Royalties' Minera Portree wins case over 2002 contract

Executive Summary

• The appellate court upheld the June 16, 2025 ruling confirming Royalties Inc.’s entitlement to a 2 % net smelter royalty (NSR) from Minera Portree’s mining contracts.
• Appeals by Capstone Gold and related parties were dismissed; defendants are ordered to pay all procedural costs for both court instances.
• The decision removes the unauthorized transfer of the NSR, securing future royalty payments to Royalties Inc.

Key Details

• Court Decision: Civil Chamber of the Superior Tribunal of Justice of Zacatecas (Appellate Court) affirmed the first‑instance judgment (case TOCA A.C. 77/2025).
• Royalty Rights Confirmed: 2 % NSR on five Portree/Parroquia mining concessions, originally granted under a Jan 11, 2002 contract, remains with Minera Portree (88 % owned by Royalties Inc.).
• Unauthorized Transfer Rejected: The court found the May 20, 2010 act authorizing transfer of royalties to Capstone Gold “non‑existent” and ruled that Mr. Gonzalez Anaya exceeded his authority in selling the royalty.
• Cost Order: Defendants (Raul Gonzalez Anaya, Gerardo González García) and Capstone Gold are liable for all procedural expenses and legal costs incurred in both the first‑instance and appellate proceedings, per article 1084 of the Federal Commercial Code of Mexico.
• Case Closure: The matter is archived as legally concluded; certified copies will be returned to the originating court.
• CEO Comment: Tim Gallagher (CEO) stated the ruling validates that the 2 % NSR could not be transferred without proper authorization and expressed intent to work with Capstone on calculating owed amounts and future royalty value.

Notable Quotes

“We are pleased the Mexico courts have logically concluded that the 2‑percent 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‑percent NSR on all five Portree/Parroquia claims.” – Tim Gallagher, CEO, Royalties Inc.