Deterra Royalties (DRR) Investor Day 2025 summary

Strategy and Business Model

• Focuses on top-line exposure to mining activity, minimizing risks from operating costs and capital overruns, and benefiting from mine expansions at no additional cost.

• Prioritizes high-quality, long-life assets with strong operators in low-risk jurisdictions, emphasizing optionality for future expansions and diversification across bulk, base, and battery metals.

• Maintains a disciplined, value-driven investment approach, targeting value-accretive opportunities in developed mining jurisdictions, primarily Australia and North America, with no set targets for commodity mix or capital deployment.

• Unique among ASX-listed royalty companies, offering diversified exposure beyond precious metals and focusing on ESG diligence with a net zero emissions target for its own operations.

• Investment screening is rigorous, focusing on net asset value, project-specific cost of capital, and robust scenario testing for production and risk.

Portfolio Highlights and Developments

• Mining Area C (MAC) remains the core asset, a 145Mtpa iron ore hub operated by BHP with a >45-year mine life, generating significant cash flow and benefiting from recent expansions and capacity payments.

• Thacker Pass lithium royalty, acquired via Trident, is a world-class, long-life asset with strong backing from GM and the US government, fully funded through construction, and a four-phase plan to expand to 160ktpa LCE.

• Gold Offtakes, though non-core, have outperformed expectations, delivering $7.2m cash in 1H25 and providing meaningful short-term cash flow; divestment is considered only at compelling value.

• Additional assets like Preciosa (silver), Antler (copper-zinc), and Minbull (copper) offer near-term catalysts and longer-term optionality, with La Preciosa silver production commencement as a near-term milestone.

• Recent Trident Royalties acquisition was immediately accretive to NAV, increasing portfolio optionality and providing immediate cash flow from gold offtakes.

Financial Guidance and Capital Management

• Maintains a strong balance sheet with $500 million in revolving credit lines and ~$200 million available liquidity for investments, supporting patient, value-driven investment decisions.

• Declared a fully franked dividend of AUD 0.09 per share, with a 75% payout ratio of NPAT; FY2025 interim dividend declared at 9.0 cents per share, fully franked.

• Capital management framework targets a minimum 50% NPAT dividend payout, with flexibility for higher ratios based on liquidity and debt levels; target leverage is 0–15% of enterprise value.

• Strong cash flow generation from cornerstone assets and gold offtakes provides flexibility to pay down debt or fund new investments; one-off receipts are used to pay down debt.

• Technical due diligence for new investments is thorough, leveraging both internal and external expertise, especially for novel projects like Thacker Pass.