Creating sustainable returns for all shareholders alike
The mining royalty business model is not new – it has been around for decades and existing mining royalties have been acquired for years. Today, many mining royalty companies have challenges finding new high-quality royalties to grow their companies. Some have branched into the model of streaming, where they typically seek to create new royalties on development staged assets during construction financing. Others have had to go to more challenging jurisdictions or earlier stages of development to find new royalties.
Nations Royalty’s unique advantage is being the only majority Indigenous-owned public mining royalty company giving investors access to the untapped opportunity set of Indigenous-owned royalties. Indigenous Peoples have unparalleled access to high quality royalties on operating and advanced stage assets located in safe jurisdictions like Canada. As first movers, we have the potential to access hundreds of millions of dollars of Indigenous-owned royalty payments on high quality assets creating a tangible path to becoming a top royalty company.
Nations Royalty acquires and manages Indigenous Benefit Agreement payments (royalties) from a variety of precious metals and natural resource assets. By pooling these assets together into a single public company, we look to create a diversified portfolio of high quality royalty payments to unlock premium valuations. Strong diversified royalty portfolios based in safe jurisdictions can generate profits in good and bad markets. Nations Royalty is an innovative successor to the now established royalty model working in the last untapped royalty space, Indigenous-owned royalties. We aim to create a precious metals focused royalty portfolio focused solely in tier one jurisdictions such as Canada.
Most natural resource projects in Canada have Benefit or Collaborative Agreements with affected Indigenous groups that include financial payments (such as royalties). These agreements were generated through rigorous permitting processes which involve the consultation and consent of Indigenous Peoples. We look to partner with Indigenous Groups on their royalty payments by issuing them equity (and/or cash) in exchange for all, or a portion of, their future royalty payments. Through new partnerships, we look to grow and unlock value for Indigenous and Non-Indigenous shareholders alike.
Partnerships on Indigenous–owned mining royalties give us exposure to increased revenues from higher metal prices, future production expansions, and resource conversion as the payment sizes are related to the underlying commodity.
Top-to-Middle line royalties are less exposed to operating and capital cost risks and developing a portfolio of royalties limits downside risk to single asset failures as you diversify over many assets.
Our business model is scalable and allows us to operate effectively with only a fraction of the employees of a producing mining company. We do not operate the mines, and instead we simply receive periodic payments. Royalty companies are known for achieving some of the highest revenue per employee metrics in the mining space.
The royalty business model can perform throughout the commodity cycle, and allows us to invest counter-cyclically in attractive acquisition opportunities during downturns, while enjoying leverage to higher commodity prices during upturns.
Benefit agreements are agreements established between Resource Companies and Indigenous Communities. They are legally enforceable multi-faceted agreements established to manage the predicted impacts of development projects and to secure benefits (i.e. financial, employment, training) for impacted communities.
Financial benefits included within Benefit Agreements vary widely and can include lump sum royalties, that take many forms. Modern agreements host topline royalties that have limited downside risk.
Nations Royalty will seek to acquire additional royalties and similar financial entitlements (referred to here as “Royalties”) on mining projects that are part of the financial benefits that Indigenous Communities derive from their agreements with resource companies. These transactions will enable the Indigenous Communities to realize immediate value, typically in the form of cash and/or equity in Nations Royalty.
These acquisitions may be structured in various ways in response to several factors including commercial considerations, tax, and required consents; however, regardless of the partnership structure, the other rights and entitlements afforded to the Indigenous Communities in their Benefit Agreements will remain with the Indigenous Communities.
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