Mr. Tim Gallagher reports

ROYALTIES INC. REPORTS CAPSTONE INEXPLICABLY FILES AN AMPARO

Minera Portree de Zacatecas SA de CV, a company in which Royalties Inc. holds an 88-per-cent ownership stake, was notified on Dec. 19, 2025, that Capstone Gold SA de CV, a subsidiary of Capstone Copper Corp. through Jorge Alberto Espinoza Cortes, a lawyer based in Chihuahua, rather than in Zacatecas, filed a direct Amparo with the Federal Collegiate Tribunal. This grants a suspension of the sentence of the Nov. 4, 2025, decision where the Appellate Court in the State of Zacatecas upheld and confirmed the court decision ruled on June 16, 2025, that the Capstone had improperly transferred to itself royalties without consent, authorization or payment and attempting to sell royalties, belonging to Minera Portree, as per a Jan. 11, 2002, net smelter royalty agreement. Capstone does not dispute these facts.

The outcome of this third and final step in the Mexican legal process will likely be that the Federal Court will uphold the lower court decisions as the facts and Capstone's admissions have not changed. Capstone's Amparo is considered weak as in civil cases. The Federal Court rarely overturns decisions as its review is narrow in scope and especially as no constitutional or human rights have been violated. Accordingly, the company is confident this final procedural step will be resolved in MPZ's favour, paving the way for quantification and collection of seven years of royalties owed on historical production 2019 to 2025 at the Cozamin mine. With copper (36 per cent year to date) and silver (135 per cent YTD) prices soaring to record highs in 2025, Royalties estimates that if Capstone had been properly paying the 2-per-cent NSR to MPZ since 2019, equating to approximately $2-million per year, the company would be valued at $100-million market capitalization in line with the well-documented valuation model of the public precious metal royalty company peer group. Given that Capstone's mind and management are based in Vancouver, this economic loss should logically form the basis for a corresponding lawsuit in British Columbia which clearly surpasses the materiality threshold set by Capstone's auditor and bankers. Capstone's market cap has appreciated from $200-million market cap to over $10-billion since 2020 when the dispute began.

"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. Capstone's filing of a wordy and non-sensical Amparo serves only as a delay tactic. In 2024, we introduced ourselves to Cashel Meagher, Capstone's president and CEO, who was surprisingly unaware of our lawsuit. He unequivocally stated that 'it is not who Capstone is, if we owe, we pay.' Apparently, he was compelled, along with the Chairman, John MacKenzie, who was notified of the lawsuit in 2022, who also had the opportunity to rectify this unnecessary dispute, to follow the instructions of their in-house counsel, Wendy King, to delay a settlement and exhaust the legal process. We have been looking forward to Capstone's co-operation since 2020 in properly paying the amount owed on production and on the proper future value of the 2-per-cent NSR on all five Portree/Parroquia claims, recognizing resource depth potential and the impact of significantly increased copper and silver prices," stated Tim Gallagher, chief executive officer.

About Royalties Inc.

• Royalties owns a 100-per-cent interest, subject to a 1.5-per-cent NSR 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 preliminary economic assessment.
• Royalties owns 88 per cent of Minera Portree de Zacatecas SA de CV, which holds a court-confirmed claim to a 2-per-cent NSR 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. 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.
• Royalties has a 5-per-cent stake in Music Royalties Inc., which has paid out over $14-million in 71 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.