If all $500M is utilised for an acquisition the D/E would be at...

If all $500M is utilised for an acquisition the D/E would be at ~600%, which is high. Although from current NPAT it could be paid off in 6 years, not including income from acquisitioned royalties. The business model is strong, negative equity could be sustained with the right asset. Question is could they find another Area C style royalty to acquire at a reasonable price, given that they were a split entity to attain this current position.

Acquisitions aside, on a purely income driven analysis on the IO price, FMG presents a better position/return on IO price than DRR. IO low price in Oct 2021 presented a better buying opportunity with FMG than DRR, as FMG SP doubled since with same rising IO price that DRR is valued at, while DRR only increased 50%.