UPDATE 1-Canadian Royalties still in financing talks for Nunavik

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Oct 1 (Reuters) - Canadian Royalties Inc (CZZ.TO) said it is still in discussions for financing its Nunavik Nickel Project in northern Quebec and is also considering strategic alternatives for the project financing.

Negotiations to reach an agreement to share in the use of certain local infrastructures have been delayed until financing discussions are completed, the mineral exploration company said.

In August, Canadian Royalties said negotiations for financing with Bank of Montreal Capital Markets and Commonwealth Bank of Australia will continue until at least Sept. 30.

The C$465 million ($439.9 million) mine, which is located just 20 km south of Xstrata Plc's (XTA.L) Raglan nickel mine, is expected to eventually produce up to 27 million pounds of nickel a year and up to 50 million pounds of copper.

The company said it has laid off certain staff functions as planned at all offices and sites to preserve cash, and also sees additional staffing reductions as the project winds down for the winter over the next several weeks.

The company's shares, which have fallen more than 80 percent so far this year, were down more than 13 percent at 45 Canadian cents on the Toronto Stock Exchange.

($1=1.057 Canadian Dollar) (Reporting by Krishna Chaithanya in Bangalore; Editing by Deepak Kannan)