DRR Dividend, page-11

Thanks Jungle.

On acquisitions, DRR can take on debt, modestly reducing NPAT at these low interest rates, or issue equity and dilute holders. Either would affect dividends. I would prefer debt.

It needs acquisitions to become a more balanced royaltyCo - currently almost wholly reliant on IO prices and therefore susceptible to wild swings from China sentiment and monopsony.

Surprised it didn't win the S32 royalty portfolio recently sold to Canada's Elemental Royalties for $40m cash and $15m in shares (S32 announcement 24/11/20). DRR has a distinct and enduring structural advantage as an Australian domiciled entity able to pass on Australian taxes paid to A & NZ holders as franking credits.

There are many royalty interests in place in Australia. While they are jealously guarded by the original prospectors, when royalties devolve to children or grandchildren who may not have the skills and time to manage and defend them, DRR ought to become their natural home.

Julian Andrews & team will be talking to everyone out there with royalty interests, and will have been doing so since the split was announced. They have an ASX listed equity backed by a world-class royalty asset to swap or borrow against. Their lack of progress is noted - hence my sentiment.

Ash