Canadian Royalties and Norilsk Nickel Sign Agreements for the Sale of Nickel Concentrates and an Equity Investment

Canadian Royalties Inc. and Norilsk Nickel Harjavalta Oy, a wholly owned subsidiary of MMC Norilsk Nickel, announced the signing of several agreements aimed at expediting the development of CRI’s Nunavik Nickel Project. The agreements include a sales agreement for nickel concentrates, an immediate C$25 million share subscription, and an option for additional financing at a later date to ensure project completion.

Sales Agreement for Nickel Concentrates
Following an extensive bidding process, CRI has reached an agreement with Norilsk Nickel to sell nickel concentrates produced from its Nunavik Nickel Project to Norilsk Nickel. The terms of this agreement are considered by CRI’s management to be highly competitive with market rates.

Equity Investment
Under the equity investment, Norilsk Nickel shall subscribe on a private placement basis for an aggregate of 7,246,377 common shares in the equity of CRI at a price of C$3.45 per common share for a total of C$25 million. The purchase price represents a 23% premium over the closing price of CRI’s securities on Friday, September 28, 2007. The subscription is subject to the approval of the Toronto Stock Exchange (the “TSX”). Under the agreement, CRI may request Norilsk Nickel to provide an additional C$25 million in financing on mutually agreed terms to ensure project completion.

About Canadian Royalties and the Nunavik Nickel Project

Canadian Royalties has initiated the development of an independent, stand-alone nickel-copper mine on its Nunavik Nickel Project, located in northern Quebec. Canadian Royalties is proceeding with permitting applications, as well as exploration for additional resources.
Canadian Royalties currently holds a 100% interest in the Ivakkak deposit, subject to a net smelter royalty (“NSR”, refer to news release dated September 21, 2005). Additionally, Canadian Royalties has vested in a 70% interest in the Expo-Ungava property (which hosts the Mesamax, Mequillon and Expo deposits), where its interest shall be increased to 80% simultaneously with the creation of the joint venture. Further, Canadian Royalties holds an underlying 2% NSR on the Expo-Ungava Property.