Regulatory
Mexican Courts Rule That Capstone Copper Owes Unpaid Royalties Since 2019 on the Cozamin Mine-Pending Amparo
Mexican court ruling confirms $50 million royalty claim against Capstone Copper, but final collection awaits federal amparo decision—leaving Royalties Inc. inching toward a windfall while legal uncertainty persists.
Executive Summary
- Two levels of Mexican courts have ruled that a 2% Net Smelter Return (NSR) royalty on five concessions at Capstone Copper’s Cozamin mine belongs to Minera Portree de Zacatecas (MPZ), an 88%‑owned subsidiary of Royalties Inc.
- The courts found the 2019 royalty assignment to Capstone was legally non‑existent because MPZ did not consent; Capstone therefore owes unpaid royalties from August 9, 2019.
- The claim is now quantified at approximately US$50 million in total value:
- US$15 million for unpaid royalties (2019‑2025, including 10% cumulative interest)
- US$15 million for future royalties (2026‑2030)
- US$20 million post‑2030 value
- Capstone Copper has filed a “Direct Amparo” (federal constitutional appeal) to suspend the ruling, but Mexico’s Attorney General has officially recommended the amparo be denied and the lower‑court judgments be upheld.
- Royalties Inc. has formally notified Scotiabank GBM—the advisor running a reported sale process of Cozamin—that the royalty is a registered legal encumbrance on the concessions.
- Cozamin produced 25,348 tonnes of copper and ~1.4 Moz silver in 2025; at current prices the 2% royalty could generate roughly US$9 million per year (with MPZ’s one‑third share included).
Material Impact
- The ruling is a significant step forward, confirming that MPZ’s 2% royalty remains valid and that Capstone owes substantial past and future payments. The claim size has grown from earlier estimates of US$10‑25 million to a headline US$50 million, reflecting higher metal prices and a longer production outlook.
- However, collection is not yet imminent: the amparo appeal remains unresolved, and while the Attorney General’s recommendation to deny it is influential, a final federal court decision is pending. Until that process concludes, the royalty cash flow is blocked.
- The news also ties directly to the active sale process of Cozamin. By notifying Scotiabank, Royalties Inc. signals that any buyer must clear the royalty—potentially forcing Capstone to settle or reach a agreement to avoid derailing the sale.
- For a micro‑cap company whose stock has traded in a narrow range (~$0.08‑$0.11), the confirmation of a US$50 million claim is material positive, but the market will remain cautious until cash actually flows. The stock’s muted reaction (price around $0.10) suggests investors have already priced in a favorable court outcome and are waiting for finality.
RI · Price
Company Overview
- Royalties Inc. is a micro‑cap company with two principal assets:
- 2% NSR Royalty on Cozamin Mine (Mexico): An 88% ownership (via MPZ) of a 2% net smelter return royalty covering five concessions at Capstone Copper’s producing Cozamin copper‑silver mine. The mine produces ~25 ktpa copper and 1.4 Moz silver annually.
- Bilbao Silver‑Zinc‑Lead Project (Mexico): 100%‑owned (subject to a 1.5% NSR) early‑stage deposit in Zacatecas with a 2014 PEA outlining an 8‑year mine life. Updated economic studies are underway, driven by higher silver prices.
- A passive investment in Music Royalties Inc. provides minor dividend income (~$182 k/year).
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Mar 20, 2026 · 16:27