Royalties Inc. Reports Q3 Results For September 30, 2025 and Success on Capstone Copper Lawsuit for 2% NSR on Cozamin Mine

Executive Summary

• Royalties Inc. reported Q3 2025 revenue of $41,240 (up 60%) but a net loss of $132,760 driven by higher operating expenses and a foreign‑exchange loss on a contingent liability.
• Its 88% subsidiary Minera Portsee de Zacatecas (MPZ) secured a second court ruling confirming a 2 % NSR on five concessions at Capstone Copper’s Cozamin Mine, with an estimated current claim value of US$9 million and a longer‑term valuation up to US$25 million.
• The company highlighted the potential for additional upside from future production through 2030 and from untapped resources in the area.

Key Details

• Q3 2025 Financials – Revenue $41,240 (↑60%); dividend income $36,150; other royalty income $5,090.
• Operating Expenses – $111,727 (↑130%) due to OTC US listing costs, legal fees, and increased marketing linked to the Capstone lawsuit.
• Net Loss – $132,760 for the quarter (vs. net loss of $31,454 in Q3 2024).
• Nine‑Month Results – Net loss $54,584 (vs. loss of $118,762 in prior year).
• Balance Sheet – Total assets $2.775 million as of Sept 30 2025 (up from $1.25 million on Dec 31 2024); investment in Music Royalties Inc. increased by $1.525 million to a total of $2.525 million, expected to generate $181,800 annual dividend income.
• Legal Victory – MPZ obtained a favorable judgment (June 16 2025) and a reaffirmation (Nov 4 2025) from the Civil Chamber of the Superior Tribunal of Justice of Zacatecas confirming its 2 % NSR entitlement on five Portree claims at Capstone’s Cozamin Mine.
• Estimated Claim Value – Based on public data, MPZ estimates US$9 million owed for past production (2019‑present) and a longer‑term valuation up to US$25 million when including future production through 2030 and additional untapped resources (~2 Mt historical resource at Parroquia).
• Capstone Royalties Context – In 2024 Capstone paid US$4.4 million in royalties (average 1.9 % NSR) to other holders; MPZ believes a portion of those payments should have been directed to its 2 % NSR claim.
• CEO Comment – Tim Gallagher emphasized the company’s intent to enforce the judgment, including asset seizure if necessary, and described the claim as “immaterial” to Capstone but material to Royalties Inc.’s future cash flows.

Notable Quotes

“The second legal victory against Capstone in Mexico… should finally bring its Management and Directors to their senses… 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.” – Tim Gallagher, Chairman & CEO

Materiality Assessment: Material – Neutral (the legal ruling creates a potentially significant future cash‑flow source while the quarter’s financial results show a material loss).