Royalties Inc. Reports Q3 Results For September 30, 2025 and Success on Capstone Copper Lawsuit for 2% NSR on Cozamin Mine
Royalties Inc. Reports Q3 Results For
September 30, 2025 and Success on Capstone
Copper Lawsuit for 2% NSR on Cozamin Mine
Toronto, Ontario--(Newsfile Corp. - November 28, 2025) -
Royalties Inc. (CSE: RI)
(OTCID:
ROYIF)
(or "the
Company
") reports its results for the third quarter ended September 30, 2025.
This news release should be read in conjunction with the Company's unaudited financial statements
and the associated management's discussion and analysis (MD&A) for the quarter ended September
30, 2025 which are available on the Company's website at
www.royaltiesinc.com
or under the
Company's profile on SEDAR+ at
www.SEDARplus.ca
.
In the third quarter of 2025, the Company generated revenue of $41,240 (+60%), consisting of $36,150
in dividend income from its increased investment in Music Royalties Inc. ("MRI") and $5,090 in other
royalty income. Operating expenses totaled $111,727 (+130%), due to the expenses of the OTC US
listing, legal expenses and increased marketing commensurate with the success in the lawsuit against
Capstone Copper, leading to an operating loss of $70,487 versus $22,875 in the prior year's quarter.
A
non-cash foreign exchange loss of $62,273 on a US$2 million denominated contingent liability of a
Mexico subsidiary resulted in a net loss of $132,760 for the quarter, compared with a net loss of $31,454
in Q3 2024. For the nine-month period, the Company had a net loss of $54,584 versus a loss of
$118,762 in the prior year.
As at September 30, 2025, total assets increased to $2.775 million (December 31, 2024 - $1.25
million), reflecting the Company's increased investment in MRI of $1,525,000, for a total of $2,525,000
which will generate $181,800 in dividend income per year.
Ownership of 2% NSR on Capstone's Cozamin Mine Confirmed by Zacatecas Appeals Court
Royalties Inc.'s 88% subsidiary Minera Portree de Zacatecas ("MPZ") achieved a significant legal
victory in Mexico on June 16, 2025 when it obtained a favourable court judgment confirming its
entitlement to a 2% net smelter royalty ("NSR") on five concessions ("Portree claims") at Capstone
Copper's ("Capstone") Cozamin Mine. Capstone appealed and on November 4, 2025, the Civil
Chamber of the Superior Tribunal of Justice of Zacatecas upheld MPZ's entitlement to royalties
established in a January 11, 2002, mining contract and rejected the appeals filed by defendants Raúl
González Anaya and Capstone Gold S.A. de C.V. - the Appellate Court concluded that the defendants
had improperly transferred the royalties without authorization. The next step is the calculation and the
collection of the amount owed on the 2% NSR on past production from the Portree claim under the
tailings pond. The accuracy of this amount will only be determined with the co-operation of Capstone,
which has not been forthcoming. However, based on Capstone's public disclosures including its 43-101
reports and royalties paid in its audited financial statements, it is possible to estimate a figure of US$9
million for the amount owing before interest and damages.
Capstone initially reported that mining started within the Portree claim in the fourth quarter of 2019 which
equates to 6 years of production. The company estimates that Portree represents up to 30% of the Mala
Noche Footwall Zone ("MNFZ") based on the assumption of the proportion of the surface linear strike of
1.5 km of the MNFZ, the area which has represented almost all of the production at the Cozamin Mine
since 2017, according to Capstone.
In 2024, Capstone paid US$4.4 million in royalties on US$234 million of net revenues for an average
1.9% NSR paid to two royalty holders. Royalties of US$1.2 million were paid to Gold Royalty
Corporation ("GROY") in respect of a 1% NSR on 2 claims only 300 meters and down strike from the
Portree claim on the MNFZ. Royalties of US$3.2 million were paid to Grupo Minera Bacis S.A. de C.V.
("Bacis"), the former owner of the Cozamin Mine, under the terms of a December 2003 agreement
where a 3% NSR is paid on production from the property covered by the agreement. However, based on
Capstone's 43-101 and numerous public documents, MPZ estimates that the Bacis area has long since
been substantially mined out and therefore Capstone has incorrectly paid Bacis, royalties due to MPZ.
Accordingly, the 2% NSR equates to approximately US$1.5 million per year on the production since
2019 for a total estimated US$9 million amount owing to MPZ.
In addition, the actual value of the 2% NSR includes the future production under the current mine plan to
2030 plus the depth potential and any resource mined on the remaining 90% of the area covered by the
five Portree claims which is yet to be exploited. This includes the historical high grade Parroquia copper
mine in the southwest of current mine operations with an estimated 2 million tonnes historical resource.
MPZ hired a local geological expert who reviewed Capstone's public 2019-2020 drill results on the
Portree claim and estimated the value of the 2% NSR at US$25 million. With the ongoing rise in copper
and especially with record silver prices, the value of the 2% NSR will continue to appreciate for the
foreseeable future.
"The second legal victory against Capstone in Mexico, which has clearly lost twice in court in a simple
open and shut case, should finally bring its Management and Directors to their senses to step up and
resolve this unnecessary dispute. Unfortunately, they have been relying on the bad advice of a Mexican
lawyer who is documented lying in front of the judge. We are committed to using all means at our
disposal to exact accountability and settlement, including the seizing of assets which will involve the
police. This is an immaterial claim to Capstone and should be dealt with accordingly," commented Tim
Gallagher, Chairman and CEO.
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 a court confirmed claim (twice) 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 attempted to assign this
royalty to themselves without the knowledge, consent or proper payment to MPZ, the longstanding
and rightful owner since 2002.
Royalties Inc. has a 5% stake in
Music Royalties Inc
. ("MRI"), which has paid out over $13 million in
70 monthly dividends since 2019 from 31 cash-flowing catalogs with 7,000 songs with 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
Neither the CSE, nor its Regulation Services Provider accepts responsibility for the adequacy or
accuracy of this press release.
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.
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