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Highlights

  • RI acquired 1 million MRI shares in a share exchange valued at CAD 500,000.
  • The Company now holds 3 million MRI shares, generating annual dividend income of CAD 108,000.
  • Royalties Inc. holds a stake in Music Royalties Inc., which owns 30 royalty assets and has distributed over CAD 11 million in dividends since 2019.

Royalties Inc. (CSE: RI) (OTC Pink: ROYIF) is a Canada-based resource and royalty investment company. It owns 100% of the Bilbao silver-zinc-lead project located in Zacatecas, Mexico, subject to a 1.5% net smelter royalty (NSR), which the company also owns as a separate asset.

The company has entered into an acquisition agreement to purchase additional shares in Toronto-based Music Royalties Inc. (MRI), expanding its position in the private music royalties’ firm. The transaction involves the acquisition of 1 million common shares of MRI at CAD 0.50 per share, amounting to a total value of CAD 500,000.

The shares were purchased from Quinsam Capital Corporation, with Royalties Inc. completing the deal through the issuance of 12.5 million common shares of its own stock. All securities issued under this transaction will be subject to a four-month and one-day statutory hold period from the date of issuance. Following this acquisition, RI will now hold 3 million shares in MRI, which currently represents a 2% stake in the music royalties company. This expanded holding is expected to generate annual dividend income of CAD 108,000, based on MRI’s existing 7.2% annual yield.

This acquisition reinforces Royalties Inc.’s continued interest in income-generating royalty assets across diversified sectors. The transaction increases its exposure to the music royalties space, which has been gaining traction among investors due to recurring revenue streams tied to music consumption.

Royalties Inc. also holds an 88% interest in Minera Portree de Zacatecas, S.A. de C.V. (MPZ), a company that claims legal ownership of a 2% NSR on the Portree claims a group of five mining concessions located on a portion of the Mala Noche Footwall Zone. This zone is a key source of production at the Cozamin mine, operated by Capstone Copper Corp.

According to Royalties Inc., the 2% NSR was improperly transferred by Capstone in 2019 without proper notification or compensation to MPZ. MPZ subsequently filed civil and criminal lawsuits in 2021, seeking to invalidate the transfer and restore its royalty rights. A judgment in the case is anticipated soon.

Through its investments, Royalties Inc. is engaged in a mix of mineral royalties and music royalty income, providing exposure to both tangible and intellectual property assets. As the company awaits the outcome of legal proceedings regarding the Cozamin royalty claim, the additional income from MRI dividends could provide ongoing cash flow support. Royalties Inc.’s multi-sector royalty strategy remains focused on asset-backed income generation, combining traditional mining interests with non-resource cash flows.