Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

October 12, 2006 13:56 ET

Canadian Royalties Inc.: Community Activities and Corporate Developments Update

MONTREAL, QUEBEC--(CCNMatthews - Oct. 12, 2006) - Canadian Royalties Inc. (TSX:CZZ) provides the following update of recent corporate developments and community activities.

Raglan South Nickel Project - Community Activities Update

As part of the ongoing efforts to maintain a mutually supportive relationship between Canadian Royalties and local communities near the Raglan South Nickel Project, the Company has recently retained local Community Relations Officers ("CRO") in each of the following communities: Kangiqsujuaq, Salluit, and Povirnituq, all of which are located in the Nunavik region of northern Quebec. Each of the CRO's will act as the Company's community relations consultant in their respective communities and will assist in maintaining an open discussion about potential impacts and benefits to those local communities for the creation of jobs, job training programs and complementary business and contract opportunities and provide information regarding environmental issues. The CRO's will complement the Company as it continues its direct contact with each of the communities through additional meetings with the Landholdings Corporations, and/or municipal authorities.

Canadian Royalties was pleased to assist this summer with infrastructure and logistical support along the road from Douglas Harbour for the inaugural Arctic Marathon Cruise. This event, a joint effort with the Toronto Marathon and Cruise North Expeditions, featured a classic 42-km marathon along the Douglas Harbour road. The Arctic Marathon Cruise promotes tourism awareness in the Nunavik region and presents a business opportunity for the benefit of the Inuit communities. Makivik Corporation and Cruise North Expeditions (Inuit joint venture business) are the event's organizers. For further information and event photos, visit http://www.canadianroyalties.com/arctic-marathon and http://www.cruisenorthexpeditions.com/.

Canadian Royalties has recently signed a memorandum of understanding ("MOU") with Makivik Corporation. The purpose of the MOU is to establish a framework and schedule to complete a comprehensive impact benefits agreement establishing each of the respective undertakings of both the Company and Makivik Corporation, with respect to the Raglan South Nickel Project.

Corporate Update

Canadian Royalties is pleased to announce the appointment of Mr. Gaetan Lavalliere as Exploration Manager. Mr. Lavalliere has a B.Sc. in geology from the Universite de Montreal, a PhD degree in Mineral Resources (Metallogeny of Massive Sulphide Deposits and Optimization of Associated Exploration Strategies) from the Universite de Quebec a Chicoutimi. Mr. Lavalliere was most recently employed as a Regional Manager of SOQUEM where he directed exploration programs and teams in the Abitibi Region of Northwestern Quebec. The Company looks forward to working closely with Mr. Lavalliere who will use his expertise to assist R. Bruce Durham, the Company's Vice President of Exploration and Business Development with the Raglan South Nickel Project and the Company's exploration efforts on its Abitibi Greenstone Belt properties.

Canadian Royalties announces that Ms. Luciana Zannella, the Company's Secretary-Treasurer has accepted a a new professional opportunity in another industry. The Company wishes her the very best in her new career endeavour and takes this opportunity to express its gratitude for her exemplary work. Canadian Royalties announces that Mr. Jens Zinke will be, on an interim basis, her successor as Corporate Secretary.

The Company announces that it has granted incentive stock options under its Stock Option Incentive Plan to one director, several consultants, and employees for an aggregate 354,000 common shares of the Company at an exercise price of $2.00 per share. Of these, 200,000 options were granted to a director of the Company. All such options expire five years from the date of grant and are subject to all applicable hold periods.

About Canadian Royalties and the Raglan South Nickel Project

Canadian Royalties' main focus remains evaluating the potential of establishing an independent, stand-alone Ni-Cu-PGE mining and milling operation in the general vicinity of Xstrata Nickel's Raglan Mine in Nunavik, Quebec. Canadian Royalties is currently proceeding with permitting applications, a bankable feasibility study ("BFS") and an environmental and social impact analysis ("ESIA"), as well as with exploration for additional resources near existing Ni-Cu-PGE deposits and new areas of mineralization.

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

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