Deterra Royalties (ASX:DRR) has provided a quarterly portfolio update for the period ended 30 September 2024.
HIGHLIGHTS
- Completed acquisition of Trident Royalties plc (Trident):
- Acquisition in line with investment strategy, delivering diversification and optionality
- 22 royalty and offtake assets covering lithium, gold, copper, silver, iron ore and mineral sands across 11 countries added to the portfolio
- Portfolio revenue of $53.1 million for the September 2024 quarter, down 9.2% from the prior quarter including:
- Mining Area C (MAC) iron ore revenue royalties of $50.7 million:
- Down 12.7% on prior quarter on lower volumes and realised pricing
- Gold offtakes net realised margin of $1.9 million attributable to Deterra
- Other royalties of $0.5 million
- Gold offtake contracts performing strongly on record gold pricing:
- Net realised margin of $5.7 million for the full quarter on a pro-forma basis
- Subsequent to the quarter, significant progress on the Thacker Pass Lithium Project in Nevada, USA with its owner, Lithium Americas Corporation, announcing:
- A US$625 million investment agreement with General Motors Holdings LLC to fund, develop, construct and operate Thacker Pass
- Closing of the US$2.26 billion loan from the U.S. Department of Energy
- Mining Area C (MAC) iron ore revenue royalties of $50.7 million:
Julian Andrews, Managing Director and Chief Executive Officer of Deterra commented:
“It is pleasing to report another quarter of strong revenue for the Company. The Mining Area C royalty continues to deliver consistent cash flow. As previously reported, the South Flank expansion is now complete and at nameplate capacity we expect the MAC royalty to be the foundation of our portfolio for some time to come and continue to deliver value for our shareholders.”
“Integration of the Trident assets into the business is well advanced and it is also pleasing to see the gold offtake contracts generating meaningful revenues on record gold pricing. In the four-week period since completion of the deal, these offtakes contributed $1.9 million in realised margins.”
“Subsequent to the reporting period, we have also seen material progress at Thacker Pass, with Lithium Americas Corporation announcing the closing of the US Department of Energy US$2.26 billion loan, and a US$625 million joint venture agreement with General Motors to fund, develop, construct and operate the project. Taken together, these announcements substantially de-risk the project, and capex for Phase 1 is now largely secured.”
“Royalties over multi-billion-dollar development projects in Tier 1 jurisdictions are rare. In Thacker Pass we saw a countercyclical opportunity to invest in an asset that shows the hallmarks of a MAC-like asset 25 years ago. The support of General Motors and the U.S. Department of Energy are strong endorsements of our investment case and highlight the strategic importance of Thacker Pass to meet growing domestic requirements for lithium in the U.S..”
