Mr. Tim Gallagher reports

ROYALTIES INC. REPORTS YEAREND RESULTS FOR 2025

Royalties Inc. has released its results for the year ended Dec. 31, 2025.

This news release should be read in conjunction with the company's audited financial statements and the associated management discussion and analysis for the year ended Dec. 31, 2025, which are available on the company's website or under the company's profile on SEDAR+.

Key milestone in 2025 -- success on Capstone Copper Corp. lawsuit for 2-per-cent NSR (net smelter royalty) on Cozamin mine

Royalties made significant progress advancing the strategies on its three strategic investments:

1. Won the lawsuit and the appeal in the state of Zacatecas against Capstone Gold SA de CV to recognize a 2-per-cent NSR royalty, which is a cash-flowing royalty on the Portree claims, part of the Cozamin mine; the federal and final appeal is expected to be resolved in the next few months in the company's favour as the federal prosecutor recommended denying Capstone's Amparo; the company estimates it is owed over $10-million (U.S.) in royalties on production since 2019 before interest and damages, plus the estimated value of the royalty of $25-million (U.S.);
2. The breakout in the silver price has exponentially increased the potential value of the Bilbao silver-zinc-lead property in Zacatecas, according to the updated economic model prepared by SLR Consulting; accordingly, the company is working on a plan to expand the resource with a new drill campaign and spin off the asset;
3. The company increased ownership in Music Royalties Inc. (MRI) by $1,525,000 to $2,525,000, which will provide dividends of $181,800 in 2026.

Results of operations

In 2025, the company generated record revenue of $143,881 (up 32 per cent), consisting of $117,600 in dividend income from its increased investment in MRI and $26,278 in other royalty income. Operating expenses totalled $316,945 (up 28 per cent), due to the OTC (over-the-counter) U.S. listing, legal expenses and increased marketing commensurate with the success in the lawsuit against Capstone Copper, leading to an operating loss of $173,064 versus $139,130 in the prior year. A non-cash foreign exchange gain of $134,776 on a $2-(U.S.) million denominated contingent liability of a Mexican subsidiary resulted in a net loss of $38,288 for the year, compared with a net loss of $392,292 in 2024.

Ownership of Royalties on Capstone's Cozamin mine Confirmed by Zacatecas Appeals Court

Royalties' 88-per-cent subsidiary, Minera Portree de Zacatecas SA de CV (MPZ), achieved a significant legal victory in Mexico on June 16, 2025, when it obtained a favourable court judgment confirming its entitlement to a 2-per-cent NSR on five concessions (Portree claims) at Capstone Copper's Cozamin mine. Capstone appealed and, on Nov. 4, 2025, the Civil Chamber of the Superior Tribunal of Justice of Zacatecas upheld MPZ's entitlement to royalties established in a Jan. 11, 2002, mining contract and rejected the appeals filed by defendants Raul Gonzalez Anaya and Capstone Gold; the Appellate Court concluded that the defendants had improperly transferred the royalties without authorization. Following the official rejection of the federal appeal, the next step is the calculation and the collection of the amount owed from the royalties on past production on the Portree claims since 2019. The accuracy of this amount will only be determined with the co-operation of Capstone, which has not been forthcoming. However, based on Capstone's public disclosures, including its National Instrument 43-101 reports and royalties paid in its audited financial statements, it is possible to estimate a figure of $10-million (U.S.) for the amount owing before interest and damages.

Capstone initially reported that mining started within the Portree claims in the fourth quarter of 2019, which equates to seven years of production. The company estimates that Portree represents up to 30 per cent of the Mala Noche footwall zone (MNFZ) based on the assumption of the proportion of the surface linear strike of 1.5 kilometres of the MNFZ, the area which has represented almost all of the production at the Cozamin mine since 2017, according to Capstone.

In 2025, Capstone paid $4.9-million (U.S.) in royalties on $300-million (U.S.) of net revenues ($2-million (U.S.) Q4 due to increased copper and silver prices) to two royalty holders. Royalties of $1.35-million (U.S.) were paid to Gold Royalty Corp. in respect of a 1-per-cent NSR on two claims only 300 metres and down strike from the Portree claims on the MNFZ. Royalties of $3.5-million (U.S.) were paid to Grupo Minera Bacis SA de CV, the former owner of the Cozamin mine, under the terms of a December, 2003, agreement where a 3-per-cent NSR is paid on production from the property covered by the agreement. Accordingly, the 2-per-cent NSR equates to approximately $1.5-million (U.S.) per year on the production since 2019 for a total estimated $10-million (U.S.) amount owing to MPZ.

In addition, the actual value of the 2-per-cent NSR or royalties includes the future production under the current mine plan to 2030 plus the depth potential and any resource mined on the remaining 90 per cent of the area covered by the five Portree claims, which is yet to be exploited but is possibly being drilled. This area includes the historical high-grade Parroquia copper mine in the southwest of current mine operations with an estimated two-million-tonne historical resource. MPZ hired a local geological expert, who reviewed Capstone's public 2019-2020 drill results on the Portree claims and estimated the value of the 2-per-cent NSRs at $25-million (U.S.), long before the rise in copper and record silver prices; hence, the value of the royalties claim against Capstone has significantly increased.

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 located in the state of Zacatecas, Mexico.

Royalties owns 88 per cent of the outstanding shares of Minera Portree de Zacatecas (MPZ), which holds a court-confirmed claim (twice) to a 2-per-cent net smelter 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. 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, which has paid out over $15-million in 74 monthly dividends since 2019 from 31 cash-flowing catalogues with 7,000 songs with a 7.2-per-cent annual yield.

We seek Safe Harbor.