It was a pleasure speaking with Derrick Pattenden of Nations Royalty corp| NRC, one of my newest Royalty & Streaming holdings. The recorded conversation was one of several we had during the Rule Symposium in Boca Raton - we had dinner that night and honestly the steak was up there with any I’ve had in Argentina - which says a lot!
Nations Royalty is seeking to become a top global royalty company, focused on Indigenous-owned royalties on precious metals and other natural resources assets.
Unlike other smaller royalty start-ups who are competing in what has become a highly contested space, NRC has effectively created a different business segment and therefore it can be said that they essentially have no competition.
NRC is the first majority Indigenous-owned publicly traded company in Canada and as such they have the first mover advantage in unlocking what has previously been an entire asset class that was excluded from public investing - Indigenous Royalties.
Canada is known as a nation blessed with an enviable bounty of natural resources. As Derrick explained to me during our conversations at the Rule symposium, every time a mine is built or oil field is constructed in Canada the operating company must enter into an agreement with the respective local indigenous group known as an ‘impact and benefits agreement’. As part of this agreement, a royalty agreement is struck between the operator and the local indigenous community.
These royalties are the dream of every royalty investor but previously, if you weren’t indigenous (I am not) you had no way of accessing them. Additionally, it has always been a highly fragmented market given that each local group held individual agreements and there are over 600 indigenous communities in Canada - according to google.
Nations Royalty acquires and manages Indigenous Benefit Agreement payments (royalties) from a variety of precious metals and natural resource assets. Pooling these assets together into a single public company, they are essentially consolidating a diversified portfolio of high quality royalty payments to unlock premium valuations.
This is a new concept and I view it as essentially a venture capital investment.
However, if Derrick and the team can pull this off I think it is a multi-bagger over the next decade or so.
Unlike the other Royalty start-ups, they don’t have to finance an exploration project and wait until it hits production (although I suspect that will happen in time), they are consolidating existing, cash-producing, royalty and streams. The hardest part of this model will be getting the first few deals over the line, from there I can easily imagine a future where other indigenous groups see what is happening and actively decide to get on board creating a powerful snowballing effect.
Derrick strikes me as a great guy - he was already a successful banker and quit to become a part of NRC the moment he heard it. He is maniacally focused on hitting scale with NRC and has real skin in the game.
I hope to have him back on the channel soon (without our interview being hijacked).
I have also bought a 2% position in NRC for my ‘Royalty King’ Portfolio, a portfolio of currently 18 rather obscure Royalty companies, many of which are not available on major exchanges and which I believe will outperform.
Until then, take care.
Benjamin.
P.S. Love the episode? Re-stack with your thoughts or questions—I’d love to hear them!
Disclaimer: This publication is intended solely for documenting my personal journey with trading and investments for income and travel purposes. I am not a certified financial advisor nor am I a financial professional and none of the content provided should be construed as investment advice. It is essential to conduct your own thorough research and consult a registered financial service provider for appropriate guidance. I cannot guarantee the accuracy or completeness of the information presented. Any actions taken based on the information shared in any of my work are done at your own risk and discretion.
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