Nisga'a Nation forms mine royalty company
North of 60 Mining News - February 2, 2024
Pretium Resources Inc.
Ultrahigh-grade gold permeates a rock sample collected from Brucejack– a Northern B.C. mine that represents one of the five royalties that Nisga'a Nation is transferring to Nations Royalty.
Nations Royalty is positioned to be Canada's largest business majority owned by a First Nation, significant player in realm of mining royalties.
Leveraging royalties it has received through benefits agreements for mine projects in Northern British Columbia, the Nisga'a Nation is forming a Canadian First Nations mining royalty company for Indigenous people.
The Nisga'a Nation's lands and treaty area covers nearly 27,000 square kilometers (10,400 square miles) at the southern tip of B.C.'s prolific Golden Triangle. In recent years, the northwestern B.C. First Nation has accumulated significant royalties through benefit agreements with companies exploring and developing five mine projects in its region.
On Feb. 1, the Nisga'a Nation finalized a deal to transfer these annual benefit payment entitlements to Vega Mining Inc. in exchange for Vega shares. As a result of the transaction, Vega will be majority-owned by the Nisga'a Nation and renamed Nations Royalty Corp.
"Our people have a history of leadership and innovation, from significant legal victories to the first Modern Treaty in British Columbia," said Nisga'a Lisims Government President Eva Clayton. "Today, we embark on this new venture with Indigenous groups and leaders from the mining industry to promote cooperation and progress, ushering in a new era in Indigenous business, as well as Canada's mining and natural resources sector."
Rob McLeod, a third-generation miner from the town of Stewart within the Nisga'a region and with deep family ties to Nisga'a leadership, will serve as interim president and CEO of Nations Royalty.
Mining magnate Frank Giustra is a strategic advisor to the First Nations-owned royalty company.
"I am honored to collaborate with the Nisga'a and other First Nations in establishing this essential new company," Giustra said. "Almost two decades ago, I played a role in developing the metals streaming concept as a co-founder of Wheaton Precious Metals and I see Nations Royalty as a vitally important successor to this concept."
Strong royalty foundation
Nations Royalty will be built on a foundation of five royalties Nisga'a Nation holds on one operating gold mine, one gold mine ramping up to operation in the coming months, and three advanced-stage mineral exploration and mine development projects.
These projects for which Nisga'a Nation holds royalties include:
• Brucejack – a high-grade gold mine operated by Pretium Resources Inc., a wholly-owned subsidiary of Newmont Corp, the largest gold mining company in the world. This mine produces nearly 300,000 ounces of gold per year.
• Premier and Red Mountain – a mining operation being developed by Ascot Resources Ltd. that is slated to reach commercial production in the coming months. This mine is expected to produce roughly 1.1 million oz of gold and 3 million oz of silver over the first eight years.
• KSM – a world-class mine project being developed by Seabridge Gold Inc. that is slated to produce more than 1 million oz of gold, 3 million oz of silver, 178 million lbs of copper and 4.2 million lbs of molybdenum annually for 33 years.
• Kitsault molybdenum deposit – a large and fully permitted brownfield site being actively advanced by New Moly LLC. Nisga'a Lisims Government is having preliminary discussions with mining companies on the idea of a hub and spoke mill at the site of the Kitsault.
"Our portfolio of royalties are from Tier 1 and Tier 2 assets equally diversified across gold and copper, providing a strong foundation to grow the company," said Nisga'a Lisims Government Secretary-Treasurer Charles Morven. "Our objective is to establish the Company as a long-term, dividend-paying cornerstone investment for the Nisga'a Nation."
Diversifying Indigenous royalties
The Nations Royalty benefits are expected to extend well beyond the Nisga'a Nation. The company is already in discussions with other First Nations and Indigenous groups to join the company in the near future, marking a transformative moment in Canada's mining landscape, characterized by unity, empowerment, and a shared vision for the future.
"We look forward to collaborating with First Nations across Canada and Indigenous communities worldwide, as well as outside shareholders, through Nations Royalty," said Morvan.
Building on the strong foundation laid with the Nisga'a royalties, Giustra sees Nations Royalty as a way for other Indigenous groups to expand and diversify their potential gains by pooling the royalties held in various regions of Canada and potentially in places like Alaska, where Indigenous groups hold royalties on lands owned by Alaska Native Claims Settlement Act (ANCSA) regional and village corporations.
"Through the vision of combining additional Indigenous held royalties, Nations Royalty will provide an opportunity for Indigenous groups across Canada and potentially globally, to achieve diversification through different regions and commodities," he said.
Giustra also sees Nations Royalty as a vehicle to inspire Indigenous entrepreneurs and companies to participate in capital markets across various industries while also providing a collective Indigenous voice to sustainable mining practices.
"A core focus of the company is to build capacity for Indigenous people in the management of public companies and capital markets, which we hope will result in the creation of additional Indigenous economic ventures," he said. "The company is positioned to set new benchmarks in environmental, social, and governance (ESG) principles, benefiting indigenous groups, investors, and capital markets."
Details of the deal
Vega Mining, a company formerly listed as a metals and mining company on the TSX Venture Exchange, is basically a shell company for the formation of Nations Royalty.
To transform Vega into Nations Royalty, the idling company will issue shares in exchange for the Nisga'a Nation royalties. At the same time, Vega will raise C$10 million through the issuance of 11.11 million shares at C90 cents per share. As a result of these transactions, Nisga'a Nation will own 76.5%, current Vega shareholders will own 15.9%, and investors in the financing will own 7.6% of Nations Royalty.
"This transaction allows us to bring forward the future value of our royalties and retain the net-asset value (NAV) multiple and diversification afforded to public royalty companies," said Morven.
Nations Royalty's board will consist of six directors, four nominated by Nisga'a Nation and two independent directors – Matthew Coon Come and Alex Morrison.
Coon Come gained international recognition during his tenure as the National Chief of the Assembly of First Nations from 2000 to 2003, where his dedication to indigenous self-determination and commitment to bridging gaps between Indigenous and non-Indigenous communities have left a lasting legacy in the ongoing struggle for Indigenous rights and reconciliation in Canada and worldwide. In 2018, he was appointed an Officer of the Order of Canada for his exceptional contributions. He currently serves as a director of Seabridge Gold, and previously served on the boards of Newmont and Goldcorp Inc.
Vega Mining Inc.
Mines and development projects within the Nisga'a Nation region of northwestern B.C.
Morrison is an experienced mining executive with more than 35 years of experience. He has vast multidisciplinary experience in senior strategic roles in finance, accounting, information technology, supply chain, risk management, and operations support at Newmont Mining, Homestake Mining, Phelps Dodge, and Stillwater Mining. His most relevant experience for Nations Royalty is his former role as chief financial officer at Franco Nevada, a leading international gold royalty company. He has held diverse corporate director, chairman, and lead director roles for a broad list of mining companies, including Detour Gold, Taseko Mines, Energy Fuels, Gold Standard Ventures, and Gold Resource Corp. He is a chartered professional accountant.
McLeod, who played a pivotal role in the formation of Nations Royalty, is expected to be named as interim president and CEO.
It is the goal of Nations Royalty, however, to be managed and run by Indigenous people.
Upon the completion of the transaction, Nations Royalty's management team will include individuals possessing extensive expertise in Indigenous engagement, benefit agreement negotiations, finance, technical due diligence, and marketing, with a strong emphasis on Indigenous leadership at the forefront.
Over his more than 15 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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