Canadian Royalties Nunavik Nickel Project Update

Canadian Royalties Nunavik Nickel Project Update

October 1, 2008 Filed Under: Nickel Mining  

Canadian Royalties Inc. provides the following update about the progress of construction of its Nunavik Nickel Project, and about the implementation of an Asset Conservation Plan, previously announced on August 5th, 2008.

The ongoing 2008 Exploration Program is progressing as planned with over 24,000 metres drilled to date; results will follow in separate news releases commencing in approximately one week.

Nunavik Nickel Project: Construction on the Project site started on May 20th, 2008. Following implementation of the ACP, construction activities were refocused to complete essential infrastructure and to prepare the site for a temporary shutdown. To date progress on the project includes the following:

– The housing complex is fully operational with a capacity of 250 people. – A significant portion of the mine fleet is on-site. – Site preparation for the complex, concentrator, power plant and fuel storage is complete. – The concentrator foundation has been completed. – Critical path items such as ball mills, floatation cells etc. are stored on-site. – Several large hanger-style shelters have been built to store and protect equipment, the mine fleet and other construction materials. – Potable and waste water systems are installed and operational.

– Winterization of the facilities and equipment is being carried out to ensure efficient future start-up.

A current aerial photograph of the Mine site is available at

Including the exploration crew, there are currently 131 employees on site. Demobilization of site employees will continue progressively with the weekly crew rotations until the last week of October at which point the winter caretaking team will be in place. Final preparation of the Berbegamo camp for winter use will be completed in the coming weeks. A fuel delivery for winter caretaking operations is planned and the last sealift backhaul of material from Deception Bay, including rental equipment, is planned for October 14th.

Project Financing: Discussions and negotiations are ongoing and strategic alternatives are being considered.

Litigation: Canadian Royalties also is continuing to diligently prosecute its legal and arbitration proceedings against Nearctic Nickel Mines Inc. (formerly Ungava Minerals Corp.) (”Nearctic”) as well as certain of its principals. The Company is also vigorously defending itself from the various proceedings launched by the Ungava/Neararctic group and related parties.

Access to Infrastructure: Negotiations to reach an agreement to share in the use of certain local infrastructures have been delayed until financing discussions are completed. The absence of an agreement continues to impede the Corporation’s ability to efficiently and cost-effectively transport people and supplies to the Project site.

Employees and Contractors: A retention plan was implemented for certain key employees and managers. Planned layoffs of other staff functions have occurred at all offices and sites as the Corporation implemented conservation measures (ACP) to preserve its financial resources. Additional staffing reductions are expected as the Project winds down for the winter over the next several weeks. Most of the staff working on the Project site since the beginning of construction in May are contractors and will no longer be employed once essential work is completed.

About Canadian Royalties and the Nunavik Nickel Project: Canadian Royalties has initiated the development of a nickel-copper mine on its Nunavik Nickel Project, located 20 kilometers south of Xstrata Nickel’s Raglan Mine in Nunavik, Québec. Canadian Royalties received its Environmental Certificate of Authorization on May 20th, 2008 and Mine Leases for the Expo, Mesamax, Ivakkak and Mequillon sites, which were obtained in June and July of 2008.

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