Northern Rand Resource Corp.

September 23, 2010 13:25 ET

Northern Rand Enters Into Agreements to Acquire Tanzanian Properties

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 23, 2010) - Northern Rand Resource Corp. ("Northern Rand" or the "Company") (TSX VENTURE:NRR) is pleased to announce that it has entered into arm's length agreements with each of Eden Gold Limited, Eden Minerals Limited and Falco Goldfields Limited, all companies incorporated under the laws of the United Republic of Tanzania, pursuant to which Northern Rand has an option to acquire a 100% interest in certain properties. Northern Rand proposes to acquire ten prospecting licences totalling 859 square kilometres from Eden Gold Limited (the "West Handeni Property") and seven prospecting licences totalling 496 square kilometres from Eden Minerals Limited (the "East Handeni Property"), all such prospecting licenses located in the Handeni district in the Tanga region of eastern Tanzania. Northern Rand also proposes to acquire eight prospecting licences totalling 2,075 square kilometres from Falco Goldfields Limited, such prospecting licenses located in the Handeni-Muheza district in the Tanga region of eastern Tanzania (the "Handeni-Muheza Property").

The West Handeni Property is located approximately 10 kilometres from the western boundary of Canaco Resources Inc.'s ("Canaco") Magambazi property in the Handeni district in the Tanga region. The East Handeni Property is located approximately 15 kilometres from the eastern boundary of Canaco's Magambazi property and the Handeni-Muheza Property is located approximately 48 kilometres to the northeast of Canaco's Magambazi property. By press releases dated July 12, 2010 and September 13, 2010, Canaco announced a gold discovery on their Magambazi property as well as follow up exploration results.

Recent graduate level research published by the University of Western Australia (Kabete et al, 2008) show that the highly-endowed Sukumaland Superterrane, the geological host to Tanzania's most significant gold deposits, has been overprinted on its east-southeastern extension by a Proterozoic orogeny adjacent to the Mozambique Belt further east. Newly-recognized gold prospects, exploited on a small scale by artisanal miners, are sited at several locations in this overprinted Archean terrane.

The geology of the Handeni district represents a non-traditional exploration environment dominated by Proterozoic, high-grade metamorphic (granulite to amphibolite facies) rocks. Barth (1990) noted that the Mozambique belt extends from North (outcrops of gneisses and quartzites exposed at Mbulu) on the eastern Escarpment of Lake Eyasi Graben. Other exposures are the Serengeti plains outcrops at Naabi gate (Monadnocks), Lobo lodge, Bologonja springs and Grumeti head waters. The belt extends further South to Mozambique, Malawi and Zambia. Saggerso (1969) on his account described that the Mozambique belt consists of gneisses, limestone (sometimes graphitic), graphite schists and quartzites containing kyanite and sillimanite. The high grade metamorphic facies, characteristic of the belt, resulted from granitisation and migmatization which occurred during the Pan-African tectono-Thermal event which affected the entire Mozambique belt.

The belt is highly deformed with shear zones developed at the North Easterly and Westerly trend. Folding is present at both regional and local scale. These structures are an important target area for stock work gold mineralization within the fold hinge zones. The Mozambique belt in Tanzania is underexplored and from recent field observations, the area is characterised by banded amphibolites and gneissic granulites, quartzites, migmatites, marble, schist and mylonite.

Traditionally, exploration for Precambrian orogenic gold deposits has been concentrated towards the centre of cratons in sub-greenschist, to greenschist amphibolite transition domains (Goldfarb et al, 2005). Recent exploration has, however, increasingly uncovered orogenic-style gold deposits in amphibolite to lower granulite facies terranes external to accepted craton margins. An important example is the world-class Plutonic deposit of Western Australia, which is sited in Archaen rocks, reworked in the Paleoproterozoic. It is strongly suggested that this type of gold deposit is reworked Archaen orogenic gold, rather than epigenetic deposits of Proterozoic age (Groves et al, 2008).

Subject to the approval of the TSX Venture Exchange, Northern Rand will acquire a 100% undivided interest in and to each of the West Handeni Property, East Handeni Property and Handeni-Muheza Property, subject to a 3% net smelter royalty ("NSR") on each property. The consideration payable to the vendors shall consist of the following: (i) an aggregate cash payment of $800,000 on closing; (ii) aggregate cash payments of $3,200,000 over a 24 month period after closing; and (iii) the issuance of up to an aggregate of 5,000,000 common shares of Northern Rand over a 30 month period after closing. Pursuant to the terms of the agreements, Northern Rand will also be required to incur minimum exploration expenditures of $2,500,000 on the West Handeni Property and of $1,500,000 on each of the East Handeni Property and the Handeni-Muheza Property, all over a period of 30 months after closing. If Northern Rand does not make any or all of the cash payments, issue any or all of the common shares or incur any or all of the exploration expenditures specified above, it shall be in default under the agreements and all rights and title to the West Handeni Property, East Handeni Property and Muheza Property, as the case may be, shall be promptly returned to the vendors. In addition to the above, the agreements also provide that Northern Rand shall have the option to acquire 2% of the NSR on the West Handeni Property, East Handeni Property and/or Handeni-Muheza Property, exercisable at any time, in consideration for cash payments of $2,500,000 for the West Handeni Property and $1,500,000 for each of the East Handeni Property and the Handeni-Muheza Property.

The completion of the acquisition of the West Handeni Property, East Handeni Property and Handeni-Muheza Property is subject to a number of conditions precedent including, without limitation, the following: (i) all director, shareholder, securities and regulatory approvals and acceptances (as required) and all third party consents (as required) having been obtained including, without limitation, the approval of the TSX Venture Exchange; (ii) prior to the closing date, the vendors shall have provided to Northern Rand technical reports on the properties prepared in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") and in a form acceptable to the TSX Venture Exchange; and (iii) prior to the closing date, the vendors shall have provided to Northern Rand title opinions on the properties, in form satisfactory to Northern Rand, acting reasonably.

Concurrent with the acquisitions described above, subject to the approval of the TSX Venture Exchange, Northern Rand proposes to undertake a non-brokered private placement of up to 15,000,000 units (each, a "Unit") at a price of $0.40 per Unit for aggregate gross proceeds of up to $6,000,000. Each Unit is proposed to consist of one common share of the Company (each, a "Common Share") and one common share purchase warrant (each, a "Warrant"). Each Warrant will be exerciseable to acquire a Common Share at a price of $0.65 per share for a period of 12 months from the date of issuance provided, however, that the Company shall have the option to require the Warrant holders to exercise their Warrants in the event that the 20 day weighted average trading price of the Common Shares on the TSX Venture Exchange is equal to or greater than $1.00 at any time before the expiry date of the Warrants. The net proceeds of the private placement will be used, in part, to satisfy the cash payments and exploration requirements related to the acquisitions described above.

Trading of the Common Shares has been halted and will not resume until Northern Rand has satisfied certain TSX Venture Exchange requirements, including the requirement to provide the TSX Venture Exchange with technical reports on the properties prepared in accordance with NI 43-101. Northern Rand will issue a further new release as soon as further details are available regarding the resumption of trading.

Mr. Nico Scholtz, M.Sc., Geology Pr. Sci. Nat., Principal Geologist of Scarab Environmental and Geological Enterprises, is the "qualified person" as defined in NI 43-101, who has reviewed and approved the technical content in this press release.

Reader Advisory

This press release should not be considered a comprehensive summary of the terms of the acquisitions described above. Additional information may be required by the TSX Venture Exchange and may be disseminated at a future date following a satisfactory review by the TSX Venture Exchange.

Trading of the common shares of Northern Rand will remain halted pending receipt and review by the TSX Venture Exchange of acceptable documentation regarding Northern Rand following completion of the acquisitions. The proposed acquisitions have not been approved by the TSX Venture Exchange and remain subject to TSX Venture Exchange approval.

Completion of the acquisitions is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. The acquisitions cannot close until the required approvals are obtained. There can be no assurance that the acquisitions will be completed as proposed or at all.

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to timing and completion of the acquisitions, the completion of the conditions precedent to the acquisitions (including receipt of TSX Venture Exchange approval), the terms of, timing and completion of the private placement of Units and the expected use of net proceeds. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors could cause results to differ materially from those expressed in the forward-looking statements include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in commodity prices; governmental regulation of the mining industry, including environmental regulation; geological, technical and drilling problems; unanticipated operating events; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for commodities; liabilities inherent in mining operations; changes in tax laws and incentive programs relating to the mining industry; and the other factors described in our public filings available at Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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