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Thoughts on ILU spin-off, Deterra (DRR)

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Thoughts on ILU spin-off, Deterra (DRR)

Hi James and Team .

Thanks for your ongoing commentary, website is working well and your new podcasts are great - I recently topped up on ALU following your review. I would appreciate your view on DRR, demerged from Iluka in November 2020. This mining royalties business looks really interesting with potential capital growth and dividends as the global growth continues and infrastructure investment increases. Any reduction in the iron ore price should be mitigated by these factors . General advice only.

Thanks David P.

Answer

Hi David,

ILU spin-off DRR has become a $2.4bn mining royalties business which will largely follow the Iron Ore price when dividends are included. That means it’s well positioned while the Iron Ore price remains high which is a big ask given where it’s trading.  We believe resources might come off the boil in the coming months hence our buy zone for DRR is closer to $4.20 i.e. 8% lower – we’re not a buyer here.

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Deterra Royalties (DRR)
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