GM 62026 ASSESSMENT REPORT ON THE HITMEN PROPERTY Assessment Report on the Hitmen Property Rea.n~a 6 ► ar 4+04urotteS Nunavik, Quebec • 2 s tow. NTS 35H/12 2005 Bureau Regional Val -d'Or Prepared for: Canadian Royalties Inc. GM 6 2026 Prepared by: Jean Bernard, B.Sc. November 04, 2005 05332009 TABLE OF CONTENTS 1.0 INTRODUCTION 1 2.0 PROPERTY DESCRIPTION AND LOCATION 1 3.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND — PHYSIOGRAPHY 6 4.0 REGIONAL GEOLOGY 7 5.0 PROPERTY GEOLOGY 9 6.0 2005 CANADIAN ROYALTIES EXPLORATION PROGRAM 9 7.0 ECONOMIC GEOLOGY 10 — 7.1 PROSPECTING 10 7.2 SAMPLING METHOD AND APPROACH 10 10.0 CONCLUSION AND RECOMMENDATION 12 LIST OF FIGURES Figure 1 Location Map 2 Figure 2 Mineral Deposits and Property Locations, Ungava Area 3 Figure 3 Regional Geology and Mineral Deposits, Ungava Area 4 LIST OF TABLES Table 1 List of Map Designated Units, Hitmen Property 5 Table 2 Stratigraphic Formations, Cape Smith Belt 8 Table 3 Summary of Field Work Completed in 2005 9 Table 4 2005 Grab Sample Assay Results, Hitmen Property 11 APPENDIX I 2005 Grab Assay Certificates i 1 MAPS IN BACK POCKET MAP 1 Map Designated Units, Geology, Grab Samples. ii 1.0 INTRODUCTION The Hitmen Property is located on the Ungava Peninsula in the Nunavik region of northern Quebec on claim map 35H12, approximately 100 kilometres west-southwest of the coastal village of Kangiqsujuaq (Wakeham Bay). During July of 2005 to end of September of 2005, Canadian Royalties Inc. completed an airborne geophysical survey, reconnaissance prospecting, gridding, geological mapping, ground geophysics on the Blazers Property, In July 2005, Areoquest Ltd carried out a helicopter-borne electromagnetic-magnetic survey on the South Trend Property. The HLEM survey generated numerous anomalies that followed up on by the Canadian Royalties Inc exploration crew. Following a comprehensive geological and historical exploration work compilation, a grab sampling-prospecting program started in July 2005. Prospecting encountered sulphide mineralization in gabbro, pyroxenite and peridotite in the vicinity of the Hitmen Property. Jean Bernard, B.Sc, of Thetford Mines, Quebec, prepared the report. Jean Bernard completed 10 weeks of fieldwork as a geological consultant for Canadian Royalties on adjacent properties during the 2005 exploration program, he did visit the Hitmen Property. Todd Keast, P.Geo managed the 2005 exploration programs on the Hitmen Property for Canadian Royalties Inc. 2.0 PROPERTY DESCRIPTION AND LOCATION The Hitmen Property is located approximately 100 kilometres west-southwest of the village of Kangiqsujuaq (Wakeham Bay), on the Ungava Peninsula in the Northern Québec region of Nunavik (Figures 1 and 2). The center of the property is located at UTM Nad 83 (Zone 18) — coordinates 560200E and 6830000N. The property is situated on claim map 35H12. The property consists of 16 Map Designated Units (MDU), which together encompass an area of 656,96 hectares (ha). Canadian Royalties has a 100% interest in the property. The MDUs are contiguous and form a irregular rectangular block that is 4,4 kilometres in an east-west direction by 1,85 kilometres in a north-south direction (Map 1). A detailed description of the property with claim numbers, claim size, specific claim location, claim recording dates, claim expiry dates, work in reserve, and work required is included in Table 1. -1- •n„ .~ \ ~~~ \ 1. Igaluit fl Strait \ ~•~ t \ --\ \ \\ Sallult Kangiqsujuaq Hitmen Property Ungava LABRADOR Hudson Bay SEA Bay 1 ^ I Kuujjuaq t VOISEY'S i BAY t t James SUPERIOR Bay GRENVILLE CANADIAN ROYALTIES Inc. Proterozoic Rocks Granitoid Rocks CANADIAN ROYALTIES INC. TSX-V:CZZ Superior Province Grenville Province LOCATION MAP NUNAVIK, QUEBEC 300 kilometres FIGURE: 1 Canadian Royalties' Raglan South Trend Property Interests (CZZ) 1 Phoenix 20 Greyhounds 2 Expo Ungava (Ungava Minerals) 21 Colts (Boulder Option) 3 New Foreurs West and East 22 Otters 4 Wheat Kings 23 Sting 5 Hitmen 24 Cougars 6 67's 25 Vicenza 7 Pats 26 Platters 8 Expo-Ungava West 27 Arbitration 9 Rocket 28 Giants 10 Olympiques 29 Breakaway (Boulder Option) 11 Rebels 30 Gamache (Montoro Option) 12 & 13 Crocodile Tears East and West 31 South Trend (Montoro JV) 14 Ron Roy West 32 Sub. (Novawest 3% NSR) 15 Giraffe 33 Lac Nuvilik (Novawest 3% NSR) 16 Lac Felix NE (Little Mountain Option) 34 Eastbridge (Novawest 3% NSR) 17 Generals (Little Mountain Option) 35 Delta West (Novawest 3% NSR) 18 Blazers 36 Delta (Novawest 3% NSR) 19 Ice 37 Grey Goose HUDSON S STRAIT FALCONBRIDGE LTD Zones 13 RAGLAN MINE ,r-' KING G . ORGE BAY Katinniq and 14 Boundary Deposit (DOUGLA ' HARBOUR) ❑ \ Deposit New East Dona dson Cross Lake "` Deposit Deposit U Deposit KANGIQSUJUAQ AKEHAM BAY) FALCONBRIDGE / MELKIOR DELTA DEPOSIT MESAMAX DEPOSIT —-1 Tootoo ROAD PERIOOTITE OR PYROXENITE Méquillon AIRPORT 100% CZZ ▪Q CZZ ROYALTY (32,33,305,M EXPO-UNGAVA DEPOSIT +Jf SEAPORT as CZ2 OPTION /JV PROPERTY (2,31) O CZZ DEPOSIT • CZZ 3N PARTY OPTION (21,25,30) 30 KILOMETRES * CZZ NS cu SHOWINGS O FALCONBRIDGE Ç CANADIAN ROYALTIES Inc. © OTHER DEPOSIT OTHER CLAIM HOLDERS From Thalenhorst and Keast, 3; Modified May 2005 by L.Plante Figure 2 - Mineral Deposits and Property Locations - Ungava Area Granitic Rocks BOUNDARY Hudson KATINNIQ DEPOSIT- DEPOSITS Bay Ç 6 850 000N EAST LAKE DEPOSITS Zone 5~ BD ~P AOS~ IT~S~ ~ MA A 0 ST DONALDSON Ontario DEPOSITS * 1 NEW EAST DEPOSITS CROSS LAKE DEPOSITS Zone 13 - 14 DEPOSITS ,i/ i. HITMEN FALCONBRIDGE/ MELKIOR PROPERLY DELTA DEPOSIT TK DEPOSIT MESAMAX DEPOSIT EXPO-UNGAVA DEPOSIT LEGEND HITMEN PROPERTY Cu-Ni Deposits WATTS GROUP Cu-Ni Showing SPARTAN GROUP Peridotite, Gabbro CHUKOTAT GROUP CANADIAN ROYALTIES Inc. Group Contact POVUNGNITUK GROUP CZZ Royalty LAMARCHE GROUP Geology modified from : Géologie de la région de la fosse de l' Ungava; DPV-897 100% CZZ Updated : Feb 26, 2003 by C. Belzil and March 2003 by L Plante CZZ Joint Venture (Expo-Ungava) 0 10 20 30 Modified : Feb 2005 by P Pope Kilometres Figure 3 - REGIONAL GEOLOGY AND MINERAL DEPOSITS, UNGAVA AREA CTE_Reg_GeolFigure3.cdr 2005/11/21 m.b. Table 1 List of Map Designated Units, Hitman MDU Area NTS Range Lot Date Due Date Work in Work No. (hectares) MapSheet Recorded Reserve Required 1027896 41.06 35H12 12 16 19-Sep-01 18-Sep-05 0 $400.00 1027897 41.06 35H12 12 17 19-Sep-01 18-Sep-05 0 $400.00 1027898 41.06 35H12 12 18 19-Sep-01 18-Sep-05 0 $400.00 1027899 41.06 35H12 12 19 19-Sep-01 18-Sep-05 0 $400.00 1027900 41.06 35H12 12 20 19-Sep-01 18-Sep-05 0 $400.00 1027901 41.06 35H12 12 21 19-Sep-01 18-Sep-05 0 $400.00 1027902 41.06 35H12 12 22 19-Sep-01 18-Sep-05 0 $400.00 1027903 41.06 35H12 12 23 19-Sep-01 18-Sep-05 0 $400.00 1027904 41.06 35H12 12 24 19-Sep-01 18-Sep-05 0 $400.00 1027905 41.06 35H12 12 25 19-Sep-01 18-Sep-05 0 $400.00 1027906 41.05 35H12 13 20 19-Sep-01 18-Sep-05 0 $400.00 1027907 41.05 35H12 13 21 19-Sep-01 18-Sep-05 0 $400.00 1027908 41.05 35H12 13 22 19-Sep-01 18-Sep-05 0 $400.00 1027909 41.05 35H12 13 23 19-Sep-01 18-Sep-05 0 $400.00 1027910 41.05 35H12 13 24 19-Sep-01 18-Sep-05 0 $400.00 1027961 41.05 35H12 13 25 19-Sep-01 18-Sep-05 0 $400.00 3.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY The Hitmen Property is located on a broad plateau, in an area of gently rolling topography, north of the tree line, within the Povungnituk Range. The topography is characterized by moderate to steep east-west trending ridges and valleys. Vegetation consists of sparse shrubs, plants and grass growing no more than 25 centimetres in height. Outcrop ridges are generally bare rock, devoid of vegetation, where outcrop or subcrop is commonly reduced to frost heaved blocks and boulders. The low areas between outcrop ridges are typically flat, grass-covered tundra, bisected by small streams. The entire area is affected by permafrost. The elevation is 365-550 metres above sea level and the relief is subdued to moderate ranging from 10 metres to 75 metres. Overburden in the area is generally less the 20 metres in thickness (from drill hole information). The climate of the area is harsh, with summer (July and early August) temperatures ranging between 0°C and 20°C and winter temperatures ranging between 0°C and -50°C. Snow can accumulate in any month of the year. Sheltered ridges often remain snow covered throughout the year. The area is subject to strong wind conditions and periods of dense fog. The optimal field season for surface exploration activities are the months of June, July, August and the early part of September. The property can be reached by helicopter from the coastal communities of Kuujjuaq, Salluit, and Kangiqsujuaq (Wakeham Bay), located 120 kilometres east-northeast (Figures 1 and 2). All of these villages are accessed by daily air service from Montreal by First Air (Kuujjuaq) or Air Inuit (Salluit and Kangiqsujuaq). Air service from Salluit also connects to the community of Radisson to the south in the James Bay hydroelectric development area. Heavy equipment, fuel and freight can be shipped to these coastal communities by boat (sealift) between the months of July and September. A 16 person exploration camp located on the south shore of Kenty Lake, 45 kilometres west of the property, serves as the base camp for work in this area.