Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

June 30, 2005 10:19 ET

Canadian Royalties Inc.: $8,500,000 Raglan South Exploration Program Commences; Expo Resource Estimate Anticipated Within Two Weeks

MONTREAL, QUEBEC--(CCNMatthews - June 30, 2005) - Canadian Royalties Inc. (TSX:CZZ) reports that exploration and drilling crews have been mobilized to its Raglan South Nickel project, commencing an $8,500,000 exploration program located approximately 15 kilometres south of Falconbridge's Raglan Division mining operation in Nunavik, northern Quebec. Canadian Royalties has been successfully exploring for, and defining, nickel-copper-cobalt-platinum-palladium (Ni-Cu-Co-PGE) deposits on its extensive land position since 2001. Recent reports on the Ni-Cu-Co-PGE deposits now place Canadian Royalties' total indicated resources on the project at 6.12 million tonnes with average grades of 1.1% nickel, 1.4% copper, and 3.8 g/t PGE. These resources do not include an estimate for the Expo deposit where Canadian Royalties has completed 111 diamond drill holes (11,500 metres of drilling) and outlined at least part of the significant massive and disseminated Ni-Cu-Co-PGE bearing sulphide mineralization. Strathcona Mineral Services Limited, independent consultants to Canadian Royalties, are nearing the completion of an initial estimate (to National Instrument 43-101 standards) of the mineral resources defined to date at the Expo deposit. The release of the results of this resource estimate study is expected within two weeks.

2004 Exploration Highlights

One of the highlights of Canadian Royalties' success to date has been the definition of near surface, high grade, high dollar value, polymetallic mineralization at the Mesamax deposit. In May, 2005, Strathcona Minerals completed a revised resource estimate on the Mesamax deposit with increased indicated resources at the Mesamax deposit of 1,848,000 tonnes grading 2.1% Ni, 2.6% Cu, 0.08% Co, 0.2 g/t Au, 1.0 g/t Pt and 3.8 g/t Pd (5 g/t PGE). An additional 220,000 tonnes of net-textured sulphides remain to be added to the Mesamax resource pending metallurgical testing of this material, that is currently anticipated to be completed during the third quarter of 2005.

A significant highlight of the 2004 program was the tripling of indicated resources at the Mequillon deposit to 4,185,000 tonnes grading 0.6% Ni, 0.9% Cu, 0.03% Co, 0.2 g/t Au, 0.7 g/t Pt and 2.4 g/t Pd (3.3 g/t PGE). It is significant that mineralization has been consistently intersected over a length of 1000 metres and the zone remains open to further extension to the east where drilling ceased at the end of the 2004 program. Of particular note is that drilling at the eastern limit produced the first significant massive sulphides in the Mequillon deposit.

2005 Exploration Program Objectives

As part of the expanded 2005 program, Canadian Royalties is increasing its diamond drilling program by adding the fourth and fifth diamond drills to the project. Canadian Royalties will focus a significant amount of effort on the definition of additional mineralization at both the Mequillon and Expo deposit areas. Drilling in the 2005 exploration season is expected to begin at the Expo deposit with two diamond drills. Drilling at the Mequillon deposit will start shortly and will concentrate on the eastern extension to that deposit.

At the Mesamax deposit, a larger "HQ" sized diamond drill rig will be arriving on the project in mid July and be operation shortly thereafter, to collect a 50 tonne representative bulk sample of the massive and disseminated sulphide mineralization. This bulk sample material will be catalogued, sealed and shipped south at the end of the field season to SGS Lakefield Laboratories (Lakefield, ON) for processing as a bulk sample in a pilot plant setting. This pilot plant test work is a critical and necessary step in the advancement of the project toward eventual feasibility studies.

Numerous other diamond drill targets have been identified in the course of exploration work completed to date. Ni-Cu-Co-PGE mineralization was intersected at a number of locations during the 2003-2004 drilling programs, and the results of that work have now been integrated into the strategy for the 2005 exploration program. A number of previously untested airborne and ground based geophysical responses typical of that expected from accumulations of sulphide mineralization are priority targets for the 2005 program. Approximately 20% of the diamond drill program will target new areas of mineralization, located mainly between the Mequillon and Mesamax deposits.

Many other activities, from prospecting, airborne and ground geophysical surveying, to environmental test work and initial road construction work will be undertaken this year as Canadian Royalties continues to expedite the exploration and evaluation of this rapidly evolving Ni-Cu-Co-PGE project.

Earlier this month Canadian Royalties mobilized an advance party and helicopter to the project to open camps in preparation for full field operations and drilling, which are now underway. A winter program of fuel and equipment deployment was undertaken in late March and April to help expedite the field program start-up, pre-positioning over 800 drums of fuel from the port facilities to initial drill setups at the Mesamax, Expo and Mequillon deposits.

"We are excited to get back drilling on the project and we are particularly excited to be in a position to continue to expand the resource base while testing new blue sky targets throughout the property", said Bruce Durham, President and CEO, commenting on the drill program start-up. Bruce Durham is the designated Qualified Person responsible for the exploration program on the property and the person responsible for the preparation of this release.

For additional information please visit our website at www.canadianroyalties.com.

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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