The largest majority-Indigenous-owned public company in Canada, Nations Royalty, was founded by the self-governing Nisga’a Nation from the Nass Valley in BC’s Northwest.
Their current portfolio includes mining assets with royalties valued at US$214 million.
The Nisga’a Nation owns 77 per cent of Nations Royalty, and several of their representatives attended the BC Natural Resources Forum held at the Prince George Civic Centre from Jan. 14 to 16. Kody Penner, vice president of corporate development, featured as a headline speaker during the Indigenous Successes in Northern BC panel discussion.
Through the company’s business model, the royalty assets are still owned by Indigenous communities, but the maximum value of their mining royalty is unlocked through a portfolio of diversified royalties – lowering the risk associated with holding a single asset. Many mining royalties owned by Indigenous groups today are not yet in production, but through Nations Royalty, they would be able to access the present value.
Nations Royalty's foundation starts with the royalties Nisga’a Nation has in place in respect of the following properties:
- The high-grade Brucejack gold mine operated by Pretium Resources Inc., a wholly owned indirect subsidiary of Newmont Corporation, a large underground gold mine in Canada;
- The KSM Copper-Gold-Silver-Molybdenum deposit, currently in development by Seabridge Gold Inc., the largest, undeveloped yet fully permitted gold and copper project in the world, with almost 50 million ounces of gold and more than seven billion pounds of copper in reserves alone;
- The Premier Gold Project and Red Mountain Gold Deposit, in construction by Ascot Resources Ltd., and;
- The Kitsault Molybdenum Deposit, a large, fully permitted brownfield site owned and being actively advanced by New Moly LLC, majority-owned by Resource Capital Fund VI L.P.
Nations Royalty is eager to build further Indigenous capacity and representation in the corporate world.
“Indigenous people have not been included in the capital markets for years,” Kody Penner, Nations Royalty vice president of corporate development, said as he sat down with The Citizen at the Natural Resources Forum on Thursday morning.
“Nations Royalty is the first and largest majority-Indigenous owned publicly traded company in Canada. We trade on the Toronto Stock Exchange Venture. You can go buy some of our shares if you’d like and that’s never been done before. We’re the only ones and we certainly hope we’re not the last. We want to help build Indigenous capacity in the public markets so they can get access to the risk capital they need to build projects in their territories.”
This is a new step for Indigenous peoples, he added.
“We want people to get used to the idea of Indigenous people being wealthy,” Penner said.
“They can be project owners right from the get-go. Indigenous people deserve this opportunity.”
The first priority of Nations Royalty is share-holder return which means growing the Nisga’a Nations wealth.
“The second is to build Indigenous capacity,” Penner said. “We have a majority-Indigenous board, we have a majority-Indigenous management team and we want to teach Indigenous people how to utilize the public markets to grow these businesses from the ground up.”
And Nations Royalty can show them how to do that, he added.
“The more royalties you’re able to pool into a single company, the higher your valuation goes, because essentially you’re lowering risk on any single royalty – it’s kind of like a mutual fund,” Penner explained.
“The mutual fund owns a little bit of many stocks. That’s much less risky than putting all your money into one stock because if that stock flops you go to zero but with a mutual fund if one of those stocks flop you still getting benefits from the other stocks in the fund. It’s exactly the same thing in the royalty space and that’s what we do for Indigenous groups.”
Penner is a citizen of the Tahltan Nation, neighbours of the Nisga'a Nation. He grew up in the mining industry and was an underground miner at Newmount’s Brucejack mine. With a Bachelor of Commerce from the University of British Columbia, Penner is also vice chair of the Tahltan Nation Development Corporation, where he has helped lead the company through major strategic and operational changes by enhancing governance and management structures.
While the mining royalty concept is not new, Nations Royalty is different as it’s able to create new pathways for wealth generation and community development for Indigenous peoples.
“I like to say Nations Royalty does three main things for Indigenous groups,” Penner said. “First, frontload that capital so Indigenous groups can be partners right from the beginning. Second, lower their financial risk by diversifying their portfolio royalties. And third, give them a nice return as we come together.”
Nations Royalty provides a service to Indigenous groups where they offer their assistance at no cost to help them negotiate for better royalty structures in their impact benefit agreements, which is the contract between a resource extraction company and an Indigenous community.
“Imagine this: you are an Indigenous group in a remote location and now you have a big mine there,” Penner said.
“Now you are negotiating against professional financiers, geologists, engineers, lawyers – they know what they got – they’re professionals – and I’m not saying chief and councils aren’t professionals but they have a million things to think about – community, Elders, land claims – and unless they spend their time in the finance realm, which is part of chief and councils duties but not all of it – it’s tough negotiating against these groups. The asymmetry between groups is just ridiculous. We help groups negotiate in these circumstances for free. We would like to partner with them at the end when they accomplish everything but even if that doesn’t happen a rising tide lifts all boats and if you start to see more agreements with better structures being placed around Canada that helps Indigenous people in general… and we’ve accomplished our mission. So that’s a big thing that we do, and we spend a lot of time doing it – helping Indigenous groups negotiate for better outcomes. We gotta fight fire with fire.”
Nations Royalty is also backed by BC billionaire Frank Giustra, one of Canada’s most successful mining entrepreneurs, founder of Lionsgate Entertainment, Fiore Group CEO and a recent inductee into the Canadian Mining Hall of Fame.
For more information about Nations Royalty visit nationsroyalty.ca/.
