Deterra Royalties (ASX: DRR) has provided it’s annual report for the financial year ended 30 June 2025.
In his address, Managing Director and CEO Julian Andrews said the Company was signing off on another set of strong full-year results, with total revenue of $263.4 million, up 10% on FY24.
At MAC, volume growth partly offset softer realised iron ore pricing and with the $20 million capacity payment following completion of the South Flank expansion, revenue from our foundational asset was steady at $219.3 million.
Revenue from the gold offtake contracts acquired during the year contributed $21.5 million and other assets $2.6 million.
Full year earnings before interest, tax, depreciation and amortisation (EBITDA) was $238.1 million, up 4% on the prior year. EBITDA margin of 90% (FY24: 95%) reflected one-off costs associated with the Trident Royalties transaction of $12 million.
The Board has declared a final dividend of 13 cents per share, fully franked. This brings the total dividend for FY25 to 22 cents per share, fully franked, representing 75% of net profit after tax (NPAT).
In the five years since our listing in 2020 we have now returned $676 million to shareholders by way of fully franked dividends.
Executing our strategy
In this letter each year since our listing in 2020, we have spoken about our strategy to add value to the business through patient and disciplined investment in good quality royalty and streaming assets that add earnings growth and optionality to our business.
Consistent with that strategy, in September last year we announced the successful completion of our acquisition of Trident Royalties – an on-strategy, counter cyclical investment that added 22 new royalties and royalty-like assets to our portfolio.
Our investment decision was based on value – it was an opportunity to acquire a portfolio that provided immediate cash flow, high quality growth and longer- term optionality at a price below the value we saw in it. At the core of this acquisition was a royalty over the Thacker Pass Lithium Project in Nevada, USA, which has the potential, similar to MAC, to operate for many decades as one of the highest quality operations amongst its commodity peers.
In the period since completion of the deal, these new assets have consistently outperformed our expectations. We have seen significant de-risking of the flagship Thacker Pass asset with funding of over US$3 billion confirmed and a positive Final Investment Decision (FID) announced in April. As a result, the project has moved from a development stage asset to construction, with production expected to begin in 2027.
Further, in an example of how our business model can participate in value enhancement, in January the project operator Lithium Americas Corporation released an updated non-JORC Technical Study (NI 43-101)1 which increased the project’s reserves and resources by 286% and 177% respectively.
The gold volumes we received under the offtake contracts acquired have been strong and with high gold pricing and volatility these assets have generated substantial revenue, more than offsetting the interest cost of the debt used to fund the total acquisition over the period.
The Trident acquisition is an example of how our investment strategy can deliver value and we remain focused on executing it in a patient and disciplined manner.
Asset performance
Mining Area C iron ore royalty
MAC had another outstanding year, producing a record 140.1 million wet tonnes (mwt) for the year. Production volumes have now more than doubled over the past five years as the South Flank expansion reached and exceeded nameplate capacity this year, resulting in record overall volumes from the combined MAC operation. This increase in volumes largely offset the decrease in realised iron ore pricing that we experienced during FY25.
Thacker Pass Project lithium royalty
Since acquiring our royalty over Thacker Pass in September last year, and in addition to reserve and resource increases, the project has met several key milestones as it has moved from development to construction:
- More than US$3 billion of funding for Phase 1 was secured.
- Construction at the mine site began following FID in April, with first concrete poured in May. All long lead items have been awarded and over 70% detailed engineering design is complete.
The project remains on track for mechanical completion and first production in late 2027.
- Lithium Americas (LAC) “NI 43-101 Technical Report on the Thacker Pass Project Humboldt County, Nevada, USA” dated effective 31 December 2024
- Relative to LAC’s “Feasibility Study National Instrument 43-101 Technical Report for the Thacker Pass Project Humboldt County, Nevada, USA”, dated effective November 2, 2022
Looking ahead
Looking to the financial year ahead, prevailing global market conditions are favourable for resources royalties companies and conducive to the royalty model as a complimentary source of potential funding for resources project developers. We see strong demand for many of the commodities on which we focus. With greater uncertainty around availability of the capital to fund the investment in new supply needed to meet that demand, we look forward to working with owners of high quality projects to provide long-term funding solutions.
Our current portfolio is well positioned, with royalties over a mix of high quality producing, construction and development mines and projects in well established mining jurisdictions. Our balance sheet is strong and offers flexibility to provide ongoing shareholder returns as well as the strategic optionality to diligently pursue shareholder value creation opportunities through strict royalty investments and financing opportunities.
Deterra’s clear, simple business model offers investors a unique exposure to resources investments that minimises downside exposure to operating risk and operating cost inflation.
The Trident acquisition provides a good example of how our strategy can deliver value through thoughtful capital investment and we remain focused on executing it in a patient and disciplined manner.
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View Deterra’s Corporate Governance Statement
