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Royalties Inc. (CSE: RI) reports its 2023 yearend results with key milestones including progress on music royalties, a lawsuit against Capstone Gold S.A. de C.V., and monetizing the Bilbao silver-zinc-lead property. The company generated record dividend and royalty income, but also increased expenses leading to a higher net loss. Assets saw an increase in book value, but liquidity remains a concern with cash to settle liabilities.
Royalties Inc. (CSE: RI) ha comunicato i risultati di fine anno 2023, evidenziando traguardi importanti quali il progresso nelle royalties musicali, una causa contro Capstone Gold S.A. de C.V., e la monetizzazione della proprietà di argento-zinco-piombo di Bilbao. La società ha generato un reddito da dividendi e royalties record, ma ha anche registrato un aumento delle spese che ha portato a una maggiore perdita netta. Gli asset hanno visto un incremento del valore contabile, tuttavia la liquidità rimane preoccupante con disponibilità di contante per saldare le passività.
Royalties Inc. (CSE: RI) informa sobre los resultados del cierre del año 2023, destacando hitos clave como el progreso en regalías musicales, una demanda contra Capstone Gold S.A. de C.V., y la monetización de la propiedad de plata-zinc-plomo de Bilbao. La compañía generó ingresos récord por dividendos y regalías, pero también incrementó los gastos, lo que llevó a una mayor pérdida neta. Los activos experimentaron un aumento en el valor en libros, sin embargo, la liquidez sigue siendo preocupante con efectivo disponible para saldar pasivos.
Royalties Inc. (CSE: RI)는 2023년도 결산 결과를 발표하며 음악 로열티 진전, Capstone Gold S.A. de C.V.에 대한 소송, 그리고 Bilbao 은-아연-납 재산의 화폐화 등 주요 이정표를 포함하였습니다. 회사는 사상 최고의 배당금과 로열티 수입을 창출했지만, 지출 증가로 인해 순손실이 증가하였습니다. 자산은 장부 가치가 증가하였으나, 부채를 해결하기 위한 현금 유동성은 여전히 우려되는 상황입니다.
Royalties Inc. (CSE: RI) a publié ses résultats de fin d'année 2023, soulignant des jalons clés tels que les progrès sur les royalties musicales, un procès contre Capstone Gold S.A. de C.V., et la monétisation de la propriété de plomb-zinc-argent de Bilbao. L'entreprise a généré des revenus record de dividendes et de royalties, mais a également subi une augmentation des dépenses entraînant une perte nette plus élevée. Les actifs ont vu une augmentation de leur valeur comptable, mais la liquidité reste préoccupante avec des disponibilités pour régler les passifs.
Royalties Inc. (CSE: RI) meldet die Jahresend-Ergebnisse 2023 mit wichtigen Meilensteinen wie Fortschritte bei Musiklizenzen, eine Klage gegen Capstone Gold S.A. de C.V. und die Monetarisierung des Bilbao Silber-Zink-Blei-Vermögens. Das Unternehmen erzielte Rekord-Einnahmen aus Dividenden und Lizenzgebühren, musste jedoch auch einen Anstieg der Ausgaben verzeichnen, der zu einem höheren Nettoverlust führte. Das Anlagevermögen verzeichnete eine Steigerung des Buchwerts, jedoch bleibt die Liquidität aufgrund der verfügbaren Barmittel zur Begleichung von Verbindlichkeiten besorgniserregend.
Positive
Record dividend and royalty income of $81,754 in 2023 compared to $11,046 in the prior year.
Increased progress on music royalties with a $721,400 investment in Music Royalties Inc. generating a 7.2% annual yield and a monthly dividend of CAD$6,000 to RI.
Acquisition of four music royalties catalogs in 2023 generating additional income for the company.
Assets showing an increase in book value to $1,313,330 compared to $949,103 in the prior year.
Negative
Net loss increased to $137,596 in 2023 from $85,469 in 2022 due to higher expenses.
Total expenses rose to $234,590 in 2023 from $121,426 in the prior year mainly due to increased professional fees and expenses in Mexico.
Liquidity concerns as the company had only $33,155 in cash to settle current liabilities of $118,263.
Toronto, Ontario--(Newsfile Corp. - April 29, 2024) - Royalties Inc.(CSE: RI) ("RI" or "the Company") reports its results for the year ended December 31, 2023. Amounts are stated in US dollars unless otherwise stated.
This news release should be read in conjunction with the Company's audited financial statements and the associated management's discussion and analysis (MD&A) for the year ended December 31, 2023 which are available on the Company's website at www.royaltiesinc.com or under the Company's profile on SEDAR+ at www.SEDARplus.ca.
Key Milestones in 2023
Royalties Inc. made significant progress advancing the strategies on its 3 major investments: 1) Music Royalties, 2) the lawsuit against Capstone Gold S.A. de C.V. to recognize the 2% NSR on the Portree claims and 3) monetizing its silver asset, the Bilbao silver-zinc-lead property in Zacatecas, Mexico.
Music Royalties
The Company owns five cash flowing music royalties generating approximately $100,000 (CAD$136,000) per year. Royalties Inc. made a $721,400 (CAD$1 million) investment in September 2022 in Music Royalties Inc. ("MRI"), a private company which has acquired 28 catalogues and paid out over CAD$8 million to its shareholders since 2019. MRI is currently paying a monthly dividend of CAD$6,000 to RI generating a 7.2% annual yield. RI received $48,886 (CAD$66,000) in dividend income from MRI in 2023 versus $11,046 (CAD$15,000) in 2022.
In 2023, the Company acquired four music royalties catalogs for $339,433 which generated $32,786 as follows:
1) On January 9, 2023, MRI advanced the Company cash to purchase $137,900 of royalty assets comprised of "New Message" Alert Tones which generated $18,328 from 11 monthly payments in 2023. The acquisition included 415 tracks, for a term of "Author Life of Rights plus 70 years". Alert Tone royalties are short message-based ringtones which are generated from consumer downloads on the Apple iTunes ringtone store on iPhones.
2) On May 11, 2023, the Company invested $18,532 (CAD$25,000) through the issuance of 500,000 shares at CAD$0.05 per share in order to participate in a 300 song catalog which generated $1,234 in 2023 paid by royalty distributors SOCAN and Universal Music Publishing Group ("UMPG").
3) On May 17, 2023, the Company completed an acquisition for $53,000 which generated $3,286 in 2023 from an American songwriter's public performance royalties consisting of 103 tracks performed by artists including Backstreet Boys, Marshmello and Anarbor and including top songs "Ritual", "It's Christmas Time Again", "White Flag" and "18".
Royalties Inc. owns two mining royalties with significant potential value:
1) Litigation against a subsidiary of Capstone Copper Corp. in Zacatecas, Mexico to make payments on the 2% NSR on the production since 2019 from five Portree claims on the Cozamin Mine, on which a lien has been registered. Key witnesses were deposed in September and October, followed by a court ordered mine site inspection in November. The timing and the outcome of the lawsuit is uncertain.
2) A 1.5% NSR on the Bilbao property tied to the eventual breakout of the silver price above $30 per ounce and the sale of the property to a silver producer.
Results of Operations
The Company generated record dividend and royalty income of $81,754 vs $11,046 in the prior year. Total expenses were $234,590 vs $121,426 due to increased professional fees, D&O insurance and expenses in Mexico, which lead to an increased net loss of $137,596 vs $85,469 in 2022.
Assets and Liquidity
The book value of total assets as at December 31, 2023 was $1,313,330 compared to $949,103 in the prior year. Since 2008, the Company has invested $23,393,257 on its Bilbao mineral project, which in accordance with the Company's accounting policies has been fully impaired, primarily based on the 2014 PEA's assumption of a minimum price of $30 per ounce silver.
As at December 31, 2023, the Company had cash of $33,155 to settle current liabilities of $118,263, excluding a $2,000,000 contingent liability of a subsidiary to a defunct company, which therefore will never be paid.
About Royalties Inc.
Royalties Inc. has a 2% stake in Music Royalties Inc. ("MRI"), a Canadian-based private company that acquires passive music royalties from rightsholders (including but not limited to artists, producers and songwriters) and currently holds a portfolio of approximately 28 cash-flowing royalties.
Royalties Inc. owns a 100% interest, subject to a 1.5% net smelter royalty repurchased in July 2019, on the Bilbao silver-lead-zinc-copper project located in the southeastern part of the State of Zacatecas, Mexico.
Royalties Inc. owns 88% of the outstanding shares of Minera Portree de Zacatecas, S.A. de C.V ("Minera Portree") which holds an asserted claim to a 2% net smelter royalty on five mining concessions which are part of the Cozamin Mine operated by Capstone Copper Corp., which claim is challenged by Capstone.
Neither the CSE, nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this press release.
Forward-Looking Statements
This news release contains "forward-looking information" within the meaning of applicable securities laws. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as "may", "will", "expect", "likely", "should", "would", "plan", "anticipate", "intend", "potential", "proposed", "estimate", "believe" or the negative of those terms, or other similar words, expressions, and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is based on assumptions made in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to: sufficient capital and financing required in order to fulfill the Company's business plans and strategy may not be obtained as expected; that the Company will not be able to pay future dividends; and other risks related to the Company as disclosed in the documents filed on the Company's profile at SEDAR+ at www.SEDARplus.ca. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements contained in this press release and they are expressly qualified in their entirety by this cautionary statement. The forward-looking statements herein are made as at the date hereof and are based on the beliefs, estimates, expectations, and opinions of management on such date. The Company does not undertake any obligation to update publicly or revise any such forward-looking statements whether as a result of new information, future events or to explain any material difference between subsequent actual events and such forward-looking information, except as required under applicable securities law.
What were the key milestones for Royalties Inc. in 2023?
Royalties Inc. made progress on music royalties, pursued a lawsuit against Capstone Gold S.A. de C.V., and worked on monetizing the Bilbao silver-zinc-lead property.
How much dividend and royalty income did the company generate in 2023?
The company generated a record dividend and royalty income of $81,754 in 2023.
What led to the increase in net loss for Royalties Inc. in 2023?
The net loss increased to $137,596 in 2023 from $85,469 in 2022 due to higher expenses.
What were the total expenses for Royalties Inc. in 2023?
Total expenses rose to $234,590 in 2023 from $121,426 in the prior year mainly due to increased professional fees and expenses in Mexico.
What is the liquidity situation of Royalties Inc. as of December 31, 2023?
The company had only $33,155 in cash to settle current liabilities of $118,263, raising liquidity concerns.
