CORRECTED - CORRECTED-DEALTALK-Canadian Royalties deal seen unlikely for Chi

(Corrects third paragraph from the bottom to clarify that Canadian Royalties stock is currently trading at 68 Canadian cents, not dollars)

* Investors led by Jaguar Financial look to block deal

* Jien Canada sets final deadline

(For more Reuters DEALTALKs, click [DEALTALK/])

By Ashutosh Joshi

BANGALORE, Oct 30 (Reuters) - China's No. 2 nickel producer Jilin Jien's (600423.SS) ambition to expand its Canadian footprint, is facing its biggest hurdle as investors look set to reject its final bid for early-stage miner Canadian Royalties (CZZ.TO).

Even after Jien Canada, a joint venture between Jilin Jien and Vancouver-based Goldbrook Ventures (GBK.V), increased its intial offer to buy Canadian Royalties, the deal fell short of the two-third majority of debenture holders required for acceptance.

On Wednesday, the Jien group extended the expiry on its offer to take over Canadian Royalties for a third time to Nov. 10.

Jilin Jien, partly controlled by the Chinese government, is one of the many Asian companies looking to expand in Canada through cross-border deals, taking advantage of the opportunities created by the global downturn in resource prices.

In April, Jilin Jien bought 51 percent stake in Liberty Mines (LBE.TO), which has nickel deposits in Northern Ontario. Jilin Jien also has about 15 percent stake in Victory Mines (NI.TO) and Australia's Metallica Minerals (MLM.AX).

Jien Canada's C$192 million offer will pay out 80 Canadian cents for each Canadian Royalties share and C$800 for each C$1,000 debenture.

The Jien-led group needs support from two-thirds of shareholders and debenture-holders to take control of the Canadian company.

Jien Canada said more than two-thirds of shareholders have already tendered their shares, but it has a lock-up agreement with only about 60 percent of the debenture holders.

The debenture holders, led by merchant bank Jaguar Financial (JFC.TO), are seeking a premium over the principal amount, claiming that the bonds' indenture agreement entitles them to this.

"The indenture agreement says if there is a change of control -- (that is) if somebody acquires two-thirds or more shares -- then you got to pay 101 cents on the dollar to the debt holders," Jaguar Chief Executive Vic Alboini said in a telephone interview.

Jaguar, which typically invests in early-stage Canadian companies, said it was confident that Jien Canada's offer won't fly as it now stands.