Canadian Royalties Inc.

Canadian Royalties Inc.

August 15, 2007 12:46 ET

Canadian Royalties Inc.-Nunavik Nickel Project: Contract Award for Diesel Generators and Mining Equipment to Hewitt Equipment/Caterpillar

MONTREAL, QUEBEC--(Marketwire - Aug. 15, 2007) - Canadian Royalties Inc. (TSX:CZZ) announces that it has awarded the supply of primary and secondary Caterpillar power generation equipment, and its Caterpillar mining equipment fleet to Hewitt Equipment of Val-d'Or and Pointe-Claire, Quebec. The power generation equipment contract is valued at CDN$11 million, while the mining equipment fleet contract is valued at CDN$7 million, which are within the budget established in the Company's recently completed Bankable Feasibility Study.

The initial delivery of two Caterpillar Model 3516B diesel generators (1.6 and 1.8 megawatts) in the fall of 2007 will be supplied complete with fully integrated and self contained arctic enclosures, including all necessary ancillary equipment for turnkey operation. These machines will be used for primary power during the industrial complex construction phase which is scheduled to begin in the summer of 2008 and subsequently for emergency backup and peak load power once the project begins producing mining concentrates which is estimated for early in 2010. In addition, four Caterpillar Model 3612 3.3 megawatt machines will be used to power the mill and industrial complex once in operation. Two units will be delivered in 2008, and two units will be delivered in 2009, the timing of which supports the overall project implementation schedule. The supply of the heat recovery equipment, equipment shelters, and electrical switchgear are to be contracted separately as the detailed engineering of the power plant, currently underway by Genivar Consulting Group and Kaehne Consulting Ltd., advances.

The core mining equipment which consists primarily of three new Caterpillar 988H wheeled front end loaders, six 2007 model year 63 tonne 775F open pit ore and waste haul trucks, and a refurbished 16H motor grader. Most of this equipment will be delivered in the fall of 2007 for shipment to the site, where it will begin service in the summer of 2008 for major earthworks construction and road building purposes. Open pit mine preparations and pre-stripping is planned to start in 2009. Other miscellaneous Caterpillar construction and operations equipment such as vibratory compactors, skid steer loaders, backhoes, telehandlers, and forklifts are also supplied under the mining equipment contract for delivery in 2007.

Project Development Update

The construction of an 18 kilometre exploration access road to the Expo deposit began on schedule in July, 2007 and approximately 8 kilometers of the road have been completed to date. This access road is expected to be completed by the end of October 2007. It will support both exploration logistics and project development.

An additional 60 beds have been added to the Berbegamo logistics camp, bringing the camp capacity to 80 individuals. The Berbegamo logistics camp currently supports exploration activities and the Expo / Katinniq road construction project.

Environmental permitting is progressing through the various federal and provincial governmental departments as well as through the Kativik Environmental Quality Commission (KEQC). Canadian Royalties is responding to queries from the KEQC and the various federal ministries as part of the standard question and response cycle attached to the environmental permitting process.

The project engineering and construction team has moved into its new offices in Longueuil (Montreal south shore), Quebec. The work associated to the detailed engineering of the mill is proceeding on schedule with Genivar Consulting Group.

Project Exploration Update

As of the date of this press release, the exploration team had completed over 11,300 metres of drilling. Most of the drilling is directed at new exploration targets while some is based on results from the MegaTEM airborne geophysical survey, completed in June, 2007. In addition, some infill drilling is being completed on the Expo deposit and geotechnical drilling is being conducted to support detailed engineering of major project infrastructures. Exploration assay results will be reported in batches once received from the laboratory and verified for quality control purposes. Subsequent results will follow until year-end.

Grant Arnold, Vice-president Exploration, is a Qualified Person in accordance with National Instrument (NI) 43-101, and is responsible for the geological information presented in this press release. Canadian Royalties currently holds a 100% interest in the Ivakkak deposit, subject to a net smelter royalty ("NSR", refer to press release dated September 21, 2005) and a 70% interest and a 2% NSR in the Expo-Ungava property (which hosts the Mesamax, Mequillon and Expo deposits).

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.

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

This press 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. Incorporated herein by reference is the Company's forward looking statement as disclosed in its 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.

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