Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

June 30, 2009 08:27 ET

Canadian Royalties: Taking Action to Acquire 100% of the Expo-Ungava Property

MONTREAL, QUEBEC--(Marketwire - June 30, 2009) - Canadian Royalties Inc. (the "Company") (TSX:CZZ) announces that it has begun to take the steps necessary to acquire a 100% interest in the Expo-Ungava Property, given that Ungava Minerals Exploration Inc. (subsidiary of Nearctic Nickel Mines Ltd.) ("Ungava Minerals") has failed to bring its joint venture account into good standing.

Canadian Royalties has provided Ungava Minerals with the opportunity to comply in all respects with its obligations under the agreement, as well as with the conclusions of the Arbitration Award rendered on April 1, 2009, which, inter alia, retroactively declared the joint venture formed effective as at September, 2007 (see news release dated April 2, 1009).

Canadian Royalties currently holds a registered 70% interest in the Expo-Ungava property, as well as an additional 10% interest, the registration of which remains pending. The Arbitration Award ordered Ungava Minerals to effect the transfer of this additional 10% interest by noon on April 15, 2009, failing which the Award itself constituted valid title on which the Ministry of Natural Resources of Quebec ("MRNF") may register the interest. Ungava Minerals failed to do so, and accordingly, in April, 2009, Canadian Royalties unilaterally filed a transfer of mineral interests for this additional 10% interest (for an aggregate 80% interest in the Expo-Ungava property). Canadian Royalties also filed an application with the Superior Court of Quebec seeking to homologate the Arbitration Award so that it can be put into compulsory execution, if and to the extent required. Ungava Minerals has taken steps to preclude Canadian Royalties' efforts in both of these instances, which steps include the filing of an application to annul the Award.

Canadian Royalties continues to invoke its rights and entitlements in respect of the Expo-Ungava property. In this regard, Canadian Royalties recently provided Ungava Minerals with an additional opportunity to bring its joint venture account into good standing. Ungava Minerals failed to do so, and in accordance with the terms of the option and joint venture agreement of January 12, 2001, Canadian Royalties has the right to acquire from Ungava Minerals a 1% interest in the Expo-Ungava property for each $150,000 of joint venture expenditures incurred on the Expo-Ungava property and paid by Canadian Royalties on behalf of Ungava Minerals. The agreement provides that upon Ungava Minerals' interest diluting downwards in this manner to 10%, its interest automatically converts to a 1% net smelter royalty. Canadian Royalties has paid in excess of $1.5 million in joint venture expenses on behalf of Ungava Minerals and as such, under the terms of the agreement, Ungava Minerals is required to transfer its remaining 20% interest in the property to Canadian Royalties. Ungava Minerals has failed to do so and has failed to address Canadian Royalties entitlements as they now stand. Accordingly, Canadian Royalties has begun to take the necessary steps to increase its interest from its 80% interest (70% of which is registered), to a 100% interest in the Expo-Ungava property.

The Expo-Ungava property was host to a nickel-copper-PGE deposit when Canadian Royalties acquired the option from Ungava Minerals in 2001. Since 2001, Canadian Royalties has been instrumental in delineating several new deposits that are anticipated to be material to any potential future mine development activities.

About Canadian Royalties and the Nunavik Nickel Project

Canadian Royalties is a mineral exploration company whose principal active area is along the South Trend located 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 "Project"). The Company has completed a Bankable Feasibility Study ("BFS") and has received its Environmental Certificate of Authorization ("CA"); it has also received mine leases for four sites, namely the Ivakkak, Mequillon, Expo, and Mesamax. An Impact and Benefits Agreement ("IBA") has been entered into between the Company, three (3) Inuit communities, and Makivik Corporation, the non profit legal representative of the Inuit; the IBA constitutes the Company's formal commitment to ensure a fair and sustainable distribution of the economic benefits stemming from the Project. Development of the Project was initiated in 2007, to be subsequently put on care and maintenance as a result of the 2008 financial crisis. The Company's objective is to develop and exploit the mineral resources comprising 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 actual results or developments anticipated by the Company, 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 Company or its business operations, including the vesting of a 100% interest in the Expo-Ungava property as anticipated. 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 disclose any revisions to such forward-looking statements to reflect events, circumstances or changes in expectations after the date hereof, except as required by applicable securities law. Accordingly, readers should not place undue reliance on forward-looking statements.

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