Deterra Royalties (ASX:DRR) has provided a portfolio update for the quarter ended 31 March 2025.
HIGHLIGHTS
Portfolio revenue of $61.9 million for the March 2025 quarter, up 4% from the prior quarter:
Mining Area C (MAC) delivered strong iron ore revenue royalties of $55.6 million, up 5% on prior quarter with higher realised pricing offsetting lower sales volume; and
Gold offtakes delivered net realised margin of $5.6 million up 7% on prior quarter with record margins achieved on 69.3 thousand ounces (koz) delivered.
Lithium Americas Corporation (LAC) and strategic partner General Motors Holdings LLC (GM), announced Final Investment Decision for Phase 1 of the Thacker Pass Lithium Project, Nevada, US:
Thacker Pass is fully funded for the US$2.9 billion Phase 1 project capital expenditure
Project construction is well underway with Bechtel as EPCM and first production targeted for 2027
Julian Andrews, Managing Director and ChiefExecutive Officer of Deterra commented:
“We are delighted to report another quarter of consistently strong revenue and milestone developments at both Thacker Pass and across our asset portfolio.
“Mining Area C delivered strong cash flow, leveraged to iron ore prices, while the strong gold price and elevated volatility saw record margins per ounce delivered from gold offtakes.
“Phase 1 of the Thacker Pass Lithium Project is now fully funded, and Lithium Americas and General Motors have taken Final Investment Decision. Thacker Pass is the world’s largest lithium deposit and with first production targeted for 2027, the project is well-timed to capitalise on strong global lithium forecasts.
“Our strategy to build a diversified resource royalty portfolio that delivers new, complimentary revenue streams to our cornerstone Mining Area C (MAC) royalty remains unchanged and we continue to assess royalty investments and financing opportunities with a disciplined and patient approach.”
Record Volumes from Mining Area C IronOre Mine during FY25
During FY25, MAC has delivered record volumes from the Central Pilbara hub following completion of the ramp up of South Flank in FY24. Production for the March 2025 quarter was 32.8Mwmt (100% basis), a decrease of 6% compared to the prior quarter. Implied average iron ore pricing increased 13%, offsetting decreased sales of 7% on the prior quarter.
Deterra receives a royalty of 1.232% of Australian dollar denominated quarterly FOB revenue from the MAC royalty area. Additional one-off capacity payments of A$1 million per one million dry metric tonne (Mdmt) increase in annual mine production are determined for the period ending 30 June. The current demonstrated annual capacity level is 118Mdmt.
Final Investment Decisiontaken onfully-funded Phase 1ThackerPass Lithium Project
LAC and strategic partner GM announced a Final Investment Decision for Phase 1 of Thacker Pass on 1 April 2025. GM is LAC’s largest shareholder (7%) and holds 38% of the Thacker Pass Joint Venture (LAC 62%). GM has offtake rights for up to 100% of Phase 1 production volumes and up to 38% of Phase 2 production volumes for 20 years.
Thacker Pass is fully funded for both the US$2.9 billion Phase 1 project capital expenditure and at the corporate level for the development and construction of Phase 1 via:
GM’s US$945 in million investments;
DOE US$2.3 billion closed loan with 24 year tenor at US Treasury rate with 0% spread; and
Work Force Hub – build out will align with construction schedule – earth works are complete; engineering is being finalised; installation of utilities and foundation work progressing;
Thacker Pass Plant Areas – excavation of the process plant is 90% complete; concrete placement forecasted to begin by May 2025;
Procurement Pricing – all long-lead equipment has been awarded; commenced field purchases for goods and services; over 70% of procurement packages received recent market feedback; and
Detailed Engineering – over 50% detailed engineering design complete and continuing to advance.
Thacker Pass is the world’s largest measured lithium resource and reserve, targeting total production capacity of 160,000tpa of battery-quality lithium carbonate to be developed in four phases of 40,000tpa each. The latest NI 43-101 (non-JORC) technical report for the project includes project economics for expansion potential to 160,000 t/y Li2CO3 over an 85-year mine life, and C1 operating costs for years 1-25 of US$6,238/tonne.
Deterra holds a 4.8% gross revenue royalty over Thacker Pass (reducing to 1.05% gross revenue royalty, after expected exercise of a partial royalty buyback, which would see US$13.2 million paid to Deterra at or around the time of first production).
