Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

August 18, 2009 17:41 ET

Canadian Royalties Adopts Shareholder Rights Plan

MONTREAL, QUEBEC--(Marketwire - Aug. 18, 2009) - Canadian Royalties Inc. (the "Company", or "Canadian Royalties") (TSX:CZZ) has adopted a shareholder rights plan (the "Rights Plan"). The Rights Plan has been adopted to ensure the fair treatment of all Canadian Royalties' securityholders in connection with any take-over bid for the outstanding common shares or the outstanding 7% convertible senior unsecured debentures due March 31, 2015. The Rights Plan will provide securityholders with adequate time to properly evaluate and assess a take-over bid without facing undue pressure or coercion. The Rights Plan also provides the Board of Directors of the Company (the "Board") with additional time to consider any take-over bid and, if applicable, to explore alternative transactions in order to maximize shareholder value.

Pursuant to the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders is deemed to be a "Permitted Bid". A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, in addition to certain other conditions, must remain open for 60 days. In the event a take-over bid does not meet the Permitted Bid requirements of the Rights Plan, the rights issued under the plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of Canadian Royalties at a significant discount to the market price of the common shares at that time.

The Board has called a special shareholders meeting to ratify its adoption of the Rights Plan to be held on September 30, 2009. The Rights Plan has been adopted subject to TSX regulatory approval.

The Board has determined to defer the "Separation Time" for rights under the Rights Plan in connection with the offers made by Jien Canada Mining Ltd., Jilin Jien Nickel Industry Co., Ltd., Jien International Investment Ltd. and Goldbrook Ventures Inc. (the "Jien Offers"), to September 11, 2009, in order to permit the Bidders to make a Permitted Bid.

The Special Committee of the Board and the Board will provide securityholders with their recommendations in relation to the Jien Offers by way of press release and directors' circular as contemplated by securities laws.

About Canadian Royalties and the Nunavik Nickel Project

Canadian Royalties is a mineral exploration company whose principal active area is along the South Trend located in the Raglan mining district of Northern Quebec's Nunavik Region. Since 2001, the Company has discovered and delineated several potentially mineable nickel-copper-cobalt-platinum-palladium-gold deposits which collectively form the Nunavik Nickel Project (the "Project"). The Company has completed a Bankable Feasibility Study ("BFS") and has received its Environmental Certificate of Authorization ("CA"); it has also received mine leases for four sites, namely the Ivakkak, Mequillon, Expo, and Mesamax. An Impact and Benefits Agreement ("IBA") has been entered into between the Company, three (3) Inuit communities, and Makivik Corporation, the non profit legal representative of the Inuit; the IBA constitutes the Company's formal commitment to ensure a fair and sustainable distribution of the economic benefits stemming from the Project. Development of the Project was initiated in 2007; the Project was subsequently put on care and maintenance as a result of the 2008 financial crisis. The Company's objective is to develop and exploit the mineral resources comprising the Project either independently or through a partnership.

Forward-looking Statement

This news release contains certain forward-looking statements or forward-looking information. These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability and control, which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Some of these risks and uncertainties are identified and disclosed under the heading "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2008. Accordingly, all of the forward-looking information contained in this press release is qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company, as expressed or implied by the forward-looking information, will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business operations. All forward-looking statements speak only as of the date of this news release and the Company does not undertake any obligation to update or publicly disclose any revisions to such forward-looking statements to reflect events, circumstances or changes in expectations after the date hereof, except as required by applicable securities law. Accordingly, readers should not place undue reliance on forward-looking statements.

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