Arizona Sonoran completes buydown of Cactus royalties

Executive Summary

• Arizona Sonoran Copper Company Inc. completed a $8.91 million cash buy‑down of net smelter return (NSR) royalties on the Cactus project, reducing total royalty burden from 3.18 % to 2.54 %.
• The transaction involved two payments: $7 M to RG Royalties LLC (Royal Gold Inc.) lowering its royalty from 2.5 % to 2.0 %, and $1.91 M to Elemental Royalties Delaware LLC (Elemental Altus) reducing its royalty from 0.68 % to 0.54 %.
• Management states the buy‑down enhances project valuation under the 2024 Preliminary Economic Assessment (PEA) and improves long‑term shareholder value as the company moves toward project financing.

Key Details

• Total cash outlay: $8.91 million (U.S.).
• Royalty reductions achieved:
• Royal Gold’s NSR royalty: from 2.5 % → 2.0 % for a payment of $7 M.
• Elemental Altus’s NSR royalty: from 0.68 % → 0.54 % for a payment of $1.91 M.
• Aggregate NSR royalty on the Cactus project decreased from 3.18 % to 2.54 %.
• Executed by subsidiaries Cactus 110 LLC and Arizona Sonoran Copper Company USA Inc. following definitive documentation.
• CFO Nick Nikolakakis highlighted that the $8.91 M expenditure improves the project’s valuation across a range of long‑term copper price scenarios, supporting shareholder value creation ahead of financing.

Notable Quotes

“Management's focus is driven by delivering copper price exposure and potential upside to our shareholders. The completion of the buydowns is a natural step for the company to generate potential additional shareholder value and reduce economic encumbrance on the asset as we advance towards project financing.” – Nick Nikolakakis, CFO & VP Finance, Arizona Sonoran Copper Company Inc.