Mequillon deposit improves with drilling (December 29, 2004)

Canadian Royalties (CZZ-T) is continuing to hit significant nickel, copper and platinum-group-element-bearing sulphide mineralization at its Expo-Ungava property in northern Quebec.

Diamond drill results from 19 holes, which tested the Mequillon deposit, are highlighted by one hole that cut 42.9 metres grading 0.83% nickel, 1.11% copper, 0.04% cobalt, 0.17 gram gold per tonne, 0.75 gram platinum, and 3.16 grams palladium per tonne. Included within this intercept is a 26.2-metre interval grading, 1.17 nickel, 1.18% copper, 0.05% cobalt, 0.21 gram gold, 1.06 grams platinum, and 4.54 grams palladium per tonne at 100 meters downhole.

Another hole cut 1 gram gold, 1.32 grams platinum and 3.94 grams palladium per tonne, as well as 1.37% nickel, 2.99% copper, and 0.06% cobalt over 4.3 metres.

Two holes hit 10-metre sections that graded 1% (and 1.41%) nickel, 1.03% (and 1.37%) copper, 0.04% (and 0.06%) cobalt, 0.18- and 0.16-gram gold, 1.4- and 0.86-grams platinum and 5.14- and 3.25-grams palladium per tonne respectively.

Twelve holes intersected from 2-139 metres grading from 0.26-0.9% nickel, 0.35-2.2% copper, 0.02-0.04% cobalt, 0.07-1.2 grams gold, 0.26-1.17 grams platinum, and 0.9-4.25 grams palladium per tonne. Three holes failed to cut significant mineralization.

Mineralization was cut at 14 metres downhole in the hole that cut 139 metres of mineralization. True width is interpreted to be at least 70% of the downhole depth.

The deposit has been traced for 1,000 metres along strike and is open to the east. Sulphide mineralization is found at the lower contact of the ultramafic host. Normally the highest grade is at the bottom of the mineralized interval.

Assay data, for an additional 19 holes, is pending. A new resource estimate will be calculated using these results.

Canadian Royalties owns 70% of the property and Ungava Minerals (UGVAF-O) holds the rest. Canadian Royalties can increase its ownership by 10% by completing a bankable feasibility study on the property.