Royalties Inc. Reports Capstone Inexplicably Files an Amparo

Executive Summary

• Royalties Inc. reports that Capstone Copper Corp.’s subsidiary filed a direct amparo in Mexican federal court seeking to suspend a lower‑court decision that upheld Royalties’ claim to royalties from Minera Portree de Zacatecas (MPZ).
• The company expects the federal court to reject the amparo, which would allow MPZ to collect approximately US$2 million per year in unpaid 2% NSR royalties for 2019‑2025 and pursue a larger settlement as copper and silver prices surge.
• Royalties Inc. estimates that proper royalty payments would support a ≈ US$100 million market‑cap valuation, far above its current level, and indicates the dispute may give rise to a separate lawsuit in British Columbia.

Key Details

• MPZ (88% owned by Royalties) received notice on 19 Dec 2025 that Capstone’s subsidiary filed an amparo with the Federal Collegiate Tribunal.
• The amparo seeks suspension of the 4 Nov 2025 decision confirming a 16 Jun 2025 appellate ruling that Capstone improperly transferred royalties without consent or payment, violating a 2002 NSR agreement.
• Royalties Inc. judges the amparo “weak” because Mexican federal courts rarely overturn lower‑court decisions in civil matters lacking constitutional or human‑rights issues.
• If the federal court upholds the lower rulings, MPZ can quantify and collect seven years of unpaid royalties (2019‑2025) from the Cozamin mine.
• Estimated unpaid royalties: ≈ US$2 million per year (based on 2% NSR on historical production).
• Royalties Inc. projects that proper royalty receipt would justify a US$100 million market cap, aligning with peer valuation models for precious‑metal royalty companies.
• Capstone’s market capitalization has risen from ≈ US$200 million (2020) to > US$10 billion during the dispute period, underscoring the material financial impact of the unpaid royalties.
• CEO Tim Gallagher states the amparo is a “delay tactic” and emphasizes Capstone’s responsibility to pay owed royalties, referencing prior discussions with Capstone leadership in 2024.
• The company indicates that the legal outcome may also trigger a lawsuit in British Columbia, given Capstone’s Vancouver‑based management and the magnitude of the alleged loss.

Notable Quotes

“While it is extremely disappointing to witness Capstone's Management and Directors close ranks… their stonewalling serves to delay an increasingly lucrative potential financial settlement into a once‑in‑a‑generation copper and silver price cycle, doubling the potential royalty revenue.” – Tim Gallagher, CEO

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