NANA created a fund to collect the Red Dog mine proceeds for future shareholders.
NANA Regional Corp. — which is owned by more than 15,000 Iñupiat shareholders who live in or have roots in Northwest Alaska — has been disbursing dividends through the pre-tax investment Shareholder Trust. Last month, shareholders approved amendments to the trust and the creation of the shareholder permanent fund.
The fund is similar to the Alaska Permanent Fund: NANA will invest in it the net proceeds from the Red Dog mine to generate earnings that will be distributed to the next generations of shareholders, even after the mine stops operating, NANA President and CEO John Lincoln said.
“Like oil in Alaska, zinc at Red Dog Mine is a finite resource,” Lincoln said. The current mine plan forecasts Red Dog to close in 2031. “Investing Red Dog’s net proceeds to NANA in the trust allows those proceeds to generate earnings that will fund dividends beyond the life of the mine.”
The yearly amount of net proceeds the Red Dog Mine generates is dependent on many factors such as market prices for metals and operation costs. Still, the mine makes significant contributions to the NANA region in any given year. In 2022 alone, NANA has received 172.5 million in net proceeds from Red Dog Mine.
In the past, NANA has relied on Red Dog Mine to fund dividends and other programs including regional investments, the NANA Elders Settlement Trust and the Aqqaluk Trust, Lincoln said. More recently, NANA’s operating companies have become profitable enough to enable the board to invest Red Dog proceeds for the long-term benefit of shareholders, he said.
This is why the shareholders currently receiving NANA dividends should experience no disruptions after the creation of the fund: Their payouts will continue to be funded by NANA’s businesses until the permanent fund balance grows enough.
When the fund balance reaches $750 million, beneficiaries will start receiving dividends from it, he explained. The fund is designed to grow over time to account for inflation and increasing shareholder population.
The anticipated first contribution from the net proceeds to the shareholder permanent fund will happen in fiscal year 2024. The maximum amount of the permanent fund distribution will be determined each year using a formula based in part on the prior year’s permanent fund distribution and in part on the value of the permanent fund.
In total, more than 86% of the NANA members who voted approved the amendments.
“This is a historic vote that creates stability and a strong base for our financial future,” NANA Board Chair Ely Cyrus said in a statement.