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Nearctic Nickel Mines Inc, the Company announced that it has delivered Notice of Default to Canadian Royalties inc. A CRI in respect of a certain of CRIs covenants in the option agreement dated January 12th 2001 Agreement.

CRI and the Company's indirect subsidiary, Ungava Mineral Exploration inc. AUMEI are currently 80:20 co owners and JV in respect of the Property which is the subject of the agreement.

CRI is the manager of the JV and has allowed part of the Property to become the subject of tens of millions of dollars worth of construction liens, as is prohibited by the terms of the Agreement. Some of the lien holders have commenced legal action for Court supervised sale of part of the property.

The Company and UMEI may seek the remedy for CRIs default in an arbitration proceeding or other proceedings.