Canadian Royalties Inc.

Canadian Royalties Inc.

March 17, 2005 08:39 ET

Canadian Royalties: Metal Recovery Forecasts-Mesamax, Expo and Mequillon Nickel-Copper-PGE Deposits




MARCH 17, 2005 - 08:39 ET

Canadian Royalties: Metal Recovery Forecasts-Mesamax,
Expo and Mequillon Nickel-Copper-PGE Deposits

MONTREAL, QUEBEC--(CCNMatthews - March 17, 2005) - Canadian Royalties
(TSX:CZZ) reports favourable nickel-copper-platinum-palladium recoveries
from its Mesamax, Expo and Mequillon nickel-copper-PGE sulphide deposits
on the Raglan South Trend Nickel project, located just south of
Falconbridge's Raglan Mine in northern Quebec. The results are based on
extensive bench scale test work carried out by SGS Lakefield
Laboratories on sample material comprised of representative drill core.
Forecasted nickel (Ni) recoveries range from 75 to 82%, copper (Cu)
recoveries range from 83 to 98%, platinum (Pt) recoveries range from 60
to 80%, and palladium (Pd) recoveries range from 80 to 93%.

Canadian Royalties engaged independent consulting metallurgist Klaus
Konigsmann to manage and supervise the test work conducted by SGS
Lakefield Laboratories. Mr. Konigsmann and Dan Imeson of SGS Lakefield
reported the following:

1. While mineralogical characteristics of the ores vary over a wide
range with respect to hardness, grain size, and oxidation potential, the
ores are sufficiently similar in flotation performance to be treated in
a common circuit. Process layout work determined a conceptual flow
sheet for the production of two sulphide concentrates, the first being a
copper concentrate, the second a nickel concentrate. The production of a
single copper-nickel bulk concentrate was also evaluated, however, the
added flexibility of more saleable separate concentrates appears to be
the preferred option at this point. Capital, operating costs, and
recoveries do not vary significantly in the two alternatives.

The tailings product will most likely be filtered and dry stacked in a
similar fashion to that used at the nearby Raglan Mine;

2. The recovery estimates listed in the following tables have been
derived from the results of several test series. Forecasted concentrate
qualities and metal recoveries for Expo are:

% Weight Grade Analyses Recovery(%)
Cu(%) Ni(%) Pt(g/t) Pd(g/t) Cu Ni Pt Pd
Feed Grade 100.00 0.9 0.75 0.4 1.8
Concentrate 2.10 27.0 0.7 5.0 34.0 64.0 2.0 25.0 40.0
Concentrate 5.50 3.0 10.0 4.1 13.0 19.0 74.0 55.0 40.0
Calc Bulk
Concentrate 7.60 9.6 7.4 4.3 19.0 83.0 76.0 80.0 80.0

3. The mineralogical characteristics are similar for Mesamax net
textured and the Mequillon ores. Forecasted concentrate qualities
and metal recoveries for combined Mesamax and Mequillon ores are:

% Weight Grade Analyses Recovery(%)
Cu(%) Ni(%) Pt(g/t) Pd(g/t) Cu Ni Pt Pd
Feed Grade 100.00 1.00 1.15 0.80 3.20
Concentrate 3.2 28.0 1.0 4.0 67.0 87.0 3.0 20.0 65.0
Concentrate 6.6 1.5 12.0 5.0 12.0 10.0 72.0 45.0 24.0
Calc Bulk
Concentrate 9.7 10.0 8.4 4.7 30.0 97.0 75.0 67.0 89.0

4. Forecasted concentrate qualities and recoveries for the massive
sulphide ores, based on tests conducted on Mesamax sample material,

% Weight Grade Analyses Recovery(%)
Cu(%) Ni(%) Pt(g/t) Pd(g/t) Cu Ni Pt Pd
Feed Grade 100.00 5.0 3.6 1.5 2.0
Concentrate 11.90 31.0 0.8 1.5 6.0 71.0 2.5 15.0 33.0
Concentrate 19.60 7.0 15.0 3.5 6.5 27.0 80.0 45.0 60.0
Calc Bulk
Concentrate 31.50 16.0 9.4 3.0 6.0 98.0 82.0 60.0 93.0

5. The estimated recoveries of nickel and platinum are higher for Expo
ores than those for the net textured Mesamax or Mequillon ores, even
though the latter contain higher feed grades and appear to have a
coarser grain structure. Further test-work should aim to improve results
for both ore categories;

6. Liberation and fineness of grind:

- Expo - The fineness of the primary grind for this ore was set at a K80
of 30 to 50 micron. Intermediate products are ground finer in a re-grind
circuit. Metal recoveries increase almost linearly with finer grinding
over the range from 200 to 20 microns;

- Mesamax and Mequillon - The primary grind for these ores was set at a
K80 of 50 to 70 micron;

- Massive sulphides - this ore is known to be coarse grained and grind
targets were selected based on parallel testing of Mesamax net textured

7. Ore hardness varies widely for different deposits. Extensive
grindability test work was performed on a sample of Mesamax net textured
ore and preliminary estimated for equipment sizing were based on these
results. Bond ball and rod mill work indices were determined for all
ores. Rod mill work indices (RWIs) varied from 5.3 to 22.9 kWh/t while
ball work indices (BWIs) varied from 7.7 to 19.9 kWh/t. Basic flow
sheets were determined and some preliminary sizing studies were carried
out relating to SAG and ball mill sizes, power requirements, flotation
cell volumes etc;

8. Investigation relating to the dewatering of the tailings and
concentrate remains incomplete. Ore and tailings were, as is common for
these ores, found to be acid generating. Water requirements and general
recycling parameters were generally addressed and will be further
addressed in follow-up work;

9. The primary sulphide minerals are pyrrhotite, chalcopyrite and
pentlandite; and

10. Abrasiveness tests indicate the rock to be only mildly abrasive.

Significance of the Recovery Results

Canadian Royalties notes that these recoveries compare very favourable
with the projected recoveries for the Aguablanca project currently being
placed in commercial production by Rio Narcea Gold Mines Limited with
forecasts of nickel recovery at 82%, copper recovery at 85% and PGE
recoveries at 75%. Forecast palladium recoveries appear to be well above
the 75% range reported by North American Palladium Limited, Canada's
only primary palladium producer.

The nickel and copper recoveries for the disseminated sulphide
mineralization at Expo is significantly higher than the recoveries
reported in initial floatation recovery tests completed by Amax on
similar mineralization in 1970 (MRN file GM-26102). Nickel recovery in
sulphide deposits is nearly always affected to a certain extent by the
inability to recover nickel mineralization locked in pyrrhotite and
minor nickel locked in silicate minerals.

Test-work on the oxidized near surface mineralized material from the
Mesamax deposit is currently underway to assess the potential milling
characteristics of this material.

Company management is pleased with the significant progress being made
with respect to the recoverability of the nickel, copper, platinum and
palladium within the three deposits. The President of Canadian
Royalties, Mr. Bruce Durham, reports that the next significant
milestones, the completion of updated resource estimates for the
Mesamax, Expo and Mequillon deposits, will provide the basic data
required to complete an initial scoping level study on the viability of
a stand alone nickel-copper-PGE mining operation on the project. He
further commented: "The long term fundamentals for these commodities
continue to look strong by all reports and we now see analysts calling
for higher long term metal prices in light of the rapidly increasing
cost of developing new nickel laterite deposits or even expanding some
of the existing nickel laterite mines. There are relatively very few
solid sulphide nickel-copper-PGE projects in the world with similar
results and we feel we have one of the best projects around."

About the Raglan South Trend Nickel Project

Canadian Royalties' principal asset is its Raglan South Trend Nickel
project. Since Canadian Royalties' first discovery in 2001, Canadian
Royalties has discovered and defined three new
nickel-copper-platinum-palladium deposits (TK, Mesamax and Mequillon)
and is also working on the first National Instrument (NI) 43-101
resource estimate on the Expo deposit. The project is vast (964 km2,
238,000 acres) and is considered by management to have very good
prospects for the discovery of further resources. The project is located
approximately 20 kilometers south of Falconbridge's Raglan Mine, and
associated infrastructure.

Canadian Royalties continues to develop strategies with respect to the
advancement of the project and is in the process of quantifying general
operating and capital costs associated with the development of a mining
operation on the property and will increase these efforts once it
receives new resource estimates for the Mesamax deposit, Mequillon
deposit and Expo deposit in the upcoming quarter.

Bruce Durham, P.Geo. and President of Canadian Royalties Inc. is the
designated Qualified Person responsible for the exploration program on
the property and the person responsible for the preparation of this

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


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