Corporate & Exploration Update - New Bidlamaque Prospect Optioned to C2C Inc.

Montr�al, Qu�bec - June 1^st, 2007 - Canadian Royalties Inc. (TSX symbol: CZZ) is pleased to announce that it has entered into an agreement with C2C Inc. (TSX-V: CCN) pursuant to which C2C may earn up to a 66% interest, pursuant to the terms outlined below, in the New Bidlamaque Prospect which is located in Bourlamaque Township, Qu�bec.

About Bourlamaque Township: The 10 claim (149 hectares) New Bidlamaque Prospect sits in the heart of the Val-d'Or gold camp, where production to date totals more than 15 million ounces of gold, and which is located approximately 5-km east of the town of Val-d'Or, between the Sigma-Lamaque complex and East Sullivan Mine to the west, and the Ferderber (Belmoral), Dumont, Lac Herbin and Perron-Beaufor to the east and northeast.  The Property is reported to contain a historic resource¹ of approximately 193,000 tons grading 5.8 g/t gold (Au) and 1.2% copper (Cu) (Ministry of Natural Resources, Quebec: NTS: 32C/04-#203; Fiche de Gite #32C/04-#66; SIGEOM: 32C/04-200-102).

Exploration History: Previous exploration work includes a surveyed grid, extensive Diamond drilling (over 32,000 metres), shaft sinking and modest underground lateral development (a three compartment shaft was sunk to 390-feet in 1946 and levels were established at the 150, 250 and 375 foot elevations). This work followed the original discovery of gold in quartz veins by Fred Bidgood et al. (1933) and was largely directed at evaluating the potential of mining shear-zone hosted quartz veins near the geographic centre of the Property.

Canadian Royalties completed a program (see news release dated July 11, 2006) of Diamond drilling (7 ddh's; 1,017.6-metres) principally dedicated to the testing of geophysical anomalies delineated by its "in-house" technical team at the Sullivan exploration office under the direction of consulting geologist, Michael P. Rosatelli and geophysical engineer, Langis Plante.  Significant results include what is believed to be a new zone of diorite-hosted gold mineralization east of the historic shaft area described above as indicated in Diamond drillholes CNB-06-05, 06 & 07 (see table attached below). 

Separately, drillhole CNB-06-01 intersected what is interpreted as the extension of the historical New Bidlamaque shaft vein-hosted mineralization 240-metres northwest, manifest as two separate high-grade vein-hosted gold intersections, plus three other separate, moderate to low-grade gold-bearing zones (see table).

Another area of interest is located north of the historic New Bidlamaque shaft and is characterized as broad zones of anomalous gold and copper associated with two separate moderate to strong conductive zones, all enclosed within a wide zone of polarisable material referred to as the "West-Northwest magnetic cluster" in drillholes CNB-02, 03 and 04.

All drill targets/intercepts remain open along strike and at depth. Additional detailed core sampling is required.

Table Representing Assay Highlights:

Significant historical drill intersections have previously been reported on the Property at depth (e.g.: 0.90 oz/t gold over 2.5' and 0.36 oz/t gold over 7' at the 850' and 950' levels respectively in 1946) for the main vein within the New Bidlamaque shaft area. Reported historic copper values are higher than normal for the Val-d'Or mining camp, and this copper mineralization was the focus of at least one exploration program by East Sullivan Mines in the 1960's. These are considered intriguing in the context of the East Sullivan, Dunraine, Louvem, Louvicourt, Bevcon, and Buffadison Mines b ase metals mines located in the area, and in the context of current metals prices for copper. The Property is situated near the south contact of the Bourlamaque Batholith and underlain by rocks of the felsic to intermediate Jacola and Val d'Or Formations.

The New Bidlamaque Prospect is considered prospective for quartz-vein hosted gold mineralization of both the shear ("Kiena") or intrusive ("Ferderber-Dumont-Sigma-Lamaque") type deposits which characterize historic and current production in the Val-d'Or mining camp and is also considered to have good potential for volcanogenic (VMS) massive-sulphide mineralization based on the signatures derived from recent geophysical surveys in areas north and east of the historic New Bidlamaque shaft zone. Total production of gold, silver, copper and zinc in the Val-d'Or mining camp amounts to approximately 15,000,000 ounces of gold through 2004 (from 27 past and current producers), 18,000,000 ounces of silver, 1.5 billion pounds of copper and 1.4 billion pounds of zinc.

Terms the Option-Joint Venture:  C2C may earn an initial 50% interest in the Property by making a $40,000 cash payment on signing, issuing an aggregate 250,000 C2C shares, and incurring exploration expenditures of $5,000,000 over a four year period.  Provided that C2C makes the cash payment ($40,000), issues the shares (250,000), and completes the required exploration expenditures ($5,000,000), C2C may then elect to increase its interest in the Property by 10 % (aggregate 60%) by issuing an additional 250,000 C2C shares, and incurring further expenditures of $5,000,000 (aggregate $10,000, 000) in the 5^th year of the agreement. Further, provided that C2C has completed the requirements of the 2^nd stage of vesting, C2C may earn an additional 6% (aggregate 66%) in the Property by completing a bankable feasibility study and issuing a further 500,000 C2C shares to the Company (aggregate 1,000,000). Canadian Royalties shall be the operator during the option period.  

Canadian Royalties acquired the New Bidlamaque Prospect pursuant to the terms of an option agreement, the terms of which are disclosed in a press release of the Company dated June 11, 2002 which is available for viewing via the internet at www.sedar.com.  

All drill core was of BQ-size, and is logged, sampled and split at the Company's Val d'Or office, in intervals ranging from 0.25 metres to a maximum of 1.5 meters, sealed in bags, and sent to ALS CHEMEX Laboratory with sample preparation completed in Val-d'Or (QC) and analyses completed at ALS CHEMEX in Vancouver (BC). Gold values were determined by 30 gram fire assay with a FA-AA finish and ME-ICP61, 27 element four acid ICP-AAS. Over limits for gold (if gold values ≥ 10.0 ppm), re-analyzed by 30 gram fire assay with a gravimetric finish, and copper (if copper values ≥10,000 ppm), re-analyzed by ore-grade Cu - four acid / AAS.

Michael P. Rosatelli, P. Geo. is a "Qualified Person" as defined in National Instrument 43-101 and is responsible for the technical information presented in this news release. Canadian Royalties has set up an internal quality control procedure that includes systematic addition of blank samples and duplicates to every batch of samples sent out for analysis.

Litigation update: The Company has been advised by two of its directors, Messieurs Glenn J. Mullan and Bruce Durham, that Ungava Mineral Exploration Inc. ("UMEI"), a wholly owned subsidiary of Ungava Minerals Corp., is appealing the April 24, 2007 decision of the Qu�bec Superior Court wherein Madame Justice H�l�ne Langlois dismissed a claim filed by UMEI against each of them on the grounds that all of the substantive matters raised by UMEI in its proceedings had been previously litigated and decided upon on multiple occasions. Notwithstanding that this action is against Messieurs Mullan and Durham, and not against the Company, the Company considers that the recent appeal by UMEI constitutes another frivolous proceeding in a multiple of proceedings filed by Ungava Minerals and parties related to Ungava Minerals in both Qu�bec and Ontario since 2002.  The Company is proceeding with its own action to have Ungava Minerals declared vexatious litigants and to be held accountable for abuse of process.

About Canadian Royalties and the Raglan South Nickel Project

Canadian Royalties is evaluating the potential of establishing an independent, stand-alone Ni-Cu-PGE mining and milling operation in the general vicinity of Xstrata Nickel's Raglan Mine in Nunavik, Qu�bec. Canadian Royalties is currently proceeding with permitting applications and a bankable feasibility study ("BFS"²), as well as with exploration for additional resources near existing Ni-Cu-PGE deposits and new areas of mineralization.

Forward-looking Statement

This news release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Such risks and uncertainties are disclosed under the heading "Risk Factors" in the Company's Annual Information Form dated March 31, 2007. 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 release any revisions to such forward-looking statements to reflect events, circumstances, or changes in expectations after the date hereof. Accordingly, readers should not place undue reliance on forward-looking statements.

For additional information please visit our website at www.canadianroyalties.com or contact:

Renmark Financial Communications Inc.

Jason Roy : jroy@renmarkfinancial.com

Henri Perron : hperron@renmarkfinancial.com

Tel. : (514) 939-3989

Fax : (514) 939-3717

www.renmarkfinancial.com