Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

October 27, 2005 10:30 ET

Canadian Royalties: Mequillon Deposit Extends East with Initial 2005 Drill Results

MONTREAL, QUEBEC--(CCNMatthews - Oct. 27, 2005) - Canadian Royalties Inc. (TSX:CZZ) reports the extension of the Mequillon deposit 100 metres further east of the previously known limits of the deposit, extending the strike length of the deposit to approximately 1100 metres. The deposit remains open to the east, with an additional eight drill holes completed in 2005 remaining to be reported. The widest section of mineralization drilled to date at the deposit was intersected in the easternmost section: 1.02% nickel (Ni), 1.32% copper (Cu), and 4.5 g/t platinum-palladium-gold (PGE) over 57.7 metres in MQN-05-105.

The Mequillon deposit indicated resource is currently 4,185,000 tonnes grading 0.6% Ni, 0.9% Cu, 0.03% cobalt (Co), 0.2 g/t gold (Au), 0.7 g/t platinum (Pt) and 2.4 g/t palladium (Pd) (3.1 g/t PGE), based on drilling completed to the end of the 2004 season. Canadian Royalties intends to update the resource estimate once all assay results from 2005 drilling have been received.



Highlights:

- Six drill holes, MQN-05-98 to 103, were drilled on section 250E,
extending the known mineralization of the Mequillon deposit
50 metres east. MQN-05-100 returned assay values of 0.72% Ni,
0.98% Cu and 3.3 g/t PGE over 32 metres.

- Five drill holes, MQN-05-104 to 108, were drilled on section 300E,
extending the known mineralization 100 metres east of the 2004
limits of the deposit. MQN-05-105, on section 300E, returned
assay values of 1.0% Ni, 1.3% Cu and 4.5 g/t PGE over 57.7 metres.
Due to technical difficulties drilling was abandoned in massive
sulphides prior to reaching the footwall contact. The massive
sulphide interval assayed 2.4% Ni, 0.98% Cu and 6.0 g/t PGE over
5.5 metres, and is the thickest intersection of massive sulphides
in the deposit to date.

- The Mequillon deposit has now been traced continuously for
approximately 1100 metres along strike from sections 800W to 300E.

- Drill results for eight holes completed further to the east
are pending.



---------------------------------------------------------------------
MQN From To Width Ni Cu Co Au Pt Pd PGE
DDH (m) (m) (m) (%) (%) (%) (g/t) (g/t)(g/t)(g/t)
---------------------------------------------------------------------
MQN-05-098 203 236.9 33.9 0.28 0.43 0.02 0.1 0.2 0.9 1.2
---------------------------------------------------------------------
MQN-05-100 209 282.3 73.3 0.46 0.66 0.02 0.1 0.4 1.7 2.2
---------------------------------------------------------------------
incl. 232 264 32 0.72 0.98 0.04 0.06 0.67 2.59 3.32
---------------------------------------------------------------------
MQN-05-101 201 236 35 0.31 0.44 0.02 0.1 0.3 1.0 1.5
---------------------------------------------------------------------
MQN-05-104 202 256.1 54.1 0.72 1.61 0.03 0.3 0.6 2.5 3.4
---------------------------------------------------------------------
MQN-05-104 271 293 22 0.76 1.15 0.04 0.1 0.5 2.5 3.1
---------------------------------------------------------------------
MQN-05-105 211.8 269.5 57.7 1.02 1.32 0.05 0.1 0.8 3.6 4.5
---------------------------------------------------------------------
incl. 264 269.5 5.5 2.4 0.91 0.11 0.04 1.0 5.0 6.0
---------------------------------------------------------------------
MQN-05-107 204 245 41 1.19 1.86 0.05 0.4 0.6 2.0 3.0
---------------------------------------------------------------------
incl. 222 238 16 2.15 2.29 0.08 0.7 0.8 2.4 4.0
---------------------------------------------------------------------
MQN-05-108 209 226 17 0.26 0.42 0.02 0.1 0.2 0.9 1.1
---------------------------------------------------------------------



Notes:

- Holes MQN-05-99, MQN-05-102 and MQN-05-106 encountered technical
problems and did not reach the main mineralized zone. Holes
MQN-05-101 and 105 encountered technical problems and stopped in
the main mineralized zone.

- Highlighted intervals are above the average deposit resource grade;

- Lengths are drill intersected core lengths, composite lengths
are length weighted. True thicknesses have not yet been determined
but are thought to be generally 70% or more of the core length
given in the table;

- PGE equals gold + platinum + palladium;

- g/t equals grams per metric tonne.


Canadian Royalties' Raglan South Nickel Project

The 2005 exploration program has resulted in the definition of new Ni-Cu-PGE sulphide mineralization, while at the same time expanding the resource base of the existing Ni-Cu-PGE deposits and mineralized zones. In addition, the company has completed environmental studies, road construction and metallurgical bulk sampling at the Mesamax Deposit.

Updated maps and drill sections for the Mequillon deposit are available on the Canadian Royalties website, at www.canadianroyalties.com/mequillon.

Todd Keast, P.Geo, Canadian Royalties Raglan Exploration Project Manager/Geologist, is the designated Qualified Person responsible for the exploration program on the property and the person responsible for the preparation of this release. All assaying was completed by ALS Chemex with sample preparation completed in Val-d'Or, QC and analyses completed at ALS Chemex in Vancouver, BC. Base metal determined by sodium peroxide fusion with ICP-AES analysis. Platinum, palladium and gold values are determined by 30 gram fire assay with ICP-AES finish.

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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