Yesterday afternoon, Deterra Royalties Ltd (ASX: DRR) reported December quarter revenue growth, with MAC iron ore royalties up 15% and strong progress at its lithium portfolio.
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What did Deterra Royalties report?
- Total portfolio revenue: $62.9 million for the December quarter, up 16% on the previous quarter
- Mining Area C (MAC) royalties: $62 million, up 15% quarter-on-quarter on record sales volumes
- Other royalties: $0.9 million, a rise from $0.3 million in the prior quarter
- First US$435 million draw down received for Thacker Pass lithium project
- No interim dividend declared in this update
- Jason Neal appointed as interim Managing Director and CEO
What else do investors need to know?
The company's flagship MAC asset delivered record iron ore sales this quarter, with production rising 10% and prices improving by 6% to an average of $143 a tonne. This underpinned the solid revenue growth for Deterra, which receives a revenue royalty from BHP's Mining Area C operations.
On the lithium front, the Thacker Pass project in Nevada reached a significant milestone with the first US$435 million drawdown from a US Department of Energy loan, helping accelerate construction. The project remains on track for first lithium carbonate production by the end of 2027.
Outside these two core assets, Deterra has early-stage royalty interests in several North American battery metals projects. Highlights include Anson Resources' Paradox Lithium Project, where offtake and partnership developments continue to progress.
What did Deterra Royalties management say?
Interim Managing Director and CEO Jason Neal said:
The quarter showcased the strong, consistent cashflow from our foundation asset, MAC, underpinned by record quarterly sales, as well as a strong pricing environment.
Throughout the quarter, the Thacker Pass Lithium Project continued to advance toward first production and cashflow on our royalty. Project development is tracking well against the late CY27 target of first lithium carbonate production. The US$435 million First Draw of the DOE Loan, and the equity positions taken by the DOE in LAC and the JV, provide pathways for the JV operators to accelerate the production timeline and reinforces the US government's support of Thacker Pass as a project of strategic importance.
With our strong balance sheet, we will continue to drive value from our core MAC and Thacker Pass royalties and earlier stage royalty assets, while also diligently pursuing opportunities for royalty investments and financing through the strict lens of shareholder value creation.
What's next for Deterra Royalties?
Looking ahead, Deterra will continue to benefit from the stable cash flows generated by its MAC iron ore royalty and the ongoing development of the Thacker Pass lithium project. With construction at Thacker Pass progressing and first lithium production targeted for late 2027, Deterra is well positioned to participate in the global energy transition.
Management says Deterra will also focus on actively seeking new royalty investment opportunities to diversify and grow its earnings base, always with a clear focus on shareholder value.
Deterra Royalties share price snapshot
Over the past 12 months, Deterra Royalties shares hav risen 4%, which is in line with the S&P/ASX 200 Index (ASX: XJO).
