Revised Jien offer provides for no effective price increase to Canadian
Royalties debenture holders




TORONTO, Oct. 23 /CNW/ - Jaguar Financial Corporation (TSX: JFC) ("Jaguar") today stated that there was no effective change in the pricing of the revised offer ("Revised Offer") by Jien Mining Canada Ltd. ("Jien") for the holders of debentures (the "Debenture Holders") of Canadian Royalties Inc. (TSX: CZZ) ("CZZ"). As the opinion from BMO Capital Markets ("BMO") stated that the original Jien offer ("Original Offer") was financially unfair to Debenture Holders, BMO cannot provide a positive fairness opinion on the Revised Offer, which has the same effective pricing for the debentures as the Original Offer. Similarly, the CZZ directors advised the Debenture Holders not to tender their debentures to the Original Offer, but these directors are now mysteriously silent and provide no recommendation to the Debenture Holders on the Revised Offer. Jaguar believes the directors are not providing a recommendation to the Debenture Holders because there is no effective price increase in the Revised Offer for the Debenture Holders.

No Effective Price Increase in Revised Offer for Debenture Holders

It is important to examine the convoluted structure of the Original Offer by Jien from the point of view of the Debenture Holders to determine the effective pricing for the debentures. The Original Offer provided for the payment of 60% of the principal amount, subject to a two-thirds tender condition. If a majority, or about 50.1% of the debentures, were tendered, Jien's stated intent was to amend the Indenture to provide for redemption of the debentures not tendered at 101% of the principal amount.

This structure was illogical because it incentivized Debenture Holders to wait for the 101% repayment, and not tender for 60%. At the same time, it was important for enough debentures to be tendered under the Original Offer to meet the 50.1% tender condition for an expected waiver of the two-thirds condition by Jien. This structure was coercive and resulted in conflicting priorities for the Debenture Holders.

Jien stated that if 50.1% of the debentures were tendered, Jien may waive the two-thirds tender condition and take up and pay 60% of the principal amount for the debentures tendered. Jien also signalled that it then would redeem the debentures not tendered for 101% of the principal amount.

The effective pricing of the Original Offer to the Debenture Holders was 80.46% of the principal amount of the debentures represented by the average of a payment of 60% of the principal amount for 50.1% of the debentures and a payment of 101% of the principal amount for the remaining 49.9% of the debentures.

The Revised Offer at 80% of the principal amount does not increase the consideration offered to Debenture Holders. The Revised Offer simply makes explicit the offer to pay 80% of the principal amount in the debentures, which was effectively the same implicit pricing in the Original Offer.

Vic Alboini, Chairman and Chief Executive Officer of Jaguar stated: "From the point of view of the Debenture Holders, the effective price of the Revised Offer is not an increase from the Original Offer. The Original Offer was determined to be financially unfair by BMO and was rejected as inadequate by the CZZ directors. With no effective change in price for the debentures, the Revised Offer must continue to be considered financially unfair to the Debenture Holders. The only price increase in the Revised Offer is from $0.60 per share to $0.80 per share for the sole benefit of the shareholders."

The directors of CZZ are Bryan Coates, Phillipe Couillard, Robert Durham, Bernard Guarnera, Glenn Mullan, Andrew Pepper, Arthur Porter and Michael H. Wilson. "We ask these directors to be straight with the Debenture Holders and specifically recognize that the Revised Offer is financially unfair to the Debenture Holders. They are stunningly and mysteriously silent on the treatment of the Debenture Holders" said Mr. Alboini.

"The Revised Offer must be increased to provide a payment of 101% of the principal amount to the Debenture Holders. These directors have a fiduciary duty to the Debenture Holders, and will be held personally accountable for the 21% shortfall owing to the Debenture Holders under the Revised Offer," added Mr. Alboini.

    Harvest Energy Trust Directors Provide Example of Proper Discharge of
    Fiduciary Obligations to Debenture Holders

On October 21, 2009, Harvest Energy Trust ("Harvest") announced that it had entered into an agreement with Korea National Oil Corporation ("KNOC") for the purchase of all of Harvest's trust units and the assumption of all of Harvest's debt. The Board of Directors of Harvest (the "Harvest Board") demonstrated how a board of directors should properly discharge its fiduciary obligations to debenture holders:

    "In accordance with the terms of the indentures governing
    Harvest's convertible debentures, KNOC will make an offer
    to purchase all outstanding debentures for a cash consideration
    equal to 101% of the face value thereof, plus accrued and
    unpaid interest, within 30 days following the effective date
    of the Arrangement."

The Harvest Board appears to have properly considered the fairness of the KNOC offers to both their shareholders and debenture holders when deciding to support the agreement with KNOC.

In stark contrast, the CZZ Board has mistakenly not considered the interests of the Debenture Holders in supporting the Revised Offer, refused to provide a recommendation, refused to insist upon a fairness opinion for the Debenture Holders and has chosen to remain silent.

About Jaguar Financial Corporation

Jaguar is a Canadian merchant bank that invests in undervalued small capitalization companies in a variety of industry sectors.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this news release. This news release may contain certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under Jaguar's control which may cause actual results, performances or achievements of Jaguar to be materially different from those implied by such forward looking statements.

SOURCE Jaguar Financial Corporation

For further information: For further information: Vic Alboini, Chairman & Chief Executive Officer, (416) 644-8110 - or - Kyler Wells, General Counsel & Corporate Secretary, (416) 644-8177

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