Canadian Royalties: Raglan Area Update.

MONTREAL -- Canadian Royalties (TSX symbol:CZZ) reports that approximately 10% of the anticipated 20,000 meters (or more) of diamond drilling has been completed, and the first shipment of split diamond drill core has been delivered to ALS Chemex. Assay results can be expected in approximately three weeks.

The 2004 diamond drill program commenced with two drill rigs in the Expo area, and, as originally planned, the drills are being dispersed away from the Expo area in order to test target areas more remote from the Expo area during the period of longer daylight and favourable summer weather. A third drill rig is due to commence shortly, and it is anticipated that drilling will re-commence in the Expo area near the end of the season in order that additional drilling can be completed on the Expo, Expo northeast and newly identified targets.

As well, in furtherance of a Press Release disseminated on March 19, 2004 pertaining to a proposed arbitration by Ungava Minerals, Canadian Royalties announces that a protocol of arbitration has still not been set, a schedule for the filing of formal documentation has not been set, a hearing date has not been set, but Ungava Minerals just delivered a Statement of Claim seeking: (i) the annulment of the underlying option joint venture agreement in respect of the Expo-Ungava Property; (ii) that a portion of land along the boundary of the Phoenix Property (100% owned by Canadian Royalties) and the Expo-Ungava Property be transferred to Ungava Minerals; and (iii) that Canadian Royalties pay to Ungava Minerals damages in the amount of $516,642.23.

This is not the first time that Canadian Royalties has defended these exact claims, and accordingly, Canadian Royalties remains unchanged in its position; in that the claims and allegations made by Ungava Minerals are blatantly opportunistic, frivolous and extremely vexatious.

In sum, and in respect of our exploration program, Canadian Royalties, in a Press Release dated June 10, 2004, announced an upgraded resource calculation (by Strathcona Minerals) on the Mesamax Deposit, a nickel-copper-platinum-palladium deposit discovered by Canadian Royalties, located on the Expo-Ungava (joint venture) Property. Canadian Royalties has earned 70% of its 80% entitlement in the Expo-Ungava Property.

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.