and misconduct or is aware of any internal control weaknesses. An employee should treat suspected fraud and misconduct seriously, and ensure that the situation is brought to the attention of  the  Board  of  Directors. In  addition, weaknesses  in  the  internal control procedures  of  the  Corporation  that  may  result  in  errors  or  omissions  in  financial information, or that create a risk of potential fraud or loss of the Corporation’s assets, should be brought to the attention of both management and the Board of Directors.

To facilitate the reporting of suspected fraud and misconduct, it is the policy of the Board of Directors that the employee (the “whistle blower”) has anonymous and direct access to an independent director on the Audit and Compensation Committee (the “Audit and Compensation Committee designate”) to receive reports, which may be made orally or in writing using the following methods:

1.         Use  the  Corporation’s  website  www.tanzanianroyaltyexploration.com   under Corporate Information / Whistle-Blower Policy and Procedures.  An email link is provided in order to make a confidential submission.

2.         Individuals  may  contact  the  Audit  and  Compensation  Committee  designate directly using the following methods:

a. By mail to: CONFIDENTIAL SUBMISSION
Dr. William Harvey, Audit and Compensation Committee
Designate
218 W. Hyerdale Dr.
Goshen, CT 06756
b. By email to: confidentialsubmissions@tanzanianroyalty.com
c. By telephone to: +(860) 248-9343

Should a new independent Audit and Compensation Committee designate be appointed prior  to  the  updating  of  this  document,  then  the  current  Chair  of  the  Audit  and Compensation Committee will ensure that the whistle blower is able to reach the Audit and Compensation Committee designate in a timely manner.  In the event that either the Audit  and  Compensation  Committee  designate  or   the  Chair  of  the  Audit  and Compensation Committee cannot be reached, the whistleblower should contact the Chair of  the  Board  of  Directors.    Access  to  the  names  and  place  of  employment of  the Corporation’s Directors can be found in the Corporation’s website.

In addition, it is the policy of the Board that employees concerned about reporting internal control weaknesses directly to management are able to report such weaknesses to the Board anonymously.  In this case, the employee should follow the same procedure detailed above for reporting suspected fraud.

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