Mr. Tim Gallagher of Royalties reports

ROYALTIES INC. REPORTS THE ZACATECAS ATTORNEY GENERAL FORMALLY SERVES CAPSTONE COPPER'S COZAMIN MINE WITH CRIMINAL DOCUMENT DEMAND FOR PRODUCTION EVIDENCE

Royalties Inc.'s 88-per-cent-owned subsidiary, Minera Portree de Zacatecas S.A. de C.V. (MPZ), filed a criminal lawsuit against Raul Gonzalez in 2022 for the possible criminal liability in the "sale of property belonging to another" ("venta de cosa ajena") that is, attempting to transfer the ownership of a 2-per-cent royalty on the Portree claims to Capstone Copper Corp.'s (Toronto Stock Exchange: CS) Cozamin mine. Mr. Gonzalez has admitted and accepted these facts.

The Fiscalia General de Justicia del Estado de Zacatecas, the Public Prosecutor's Office of the State of Zacatecas in the Specialized Unit for the Investigation of the Crime of Fraud re Case file CUI: 9367-UEI-FRAU-2022, against Raul Gonzalez Anaya for alleged fraudulent administration and specific fraud to the detriment of MPZ, formally served CIng, Abel Gonzalez Vargas, the legal representative of Capstone Gold S.A. de C.V. (the Cozamin mine), the Mexican operating subsidiary of Capstone Copper to produce 14 categories of confidential underground mine documents, maps, the 3-D block model and separately compels Metagri S.A. de C.V. (the Mexico City office -- and Manzanillo Port concentrate collector and trading intermediary) to produce all payment records, pro forma settlements, bills of lading and wire transfer receipts for concentrate sold from the five Portree mining concessions. This order for production records explicitly warns that failure to comply or submission of false information will result in criminal enforcement measures under Article 104 of the National Code of Criminal Procedure are subject to penalty for non-compliance.

Criminal sanction for non-compliance

This was an official ACUSE (formal criminal service document) dated Sept. 7, 2026, received and signed by Capstone Gold's representative on Sept. 10, 2026. It contains an explicit criminal warning, signed by Lic. Andrea Viridiana Arellano Ruiz, that failure to comply with this requirement, or submission of false information, will result in enforcement measures under Article 104 of the National Code of Criminal Procedure. Article 104 provides for financial penalties (fines) and, in cases of persistent non-compliance, escalating criminal sanctions against responsible individuals -- including Capstone Gold's named legal representative Abel Gonzalez Vargas, who personally received and signed the document on Sept. 10, 2026. The demand specifically investigates the offense of fraud and/or whatever may result -- the phrase "y/o el que resulte" (and/or whatever may result) is a standard Mexican prosecutorial formula that explicitly leaves open the possibility of additional charges arising from the evidence produced. In the context of this case, this includes the potential charges of lack of authority (mining outside concession limits), venta de cosa ajena (sale of property belonging to another) and administracion fraudulenta (fraudulent administration).

About Royalties Inc.

• Royalties owns a 100-per-cent interest, subject to a 1.5-per-cent net smelter returns, owned as a separate asset, on the Bilbao project in Zacatecas.
• Royalties owns 88 per cent of Minera Portree de Zacatecas, which holds a court confirmed claim (twice) to a 2-per-cent royalty established in 2002 on five mining concessions called the Portree claims, a portion of which is on the Mala Noche Footwall zone, the main source of production at the Cozamin mine where Capstone Copper has been mining since 2010. It attempted to assign this royalty to themselves without the knowledge, consent or proper payment to MPZ.
• Royalties has a 5-per-cent stake in Music Royalties Inc. (MRI), which has paid out over $16-million in 80 monthly dividends since 2019 from 31 cash-flowing catalogues with 7,000 songs for a 7.2-per-cent annual after-tax yield.

We seek Safe Harbor.