Royalty Overview

The Royalty was created under a 2017 concession division agreement between Endeavour and Capstone, under which, among other things, if Capstone outlined a primarily base metals mineral resource estimate (defined as >60% of NSR value) on certain concessions owned by Endeavour, it would grant Endeavour a 1% NSR royalty on such concessions. The Royalty applies to two concessions (Calicanto and Vicochea) where the base metals threshold was met. Gold Royalty has also been granted an option by Endeavour to acquire a 1% NSR royalty on five additional concessions if such royalties are granted in the future. Pursuant to the option, Gold Royalty would acquire such royalties, subject to existing rights of first refusal held by Capstone, in exchange for US$300,000, in the case of the Mise concession and US$50,000 in the case of each other concession, which amount may, at the option of Gold Royalty, be satisfied by issuing Gold Royalty common shares.

Project Overview

Cozamin is a copper-silver underground mine with a surface milling facility, located 3.6 km north-northwest of Zacatecas City in the mineral-rich state of Zacatecas, Mexico. Since the first full year of operation, Cozamin has generated free cash flow at all points of the copper price cycle.

Cozamin has been continuously operated by Capstone since late 2006, when it commenced commercial production at a rate of 1,000 tonnes per day. At the time, it had a three-year mine life based upon then existing mineral reserves. Since then, successful exploration has extended the expected life of the mine to 2030 based on existing mineral reserves1.

From 2023 to 2030, average annual production is currently forecasted by Capstone at 20,000 tonnes of copper and 1.3 million ounces of silver at average C1 costs of US$1.51 per payable pound of copper. Between 2023 to 2027, average projected annual production is expected by Capstone to be higher at 24,000 tonnes of copper and 1.7 million ounces of silver, at lower average projected C1 costs of US$1.46 per payable pound of copper1.

Capstone announced on February 1, 2023 that it plans to update its mine plan in 2024 to introduce cut-and-fill mining, which it expects will allow it to convert additional resources to reserves and provide a pathway to increase production at the mine to better utilize the installed mill capacity of 4,400 tonnes per day.