22 Oct Nations Royalty

Nations Royalty: Canada’s Largest Majority-Indigenous-Owned Public Company 

Overview: Nations Royalty is Canada’s largest majority-Indigenous-owned public company, and has achieved significant milestones in a short period. With a market cap of C$100 million, 77% of the company is owned by the Nisga’a Nation, a First Nation from Northwest British Columbia. Known for their leadership in numerous areas, the Nisga’a Nation has a storied history, including being home to Frank Calder, Canada’s first Indigenous Member of Parliament. Nations Royalty focuses on pooling Indigenous royalty payments on natural resources assets from agreements across Canada and internationally. The mining royalty company business model is not new, and some of Canada’s largest metals and mining companies today are actually mining royalty companies. 

Formation and Leadership: Nations Royalty went public in 2024, but the foundation for the company was laid over two and a half years ago. Rob McLeod, Interim CEO and founder, has deep-rooted connections with the Nisga’a Nation, dating back to his father’s support of Frank Calder’s political career. Through discussions with key leadership, McLeod recognized the potential for Indigenous royalty payments to be much more valuable when pooled together. They modeled five existing Nisga’a Nation royalties and determined a net asset value of US$214 million, leading to the company’s formation.  

Vision and Mission: The company’s primary goal is to unlock and maximize higher values on Indigenous assets by pooling the royalty payments together into a single public vehicle. Pooling these payments together allows for greater value creation than when they’re kept separate and held in isolation. Nations Royalty aims to offer Indigenous partners shares in the company in exchange for their royalty payments, allowing them to meaningfully benefit from the company’s growth and participate in the added value creation that comes from pooling together the royalties. 

Kody Penner, Vice President of Corporate Development, plays a crucial role in seeking out new partners and negotiating future royalty payments in exchange for company shares. With over 50 active conversations underway, Nations Royalty is positioning itself as a leader in community engagement and relationship building. 

Indigenous Ownership and Capacity Building: The Nisga’a Nation currently holds roughly C$80 million in equity, representing a majority stake in the company. Nations Royalty is managed by Indigenous executives, including its Chief Investment Officer Derrick Pattenden, a member of the Mohawks of the Bay of Quinte First Nation. The company’s board of directors is majority-Indigenous, which is a crucial aspect of its commitment to capacity building. This focus extends to developing Indigenous leaders in business, particularly those underrepresented at the director and executive levels. 

Growth Strategy: Nations Royalty’s growth strategy focuses on acquiring new royalties and forging partnerships with Indigenous groups across Canada. The company is also expanding its reach by engaging with ESG (Environmental, Social, and Governance) funds and traditional investors who may not typically be interested in mining companies but are drawn to the unique value proposition Nations Royalty offers. 

Innovation in the Industry: By pooling royalty payments, Nations Royalty provides its investors and partners with a more valuable product than individual royalty agreements. Penner explained that public mining royalty companies such as Franco-Nevada and Wheaton Precious Metals can trade above two times their net asset value because they pool royalties effectively. Nations Royalty seeks to replicate that model, and to offer significant financial returns to its Indigenous partners. 

Inspiration and Impact: Penner and Nations Royalty management are deeply inspired by the opportunity to advance significant wealth into the hands of Indigenous Nations. In 2023 alone, C$350 million was paid to Indigenous groups from the metals and mining sector. By pooling these payments together in a public vehicle, Nations Royalty aims to bring even more value to Indigenous groups. Nations Royalty is driven by the idea that this model can change lives today, rather than communities having to wait years to receive the value of their future royalty payments. 

Lessons for Non-Indigenous Groups: Nations Royalty believes that non-Indigenous groups can learn from Nations Royalty’s model, particularly the strength of Indigenous business. With substantial wealth in royalties, land, and resources, Indigenous groups have the potential to generate significant returns for both Indigenous and non-Indigenous shareholders. 

Leadership and Risk-Taking: For Nations Royalty, leadership is about taking risks. The Nisga’a Nation exemplified this by investing 100% of their five royalty assets into Nations Royalty. The rewards they are poised to make demonstrates the importance of calculated risk-taking. Nations Royalty provides a framework for other Indigenous communities to follow, offering a path to participate in the public capital markets and achieve substantial growth. 

Future Vision: Nations Royalty aims to become a capital provider for Indigenous-led projects across sectors, including mining and energy development. The company’s public equity model provides the financial power necessary for Indigenous groups to expand their projects and increase their wealth. With leadership and strategic vision, Nations Royalty is paving the way for future Indigenous businesses to enter the public capital markets and be a key player in scaling the Indigenous economy beyond 100 billion dollars economic target. This is Indigenomics.  

Learn more at: Nations Royalty