Deterra’s Revenue Climbs 10% as Thacker Pass Draws $435M DOE Loan

• Portfolio revenue up 10% to AUD 58.5 million for September quarter
• US$82 million divestment of non-core precious metals assets with ~28% pre-tax IRR
• First US$435 million drawdown from US Department of Energy loan for Thacker Pass
• Construction at Thacker Pass lithium project over 70% de-risked, first production targeted late 2027
• Managing Director Julian Andrews resigns; Jason Neal appointed interim CEO

Strong Quarterly Revenue Growth

Deterra Royalties Limited has delivered a solid September quarter, reporting portfolio revenue of AUD 58.5 million, a 10% increase compared to the prior year. This growth was primarily driven by higher iron ore royalties from its flagship Mining Area C (MAC) asset in Western Australia, where both production volumes and realised pricing improved. The company also benefited from gold offtakes, which contributed AUD 4.2 million in net revenue despite a decline in delivered ounces due to capped volumes.

Strategic Divestment of Non-Core Assets

In line with its strategy to focus on core assets, Deterra completed the sale of non-core precious metals assets for US$82 million (approximately AUD 124 million). These disposals, which included gold offtake portfolios and silver royalty assets, delivered an attractive pre-tax internal rate of return of around 28%. Proceeds from these sales are earmarked to reduce company debt, strengthening Deterra’s balance sheet and enabling further investment in growth projects.

Progress on Thacker Pass Lithium Project

The company’s investment in the Thacker Pass lithium project in Nevada continues to advance, supported by a significant US$2.23 billion loan facility from the US Department of Energy (DOE). Deterra’s partner, Lithium Americas Corporation, drew down the first US$435 million tranche to accelerate construction activities. With detailed engineering largely complete and over 70% of project risks mitigated, the project is on track to commence first lithium carbonate production by late 2027. The DOE’s equity stake and ongoing support underscore the strategic importance of Thacker Pass in the US battery materials supply chain.

Portfolio Diversification and Development Updates

Beyond lithium and iron ore, Deterra holds royalties in copper and lithium projects across the US, including the Antler Copper Project in Arizona and the Paradox Lithium Project in Utah. The Antler project recently underwent a successful takeover by Kinterra Materials, while Anson Resources, operator of the Paradox project, is progressing with a lithium extraction demonstration plant funded by POSCO Holdings. These assets add optionality and potential upside to Deterra’s royalty portfolio.

Leadership Transition

In a notable corporate development, Managing Director and CEO Julian Andrews announced his intention to step down by the end of the calendar year for personal reasons. Jason Neal, a non-executive director with extensive mining and capital markets experience, has been appointed interim CEO. The board has commenced a search for a permanent successor, signaling a period of leadership transition as the company continues to execute its growth strategy.

Overall, Deterra’s September quarter update reflects a company balancing steady cash flow generation from established royalties with strategic asset sales and advancing high-potential lithium projects, all while navigating executive changes.

Bottom Line?

With a strengthened balance sheet and key projects advancing, Deterra is poised for growth but faces leadership uncertainty ahead.

Questions in the middle?

• Who will be appointed as Deterra’s next permanent CEO and what strategic direction will they pursue?
• How will the sale of non-core assets impact Deterra’s future royalty revenue streams?
• What are the key risks and timelines for the Thacker Pass lithium project reaching production?