Royalties' Minera Portree may win Capstone case

Executive Summary

• Royalties Inc. reports that Capstone Gold SA de CV (a subsidiary of Capstone Copper Corp.) filed a direct Amparo with the Federal Collegiate Tribunal on December 19, 2025, seeking to suspend a Nov. 4, 2025, appellate decision that upheld a June 16, 2025, ruling against Capstone.
• The underlying legal dispute involves Capstone’s improper transfer of a 2% Net Smelter Royalty (NSR) on the Cozamin mine to itself without consent or payment, violating a Jan. 11, 2002, agreement with Minera Portree de Zacatecas SA de CV (MPZ), in which Royalties Inc. holds an 88% stake.
• Royalties Inc. is confident the Federal Court will uphold lower court decisions, paving the way for the quantification and collection of seven years of unpaid royalties (2019–2025), estimated at approximately $2 million per year, potentially valuing the royalty interest at $100 million given record copper and silver prices.

Key Details

• Legal Action: Capstone Gold SA de CV, represented by lawyer Jorge Alberto Espinoza Cortes, filed a direct Amparo with the Federal Collegiate Tribunal on Dec. 19, 2025.
• Legal Context: The Amparo seeks to suspend the Nov. 4, 2025, Appellate Court decision in Zacatecas, which had upheld a June 16, 2025, ruling that Capstone improperly transferred royalties to itself without consent, authorization, or payment.
• Royalty Terms: The dispute centers on a 2% NSR established in 2002 on five mining concessions (Portree claims), including the Mala Noche footwall zone, which is the main source of production at the Cozamin mine.
• Financial Impact Estimates:
  • Royalties Inc. estimates unpaid royalties from 2019 to 2025 at approximately $2 million per year.
  • With copper prices up 36% year-to-date and silver up 135% year-to-date in 2025, Royalties Inc. estimates the royalty interest could be valued at a $100 million market capitalization.
  • Capstone Copper’s market cap has grown from $200 million to over $10 billion since the dispute began in 2020.
• Future Legal Strategy: Royalties Inc. suggests the economic loss may form the basis for a lawsuit in British Columbia, citing that the amount surpasses the materiality threshold set by Capstone’s auditor and bankers.
• Ownership Structure: Royalties Inc. holds an 88% ownership stake in Minera Portree de Zacatecas SA de CV (MPZ).

Notable Quotes

• "While it is extremely disappointing to witness Capstone's management and directors close ranks and stand behind a dubious legal position, 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, Royalties Inc.
• "Apparently, he [Cashel Meagher, Capstone's president and CEO] was surprisingly unaware of our lawsuit... He unequivocally stated that 'it is not who Capstone is, if we owe, we pay.'" — Tim Gallagher, CEO, Royalties Inc.