Core Viewpoint - Royalties Inc. is optimistic about the resolution of a legal dispute regarding royalty payments owed by Capstone Gold, which could lead to the collection of approximately US$10 million in royalties owed to Minera Portree de Zacatecas S.A. de C.V. (MPZ) for the years 2019-2026 [1][4]. Legal Proceedings - The Federal Prosecutor has formally opposed Capstone Gold's constitutional challenge (Amparo) against a ruling that upheld MPZ's royalty rights, indicating that the state court's decision is sound and should be confirmed [1][4]. - The dispute centers around a 2% royalty claim related to five mining concessions at the Cozamin mine, with the courts affirming MPZ's entitlement to royalties based on a 2002 agreement [2][3]. Financial Implications - The estimated value of the royalties owed to MPZ is around US$10 million, excluding interest and damages, with the potential for future revenues from the Cozamin mine reaching US$400 million, translating to US$8 million in annual royalty payments [4][5]. - If Capstone had been paying the royalties since 2019, MPZ's market cap could have been valued at US$100 million, reflecting the significant economic impact of the delayed payments [5]. Future Prospects - The copper price has more than doubled and the silver price has quadrupled since 2019, enhancing the future value of the royalties owed to MPZ [4]. - The Cozamin mine's future royalty obligations are expected to exceed the materiality threshold set by Capstone's auditors and attract investor interest, especially if mining operations continue to expand [4][5]. Company Background - Royalties Inc. holds an 88% stake in MPZ, which has a confirmed claim to a 2% net smelter return (NSR) established in 2002 on the Portree claims, a significant portion of which is located at the Cozamin mine [10].

Core Viewpoint - Royalties Inc. has successfully upheld its royalty rights through a favorable ruling from the Appellate Court in Mexico, confirming its entitlement to royalties from a 2002 mining contract and ordering Capstone to pay legal costs [1][3]. Legal Ruling Summary - The Appellate Court confirmed the first-instance ruling from June 16, 2025, which recognized Minera Portree's rights to royalties and declared the 2019 transfer act to Capstone as nonexistent [6]. - The court dismissed the appeals from Raúl González Anaya, Capstone Gold S.A. de C.V., and Gerardo González García, stating that their arguments did not effectively challenge the core issues of royalty entitlement [3][6]. - The ruling mandates that the defendants cover all procedural expenses and costs from both court instances, as per Article 1084 of the Federal Commercial Code of Mexico [3][6]. Company Background - Royalties Inc. holds an 88% ownership stake in Minera Portree de Zacatecas S.A. de C.V. (MPZ), which has a claim to a 2% net smelter royalty established in 2002 on five mining concessions known as the 'Portree claims' [11]. - Capstone Copper Corp. has been mining in the area since 2010 and improperly assigned the royalty to itself without proper authorization from MPZ [11]. - The company also has a 4.9% stake in Music Royalties Inc., which has generated over $12 million in dividends since 2019 [11].