Nations Royalty seeks to bring together Indigenous groups with mining royalties

A first-of-its-kind, royalty-seeking company isn’t searching for crowns. Instead, it’s eyeing Indigenous communities in Manitoba.

“A big part of my job is building trust,” said Kody Penner, Nations Royalty vice-president of corporate development.

He stopped in Winnipeg on Friday. It’s the latest destination he’s visited to generate interest for Canada’s first majority Indigenous-owned mining royalty company.

The firm went public last year; it’s traded on the Toronto Stock Exchange. British Columbia-based Nisga’a Nation launched the company alongside mining financiers such as billionaire Frank Giustra.

The goal, Penner said, is to band Indigenous groups with mining royalties together and grow their wealth.

When a mine begins, it signs an impact benefit agreement with impacted communities. Those communities get money through the deal. They might receive a percentage of the mine’s revenue or profit.

Nisga’a Nation has impact-benefit agreements with five different mines in B.C.’s so-called “Golden Triangle.” It put all future payments from the mines into Nations Royalty. In exchange, it became majority owner of the company (77 per cent).

One of the mines, Seabridge Gold’s KSM project, is touted as one of the world’s largest undeveloped gold projects. The Brucejack mine (gold and silver) in B.C. is currently the only operational mine in Nations Royalty’s portfolio.

The company was launched after raising $10 million from investors and receiving backing from the Fiore Group. Giustra, co-founder of Wheaton Precious Metals — a streaming firm valued at more than $40 billion in February — is the largest shareholder outside of Nisga’a Nation, Penner said.

Nations Royalty is now looking for other Indigenous groups with mining royalties to join in. Communities would trade their impact benefit agreement payments — or part of them — for equity in the company.

“When you’re able to pool many different payments from different mines … into a single company, you become more valuable,” Penner said. “You’re creating a lower-risk environment for investors.”

He’s been sharing the same points with local leaders he’s met throughout the country: they could get equity (and/or money) quickly instead of waiting for an annual cheque; diversification lowers risk; and, if all goes as planned, the company’s value will greatly increase over time.

Penner declined to say projected returns, adding he can’t predict it. Nations Royalty hasn’t yet inked deals with other Indigenous communities to date.

“We’ve worked so hard to get these (impact-benefit agreements),” said Penner, who’s from Tahltan First Nation in B.C.

“It took a few hundred years of colonization to finally get to a point where we have impact-benefit agreements and we have participation at these mine sites. (So) it’s a little bit of a trust thing.”

Penner said he’s spoken with Indigenous leaders from Manitoba, Ontario, B.C. and Nunavut. Some have questioned if they want others managing their money; weighing cash needs now versus in the future is another factor, Penner said.

He wouldn’t divulge how many Manitoba-based communities he’s spoken to or how close Nations Royalty is to signing a new deal, citing confidentiality.

Indigenous groups who put their impact-benefit agreements into Nations Royalty will continue to be part-owners as long as they hold shares in the company, even when the agreement-bound mine closes and its related payments stop, Penner said.

Renee Greyeyes has kept tabs on Nations Royalty. The Indigenous Chamber of Commerce Manitoba president considers it a “good model.”

“It does change the game for us,” Greyeyes said. “It puts Indigenous nations on the shareholders side of resource projects. It’s not just stakeholders and us being consultants anymore.”

She views Nations Royalty as a way to connect Indigenous people with capital market access, boosting finance, housing, health and education.

More Indigenous ownership in all sectors is key going forward, Greyeyes stressed. At least one local First Nation is working with the chamber to start its own mining project, Greyeyes hinted.

“When we talk about economic reconciliation, that’s it,” she said, adding she believes Nations Royalty is “moving us in the right direction.”

gabrielle.piche@winnipegfreepress.com