Mr. George Ogilvie reports

ARIZONA SONORAN BUYS-DOWN 0.64 per cent OF THE CACTUS PROJECT ROYALTIES

Arizona Sonoran Copper Company Inc.'s subsidiaries have exercised their rights to buy down 0.64 per cent of certain net smelter return royalties on the Cactus project ahead of the applicable July 10, 2025, exercise notice expiry dates. Total cash payments of $8.91-million (U.S.) will be made to RG Royalties LLC, a subsidiary of Royal Gold Inc., and Elemental Altus Royalties Corp. to reduce the aggregate percentage of the NSR royalties from 3.18 per cent to a remaining 2.54 per cent. The buydowns are expected to close on or about Aug. 12, 2025.

The buydowns continue the company's royalty reduction strategy as it continues to optimize project economics in advance of the PFS (prefeasibility study) scheduled for completion later this year. The remaining 2.54-per-cent NSR royalty applies to the Cactus West and Cactus East deposits as well as a portion of the Parks/Salyer deposit. In early Q2 2025, the company's subsidiary had two historic Asarco royalties vacated by final judicial order. Additionally, in January, Arizona Sonoran bought down a royalty on the BCE property, covering a small portion of the Parks/Salyer deposit, from 1.5 per cent to 0.5 per cent for a cash payment of $500,000 (U.S.) (see press release dated Jan. 6, 2025). The southern portion of the Parks/Salyer deposit, formerly referred to as the MainSpring property, is not subject to any royalties and comprises the first four years of production in a conceptual mine plan as contemplated by the 2024 PEA (preliminary economic assessment) (see press release dated Aug. 4, 2024).

George Ogilvie, president, chief executive officer and a director of Arizona Sonoran, commented: "Upon completion of these buydowns, the collective reduction of Cactus project royalties in 2025 will be a strategic milestone for the company, set to strengthen project economics, optimize future cash flows and return copper price upside to our shareholders, as projected in the 2024 PEA. Having just completed the $51.75-million bought deal financing, we now have the necessary runway to advance Cactus, with confidence and clarity, through PFS and then definitive feasibility study to an eventual final investment decision, potentially in Q4 2026. Our team remains focused on the critical work streams needed to position the Cactus project as a lower-risk, top-tier copper development project and among the best positioned in North America to deliver copper cathode production, with a projected industry-leading capital intensity."

The company's subsidiaries, Cactus 110 LLC and Arizona Sonoran Copper Company USA Inc., have provided notice of exercise of their rights to buy down: (i) Royal Gold's 2.5-per-cent NSR royalty to 2.0 per cent for $7-million (U.S.); and (ii) Elemental Altus's 0.68-per-cent NSR royalty to 0.54 per cent for $1.91-million (U.S.), which will result in an aggregate reduction in Cactus project royalties of 0.64 per cent for aggregate payments of $8.91-million (U.S.). These NSRs were initially purchased in 2021 by funds of Tembo Capital and Resource Capital Funds, which each subsequently sold its NSR royalty to Royal Gold (December, 2024) and Elemental Altus (September, 2023), respectively. The buydowns are expected to close on or about Aug. 12, 2025, following which Royal Gold will hold a 2.0-per-cent NSR royalty and Elemental Altus a 0.54-per-cent royalty on the Cactus project.

About the Cactus project

The project is a lower-risk, brownfield, open-pit copper project with on-site permitted water wells, substation and transmission lines, neighbouring nationwide railway, nearby nationwide highway and an on-site office with a team of 20 engineers and geologists advancing Cactus to PFS, scheduled for completion later this year. The PFS will build off the heap leach and solvent extraction and electrowinning operation, producing LME (London Metal Exchange) Grade A copper cathodes, as contemplated in the 2024 PEA. The 2024 PEA projected a low capital intensity of under $10,000 per ton and an unlevered life-of-mine free cash flow of approximately $7.3-billion, from annual average production of 116,000 short tons of copper cathode over the first 20 years. The 2024 PEA projected an after-tax net present value (8 per cent) of $2.03-billion and internal rate of return of 24 per cent, at a $3.90-per-pound copper price, and an increase to $2.9-billion and 30 per cent, respectively, at a copper price of $4.50 per pound. Arizona Sonoran has appointed Hannam & Partners as project financial debt adviser for project financing. Upon completion of the PFS, the Cactus project team will immediately advance required amendments of applicable state permits and initiate the definitive feasibility study for completion ahead of a potential final investment decision, potentially by Q4 2026.

About Arizona Sonoran Copper Company Inc.

Arizona Sonoran is a copper exploration and development company with a 100-per-cent interest in the brownfield Cactus project. The project, on privately held land, contains a large-scale porphyry copper resource and a recent 2024 PEA proposes a generational open-pit copper mine with robust economic returns. Cactus is a lower-risk copper developer benefiting from a state-led permitting process, in-place infrastructure, highways and rail lines at its doorstep and on-site permitted water access. The company's objective is to develop Cactus and become a mid-tier copper producer with low operating costs, that could generate robust returns and provide a long-term sustainable and responsible operation for the community, investors and all stakeholders. The company is led by an executive management team and board, which have a long-standing record of successful project delivery in North America complemented by global capital markets expertise.

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