Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The Frank Giustra-backed Nations Royalty (TSXV: NRC), which may be the country’s first Indigenous company to focus on production contracts like net smelter returns, joined the Toronto Venture exchange on Friday, Canada’s National Indigenous People’s Day.
Nations Royalty stock closed at C$0.83 apiece, down 8% from the 90¢ listing price. The company floated 144.7 million shares with 132.9 million held in escrow.
The Nisga’a, based in northwest British Columbia near the Alaskan panhandle, hold a 77% stake in the company based on a portfolio of royalty agreements. Nisga’a Lisims government president Eva Clayton said in a statement that the listing represents a milestone for Indigenous groups.
“Nations Royalty’s vision presents a unique opportunity for the Nisga’a Nation, other First Nations and Indigenous groups, and investors to access a portfolio encompassing precious and critical metal mines, oil and gas ventures, and renewable energy projects,” Clayton said.
The company’s initial public offering comes amid ongoing reconciliation efforts between First Nations and the Canadian government as well as rising interest in mining. In BC, the Tahltan Nation and Williams Lake First Nation have reached participation agreements in projects.
In March, BC recognized the Haida Nation’s Aboriginal title on its lands, but the major step raises constitutional questions. The Northern Miner is due to report more on it next week.
Giustra, who founded Lions Gate Entertainment (Fahrenheit 9/11, The Hunger Games) and helped start Wheaton Precious Metals (TSX: WPM, NYSE: WPM; LSE: WPM) and Endeavour Mining (TSX: EDV; LSE: EDV), is helping Nations Royalty expand its investments.
The company acquired royalty rights on Newmont’s (TSX: NGT; NYSE: NEM) Brucejack gold mine and Seabridge Gold‘s (TSX: SEA; NYSE: SA) KSM copper-gold-silver-molybdenum deposit in BC’s Golden Triangle.
Rob McLeod, the interim CEO of Nations Royalty and a technical adviser to Giustra’s mining investments, praised the Nisga’a Nation’s legal advocacy and economic development leadership. The community is a pioneer as the largest majority Indigenous-owned public company in Canada, he said.
The company’s strategy involves merging royalties and incomes from various resource projects to attract external investors, promoting economic growth and reconciliation. It said it aims to capitalize on economic growth, diversification and the empowerment of Indigenous communities in the public and capital markets.
