Welcome to Drum Beats, the must-listen-to podcast for investors interested in Indigenous
investment in Canada. Born from the Canadian Indigenous Investment Summit, the show focuses
on the intersection of Indigenous economic strategies and investment opportunities.
I'm Mark McNack and my co-host Robert Brandt, and I are joined today by Cody Penner,
Vice President of Corporate Development for Nations Royalty. He was recently chosen as one of the five
2024-2025 Kakahashi Project Young Leaders, demonstrating his dedication to advancing
Indigenous interests in the resource sector. Join us as we explore how these critical conversations
are reshaping economic development across Canada. Cody Penner, thanks very much for joining us.
Thanks for having me. In the new year. It's great to have you with us. Nations Royalty getting a lot
of publicity these days, including at a conference, a mining conference, global mining conference in
London before Christmas. And we'll talk a little bit more about that. So we're really lucky to
have you with us to talk about yours and Nations Royalty's story. Awesome. Yeah, once again, thank
you for having me. Pleasure to have you here. And I think you also just came back from Japan.
Is that correct? Yeah, I was just in Japan for a week. It was a great experience. I got invited.
It's called the Kakahashi Project. And that means bridge in Japanese. And essentially, it's the Asia
Pacific Foundation nominate to get different nominations for young business leaders, what they
what they kind of label it as to go to Japan and experience the culture. We met with the Canadian
Business Council over there, talk about Indo-Pacific strategy, Japanese Business Council, the vice
minister of foreign affairs, the Hokkaido government, and the IEI new indigenous group,
which which I learned to, you know, I didn't spend much time looking at Japanese history,
but I learned there are indigenous people in Japan. So we actually got to go to their museum
and experience some of their culture. And we actually ate a chunk of dried salmon with them.
And we all sat like a traditional house. So I mean, fantastic trip, always wanted to go to Japan.
And to be able to go over that sort of passion was an amazing experience. Great country. Yeah.
Sounds like a really unique experience. Cody, why don't we start by talking a bit about you
and your background? Where did you grow up? I know you're a Teltan nation. I'm a proud member,
but tell us a bit more about your upbringing. Yeah, of course. Yeah. So I grew up actually
outside of the nation. So born in Nelson, British Columbia, southern tip, southern mid kind of tip
of British Columbia, Western Canada, moved to Yellowknife in the in the Northwest Territories,
and then over to Strathmore, Alberta by Calgary, and then grew up in San Bernardin, BC. So kind
of moved all around Western Canada as a as a young person, and then ended up living in Vancouver,
worked a slew of different jobs, and then ended up working underground in a goldmine in Northwest
British Columbia called Bruce Jack goldmine now owned by Newmont. So dad's a miner, brother's a
mining engineer. So it's kind of been in my blood since I was young. So I did a fallout in the
footsteps and running heavy machinery, jack legs, big haul trucks, different equipment underground,
and then connected back with the Teltan nation and actually worked for the Teltan central
government as the employment director, which was a really good experience. I got to sit in elder
council meetings and board meetings really understand our strategy and how we want to grow as a nation,
right, and then decided to go back to school. So I studied commerce at the University of British
Columbia at Sauder, specialized in finance, and then worked in investor relations with Sina Resources,
mine up in Northwest BC, the past producing SK creep mine, and then worked for Gentus Capital
in investment research, so equity research in the mining space as a small boutique, Michael Gray is
one of the partners, fantastic geologist, so got to kind of mentor under him, and then worked at
tech resources in a strategy finance role in the copper growth team at tech. So our job was to
allocate capital across nine different development assets and, you know, kind of bring in all the
different factors of that, whether it's risk, jurisdiction, and all these different pieces to
see where we want to put our money to grow our copper output in the future, right, so very good
experience, and then I landed in nation's royalty. Also, I recently resigned, but for the past three
and a half years, I was the vice chair of the Teltan Nation Development Corporation, so I
definitely know a little bit about indigenous business, mining, capital markets, indigenous
government governance, and you bring that all together, and it lends quite well to helping grow
an indigenous-owned royalty company. Absolutely unique experience to have real, literally,
under the ground, in the ground experience, working with those rocks. Something that was
cool about that, that I really enjoyed, is I was actually working alongside a lot of my Teltan
family, so I got to go to community, and I got to understand, like, why do people do these jobs? Why
do you actually go in a, I mean, at the end of the day, it's a hole in the ground, right, like, you
know, it's got lighting, it's all safe, and like, all these things, but it's a hole in the ground.
It's a tough job. You're away from your family for three weeks at a time, and I got to really understand
why people do it, like, what are the values, right? It's family. You want your kids to get educated.
You want all these things to better yourselves and the community, and mining projects really help
provide that, so I'm deeply passionate about the industry and the value that it can drive at a
community level and at a government, BC, Canada level, whether it's tax revenue or the supply chain
inclusion, all these different pieces, but I'm very passionate about the industry, and like I said,
one thing about working in the mine is understanding what the mine means to the people,
right, what it means to the livelihood and their kids and for future generations.
That is great experience, and I think you're right, and when you talk through your profile,
I mean, I don't think there's that many people who've had that, you know, working in the mine
experience, even though, you know, mining's a huge industry, you know, that gives you a unique
perspective, and as you said, you know, how does that relate to the Indigenous peoples, you know,
and what are the values and why would you do something like that? So I think that's great
background, and now you're at Nations Royalty. I'm at Nations Royalty, yeah, so I'm Vice President
Corporate Development at Nations Royalty. I've been here since June, so June 10th was the start
date, and it's been an amazing experience. I, you know, it kind of came out of left field a little
bit for me, like I was working in tech, I had a great role, I wasn't planning on leaving, to be
honest, it was, it's a great company to work for. It's funny, the building that you see in the
background is actually tech's main office, so I went across the street to this role, but when I
was working at the Telton Central Government, I was starting to understand how we created different
impact benefit agreements and how we got different equity deals and projects, and in my mind, I was
just like, there's got to be a way to leverage these financial instruments and these agreements
that we're creating to create extra value. Like, I watched the industry do it in other ways, right,
like what is a bank? A bank is essentially just a big lever, right, they lever a small amount of
deposits for financial gain, and I was looking at all the agreements we were creating as a teltonation,
I was like, there's got to be a way to lever this, and this company, Nations Royalty, was the first
one that I saw where you could create extra value with the things that we already own.
The premise of our business, and I'm sure we'll dive into it, is to collect different royalty
streams from different Indigenous groups across Canada internationally into a single vehicle,
publicly traded vehicle, to create extra value above and beyond what they're worth by themselves.
So when I saw the news release go out in February, I believe, I thought, holy cow, this is the answer
to the question that I had when I was working at the Telton Central Government. Basically, from
there, I connected Rob, our Interim CEO, and Ryan Weymark, one of the co-founders as well,
and started the conversation, and a few months later ended up at Nations Royalty.
Beautiful. Tell us a bit about the genesis of the Nations Royalty, the business,
it's relatively new business, it's a new concept.
Yeah, yeah, well, it's funny, it's a new concept, but it's actually an old business model,
right? The mining royalty business model has been around for decades. So you have the Weeden
Precious Metals and the Franco Nevada and the Royal Gold, those are the three big royalty companies,
and they've been around for 30 plus years. I think Franco Nevada initially went public in the 80s,
late 80s, with the Gold Strike Deposit in Nevada. And since then, they have been some of the top
performing mining and metals companies in the market, right? People love the business model,
right? You get access to the underlying commodity by directly investing in a royalty, right? Which
is essentially just a part of production. There's different structures, but the top royalty companies
have top-line royalties, right? Net smelt returns, gross royalty revenues, things of those natures.
So an investor loves that. They get access to the commodity without the downside erosion of operating
a mine, right? So if you want to get access to gold, say you believe gold is going to go up,
how do you invest? You can either buy bullion, right? You can go buy a chunk of gold if you'd like,
go buy an ETF. If you want leverage on it, then you go into the equities,
right? You can either go exploration, which generally gives you a little bit more of a lift,
or you go into a senior producer, a little bit less of a lift. Royalty companies are the exact
same. If you invest in a precious metal royalty company, you get access to that commodity, but
once again, you don't have the underlying erosion of operating. So we use that exact same business
model that investors love and that they pay a premium for, upwards of two times PNAP,
price over net asset value, which is a very high valuation. We're in the exact same business model,
but with a new twist. We work in the indigenous royalty space. So the indigenous people of Canada
and internationally have a tremendous amount of value in their royalty agreements, right? So
say if you're a miner that wants to bring an asset into production in the past 30 years in Canada,
you most likely have an impact benefit agreement signed with your local indigenous group.
Within that impact benefit agreement, there's many things. There's education, infrastructure spend,
cultural revitalization, what have you. And then there'll be financial payments,
which is essentially a royalty, right? And just to show you the size, in Canada alone,
in 2023, there was $350 million worth of these payments paid to indigenous groups,
just in the metals and mining sector. If you include oil and gas, that number actually
climbs to over $700 million. That's cash payments paid to indigenous groups just in 2023.
Those payments are all going to indigenous groups by themselves. They're in isolation. What we look
to do is collect them into a singular umbrella, nation's royalty, in exchange for equity or
potentially cash in our company. So that'll be the exchange with the indigenous group. We'll get the
rights to all or a portion of those future payments and we'll issue new shares, new
equity, and we'll give that to them. It's a value exchange, right? If they want a cash portion,
we could do cash, but we would really like them to be partners with us and come along the journey.
And what happens is when you collect more of these royalties into a single portfolio,
just like the Francos and the large, the Royal Golds, just like they have done,
you build a diversified portfolio of top tier royalties. And you can extrapolate and get
those premium valuations that go above and beyond the net asset value that any single royalties worth.
So same business model, but with a new twist, we're first movers in the space. There's never
been anybody that's done this before, right? These agreements have existed for a long time,
but no one's actually created indigenous royalty company. This is the first one, right? So we're
first movers in this space. And when I talk about that $700 million market, some of these royalty
companies traded 24, 25 times cashflow. So you can only imagine the size, the size of the company
that we can create if we're able to capture, you know, sit and capture 300 million of that 700
million, right? You can have a serious, serious royalty company in a matter of years, if we can
achieve our growth strategy. And will you be precious metals only royalties or? Yeah,
precious metals focused. So in, in Canada, there's a significant amount of top tier gold mines and,
you know, Canada is a safe jurisdiction, right? We don't have a ton of geopolitical risk, all
these different things. And if it's already operating, then it already has a, if you'd like
to label this a social license to it. And if we're working with the local indigenous group,
that's a pretty, you know, de-risked investment, right? So precious metals, safe jurisdictions,
investors love that, right? Once again, there's much less geopolitical risk. Canada has some
amazing geology. We have some top tier gold mines in the world, I would say, you know, detour gold
mine, Canadian malarctic, Meliodine, even those are kind of running out. Blackwater's about to
come online soon. We have Bruce Jack, which we actually have a royalty on. And, and we would
like to be precious metals focused, but we're also looking at base metals and energy as well.
And to prove the model, we might end up doing a partnership on something that's out of
precious metals, but long-term focus, we would like precious metals exposure that's above 50%,
you know, 70, 75% somewhere around that. And you went public earlier this year,
you raised to the small financing and you must have weighed up the pros and cons of
going public versus raising money in other ways. Why go public? Yeah, it's always been an interesting
one. I mean, go on public is always a benefit because it's easier to do your marketing and the
concept is proven as well. Right? So when, when the inception of this was kind of brought forward by
Rob McCloud or interim CEO, initial leadership, it's, it's an idea until you kind of go public
or kind of move it forward in that matter. Because when you go public, you allow investors to
obviously purchase shares on the market and that pushes the price up. So you receive those premium
valuations, right? Basically those, you know, an increased PNAV or price over net asset value is
essentially perception, right? The market perceives that you're going to be, you know, increasing cash
flow or getting more precious metal focus or whatever it may be. So you get that higher
valuation. So that's one of the top reasons that we wanted to go public. And it's also easier to
raise capital in that form. It's, it's a, it's a tough market right now, especially for juniors
and royalty companies and things like that. If you're not a top producer that's stable and dividend
producing, it's difficult to raise capital. So going public made that a little bit easier. We
work in the Fiore Group, which is, which is headed off by Frank Giustra. For those of you that don't
know him, he's a mining entrepreneur. He's, he was the co-founder of Wheat and Precious Metals,
which is the largest royalty company in the world. They trade around 40 billion Canadian.
And, and he was the co-founder of Goldcorp, which was the largest gold mining company in the planet.
So very successful mining entrepreneur. And he really helped him in the Fiore Group, Gordon
Keefe and their team really helped us go public and access capital when others weren't able to,
which is a huge, huge benefit. So going public has some, has some downsides. Obviously it's a
little bit more, you know, a little more regulatory filings and pieces like that. It costs a little
bit more, but the access to capital, the increased valuations, and also the proof of concept, right?
When we're talking with other indigenous groups, we can now say that we are a public company,
we're publicly traded, you can go buy our shares if you'd like. And that really changes the
conversation as well, versus being like, oh, this is an idea, right? We have these five royalties
that the Nishka own and we want to put them into a public company and then get other ones. We
already have done that. We've already gone public. We're trading on the market. We trade on the
Frankfurt, the OT, OQ, OTC, TB, sorry, in the States and, and on TSXB in Canada. So we're already
trading and that alleviates a lot of pressure of having to do that in the future.
And I guess if you're trying to convince other indigenous nations, communities to sell you their
royalties, then if you're trading more liquid, publicly traded stock, then that's a little bit
easier conversation to have. Yeah, it's definitely an easier conversation. We do have a little volume
right now. We have a very tight bloat, which is something that we're going to have to look at in
the future, but yeah, 100%. It makes it much more palatable partnership when you can actually see
that it's trading and there is a path to being able to say you need to liquidate a little bit.
You want to do a community, community development project like increase or build a road or
a school or put money into education, what have you. You have an option to sell some of your
position and actually put that money towards that, right? Or lever it, depending how you
structure your trust, right? So if an indigenous group ends up with a big chunk of nations royalty
equity in the future, they might be able to lever on that. And that's what gets me excited about this
job is being able to create wealth for indigenous groups and build up a balance sheet with them.
So they can actually go do these projects that they want to do. So I think there's a couple
of interesting things because you're an example of a proven business model. Now that the indigenous
peoples of Canada own their assets and there's less barriers for them leveraging them and managing
and developing their own nations and territory. You're a good example of here's a proven business
model. Now we're going to apply this to the indigenous peoples. Yeah, that's exactly it.
And like I said, it's going back to in my personal experience, it's going back to that. My thoughts
when I was working in the Telethon Central Government, I think in 2019 of like, okay,
how do we lever what we already have? Right? Like this is to your point, a proven business model.
People have done this before and received up to two times the PNAB valuation, which means
they're, you know, I'm just going to make an example up for the listeners. If you have $10 million
sitting in a one times PNAB company, that's worth $10 million. If you have that exact same
$10 million sitting in a two times PNAB company, it's worth $20 million to the market. Right? So
you're creating extra value that would never have been achieved if you didn't create the business
and pool these royalties. It's an amazing business model. It almost sounds like magic, right? But
you got to think about it. My earlier comments, building out a nice diversified portfolio of top
producing precious metals and other mines creates a tremendous amount of value that investors love
and it's been proven for years. And to your point, we're just doing it with a new twist with
indigenous lens on it. Yes. You mentioned that the PNAB is a very important business model.
They have come in as the initial transfer their role, some of their royalty streams,
I assume it's not all of their royalties. It's funny. They actually transferred
in all five of their impact benefit agreement royalty. So in group in British Columbia,
there's two kind of royalty streams, if you'd like to label them as royalties that go to
indigenous groups. First is with the province. So they actually have a tax revenue sharing
agreement where part of the taxes paid from the mine go to the local Indigenous group,
the impact community, which is amazing. And then on the second side, you have an impact
benefit agreement that's signed directly between the Indigenous group and the mining company,
the proponent. And that royalty structure can be different. It's whatever's negotiated
between the groups. And Nishka actually vended in all five of their impact benefit agreement
payments, intonations, royalties. So we did a quick model on it when they were kind of
going through the inception and the net asset value of those five royalties, just the impact
benefit agreement side, was 214 million US. So when they kind of saw that, Nishka has
always been leaders in many, many senses. And when they saw that, they thought, holy cow,
we have the inception of a royalty company, right? Because it's a significant amount
of money. A lot of it is in the future and development stage. But once those start paying,
those cash flows that we will start to see will lend very well to the company and we'll
be able to redeploy those into high return areas.
And I guess from Nishka's perspective, they're all in. How tied in are they with their, could
they sell their shares tomorrow if they wanted to?
Yeah, well, they have a three-year escrow. So they have a three-year holding period on
their shares. They own 77% of the company, which is significant, right? Those are invested
a little in different periods throughout three years, but they're in this for the long haul.
They said to us on multiple occasions, they've said publicly, they are in this to grow. They
would rather own 10% of a $2 billion company than 77% of a $100 million company. And they,
I mean, Charles Morbin, the secretary of charter has publicly said, like, they would like to
never sell them. They would like to see this grow and bolster their balance sheet, pay
dividends for a long, long time, and give them the ability to lever off of their equity
in the future to use this as a nice base, nice principal base to grow off of. So they're
in it for the long haul. They believe in the concept. They actually go and do nation to
nation meetings with us. They were just at Resourcing Tomorrow in London, as you mentioned
earlier, Rob, with us, and they're extremely supportive of the business. And once again,
they're in it for the long haul. They want to see this turn into a multi-billion dollar
company and they're all in.
And I guess from their perspective, it's a chance to diversify themselves once the company
develops and is able to bring in more royalty streams. It'll help diversify their own cash
flows.
Yeah, 100%. And that's kind of the premise of the whole business model is building out
a nice portfolio of these royalty streams. When you are able to create diversification
through owning many different royalties, that takes the load off of the ones that you have
in your territory. Nishka is lucky that they had five agreements that they had prior to
vesting the maintenance royalty. Some groups only have one or two. So if there would happen
to be a disaster at the mine, their payments would go to zero. But if they own equity in
nations' royalty as we build out this portfolio, it's better to own a little bit of many royalties
and 100% of one. And that's the vision that Nishka had as well.
The Golden Triangle, where Nishka is in Northwest British Columbia, is one of the hottest mineral
exploration and mining zones globally. And even though it is a top zone, things do happen.
Company prices can slump. Some key infrastructure might not get in place up here. There's different
pieces that might not happen. But if they're able to share their royalties with other groups
and those other groups share their royalties with Nishka, you're able to lower risk for
all groups and create those premium valuations that royalty companies have been receiving
for years.
And what about, Cody, some of the pain points that other indigenous nations are looking
at? What are some of the areas that they think are challenging to come in and participate
in the model? How do you address some of those points?
Yeah, of course. I mean, there's many things to do. I mean, one of the things too is it's
a new venture is one of the main pieces, right? Like you're an indigenous group, you've already
come up with this agreement with the company and you use lawyers in this whole process
and you've achieved this agreement. You've got it. But now somebody comes in and there's
this new model. They're like, hey, bend in that royalty for equity in the company. And
it's a little bit scary, right? Like there's a little bit of risk to it outside of just
sitting there and waiting to collect checks. You can receive a ton of extra value, once
again, upwards of two times the value, which is tremendous. And there's a bunch of things
that go through on the valuation piece, but it's a new venture. It poses a little bit
of risk. So our biggest piece is education, right? It's going to different groups and
explaining what the royalty model is, explaining how we can create extra value, how we can
lower risk, right? And all these wonderful pieces that a royalty company can provide.
So a big part of it is the capacity and the education and the training, right? And sometimes
we go in and we chat with chief and councils and different folks and they have them. I
mean, they are very busy people with a million pressures on them, right? They have community
concerns. They have education to think about wildlife, environment, all these brand claims,
all these things. So when I come in and I'm like, hey, do you want to invest in a royalty
model? Right now it's like, okay, well, what is a royalty model? So now we need to start
kind of from that point forward. So some of the main points is once again, understanding
that and then pending on the group is getting community to understand that as well. Right?
So I mean, it's one thing to talk with advisors and financial people and chief and councils,
but pending on how the group's structured, some want us to talk with community. So now
we're once again, trying to explain a mining royalty model to community. And some of them
might be, you know, maybe they're electricians or they're, or they work in HR or they work
in these different areas that isn't, you know, mining finance. So a big part of it is, is
the educational process, the risk piece. And, and there's always more from that, from that
end. Sometimes it's control as well. We do offer indigenous groups, if they do end up
with a large piece of equity in our company, we do say that we'll have a board seat, right?
And a structure. And you'll be able to help guide the company. But as the company grows
and we become a billion, two, three, $4 billion company, your equity will shrink naturally.
So, so it's a control piece too, right? So some groups are saying, well, I actually own
my royalty now 100%. I'm going to receive those payments by vested into you. Now you
control that investment. You control that money going forward. So now we need to just
show them like, Hey, you know, we have people like myself and our chief investment officer,
Derek Patton, our CEO, Rob McLeod, Frank Giustra. We have all these people that are able to
use those funds to deploy them into high return areas. That'll give you a good return, right?
So it's a control thing. It's an educational thing. And, and we're working through those.
I mean, we're a new company. Obviously there's going to be bumps in the road, but we have
been able to answer a lot of those questions and it's been going very well. And we hope
to have some partnerships in the near. Excellent. And you're also on a number of different markets
as you, as you mentioned earlier, you know, for example, in Germany, what's the pitch
to potential investors in Germany? And you know, of course you've just started out and
it's, it's early days, but some people must be coming and asking questions. Cause you're
probably introducing not necessarily a new business model, but as we said with the indigenous
peoples and that's kind of new and different. Yeah, no, it's, it's new and different. And
so what I, what I like to tell investors in the European markets, I might not understand
the indigenous landscape quite as much as a Canadian investor or potentially an American
investor is this is this is the same business model. Once again, it's the same model as
the Franco, the Wheaton, all these great companies, but with the new twist, right? So where do
you want to put your money if you're investing in a royalty company? Right? All these small
companies have been having a very, very hard time growing. They either need to niche into,
you know, different markets, you know, maybe they're here with lithium play, which it doesn't
have a proven PNAP multiple, or they go into unsafe jurisdictions or they have to go earlier
in the development stage into exploration. I'm talking with indigenous groups that have
royalties on some of the top producing gold lines in Canada, right? So if you like royalty
companies and you want torque on the price and you want to put your money on a bet that
that has that, that can actually achieve a portfolio of top tier royalties in safe jurisdictions.
We're a great bet. We're, we're, we're a great company to put that money into and watch us
grow because once again, there's no other small royalty company that's able to talk
with and did with, with, you know, large mining companies like, like each who are Canadian,
Malartic or Blackwater, all these ones that I mentioned, there's actually, even if you're
a large royalty company, no one's going to even create a royalty on these, on these mines.
They're like the only companies that have a royalty on them are Wheaton and Franco or
the large ones because they put in that construction capital at the, at the outset. We're the only
company that can go in now in 2025 and get a royalty on these top mines. So when you
talk about creating a multi-billion dollar business, that's, that's stable, safe, and
will provide long-term shareholder value. I believe we're great, great option.
And Cody, any thought of involving indigenous groups from outside of Canada who might have
royalty streams of their own on some, some great mines around the world?
Yeah, 100%. We, one thing about the Canadian indigenous landscape is it's much further
ahead and more developed than a lot of the other places on the globe. The relationship
between the Crown and indigenous people in Canada from the Royal Proclamation, I don't
need to give a history lesson to listeners, but since kind of its colonization has gone
a lot farther than let's say the US or Australia or Chile or all these other places. So the
agreements are much better. That $350 million that I had mentioned, I can't find anything
that compares to that internationally. I'm definitely talking with groups in Australia,
some of the US, there's some really big oil royalties and know the other groups in Alaska
are very developed and some others. So mainly focused in Canada, we have a lot of wood to
chop as mentioned, 350 million in the metals and mining space, and then, you know, over
700 million with oil and gas, like just to collect that in itself is a tremendous feat,
but definitely looking international. Talking, like I said, talking with some groups in Australia,
there's a few royalties coming up there, but it's not commonplace for industry to actually
pay indigenous groups royalties. They're used to only paying government royalties. And that's
kind of like the mindset down there. I've chatted with a few different folks. And in
the States, they don't have the kind of unceded territory, jurisdictional legal landscape
that we have in Canada, right? So, I mean, Canada is our primary focus, but you are starting
to see better agreements go over the border into the US and Australia. So, you know, we're
doing our best to advocate for indigenous people and getting better financial payments
and agreements. And hopefully we start to see more impact benefit agreements, financial
payments going internationally in the coming years.
Yeah, it's one of the latest great Canadian exports, I think, is what's happening in the
US, though some of the structures being used in the indigenous economy in Canada. We as
a law firm are getting calls from other groups in other parts of the world, including the
States, Central America, saying we're noticing what Canadian indigenous groups are doing.
And we'd like to understand how they're structuring some of these arrangements.
Yeah, 100%. So, one example that I have that actually just hit home recently, I was at
the Beaver Creek Precious Meadows Summit in Beaver Creek, Colorado. And I was chatting
with George Salamis with Integra Resources. So, they have some projects in the States.
And the Teltan Nation actually has some very developed agreements, whether it's government
to government or industry to Teltan. And George had brought up three tribes, they call them
in the States, to Teltan territory to actually learn about our impact benefit agreements
and to adopt those on their project. So, shout out to Integra for doing fantastic work. But
that's just one example of groups kind of looking towards Canada and the agreements
that we have set to help progress their projects in their jurisdictions as well, because it's
a huge de-risking process. It's a partnership, right? Creating good agreement from the get-go
is a huge de-risking piece for the life of the project. And if you can create good agreements
from the beginning, you can create alignment and you can de-risk returns for shareholders
and all your stakeholders and rights holders alike.
You mentioned Frank Giustra. He's a legendary investor, well known in London, mining and
investing circles, Canadian. How involved is he in the business?
Yeah, Frank has been amazing for helping us get this company off the ground, getting publicity
for it and just being a fan of it. When Rob McLeod and Nishka initially brought this idea
to him, he said that this is going to be as impactful as streaming was and as the advent
of streaming was in 2004, which is what Weed and Precious Metals was built on. It's the
largest royalty stream company in the world. So, he saw the tremendous amount of value
that could be created by pooling these royalties, these indigenous royalties, and he's helped
us do different marketing pieces. He's a cornerstone on our corporate presentation for anyone that
looks at that, obviously. He speaks about it. He's helped us with our financing. He's
helped guide and mentor us and me personally as well and really helped us grow this company.
He knows what steps to take to create a top royalty company as one of the co-founders
of Wheaton. And he's one of our major shareholders outside of Nishka. So, he is our largest shareholder
outside of the Nishka Nation, who owns 77%. And once again, huge advocate and we're blessed
to be in his office to help grow this thing because once again, he was there for Weed
to grow into a $40 billion market cap royalty company and we look to do the same. And with
his guidance, some of the rest of the members of the team that we have, we believe we can
achieve that goal.
So, I think you're the first and largest-owned indigenous public company in Canada, if not
across the world now. What exactly does that mean?
Yeah, of course. So, we're 77% owned by the Nishka First Nation, which I explained earlier,
but the First Nation Group in Northwest British Columbia. There's never been a public company
like this. So, on your average day where we've been trading around 80 to $90 million and
once again, Nishka owns 77% of this. So, it's a really big step forward for indigenous inclusion
into the public capital markets. The indigenous groups have been using private equity and
debt and other financial means, but this is the first majority of the just owned public
company, which is fantastic. And if anybody wants to invest in a company where your dollars
go directly into indigenous people, this is the only company on the market. It's generally
you're investing in the mining spaces, mining spaces, and they use their money to invest
in community benefits and culture and all these infrastructure and all these things.
If you put, I'm just going to make a number up, say you put a million dollars into our
company or many investors do and our share price went up 20%, Nishka Nation's net worth
just went up 20% in this equity, right? And our first goal is shareholder return. Our
second goal is capacity building. So, I'm a Teletent First Nation member. The majority
of our management team is indigenous. We look to keep it that way. We're actually searching
for an indigenous CEO. The majority of our board is indigenous and we look to build indigenous
capacity into the public markets, right? We're learning from Frank Giustra. We're working
from Gord Keepe, Rob McCloud, our CEO has been in the markets for years. We're helping
to build the next generation of indigenous leaders that are going to be going into the
public markets and scaling public companies that are indigenous owned. So, we think it's
really cool. We're the first and we certainly hope we're not the last, right? We see it
as a business strategy and a tactic to help grow a top royalty company. But we're also
being a shining example of what can be done when you can access risk capital in the public
markets and capital that you can't get when you're looking to pull down debt or private
equity, right? It gives you that seed capital, build projects that have a little bit of a
higher risk portfolio or profile from the get go. And generally, that's what is sitting
on indigenous land if it's a natural resource project. So, we're hoping we're the first,
we hope we're not the last. We're using it as a first mover advantage to grow a top royalty
company. And it's a really big part of what we do here at Nations Royalty.
Yes, that is exciting. And certainly the power of the network as you're talking about, you
know, indigenous management growing forward and as the company grows, those people will
move off and you start to develop that network. I think the other just interesting things
we like to speak to different indigenous leaders, you have some items in your office there besides
the beautiful sun that is of course, a lot of grain behind Rob as the sun is set and
it didn't even arrive today in London. The sun is shining behind you, but you have some
indigenous art I see in your office there. Is there a special story on that?
So I'm sorry, you asked. Thank you, Mark. This one right here is very special to me.
There's a famous Teltan artist named Dempsey Ball recently passed. He's a fantastic person,
made a tremendous amount of art. I was at the Audane Museum at Whistler last year, the
year before, and his art was on display in the whole gallery, right? He had an exhibit
that covered the whole gallery. Very famous artist. My mom had this piece of art in a
storage container for like 30 or 40 years, or maybe even longer. It was just sitting
in a suitcase and it's an original Dempsey Ball before he became famous, which I thought
was very, very cool. I don't know what it's worth or its value, but my mom had it for
this tremendous amount of time. How he kind of developed his artistic skills is when he
first started out, he used a lot of paint, right? Because it could cover up some of the
impurities and different pieces like that. So you can see like there's a lot of red and
black on it. And as he developed, he used less and less color when his most, like, you
know, his kind of newest pieces were, there was no paint. It was all just carved in there.
They're absolutely beautiful. So you can tell that it's an older piece. And this one's very
special to me. So thank you for asking. That one hits home for myself.
You're welcome. And we've just given it a global audience. So now everybody knows about
this piece of art you now have. Perfect.
Cody Penner of Nations Royalty, thanks again for your time and best of luck with this new,
old, old model enterprise. It's a great example of the way indigenous finance is evolving.
Amazing. Thank you guys for having me.
Good luck. Have you on.
Thank you to Cody Penner for sharing his insights with us. If you enjoyed this conversation,
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