Royalties Inc. Secures Landmark Victory in Commercial Lawsuit Against Capstone Copper Corp.

Rhea-AI Summary

Royalties Inc. (ROYIF) has secured a major legal victory against Capstone Copper Corp. in a commercial lawsuit regarding mining royalty rights. The Third Commercial Court of Zacatecas ruled in favor of Minera Portree de Zacatecas (MPZ), which is 88% owned by Royalties Inc., invalidating a 2019 rights assignment contract and confirming MPZ's entitlement to a 2% net smelter royalty (NSR) on five mining concessions at the Cozamin Mine. The court ordered defendants to pay royalties for various periods, with amounts to be determined during execution. The ruling affects key portions of the Mala Noche Footwall Zone at Capstone's Cozamin Mine, with royalty payments dating back to 2002 for some concessions. The case has also been referred to the State Prosecutor's Office for investigation of potential false declarations.

Positive

• Court victory confirms Royalties Inc.'s right to 2% NSR on five mining concessions
• Company will receive backdated royalty payments from multiple concessions dating to 2002
• Ruling establishes clear ownership of valuable cash-flowing royalty on an operating copper-silver mine
• 88% ownership stake in MPZ gives Royalties Inc. majority control over the royalty asset

Negative

• Claim for damages was dismissed due to insufficient evidence
• Quantification of royalty payments still pending execution phase
• Legal proceedings may continue during execution phase and potential criminal investigation

Toronto, Ontario--(Newsfile Corp. - June 19, 2025) - Royalties Inc. (CSE: RI) (OTC Pink: ROYIF) or ("the Company") is pleased to announce that Minera Portree de Zacatecas S.A. de C.V. ("MPZ" or Minera Portree), a company in which Royalties Inc. holds an 88% ownership stake, has achieved a significant legal victory in the Third Commercial Court of Zacatecas. On June 16, 2025, the court issued a final judgment in the ordinary commercial lawsuit (File 411/2022), ruling in favor of MPZ by declaring the non-existence of a 2019 rights assignment contract and upholding the company's entitlement to royalty payments from mining concessions at the Cozamin Mine, operated by Capstone Copper Corp. (TSX: CS) or ("Capstone").

The lawsuit, initiated by Luis Emilio Villanueva, Sole Administrator and General Attorney-in-Fact of Minera Portree, was filed against Raúl González Anaya, Capstone Gold S.A. de C.V.(a wholly owned subsidiary of Capstone Copper Corp.) and Gerardo González García. The court declared the August 9, 2019, contract, which purported to assign royalty rights without Minera Portree's consent, invalid due to lack of authority. The judgment reaffirmed MPZ's rights to a 2% net smelter royalty on five mining concessions, known as the "Portree claims," established in a 2002 agreement, part of which forms a key portion of the Mala Noche Footwall Zone at Capstone Copper Corp.'s Cozamin Mine.

Key Outcomes of the Judgment:

• The court invalidated the 2019 contract, confirming Minera Portree as the rightful owner of the 2% NSR.

• Defendants González Anaya and García are ordered to pay royalties for the exploitation of the Unificación del Cobre concession (2002-2007) and other concessions (2002-2019), with amounts to be quantified in the execution phase.

• Capstone Gold S.A. de C.V. is ordered to pay royalties for the Portree I concession from August 9, 2019, to the present, also to be quantified during execution.

• Royalties for additional concessions (Parroquia Dos, Parroquia Tres, Anexo a la Parroquia, and Jimena) will be assessed in the execution phase based on evidence of exploitation.

• The claim for damages was dismissed due to insufficient evidence, as the quantification of the claim requires access to the internal segmented production records at the Cozamin Mine.

• A potential false declaration by Gerardo González García was referred to the State Prosecutor's Office for investigation.

"This ruling is a pivotal moment for Minera Portree and its majority shareholder, Royalties Inc.," said Tim Gallagher. "It validates our steadfast commitment to protecting our legal rights and ensures that the 2% NSR, which is a cash flowing royalty on an operating copper-silver mine is a very valuable asset, remains with MPZ. We are confident that this court decision will finally force Capstone to admit the misguided actions of their former management and settle our claim."

About Royalties Inc.

• Royalties Inc. owns a 100% interest, subject to a 1.5% NSR owned as a separate asset, on the Bilbao silver-zinc-lead project located in the State of Zacatecas, Mexico.

• Royalties Inc. owns 88% of the outstanding shares of Minera Portree de Zacatecas, S.A. de C.V ("MPZ") which holds an asserted claim (backed by a court approved lien) to a 2% net smelter royalty established in 2002 on five mining concessions called the 'Portree claims', a portion of which is on the Mala Noche Footwall Zone, the main source of production at the Cozamin mine where Capstone Copper Corp. ("Capstone") has been mining since 2010. Capstone assigned this royalty to themselves without the knowledge of or proper payment to MPZ, the longstanding and rightful owner, in 2017 and 2019. MPZ filed civil and criminal lawsuits in Zacatecas in 2021 to invalidate the contract to transfer ownership, which has been officially supported by the court. The claim is challenged by Capstone.

• Royalties Inc. has a 2.9% stake in Music Royalties Inc. ("MRI"), which has acquired 30 cash-flowing catalogs and paid out over $11 million in dividends since 2019 from 30 cash-flowing catalogs generating a 7.2% annual yield.

For further information contact Royalties Inc. at www.royaltiesinc.com

Tim Gallagher 
CEO & Director
(416) 925‐0090

Connor Gallagher
Investor Relations
(647) 921-2206

Andrew Robertson
Director
(416) 317-0137

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Forward-Looking Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as "may", "will", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of those terms, or other similar words, expressions, and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is based on assumptions made in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to: sufficient capital and financing required in order to fulfill the Company's business plans and strategy may not be obtained as expected; that the Company will not be able to pay future dividends; and other risks related to the Company as disclosed in the documents filed on the Company's profile at SEDAR+ at www.SEDARplus.ca. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements contained in this press release and they are expressly qualified in their entirety by this cautionary statement. The forward-looking statements herein are made as at the date hereof and are based on the beliefs, estimates, expectations, and opinions of management on such date. The Company does not undertake any obligation to update publicly or revise any such forward-looking statements whether as a result of new information, future events or to explain any material difference between subsequent actual events and such forward-looking information, except as required under applicable securities law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/256133

FAQ

What was the outcome of Royalties Inc.'s (ROYIF) lawsuit against Capstone Copper?

Royalties Inc. won the lawsuit, with the court invalidating a 2019 rights assignment contract and confirming their 88%-owned subsidiary's right to a 2% NSR on five mining concessions at the Cozamin Mine.

How much royalty is Royalties Inc. entitled to from the Cozamin Mine?

Royalties Inc., through its 88% ownership in Minera Portree, is entitled to a 2% net smelter royalty (NSR) on five mining concessions at the Cozamin Mine.

What mining concessions are covered by ROYIF's royalty rights at Cozamin?

The royalty rights cover five mining concessions known as the Portree claims, including Portree I, Parroquia Dos, Parroquia Tres, Anexo a la Parroquia, and Jimena, part of which forms the Mala Noche Footwall Zone.

When will Royalties Inc. receive payment for the backdated royalties from Capstone?

The exact payment amounts will be determined during the execution phase of the judgment, with royalties dating back to 2002 for some concessions.

What percentage of Minera Portree does Royalties Inc. own?

Royalties Inc. holds an 88% ownership stake in Minera Portree de Zacatecas (MPZ).