Canadian Royalties Inc.

Canadian Royalties Inc.

October 14, 2009 11:11 ET

Nunavik Nickel Project Update: Puimajuq Adds 7.5 Million Pounds of Nickel and 12.6 Million Pounds of Copper to Measured and Indicated Resources Contained Metal Inventories

MONTREAL, QUEBEC--(Marketwire - Oct. 14, 2009) - Canadian Royalties Inc. (TSX:CZZ) reports the results of an initial resource estimate commissioned specifically to evaluate the scenario of potentially mining its wholly-owned and near-surface Puimajuq deposit using open pit mining methods. The resource study incorporates geology and results from twenty-five (25) holes totalling 1,843.6 metres, including 1,402.0 metres in seventeen (17) NQ drillholes from 2008 (see news release dated January 22nd, 2009). The high-grade Puimajuq resource estimate adds approximately 7.5 million pounds of contained nickel metal and 12.6 million pounds of contained copper metal to the project's indicated resource contained metal inventories. Puimajuq indicated and inferred base metal resources are accompanied by significant platinum and palladium values.

The table below summarizes the Puimajuq resource estimate residing within an optimized open pit shell:

Resource Ni Cu Co Au Pt Pd
Category tonnes (%) (%) (%) (g/t) (g/t) (g/t)
Indicated 209,000 1.64 2.73 0.06 0.09 0.92 2.48
Inferred 12,000 2.31 3.23 0.09 0.14 1.18 2.63

(1) The new resource for Puimajuq is estimated on the basis of 24 month trailing average US$ metal prices of $9.02/lb nickel $2.84/lb copper, $20/lb cobalt, $871/oz gold, $1,398/oz platinum and $311/oz palladium and the $US exchange rate used was $0.92. An NSR cut-off of C$40/tonne (consisting of C$25/tonne processing and C$15/tonne for G&A) was utilized along with $C5.00/tonne ore mining and $3.50/tonne waste mining in a 50 degree slope optimized pit shell to report the resource.

(2) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

(3) The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

(4) The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.

The results of the Puimajuq resource modelling exercise highlight the possibility of mining this high-grade deposit by open pit methods. Further work is warranted to optimize the open pit scenario, followed by detailed economic modelling that will determine the viability of Puimajuq's inclusion in a revised mine plan.

The drillhole database for Puimajuq, which in the Inuktitut language means "near-surface", is comprised of twenty-five (25) holes totalling 1,843.6 metres of which sixteen (16) holes contain significant mineralization. The delineation drilling was carried out on 25 metre-spaced sections at 25 metre drill centres (approximate).

A 3-D wireframe geological model was constructed and inverse distance squared grade interpolation was utilized to determine block model grades.
The Nunavik Nickel Project's measured and indicated resource base now totals 21.9 million tonnes, with a further 5.2 million tonnes in the inferred resource category. Contained metal in measured and indicated resources now totals approximately 204,000 tonnes of nickel, 252,000 tonnes of copper, 380,000 ounces of platinum and 1,539,000 ounces of palladium, while inferred resources comprise approximately 38,000 tonnes of nickel, 48,000 tonnes of copper, 85,000 ounces of platinum and 343,000 ounces of palladium. With the publication of Puimajuq resources, the Company has now completed resource estimates on seven (7) of its deposits.

The updated total Measured, Indicated and Inferred resources for the Nunavik Nickel Project, including new Puimajuq open pit resources, are summarized in the table below:

Resources(Total) Ni Cu Co Au Pt Pd
Category Tonnes (%) (%) (%) (g/t) (g/t) (g/t)
Measured 560,000 0.93 1.10 0.04 0.10 0.60 2.66
Indicated 21,342,000 0.93 1.15 0.05 0.14 0.54 2.17
Total(Meas+Ind) 21,902,000 0.93 1.15 0.04 0.14 0.54 2.19

Inferred 5,244,000 0.72 0.93 0.04 0.13 0.51 2.03

Eugene Puritch, P.Eng., Tracy Armstrong, P.Geo. and Antoine Yassa, P.Geo of P&E Mining Consultants Inc. will be the authors of an NI 43-101 compliant Resource Estimate Technical Report on the Puimajuq deposit to be filed within 45 days of this news release. They are Qualified Persons in accordance with NI 43-101, and are responsible for the information presented in this news 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, B.C. Base metal values were determined by sodium peroxide fusion with ICP-AES analysis. Platinum, palladium and gold values were determined by 30 gram fire assay with ICP-AES finish.

About Canadian Royalties and the Nunavik Nickel Project

Canadian Royalties, based in Val-d'Or - Quebec, 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 and has received its Environmental Certificate of Authorization; it has also received mine leases for four sites, namely the Ivakkak, Mequillon, Expo, and Mesamax deposits. 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; the Project was 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 Project either independently or through a 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 Company'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 Company'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. 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.

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