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Canadian Royalties Inc.: Canadian Royalties Inc.-Nunavik Nickel Project Allammaq Update/Allammaq Contained Metal in Measured an

MONTREAL, QUEBEC--(Marketwire - Oct. 8, 2009) - Canadian Royalties Inc. (TSX:CZZ) reports the results of an updated resource estimate that was commissioned specifically to evaluate the scenario of mining the Allammaq deposit using open pit mining methods and incorporates results from thirty-five (35) delineation drillholes totalling 6,697.4 metres from the 2008 drill program (see news releases dated March 3rd and April 16th, 2009). Compared to the 2008 underground resource estimate, contained nickel metal in measured and indicated resources has increased 45.5% while copper has increased 53.8%. The measured and indicated base metal resources are also complemented by approximately 71,000 ounces of contained platinum and 311,000 ounces of contained palladium. The Allammaq deposit remains open to the east for further expansion.

The table below summarizes the updated Allammaq resource estimate residing within an optimized open pit shell:

Resource Ni Cu Co Au Pt Pd
Category Tonnes (%) (%) (%) (g/t) (g/t) (g/t)
---------------------------------------------------------------------
Measured 560,000 0.93 1.10 0.04 0.10 0.60 2.66
Indicated 3,761,000 0.90 1.12 0.04 0.10 0.50 2.18
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Total (Meas+Ind) 4,321,000 0.90 1.12 0.04 0.10 0.51 2.24

Inferred 1,591,000 0.47 0.53 0.03 0.06 0.28 1.15
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(1) The updated resource for Allammaq is estimated on the basis of Sep
 30/09 24 month trailing average US$ metal prices of $9.02/lb nickel
 $2.84/lb copper, $20/lb cobalt, $871/oz gold, $1,398/oz platinum and
 $311/oz palladium and the $US exchange rate used was $0.92. An NSR cut-
 off of C$40/tonne (consisting of C$25/tonne processing and C$15/tonne
 for G&A) was utilized along with $C5.00/tonne ore mining and
 $3.50/tonne waste mining in a 50 degree slope optimized pit shell to
 report the resource.

(2) Mineral resources which are not mineral reserves do not have
 demonstrated economic viability. The estimate of mineral resources may
 be materially affected by environmental, permitting, legal, title,
 taxation, socio-political, marketing, or other relevant issues.

(3) The quantity and grade of reported inferred resources in this
 estimation are uncertain in nature and there has been insufficient
 exploration to define these inferred resources as an indicated or
 measured mineral resource and it is uncertain if further exploration
 will result in upgrading them to an indicated or measured mineral
 resource category.

(4) The mineral resources in this press release were estimated using the
 Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM
 Standards on Mineral Resources and Reserves, Definitions and Guidelines
 prepared by the CIM Standing Committee on Reserve Definitions and
 adopted by CIM Council December 11, 2005.

The 2009 resource modelling exercise highlights the potential to mine the Allammaq deposit by open pit mining methods. Further work is warranted to optimize the open pit scenario, followed by detailed economic modelling that will determine the viability of Allammaq's inclusion in a revised mine plan.

The updated Allammaq resource model was derived mainly from delineation drilling conducted during 2007 and 2008 that outlined an ultramafic-hosted, convex-shaped, shallow north-dipping lens of dominantly net-textured sulphides with lesser massive sulphide and vein-type mineralization. Two mineralized zones are present at

Allammaq: a Basal Zone and an Upper Zone. The Basal Zone (Allammaq) is the most economically important of the two with thicknesses exceeding 45 metres in the central portion of the deposit, with the highest grades being present near the base of the zone. A third zone, the West Extension, is related to the Upper Zone and occurs to the west of the main body of Allammaq mineralization. The West Extension comprises lower-grade material compared to Allammaq mineralization and was classed mainly in the Inferred category. This mineralization can now be included because it is spatially located within the potential open pit mining shell designed to quantify the Allammaq resource.

The NQ and BQ diamond drillholes used to model the reported Allammaq resource span over 600 metres of strike from section 1900E to section 2500E. The delineation drilling was carried out at 25 metre drill centres (approximate) on 25 and 50 metre-spaced sections. This drilling density, coupled with the continuity of the mineralization supported by variograms, has allowed for the bulk of the resource to be classified in the indicated category.

3-D wireframe models were constructed for the various zones and mineralized domains. Inverse distance squared grade interpolation was utilized to determine block model grades.

The Nunavik Nickel Project's Measured and Indicated contained metal in resources now total approximately 201,000 tonnes of nickel, 246,000 tonnes of copper, 374,000 ounces of platinum and 1,522,000 ounces of palladium while Inferred resources comprise another 37,000 tonnes of nickel, 48,000 tonnes of copper, 85,000 ounces of platinum and 342,000 ounces of palladium.

The updated total Measured, Indicated and Inferred resources for the Nunavik Nickel Project, including updated Allammaq open pit resources are summarized in the table below:

Resources (Total) Ni Cu Co Au Pt Pd
Category Tonnes (%) (%) (%) (g/t) (g/t) (g/t)
---------------------------------------------------------------------
Measured 560,000 0.93 1.10 0.04 0.10 0.60 2.66
Indicated 21,133,000 0.93 1.14 0.04 0.14 0.53 2.17
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Total (Meas+Ind) 21,693,000 0.93 1.14 0.04 0.14 0.53 2.18

Inferred 5,232,000 0.72 0.92 0.04 0.13 0.51 2.03
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Eugene Puritch, P.Eng., Tracy Armstrong, P.Geo and Antoine Yassa, P.Geo of P&E Mining Consultants Inc. will be the authors of an NI 43-101 compliant Resource Estimate Technical Report on the Allammaq deposit to be filed within 45 days of this news release. They are Qualified Persons in accordance with NI 43-101, and are responsible for the information 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, B.C. 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 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.

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