Deterra Royalties (ASX: DRR) has announced the sale of its La Preciosa silver assets for US$22 million (approx. A$34 million).
The company expects to generate a pre-tax profit of US$6.2 million (approx. A$9.7 million), representing a 31% pre-tax IRR upon full receipt of the US$22 million, and after payment of the US$1 million deferred consideration to Coeur.
The La Preciosa assets were acquired through the Trident acquisition less than 12 months ago and, in line with the company’s focus on bulk, base and battery electrification commodities, considered non-core to its royalties portfolio.
HIGHLIGHTS
- US$22 million (approx. A$34 million) sale of the La Preciosa silver royalties and milestone payment (described below) to the project operator, Avino Silver & Gold Mines Ltd., by way of termination of the La Preciosa royalty interests and release of a contingent milestone payment due by Avino, for the following consideration:
- US$13.25 million in cash upon completion of the termination and release; and
- US$8.75 million in cash, 12-months from completion
- Sale expected to generate a pre-tax profit to Deterra of US$6.2 million (approx.A$9.7 million), representing a 31% pre-tax IRR1 upon full receipt of the US$22 million and after payment of the US$1 million deferred consideration to Coeur
- Assets acquired through Trident portfolio for US$14.8 million
- After tax proceeds to be primarily allocated to the reduction of net debt
- Avino is fully funded to complete the transaction, reporting approximately US$37 million in cash on hand and no debt (excluding operating equipment leases) as of June 30, 2025
Julian Andrews, Managing Director and Chief Executive Officer of Deterra said:
“Deterra acquired our portfolio of precious metals assets less than 12 months ago as part of the acquisition of Trident Royalties. As highlighted at the time, precious metals are not core to our strategic investment focus on base, bulk, and battery and electrification commodities. Consistent with our strategy and our disciplined management of capital, we continuously review our portfolio for opportunities to realise value from non-core assets.”
“Deterra expects to realise a pre-tax profit of over US$6 million from the disposal, reflecting a 31% pre-tax IRR. The sale of these non-core assets provides further validation of our business model of acquiring royalties over high-quality assets, operated by established project operators.”
“Avino’s success in developing La Preciosa, coupled with the exceptionally strong silver price environment, presented an ideal opportunity to negotiate this mutually beneficial transaction. We wish Avino continued success in the development and ramp up of La Preciosa.”
La Preciosa silver royalties and milestone payment
As part of Deterra’s acquisition of Trident Royalties Plc, Deterra acquired the La Preciosa assets effective 2 September 2024, encompassing:
- 1.25% Net Smelter Return (NSR) Royalty over the defined project area
- 2.00% Gross Value Returns Royalty (GVR) over the remaining La Preciosa tenement areas
- A contingent milestone payment of US$8.75 million from Avino (which, subject to certain conditions, Avino may satisfy (at its election) up to 50% of such milestone payment with the issue of Avino shares), due within 12 months of first silver production from the La Preciosa project.
As part of the original acquisition of the assets from Coeur, Deterra is required to pay a deferred consideration of US$1 million within five business days of (i) receipt of the US$8.75 million contingent milestone payment (or alternative consideration) or (ii) if earlier, the first anniversary of the first silver production from the La Preciosa project.
