Deterra Royalties (DRR) Investor Day 2025 summary

Strategic Overview and Business Model

• Focuses on disciplined, value-driven investment in diversified mining royalties, prioritizing bulk, base, and battery/ electrification commodities over precious metals, with minimal operating or capital cost risk.

• Portfolio anchored by cornerstone royalties over BHP's Mining Area C (MAC) iron ore hub and Lithium Americas' Thacker Pass lithium project, both long-life, low-cost assets.

• Strategy targets high-quality, cash-generating and development assets, with ongoing selectivity, patience, and no fixed capital deployment rate or commodity allocation.

• Investment process involves rigorous screening, technical due diligence, and a focus on net asset value and project-specific cost of capital, with robust scenario testing.

• ESG diligence is integral, with a net zero emissions target for operations and assessment criteria covering environment, social, and governance factors.

Portfolio Developments and Asset Updates

• MAC continues to deliver strong cash flows, with future upside from capacity payments and continuous operation at nameplate capacity; South Flank reached nameplate capacity in late FY2024.

• Thacker Pass, the world's largest measured lithium resource, is fully funded, in full construction, and targets first production in Q4 CY2027 with an 85-year mine life and a four-phase plan to expand to 160ktpa LCE.

• Thacker Pass royalty structure includes an 8% gross revenue royalty (stepping down to 1.05% post-buyback), with significant optionality as the project scales.

• Gold offtake portfolio delivered $7.2m cash in 1H25, is outperforming expectations, and provides meaningful short-term cash flow and capital management optionality; divestment considered only at compelling value.

• Other assets like Preciosa (silver), Antler (copper-zinc), and Minbull (copper) add near-term optionality and diversification, with several approaching key development or production milestones.

Financial Guidance and Capital Management

• Maintains a strong balance sheet with $300 million drawn debt from revolving credit facilities, $500 million in total revolving credit lines, and ~$200 million available liquidity for investments.

• Dividend payout ratio set at a minimum 50% of NPAT, with flexibility for higher ratios; FY2025 interim dividend declared at 9.0 cents per share, fully franked.

• Target leverage is 0–15% of enterprise value, optimizing debt for future acquisitions and supporting counter-cyclical investment.

• Gold Offtakes proceeds, if divested, would be used to reduce debt; one-off receipts (e.g., MAC capacity payments, Thacker Pass buyback) used to pay down debt.

• Comfortable within banking covenants, with no immediate need to raise equity but flexibility retained for exceptional opportunities.