DRR has struggled over the last few days as iron ore royalties fell by ~25% in line with the underlying bulk commodity. DRR is a royalty scheme from one of BHP’s assets and the company simply passes 100% of the earnings through as a dividend, we do like DRR as a dividend play and it’s definitely an alternative to the large miners who can come with higher operational risk. When Iron Ore bottoms, this will be a good way to play upside in the sector.
DRR is simply a royalty stream from a Rio Tinto mine which means there is now operational risk inherent in the business. The royalty stream was actually part of Iluka Resources (ILU) until it was spun out back in 2020. As a consequence, Deterra pays out 100% of its earnings as dividends with a projected 3.5% fully franked yield, although clearly...
Deterra Royalties Limited is an Australia-based company, which is engaged in the management and growth of a portfolio of royalty assets across a range of commodities, primarily focused on bulks, base and battery metals. The Company’s portfolio includes royalties held over Mining Area C, its cornerstone asset, in the Pilbara region of Western Australia, as well as five smaller royalties, including Yoongarillup/Yalyalup, Wonnerup, Eneabba and St Ives. Its key royalty investment activities involve acquisition of royalties from third parties and providing finance to resource companies in return for royalties. The Company’s projects include Mining Area C (MAC), Yoongarillup / Yalyalup Mineral Sands Mines, Wonnerup Mineral Sands, St Ives Gold Project and Eneabba Project. MAC is located approximately 90 kilometers (km) north west of Newman Township in the Pilbara region of Western Australia, which is an iron ore province. MAC produces approximately 145 million tons of iron ore per annum.
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