Malartic CHL Joint Venture Property: Mineral Resource Estimate for Jeffrey Zone

VAL-D'OR, QUÉBEC-- Jan. 17, 2012 - In furtherance to its news release of November 22, 2011 Abitibi Royalties Inc. (TSX VENTURE:RZZ) (hereinafter "Abitibi Royalties" or the "Company") is pleased to announce the results of the technical audit completed by Micon International Limited ("Micon") on the internal mineral resource estimate prepared by Osisko Mining Corp. ("Osisko"). This resource estimate covers the western portion of the Jeffrey Zone over a strike length of approximately 450 metres, where drilling has been conducted on a 25 metre by 25 metre grid (see figure 1). The resource estimate was prepared using 210 drill holes (45,090 metres) out of a database containing the results from 307 drill holes (66,576.4 metres), which were drilled between 2007 and 2011.

The Jeffrey Zone is the first gold mineralized zone drilled by Osisko on the Malartic CHL Property for which a gold resource has now been estimated. The Jeffrey Zone is situated approximately 550 metres to the east of the Canadian Malartic main pit (South Barnat Zone) currently under development by Osisko. The Jeffrey Zone is one of several zones of gold mineralization known to occur on the Malartic CHL Property, located near the Town of Val-d'Or and immediately east of the Town of Malartic, in the Abitibi Region of north-western Quebec.

The indicated mineral resource within a Whittle-optimized open pit shell using US $1,100 gold is 5,810,000 tonnes at an average grade of 0.70 g/t Au for 130,760 ounces of contained gold plus an additional inferred resource of 1,760,000 tonnes at an average grade of 0.58 g/t Au for 32,820 ounces of contained gold. The lower cut-off grade is 0.265 g/t gold. A National Instrument 43-101 compliant technical report describing the details of the mineral resources will be filed by the Company on SEDAR (www.sedar.com) within 45 days of the date of this news release. The Jeffrey Zone forms part of the Malartic CHL Property (the "JV Property") which is currently the object of a joint venture with Osisko, and pursuant to which Abitibi holds a 30% free carried interest to production.

Among other developments, Abitibi has been advised by Osisko, that Osisko has identified potentially mineable mineralization on a claim that covers a portion of the Charlie Zone and the Gouldie Zone (see figure 2) and in which Abitibi holds a 2% NSR. This claim block is located immediately south of Osisko's Canadian Malartic main pit. Further information will be provided as it becomes available.

Key Points

  • Mineral resources in this release are reported for the western part of the Jeffrey Zone covering a strike length of approximately 450 metres (see figure 1).

  • The western limit of the portion of the Jeffrey Zone for which the resources are reported in this release is only 550 metres to the east of the boundary of Osisko's current main pit outline (see figure 1).

  • The most eastern extension of Osisko's main pit also, known as Mammoth Zone (eastern extension of the South Barnat Zone), extends onto the JV Property. No separate resource has been provided so far for the respective part of the main pit that is located on the JV Property.

  • Recent drilling has been reported from the Mammoth Zone (see news release dated September 22, 2011). The results indicate that this zone extends beyond the outline of the currently projected pit perimeters further to the east and closer towards the Jeffrey Zone.

  • Osisko is currently drilling on the JV Property and priority during the 2012 winter campaign is given to the expansion of the Mammoth Zone and to fill in the 550 metre gap (known as the Barnat Extension, see Figure 1) between the current main pit outline (east of the Mammoth Zone) and the western outline of the Jeffrey Zone, where no drilling has been reported to date.

Resource Estimate Details:

The table below summarizes the mineral resources for the Jeffrey Zone within an open pit Whittle optimized pit shell:

Tonnes [t] Grade [Au g/t] Contained Ounces Au [oz]
Indicated 5,810,000 0.70 130,760
Inferred 1,760,000 0.58 32,820

Mineral resources are not mineral reserves and do not have demonstrated economic viability.

The key optimization parameters used are:

Gold Price [US$/oz] $1,100
Oil Price [US$/oz] $100
Exchange Rate [C$/US$] 1.00
Metallurgical Recovery [%] 87%
Total Ore Based Cost [US$/t treated] $7.51
Reference Mining Cost [US$/t mined]:
Ore [US$/t]
Waste [US$/t]
Overburden [US$/t]

$1.31
$1.31
$3.22
Whittle Overall slope angle 43.8 degrees
Recovered Cut-Off Grade [g Au/t] 0.265
Waste/Ore Strip Ratio 2.9

Mr. B. Terrence Hennessey, P.Geo. of Micon is the Qualified Person responsible for the technical information related to the mineral resources reported herein, including verification of the data disclosed.

About Abitibi Royalties Inc.: Abitibi Royalties Inc. holds title to interests in the Luc Bourdon and Bourdon West Prospects (also known as the McFaulds Lake Property) and a 30% carried interest to production in the Malartic CHL Property, plus a 2% net smelter royalty interest in one claim held by Osisko Mining Corporation, which was previously held by Golden Valley Mines Ltd. and vended to Osisko, and may acquire and generate other property and royalty interests.

Forward Looking Statements:

This news release contains certain statements that may be deemed "forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Golden Valley believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or realities may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of Golden Valley's management on the date the statements are made. Except as required by law, Golden Valley undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

Figures 1 and 2 are available at the following address: http://media3.marketwire.com/docs/RZZ_F2_EN.pdf

CONTACT INFORMATION

Glenn J. Mullan
President
819-824-2808, x 204
glenn.mullan@goldenvalleymines.com