Royalties Inc. Secures Victory in Appellate Court, Confirming Royalty Rights and Capstone Ordered to Pay Legal Costs

Executive Summary

• The appellate court in Zacatecas upheld the June 16 2025 decision, confirming Minera Portree de Zacatecas’ (MPZ) entitlement to a 2% net smelter royalty (NSR) from a 2002 mining contract.
• Appeals by Raúl González Anaya, Capstone Gold S.A. de C.V., and Gerardo González García were dismissed; defendants are ordered to pay all procedural costs.
• The ruling removes uncertainty over the NSR, potentially securing ongoing royalty payments to Royalties Inc. from production at the Cozamin mine.

Key Details

• Court Decision: Civil Chamber of the Superior Tribunal of Justice of Zacatecas issued its decision on November 4 2025 (Appeal TOCA A.C. 77/2025).
• Ruling Outcome: Appellate court fully upheld the first‑instance ruling (June 16 2025) that MPZ’s royalty rights are valid and that the 2019 transfer of the NSR to Capstone was unauthorized and therefore null.
• Defendants: Raúl González Anaya, Gerardo González García, and Capstone Gold S.A. de C.V. (subsidiary of Capstone Copper Corp.) – all ordered to reimburse procedural expenses and costs for both court instances per Article 1084 of the Federal Commercial Code of Mexico.
• Royalty Details: 2% NSR on five “Portree claims” mining concessions, including the Mala Noche Footwall Zone feeding production at the Cozamin mine.
• Impact on Royalties Inc.: Confirms the company’s 88% ownership stake in MPZ and its right to receive the NSR; removes risk of loss from the disputed transfer.
• Future Actions: Company expects Capstone’s cooperation to calculate amounts owed to date and future value of the NSR across all five claims.

Notable Quotes

“We are pleased the Mexico courts have logically concluded that the 2% NSR could not be transferred to Capstone without proper authorization from and payment to MPZ. We are looking forward to Capstone's co‑operation in properly calculating the amount owed on production to date and the future value of the 2% NSR on all five Portree/Parroquia claims,” – Tim Gallagher, CEO.