Canadian Royalties Inc.

Canadian Royalties Inc.

February 24, 2005 11:11 ET

Canadian Royalties: New Nickel-Copper Property Acquired Near Falconbridge's Montcalm Deposit


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CANADIAN ROYALTIES INC.

TSX SYMBOL: CZZ

FEBRUARY 24, 2005 - 11:11 ET

Canadian Royalties: New Nickel-Copper Property
Acquired Near Falconbridge's Montcalm Deposit

MONTREAL, QUEBEC--(CCNMatthews - Feb. 24, 2005) - Canadian Royalties
(TSX:CZZ) announces the acquisition of up to an undivided 90% interest
in the "Lockout" nickel-copper prospect from Becker Gold Mines Ltd.
("Becker"). The property is comprised of three claim groups (194 mining
claims) covering an area of 3,140 hectares that is located approximately
70 kilometers northwest of Timmins, Ontario. One of the claim groups is
three kilometers from the Montcalm nickel-copper deposit, reported by
Falconbridge to host reserves of 5.1 million tonnes grading 1.46% nickel
and 0.71% copper (Falconbridge website). Falconbridge reports that it is
spending approximately $100 million dollars to bring the Montcalm
Deposit into commercial production.

A number of coincident airborne magnetic and electromagnetic anomalies
have been identified on the Lockout property. The targets have been
identified in airborne geophysical data collected in 2004 using the
AeroTEM system. The property is completely overburden covered and
consulting geophysicist Dr. Dennis Woods, P.Eng., made the following
interpretation regarding the targets on the Lockout property: "Many of
the anomalies and interpreted conductors from the survey display similar
characteristics as the geophysical signature of the Montcalm ore body:
single line conductors (or at most a small, tight grouping of
anomalies), with direct anomalous magnetic correlation". The targets
have never been reported as having been drill tested. Canadian Royalties
anticipates carrying out follow-up ground geophysics and diamond
drilling on these targets with field exploration to begin immediately.

Canadian Royalties' principal asset is the Raglan South Trend Nickel
project, where the company has discovered and completed resource
estimates on three magmatic sulphide
nickel-copper-cobalt-platinum-palladium-gold (Ni-Cu-PGE) deposits, with
a fourth deposit evaluation and pre-feasibility level metallurgical
studies on material from three of the deposits currently underway.
Canadian Royalties has an option/joint venture arrangement with Inco
Limited on the TNB South Nickel Property, located in the Thompson Nickel
Belt, where diamond drilling is currently underway. Today's prospective
nickel claim group acquisition is considered strategic, leveraging
Canadian Royalties' nickel exploration experience and now provides
Canadian Royalties a property position in its third of the three nickel
producing regions of North America.

Acquisition Details

Becker holds a 100% interest in the newly acquired claim groups, subject
to a 2% net smelter return royalty (half of which can be purchased
anytime for $1,000,000), and has agreed to transfer up to 90% of its
interest in the claim group to Canadian Royalties, subject to board and
regulatory approvals, as follows:

a) 49% shall be transferred upon Canadian Royalties: i) making certain
incremental cash payments totaling $75,000; and ii) incurring $200,000
in exploration expenditures ($50,000 of which is firm) prior to the
second anniversary of the agreement;

b) an additional 16% interest in the Property (resulting in an aggregate
65% interest) shall be transferred upon Canadian Royalties making an
additional $25,000 cash payment, and incurring additional exploration
expenditures of at least $200,000 on or before the third anniversary;

c) an additional 10% interest in the Property (resulting in an aggregate
75% interest) shall be transferred upon making an additional cash
payment of $30,000, and by incurring additional exploration expenditures
of at least $300,000 (resulting in an aggregate $700,000 in exploration
expenditures) on or before the fourth anniversary;

d) In the event that Canadian Royalties makes the final (additional)
cash payment to Becker of $120,000, then it will acquire an additional
5% interest (resulting in an aggregate 80% interest), at which time a
joint venture will be formed, whereby each of Canadian Royalties and
Becker will be responsible for the exploration and production costs in
respect of the development of the Property on a pro-rata basis (Canadian
Royalties as to 80% and Becker as to 20%).

e) Lastly, Canadian Royalties will earn and vest in an additional 5%
interest in the Property (resulting in an aggregate 85% interest) when a
Bankable Feasibility Report ("BFR") is completed by the joint venture,
and subsequently, if Canadian Royalties, at its sole discretion, elects
to arrange Becker's pro-rata share of the funding to bring the Property
into commercial production, then Canadian Royalties will acquire and
vest in an additional 5% interest in the Property, resulting in an
aggregate 90% interest.

Airborne Geophysics Underway at the Sharks Property (Virginia Gold
Mines' Eleonore Discovery Area)

Canadian Royalties also reports that it has commenced an airborne
geophysical survey on its 270-claim (14,000 hectare / 35,000 acre)
Sharks Prospect located three kilometers east of Virginia Gold Mines'
Eleonore project (approximately 13 kilometers east of the Roberto and
Roberto-Est discovery areas). The project is located 320 kilometers
north of Matagami, Quebec. Airborne surveys are now underway over the
Sharks property. The Company is planning an aggressive field program for
2005 to follow-up on any targets of merit identified. Canadian Royalties
can earn up to an 85% interest in the Sharks property (refer to press
release dated December 16, 2004).

Canadian Royalties confirms it has received title confirmations for most
of its claim applications covering an additional 370 mining claims.
These properties are owned 100% by the Company. Canadian Royalties'
holdings in the area now total over 32,000 hectares (over 80,000 acres).

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
release.

Canadian Royalties has been actively and successfully exploring for
magmatic sulphide related nickel-copper-cobalt-platinum-palladium-gold
(Ni-Cu-PGE) mineralization in the Raglan area since the summer of 2001.
Canadian Royalties holds various property interests in the Raglan South
Trend area covering over 1400 square kilometers. Canadian Royalties
maintains a strong cash position and a portfolio of more than 200
property interests.

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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