Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

May 12, 2009 11:16 ET

Canadian Royalties' Joint Venture Update: Transfer of 80% Interest in the Expo-Ungava Property and Arrears Cash Call

MONTREAL, QUEBEC--(Marketwire - May 12, 2009) - Canadian Royalties Inc. (TSX:CZZ) announces that it has made application to the Ministere des Ressources naturelles et Faune ("MRNF") to effect the transfer of an additional 10% interest in the Expo-Ungava property from Ungava Minerals Exploration Inc. to Canadian Royalties. As announced on April 2nd, 2009, Arbitrator Maitre Claude-Armand Sheppard, in his Award dated April 1, 2009, declared that the Award shall constitute valid title upon which the MRNF may register an additional 10% interest in favour of Canadian Royalties, in the event that Ungava Minerals failed to transfer the interest co-operatively prior to April 15th, 2009. Ungava Minerals failed to do so, and as such, Canadian Royalties applied directly to the MRNF for the transfer.

Since the filing of the transfer documentation with the MRNF, Canadian Royalties has been advised that Ungava Minerals and its parent company, Nearctic Nickel Mines Inc., have attempted to prevent the registration from being effected. The Company shall report on the status of the transfer, once known.

The Company further confirms that the Arbitration Award declared that the joint venture among Canadian Royalties and Ungava Minerals commenced as at September, 2007. During 2008, Canadian Royalties provided Ungava Minerals with initial cash call notices for joint venture expenses totalling $43,177,950; none of which were paid or advanced by Ungava. Given the clarity provided by the Arbitration Award, Canadian Royalties has requested in writing that partial payment of the initial cash called amounts be paid, totalling $32,383,463 (being 75%), and same was due on or before the end of business on May 6th, 2009. Canadian Royalties provided Ungava Minerals with the opportunity to audit the joint venture expenses actually incurred, so as to allow for transparency and adjustments, if warranted, and to ensure payment of remaining outstanding amounts by Ungava Minerals prior to May 31st, 2009.

Ungava Minerals has failed to bring the joint venture account into good standing.

About Canadian Royalties and the Nunavik Nickel Project

Canadian Royalties is a mineral exploration company whose principal active area is along the South Trend, in the Raglan mining district of Northern Quebec's Nunavik Region. Since 2001, the company has discovered and delineated several potentially mineable nickel-copper-cobalt-platinum-palladium-gold deposits which collectively form the Nunavik Nickel Project. The Company has completed a Bankable Feasibility Study (BFS) and has received its Environmental Certificate of Authorization and Mine Leases for four sites. An Impact Benefits Agreement (IBA) was negotiated and constitutes a formal commitment by the Company to ensure the fair distribution of the economic benefits arising from the Project with the three (3) Inuit communities impacted as well as Makivik Corporation, the non-profit legal representative of the Inuit. Development was initiated in 2007, but the Project was put on care and maintenance during the 2008 global financial crisis. The Company's goal is to develop and exploit the mineral resources of the Nunavik Nickel Project either independently or in partnership.

Forward-looking Statement

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 Corporation's ability and control, which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Some of these risks and uncertainties are identified and disclosed under the heading "Risk Factors" in the Corporation's Annual Information Form for the year ended December 31, 2008. Accordingly, all of the forward-looking information contained in this press release is qualified by this cautionary statement and there can be no assurance that the actual results or developments anticipated by the Corporation, as expressed or implied by the forward-looking information, will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Corporation or its business operations. All forward-looking statements speak only as of the date of this news release and the Corporation does not undertake any obligation to update or publicly disclose any revisions to such forward-looking statements to reflect events, circumstances or changes in expectations after the date hereof, except as required by law. Accordingly, readers should not place undue reliance on forward-looking statements.

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