/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S.
MONTREAL, March 5 /CNW Telbec/ - Canadian Royalties Inc. (the "Company"
or "Canadian Royalties") (TSX:CZZ) is pleased to announce that, in connection
with its previously announced filing of a preliminary short form prospectus
with securities regulatory authorities, it has entered into an agreement with
a syndicate of underwriters led by BMO Capital Markets and including Raymond
James Ltd. and Desjardins Securities Inc. (the "Underwriters") under which the
Underwriters have agreed to purchase $125 million aggregate principal amount
of convertible senior unsecured debentures due March 31, 2015 (the
"Debentures"). Canadian Royalties has granted the Underwriters an option to
purchase up to an additional 10% in principal amount of Debentures on the same
terms and conditions, exercisable up to 30 days following closing of the
The offering is subject to certain conditions including, but not limited
to, the receipt of all necessary approvals, including the approval of the
Toronto Stock Exchange. The offering is scheduled to close on or about
March 18, 2008.
The Debentures are senior, unsecured obligations of Canadian Royalties
and will bear interest at a rate of 7.00% per annum payable semi-annually in
arrears on September 30 and March 31 in each year commencing September 30,
2008. The Debentures are convertible at any time at the option of the holders
into common shares at an initial conversion price of $2.75 per common share.
The Debentures will not be redeemable by the Company prior to April 1, 2011.
Between April 1, 2011 and April 1, 2013, Canadian Royalties has the right to
redeem all or a portion of the Debentures at the principal amount plus accrued
interest provided the current 20-day weighted average trading price of
Canadian Royalties' common shares is at least 125% of the conversion price.
After April 1, 2013, Canadian Royalties has the right to redeem all or a
portion of the Debentures at the principal amount plus accrued interest. The
Debentures will mature on March 31, 2015.
In the event Canadian Royalties obtains equity financing at a price (the
"Reset Price") below the conversion price, the conversion price will be
adjusted to become equal to the Reset Price, provided that there will be no
downward adjustment to the conversion price after the Company obtains project
bank financing of at least $250 million and the Environmental Certificate of
Authorization for the Nunavik Nickel Project.
The Company plans to use the net proceeds from the offering to pursue the
development of the Nunavik Nickel Project and for general corporate and
This press release is not an offer to sell or the solicitation of an
offer to buy the securities, nor shall there be any sale of the securities in
any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to qualification or registration under the securities laws of such
jurisdiction. The securities being offered have not been, nor will they be,
registered under the United States Securities Act of 1933, as amended, and
such securities may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons absent registration or an
applicable exemption from U.S. registration requirements.
About Canadian Royalties and the Nunavik Nickel Project
Canadian Royalties has initiated the development of an independent,
stand-alone nickel-copper mine on its Nunavik Nickel Project, located
20 kilometres south of Xstrata Nickel's Raglan Mine in northern Quebec.
Canadian Royalties is proceeding with permitting applications, as well as
exploration for additional resources.
Canadian Royalties currently holds a 100% interest in the Ivakkak
deposit, subject to a net smelter royalty ("NSR", refer to news release dated
September 21, 2005). Additionally, Canadian Royalties has vested a 70%
interest in the Expo-Ungava property; its interest therein shall increase to
80% simultaneously with the creation of the joint venture. Further, Canadian
Royalties holds an underlying 2% NSR on the Expo-Ungava property.
For additional information please visit our website at
THIS NEWS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO PURCHASE SECURITIES OF THE COMPANY IN ANY
For further information:
For further information: Canadian Royalties Inc.: Richard R. Faucher,
President & CEO, Toll Free: 1-877-879-1688, firstname.lastname@example.org; C.
Jens Zinke, VP Business Development, Toll Free: 1-877-879-1688,