Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

January 09, 2008 10:46 ET

Canadian Royalties Inc.: Nunavik Nickel Project Progress Update

MONTREAL, QUEBEC--(Marketwire - Jan. 9, 2008) - Canadian Royalties Inc. (TSX:CZZ) provides the following progress report in respect of its Nunavik Nickel Project, where scheduling and budget are on target, as outlined in the Company's Bankable Feasibility Study ("BFS") (1) dated June 2007.

Budget

It is anticipated that the Company will meet its target budget as defined in the BFS completed by SNC-Lavalin Group in June 2007. The Company has purchased or ordered all long-lead-time items such as ball-mills, generator sets, and the mining fleet, as well as such items which have been determined to be critical for the timely start of construction, such as a camp which is to provide accommodations for up to 340 workers. These account for approximately $92 million in expenses and represent 33% of the project's direct costs of $280 million, and 20% of the aggregate project costs of $465 million. The Company expects both commitments and expenses to remain within the forecasted budget as development progresses.

Scheduling

Additionally, scheduling in relation to the project as detailed in BFS is on target. Permitting is proceeding normally: the Environmental Impact Assessment Study (EIAS) has to date been reviewed by the relevant environmental authorities and frequent exchanges have taken place between the Company and such authorities where additional answers and / or engineering details have been provided by the Company. In early December the company held various open house meetings to inform the population inhabiting the communities in the vicinity of the project. Further, the Company advises that the public hearings which are to be presided by the environmental authorities have been scheduled for early February of 2008.

In anticipation of the timely start of the project's construction phase, the Company continues to grow its project team through the addition, in the first quarter of 2008, of both site construction supervisors and managers.

To date a total of four (4) vessels comprising the majority of the camp's modules, 80% of the mine fleet, a number of generators, and other materials essential for the initiation of construction have been delivered to site. Two additional vessels transporting construction materials have also been scheduled for early July-08 deliveries. Following the delivery of the environmental Certificate of Authorization (C.A.), it is anticipated that construction will commence during the second quarter of 2008.

About Canadian Royalties and the Nunavik Nickel Project

Canadian Royalties has initiated the development of an independent, stand-alone nickel-copper mine on its Nunavik Nickel Project, located 20 kilometres south of Xstrata Nickel's Raglan Mine in northern Quebec. Canadian Royalties is proceeding with permitting applications, as well as exploration for additional resources.

Canadian Royalties currently holds a 100% interest in the Ivakkak deposit, subject to a net smelter royalty ("NSR", refer to news release dated September 21, 2005). Additionally, Canadian Royalties has vested in a 70% interest in the Expo-Ungava property (which hosts the Mesamax, Mequillon and Expo deposits), where its interest shall be increased to 80% simultaneously with the creation of the joint venture. Further, Canadian Royalties holds an underlying 2% NSR on the Expo-Ungava Property.

Forward-looking Statement

This news release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Such risks and uncertainties are disclosed under the heading "Risk Factors" in the Company's Amended and Restated Annual Information Form dated July 10, 2007 for the year ended December 31, 2006. Accordingly, readers should not place undue reliance on forward-looking statements.

(1) A bankable (full) feasibility study is a comprehensive analysis of a project's economics (+/- 15% precision) and is used by the banking industry for financing purposes.

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