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

MONTREAL -- 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.

Canadian Royalties Inc. (TSX:CZZ)