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Canadian Royalties Inc.: Canadian Royalties - Mails Special Shareholder Meeting Materials

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  Published in House and Home on Tuesday, September 8th 2009 at 10:29 GMT by Market Wire
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MONTREAL, QUEBEC--(Marketwire - Sept. 8, 2009) - Canadian Royalties Inc. (the "Company", or "Canadian Royalties")(TSX:CZZ) has mailed materials to its shareholders in connection with a special shareholder meeting to be held on September 30, 2009 to ratify, sanction and confirm adoption of a shareholder rights plan (the "Rights Plan") by the Board of Directors of the Company on August 18, 2009. The Board requests that shareholders read the information mailed in connection with the meeting carefully and recommends that shareholders vote for ratification, sanctioning and confirmation of the Rights Plan.

The Rights Plan was adopted unanimously by the Board of Directors of Canadian Royalties to ensure the fair treatment of all Canadian Royalties' securityholders in connection with any take-over bid.

The Rights Plan provides the Board of Directors of the Company with additional time to consider any take-over bid and to explore alternative transactions in order to maximize shareholder value.

The adoption of a Rights Plan is a normal course response in Canadian capital markets for a target that is the subject of a hostile transaction. In taking this action, the Board of Directors is solely and legitimately concerned with maximizing securityholder value.

The Board noted that while the proponents of the offers made by Jien Canada Mining Ltd., Jilin Jien Nickel Industry Co., Ltd., Jien International Investment Ltd. and Goldbrook Ventures Inc. (the "Jien Offers") took almost 300 days to launch their proposal since first contemplating an acquisition of Canadian Royalties in November 2008, the Rights Plan seeks only 60 days for Canadian Royalties to explore alternatives.

Pursuant to the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders is deemed to be a "Permitted Bid". A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, in addition to certain other conditions, must remain open for 60 days.

In the event a take-over bid does not meet the Permitted Bid requirements of the Rights Plan, the rights issued under the plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of Canadian Royalties at a significant discount to the market price of the common shares at that time.

The Board has determined to defer the "Separation Time" for rights under the Rights Plan in connection with the Jien Offers to September 11, 2009 in order to permit the proponents of the Jien Offers to make a Permitted Bid.

The full text of the Notice of Meeting and Management Information Circular, form of Proxy and Rights Plan are available for public viewing via the internet at [ www.sedar.com ].

The Rights Plan remains subject to Toronto Stock Exchange approval (the "TSX"). The TSX has determined, as is its practice in relation to hostile take-over bids, to defer its consideration of acceptance for filing of the Rights Plan pending any review that securities commissions may undertake.

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 to such forward-looking statements to reflect events, circumstances or changes in expectations after the date hereof, except as required by applicable securities law. Accordingly, readers should not place undue reliance on forward-looking statements.