Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

July 10, 2007 16:44 ET

Canadian Royalties Initiates Development of the Raglan South Nickel Project: Files Prospectus

MONTREAL, QUEBEC--(Marketwire - July 10, 2007) - NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

Canadian Royalties Inc. (TSX:CZZ) (the "Company" or "Canadian Royalties") announces that it has filed a preliminary short form prospectus with the regulatory authorities in each of the provinces of Canada in respect of a treasury offering of common shares (the "Offering"). BMO Capital Markets will act as lead underwriter in connection with the offering on behalf of a syndicate of dealers which includes Desjardins Securities Inc., Raymond James Ltd., and Blackmont Capital Inc. The number of common shares to be distributed and the purchase price of each common share will be determined in the context of the market, with final terms to be determined at the time of the filing of the final short form prospectus.

In connection with the Offering, the Company has granted the underwriters an over-allotment option, exercisable in full or in part for a period of 30 days from the date of closing of the Offering, to purchase up to a further 15% of the aggregate common shares sold pursuant to the Offering at a price equal to the offering price to cover over-allotments and for market stabilization purposes. The Company plans to use the net proceeds from the Offering to initiate the initial phase of development of the Raglan South Nickel Project, to continue exploration, and for other general corporate and administrative purposes.

The Offering is anticipated to close early in the third quarter, and is subject to certain conditions including, but not limited to, the entering into by the Company and the underwriters of an underwriting agreement, and the receipt of all the necessary regulatory approvals, including the approval of the Toronto Stock Exchange. The preliminary short form prospectus has been filed on SEDAR at www.sedar.com.

In conjunction with the filing of the preliminary short form prospectus, the Company further announces that it has filed an amended and restated annual information form for the year ended December 31, 2006 for the sole purpose of removing from the annual information form a disclosure stating that technical reports previously filed via SEDAR were incorporated by reference in the annual information form.

The common shares have not been registered under the United States Securities Act of 1933 (the "Act") and may not be offered or sold absent registration under the Act or an applicable exemption from the registration requirements thereof. This news release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction or an exemption therefrom.

Ownership of the Raglan South Nickel Project

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 Raglan South Nickel Project

Canadian Royalties is in the process of initiating the development of the Raglan South Nickel Project which is anticipated to be 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, as well as with exploration for additional resources near existing Ni-Cu-PGE deposits and new areas of mineralization.

Forward-looking Statements

This news release contains certain forward-looking statements or forward looking-information. 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 for the year ended December 31, 2006 and dated July 10, 2007. Further, forward-looking information is in addition based on various assumptions, including, without limitation, the expectation and beliefs of management, the assumed long term price of nickel, that the Raglan South Nickel Project is a technical viable and economic operation, that it can be successfully completed by the Company, that the Company will receive the required permits and access to surface rights, and that the Company can access financing, appropriate equipment, and sufficient labor. Should one or more of these risks and uncertainties materialize, or should the underlying assumption prove incorrect or different, actual results may vary materially from those described in the forward-looking statements. All forward looking statements speak only as of the date of this news release and the Company does not undertake any obligation to update or publicly release any revisions to such forward-looking statements to reflect events, circumstances, or changes in expectations after the date hereof. Accordingly, readers should not place undue reliance on forward-looking statements.

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

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