Canadian Royalties Inc.
TSX : CZZ

Canadian Royalties Inc.

February 20, 2007 10:20 ET

Target Mining Operation Increased by 40% to 3,500 t/day

MONTREAL, QUEBEC--(CCNMatthews - Feb. 20, 2007) - Canadian Royalties Inc. (TSX:CZZ) announces that the parameters of its Bankable Feasibility Study ("BFS", (1)) will now be based on a throughput of 3,500 tonnes of ore per day, an increase of 40% over the operation evaluated in the preliminary economic assessment report (refer to news releases dated May 9, 2006 and July 24, 2006).

The decision to evaluate an increased production rate was taken early in the design of a milling facility as management was confident of the potential to increase the existing mineral resources. The results of last years' exploration have increased the indicated mineral resources to more than 16 million tonnes from 11 million tonnes in 2005, most of which is open pittable.



Deposit tonnes Ni Cu Co Pt Pd Au PGE Last
% % % g/t g/t g/t g/t Updated
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January 25,
Mesamax 2007
Indicated 2,218,000 1.89 2.57 0.08 0.97 3.63 0.20 4.80
Inferred 31,000 1.61 1.78 0.07 0.60 3.57 0.15 4.32
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Mequillon May 12,
Indicated 4,185,000 0.60 0.90 0.03 0.70 2.40 0.20 3.30 2005
Inferred 167,000 0.80 1.00 0.04 0.70 2.40 0.20 3.30 Update
Pending
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Expo January 11,
Indicated 8,562,000 0.76 0.76 0.04 0.32 1.36 0.08 1.76 2007
Inferred 478,000 0.81 0.83 0.04 0.32 1.33 0.07 1.72
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Ivakkak February 5,
Indicated 1,128,000 1.22 1.55 0.05 0.64 3.14 0.15 3.93 2007
Inferred 40,000 1.24 1.30 0.05 0.69 2.90 0.10 3.69
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TK April 15,
Indicated 90,000 1.60 1.20 0.10 0.40 2.00 0.10 2.50 2003
Inferred 7,000 1.60 1.00 0.11 0.40 1.60 0.00 2.00
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TOTAL February 5,
Indicated 16,183,000 0.91 1.10 0.04 0.53 2.07 0.13 2.73 2007
Inferred 723,000 0.87 0.94 0.04 0.44 1.76 0.10 2.31
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The mineral resource base is now considered sufficient for more than 10 years of open pit production at a rate of 3,500 t/day (compared to 10 years at 2,500 t/day evaluated in the July 2006 preliminary economic assessment report). Additionally, once the concept of an economic underground operation is assessed on the deeper underground portion of the Mequillon deposit, it is expected that additional resources will be added to the 16 million tonnes currently delineated.

An increase in capital costs is anticipated given the increase in the milling and mining operation throughput rate and the addition of port facilities, an airport, and a tailings and waste rock management concept which has been adjusted to consider the risks associated with climate change. Such additional cost will be accounted for in the pending BFS. It is projected that the operating costs should remain unchanged as defined in the preliminary economic assessment report.

Eugene Puritch, P.Eng. and Tracy Armstrong, P.Geo., of P&E Mining Consultants Inc. are Qualified Persons in accordance with National Instrument 43-101, and are responsible for the information regarding the updated resource estimates 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, BC. 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 Raglan South Nickel Project

Canadian Royalties is evaluating the potential of establishing an independent, stand-alone Ni-Cu-PGE mining and milling operation in the general vicinity of Xstrata Nickel's Raglan Mine in Nunavik, Quebec. Canadian Royalties is currently proceeding with permitting applications, a bankable feasibility study ("BFS" (1)), and an environmental and social impact analysis ("ESIA").

Forward-looking Statement

This press release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Incorporated herein by reference is the Company's forward looking statement as disclosed in its Annual Information Form dated March 31, 2006. Accordingly, readers should not place undue reliance on forward-looking statements.

(1) A bankable (full) feasibility study is a comprehensive analysis of a projects economics (+/- 15% precision) and is used by the banking industry for financing purposes.

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