Mr. Tim Gallagher reports

ROYALTIES INC. HIRES SLR TO UPDATE BILBAO ECONOMICS

Royalties Inc. has hired SLR Consulting (Canada) Ltd. to provide an updated economic analysis based on information in the 2014 PEA (preliminary economic assessment) using current metal pricing for sensitivity analysis to assess the effect of increased commodity prices on the economics of the Bilbao project.

SLR will also carry out a high-level assessment of potential high iron-oxide ore processing technologies to identify suitable methods for extracting value from the oxide portion of the deposit, which was excluded from the PEA plan, potentially adding tonnage to the project. A report is expected to be completed within a month.

Bilbao silver-zinc-lead project

Royalties, through its Mexican subsidiaries, currently holds a 100-per-cent interest in the Bilbao zinc-silver-lead-copper project located approximately 500 kilometres northwest of Mexico City in the southeastern part of the state of Zacatecas. Bilbao is a polymetallic, replacement-style, silver-zinc-lead, skarn-type replacement sulphide deposit with a deeply weathered oxide cap.

In 2014, Runge Pincock Minarco (Canada) Ltd. (RPM) delivered an independent technical report in accordance with National Instrument 43-101 containing an updated resource estimate and PEA on the Bilbao project based on three-year trailing average prices of $30.24 (U.S.) per ounce for silver, 94 U.S. cents per pound for zinc and $1.01 (U.S.) per pound for lead. This compares with the recent significant increase in spot prices to $92 (U.S.) per ounce for silver, $1.50 (U.S.) per pound for zinc and 93 U.S. cents per pound for lead, equating to a doubling of the potential annual revenue.

The mine plan incorporated in the PEA targeted the extraction of only the lower, unoxidized sulphide zone based on a production rate of 2,000 tonnes per day, or 720,000 tonnes per year, with average grades of 2.1 per cent zinc, 1.4 per cent lead and 63.96 grams per tonne silver, over a mine life of approximately eight years.

The mineral processing plant described in the PEA projected on average, 16,913 dry tonnes per year of silver-rich lead concentrate and 26,966 dry tonnes per year of zinc concentrate, constituting an average combined total of approximately 20 million pounds of zinc, 17 million pounds of lead and one million ounces of silver per year.

"With the silver price tripling over the last year and expected to continue to be strong, it is time to revisit the economics of our Bilbao project and to focus on the high-grade silver potential as well as how to increase tonnage. Also, a review of prior exploration reports and drill results from 2010 to 2013 identified eight targets for potential satellite mineralization around the main Bilbao deposit," stated Tim Gallagher, chief executive officer.

Qualified person

Scientific and technical information disclosed in this press release was prepared by or under the supervision of and approved by Gerry J. Gauthier, PEng, a director and former president of the company and a qualified person within the meaning of NI 43-101.

About Royalties Inc.

• Royalties owns a 100-per-cent interest, subject to a 1.5-per-cent net smelter return (NSR) royalty owned as a separate asset, on the Bilbao silver-zinc-lead project, which needs an update on the impact of the increase in the silver price from $30 (U.S.) per ounce in the 2014 PEA.
• Royalties owns 88 per cent of Minera Portree de Zacatecas SA de CV (MPZ), which holds a Zacatecas Appeals Court-confirmed claim to a 2-per-cent NSR 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 Corp. has been mining since 2010. Capstone attempted to assign this royalty to itself without the knowledge, consent or proper payment to MPZ, the long-standing and rightful owner since 2002. As a final step in the Mexico legal process, Capstone filed an amparo with the Federal Collegiate Tribunal, which has not yet been officially accepted.
• Royalties has a 5-per-cent stake in Music Royalties Inc. (MRI), which has paid out over $14-million in 72 monthly dividends since 2019 from 31 cash-flowing catalogues with 7,000 songs, generating a 7.2-per-cent annual yield.

We seek Safe Harbor.