Canadian Royalties Inc.

Canadian Royalties Inc.

May 16, 2006 08:45 ET

Canadian Royalties Inc.: Announces AGM Results, Changes to the Board of Directors, New Appointments, Private Placement Financing of CDN$6.6 Million...

MONTREAL, QUEBEC--(CCNMatthews - May 16, 2006) - Canadian Royalties Inc. (TSX:CZZ)

...Board Approval to Initiate Bankable Feasibility Study

Canadian Royalties Inc. announces that shareholders approved all resolutions put to the Annual and Special Meeting of Shareholders (AGM), held in Montreal, QC on Thursday, May 11, 2006. Details of the voting by the shareholders are set forth below. Canadian Royalties welcomes the addition of Mr. David Constable to the Board of Directors. In addition, Canadian Royalties announces several changes to the officers of the Corporation and key appointments, which are detailed below. A private placement financing of CDN$6.6 million at $2.00/share is announced, also detailed below.

Board Appointments

The following board members stood for election and were duly re-elected: Glenn J. Mullan, Chairman; R. Bruce Durham; Thomas J. Obradovich; Michael H. Wilson; Raymond Savoie and Richard Faucher. David Constable was proposed for appointment for the first time and was duly appointed to the Board. The Canadian Royalties Board of Directors, as of the AGM, is now comprised of a majority of independent directors.

Other AGM Results

The auditors of the Corporation, Raymond Chabot Grant Thornton LLP, were re-appointed, the Amended and Restated Shareholder Rights Plan Agreement dated as of May 30, 2003 was reconfirmed, and a special resolution was passed by the requisite majority to amend the Articles of Continuance of the Corporation to increase the maximum number of directors from nine to eleven. Seven of these Board of Directors positions are currently filled.

New Corporate Organization

Following the AGM, the Board of Directors approved a new structure of the Corporation's officers and key personnel, designed to strengthen Canadian Royalties' organization, allow management to pursue its principal objective of developing a stand-alone nickel-copper-platinum-palladium mine on the Raglan South Nickel Project, and to scout and consider strategic initiatives for the further development of the Corporation and its projects. Glenn J. Mullan was reappointed as the Chairman of the Board of Directors. Mr. Richard Faucher was appointed as the Corporation's President and CEO. Mr. Faucher brings over 30 years experience in leadership and management roles, within Falconbridge and other public mining companies. Mr. Bruce Durham was appointed as the Corporation's Executive Vice-President, Exploration and Business Development. With over 30 years experience in the mining industry, which includes involvement in a series of significant mining discoveries, Mr. Durham will retain the responsibility of improving the asset base of Canadian Royalties through exploration and potential business acquisitions or other arrangements. Dr. Jens Zinke was appointed the Corporation's Interim Chief Financial Officer; his appointment brings key financial expertise to the management team that will assist in assessing strategic initiatives and financing with respect to the Raglan South Nickel Project. Ms. Luciana Zannella, employed as the Corporation's lawyer since 2003, was appointed as Secretary-Treasurer. Mr. Glen Schlyter, P.Eng., was appointed project manager of the Raglan South Nickel Project. Ms. Annie Karahissarian was appointed Controller.

Additionally, the Board of Directors appointed the members of the Corporation's three standing committees: the audit committee, the corporate governance committee, and the compensation committee. All three committees are comprised of independent directors.

About David Constable

David Constable, P.Geo., MBA, is a professional geologist and consultant with over 25 years experience in mineral exploration and mining development. Mr. Constable is currently Vice-President Investor Relations and Corporate Affairs for a private oil and gas exploration company. Mr. Constable was previously Vice-President Investor Relations and Corporate Affairs for FNX Mining Company Inc., a nickel-copper-platinum-palladium producer listed on the TSX; and Vice-President of Normandy Mining Limited, Australia's largest gold producer before it was acquired in 2002 by Newmont Mining. Mr. Constable is an experienced director, and a member of the boards of several resource companies. Canadian Royalties welcomes Mr. Constable to the Board, and looks forward to his guidance, particularly considering his recent experience with FNX Mining Company Inc.

New Private Placement Financing Announced

The Corporation has entered into a non-binding agreement in principle with an institutional investor for a private placement of 3,333,333 common shares of Canadian Royalties at a price of $2.00 per share for gross proceeds of $6,666,666. Canadian Royalties plans to use the proceeds raised from this placement to finance its activities on the Raglan South Nickel Project with a portion of the proceeds raised to be allocated to finance other general corporate activities. The financing does not require the issuance of any warrants and there are no commissions payable.

The private placement is subject to the receipt of all the required regulatory approvals. All the securities issued pursuant to the offering will be subject to a hold period of four months from the date of closing.

About Canadian Royalties and the Raglan South Nickel Project

Canadian Royalties is evaluating the potential of establishing an independent, stand-alone mining and milling operation in the general vicinity of Falconbridge's Raglan Mine in northern Quebec, where significant infrastructure is in place. Canadian Royalties recently announce a positive preliminary economic assessment (PEA) on the Raglan South Nickel Project, and is currently proceeding with permitting applications.

The Board of Directors approved management's recommendation to proceed immediately with a Bankable Feasibility Study, based upon the positive results of the PEA.

The Statements contained in this press release may contain statements that may involve a number of risks and uncertainties. Actual events or results could defer materially from the Company's expectations and projections.

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