Arizona Sonoran Copper Company Inc. (TSX:ASCU) (OTCQX:ASCUF)  an emerging U.S. copper developer, is pleased to announce that its subsidiaries have exercised their rights to buy-down 0.64% of certain net smelter returns royalties on the Cactus Project see FIGURE 1, outlined in yellow), ahead of the applicable July 10, 2025 exercise notice expiry dates. Total cash payments of US$8.91 million will be made to RG Royalties LLC, a subsidiary of Royal Gold Inc. (RLGD:NASDAQ) and Elemental Altus Royalties Corp. (ELE:TSX-V), to reduce the aggregate percentage of the NSRs from 3.18% to a remaining 2.54%. The Buy-downs are expected to close on or about August 12^th, 2025.

The Buy-downs continue the Company’s royalty reduction strategy as it continues to optimize Project economics in advance of the Pre-Feasibility Study (“PFS”) scheduled for completion later this year. The remaining 2.54% NSR applies to the Cactus West and Cactus East deposits as well as a portion of the Parks/Salyer deposit, outlined in yellow in FIGURE 1. In early Q2 2025, the Company’s subsidiary had two historic ASARCO royalties (Nolles/Wagoner; each 5%) vacated by final judicial order. Additionally, in January, ASCU bought down a royalty on the BCE Property, covering a small portion of the Parks/Salyer deposit, from 1.5% to 0.5% for a cash payment of US$500,000 (PR dated JAN 6, 2025), as outlined in blue in FIGURE 1. The southern portion of the Parks/Salyer deposit outlined in white in FIGURE 1, formerly referred to as the MainSpring Property, is not subject to any royalties and comprises the first four years of production in a conceptual mine plan as contemplated by the 2024 Preliminary Economic Assessment (“2024 PEA”; see PR dated AUG 4, 2024 | Technical Report).

George Ogilvie, ASCU President, CEO and Director commented, “Upon completion of these Buy-downs, the collective reduction of Cactus Project royalties in 2025 will be a strategic milestone for the Company, set to strengthen Project economics, optimize future cash flows and return copper price upside to our shareholders, as projected in the 2024 PEA. Having just completed the $51.75 million bought deal financing, we now have the necessary runway to advance Cactus, with confidence and clarity, through PFS) and then Definitive Feasibility Study to an eventual Final Investment Decision, potentially in Q4 2026. Our team remains focused on the critical workstreams needed to position the Cactus Project as a lower risk, top-tier copper development project and among the best-positioned in North America to deliver copper cathode production, with a projected industry-leading capital intensity.”

The Company’s subsidiaries, Cactus 110 LLC and Arizona Sonoran Copper Company USA, Inc., have provided notice of exercise of their rights to buy‑down (i) Royal Gold’s 2.5% NSR to 2.0% for US$7.0 million and (ii) Elemental Altus’ 0.68% NSR to 0.54% for US$1.91 million, that will result in an aggregate reduction in Cactus Project royalties of 0.64% for aggregate payments of US$8.91 million. These NSRs were initially purchased in 2021 by funds of Tembo Capital and Resource Capital Funds, which each subsequently sold its NSRs to Royal Gold (December 2024) and Elemental Altus (September 2023), respectively. The Buy-downs are expected to close on or about August 12, 2025, following which Royal Gold will hold a 2.0% NSR and Elemental Altus a 0.54% on the Cactus Project (as shown in FIGURE 1, outlined in yellow).

About the Cactus Project

The Project is a lower risk brownfield open pit copper project with onsite permitted water wells, substation and transmission lines, neighbouring nationwide railroad, nearby nationwide highway and an on-site office with a team of 20 engineers and geologists advancing Cactus to PFS, scheduled for completion later this year. The PFS will build off the heap leach and solvent extraction and electrowinning operation, producing LME Grade A copper cathodes, as contemplated in the 2024 PEA. The 2024 PEA projected a low capital intensity of under $10,000 per ton and an unlevered life of mine free cash flow of approximately $7.3 billion, from annual average production of 116,000 short tons of copper cathode over the first 20 years. The 2024 PEA projected an after-tax net present value (8%) of $2.03 billion and internal rate of return of 24%, at a $3.90/lb copper price, and an increase to $2.9 billion and 30%, respectively, at a copper price of $4.50/lb. ASCU has appointed Hannam & Partners as project financial debt advisor for project financing. Upon completion of the PFS, the Cactus Project team will immediately advance required amendments of applicable state permits and initiate the Definitive Feasibility Study for completion ahead of a potential Final Investment Decision, potentially by Q4 2026.

Links from the PR:
FIGURE 1: https://arizonasonoran.com/projects/cactus-mine-project/press-release-images/
Aug 7, 2024 Press Release: https://arizonasonoran.com/news-releases/arizona-sonoran-standalone-pea-for-cactus-open-pit-project-reports-post-tax-npv8-of-us-2.03-billion-c-2.77-billion-and-irr-of/
Technical Report: https://arizonasonoran.com/projects/technical-reports/
Jan 6, 2025 Press Release: https://arizonasonoran.com/news-releases/arizona-sonoran-buys-back-1.0-of-the-bronco-creek-exploration-royalty/

About Arizona Sonoran Copper Company

ASCU is a copper exploration and development company with a 100% interest in the brownfield Cactus Project. The Project, on privately held land, contains a large-scale porphyry copper resource and a recent 2024 PEA proposes a generational open pit copper mine with robust economic returns. Cactus is a lower risk copper developer benefitting from a State-led permitting process, in place infrastructure, highways and rail lines at its doorstep and onsite permitted water access. The Company’s objective is to develop Cactus and become a mid-tier copper producer with low operating costs, that could generate robust returns and provide a long-term sustainable and responsible operation for the community, investors and all stakeholders. The Company is led by an executive management team and Board which have a long-standing track record of successful project delivery in North America complemented by global capital markets expertise.