Deterra Royalties Limited — Investor Presentation 2021

Aug 17, 2021

3

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Australian Securities Exchange Notice

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18 August 2021

ASX: DRR

FY21 Financial Results and Outlook Presentation

Deterra Royalties Limited (ASX: DRR) ( Deterra or Company ) is pleased to release a results and outlook presentation for the period ended 30 June 2021. An investor and analyst briefing will be held at 10:00 (AWST) / 12:00 (AEDT) today by Mr Julian Andrews, Managing Director and Chief Executive Officer, and Mr Brendan Ryan, Chief Financial Officer.

The live audio webcast and on-demand replay of the results briefing will be available at www.deterraroyalties.com and via the following link:

• https://edge.media server.com/mmc/p/4pbzkzon

This document was approved and authorised for release by Deterra’s Managing Director.

Ian Gregory Company Secretary

Investor and media enquiries:

Rob Ward Corporate Development and Investor Relations Mobile: + 61 (0) 431 596 831 Email: robert.ward@deterraroyalties.com

Brendan Ryan Chief Financial Officer Phone: +61 8 6277 8880 Email: investor.relations@deterraroyalties.com

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Deterra Resources Limited • ACN 641 743 348 • Level 5 216 St Georges Terrace Perth WA 6000 T +61 (0)8 6277 8880 • www.deterraroyalties.com

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18 August 2021

Julian Andrews Managing Director and Chief Executive Officer

Brendan Ryan Chief Financial Officer

The resources investment that pays

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Im ortant notices and disclaimer p

This presentation has been prepared by Deterra Royalties Limited (“Deterra”, “the Company”). By accessing this presentation you acknowledge that you have read and understood the following statement.

The material in this presentation is general background information about Deterra and its activities current as at the date of the presentation on 18 August 2021. The information in this presentation is given in summary form and does not purport to be complete. Information in this presentation is provided to assist sophisticated investors with their own analysis of the Company but should not be relied upon as a predictor of future performance. The current outlook parameters supersede all previous key physical and financial parameters. The information in this presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investors. Investors should consider these factors and consult with their financial, legal or other professional adviser.

This presentation should be read in conjunction with Deterra's other periodic and continuous disclosure announcements which are available at www.asx.com.au.

Reporting Period

Financial Year 2021, FY21 and Period ended 30 June 2021 all refer to the period 15 June 2020 to 30 June 2021.

Reserves, resources and other technical information

Except where otherwise stated, the information in this presentation relating to the mining assets to which Deterra's royalty interests are referrable is based solely on information publicly disclosed by the owners or operators of these mining assets and information and data available in the public domain as at the date of this presentation, and none of this information has been independently verified by Deterra. Accordingly, Deterra does not make any representation or warranty, express or implied, as to the accuracy or completeness of such information. Specifically, Deterra has limited, if any, access to the mining assets in respect of which royalties are derived by the Deterra. Deterra generally relies on publicly available information regarding the mining assets and generally have no ability to independently verify such information.

Forward-looking Statements

This presentation contains certain statements which constitute “forward-looking statements”. Often, but not always, forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “expect”, “plan”, “believes”, “estimate”, “anticipate”, “outlook” and “guidance”, or similar expressions, and may include, without limitation, statements regarding plans; strategies and objectives of management; anticipated performance; estimates of future expenditure; expected costs; estimates of future royalty income, product supply, demand and consumption; statements regarding future product prices; and statements regarding the expectation of future Mineral Resources and Ore Reserves.

Where Deterra expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and on a reasonable basis. No representation or warranty, express or implied, is made by Deterra that the matters stated in this presentation will in fact be achieved or prove to be correct.

Forward-looking statements are only predictions and are subject to known and unknown risks, uncertainties, assumption and other important factors that could cause the actual results, performances or achievements of Deterra or the underlying royalty assets to differ materially from future results, performances or achievements expressed, projected or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Such risks and factors include, but are not limited to: the risks and uncertainties associated with the ongoing impacts of COVID-19, the Australian and global economic environment and capital market conditions; changes in exchange rate assumptions; changes in product pricing assumptions; major changes in mine plans and/or resources; changes in equipment life or capability; emergence of previously underestimated technical challenges; increased costs and demand for production inputs; and environmental or social factors which may affect a licence to operate, including political risk.

To the extent permitted by law, Deterra, its officers, employees and advisors expressly disclaim any responsibility for the accuracy or completeness of the material contained in this presentation and exclude all liability whatsoever (including in negligence) for any loss or damage which may be suffered by a person as a consequence of any information in this presentation or any error or omission therefrom. Deterra does not undertake to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

No independent third party has reviewed the reasonableness of the forward-looking statements or any underlying assumptions.

Past performance

Investors should note that past performance metrics and figures in this presentation are given for illustrative purposes only and cannot be relied upon as an indicator of (and provide no guidance as to) future Deterra performance, including future share price performance. Any such historical information is not represented as being, and is not, indicative of Deterra's views on its future financial condition and/or performance.

Non-IFRS Financial Information

This document may contain non-IFRS financial measures including EBITDA, Underlying EBITDA, EBIT, free cash flow, and net debt amongst others. Deterra management considers these to be key financial performance indicators of the business and they are defined in the FY21 Annual Report (18 August 2021). Non-IFRS measures have not been subject to audit or review.

All figures are expressed in Australian dollars unless stated otherwise.

In accordance with ASX Listing Rule 15.5, Deterra confirms that this presentation has been authorised for release to ASX by Deterra's Managing Director.

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A better wa to invest in the resources industr y y

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► Operate with Integrity
► Monitor Performance
► Maintain Transparency
Delivering
attractive and
sustainable
shareholder
returns
► Diversify our Portfolio
► Act with Discipline
► Manage Risk
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Achievements for FY21

Successful demerger & ASX listing

• Board and management team fully in place

• Implemented lean corporate structure

Lean business model delivering strong financial performance

• Revenue of $145.2 million with an NPAT of $94.3 million[1]

• Underlying EBITDA of $135.5 million at a Post-demerger margin of 96%

• Declared a Final Dividend of 11.52 cents per share (fully franked) distributing 100% of NPAT

Realising and developing value-accretive growth options

• MAC South Flank achieved first ore – growth of 80 million wet metric tonne per annum (Mwmtpa) capacity underway bringing total MAC capacity to 145Mwmtpa

• Identification and evaluation of new royalty opportunities

Committed to sustainable shareholder returns

• Established ESG assessment criteria for new investments

• Targeting net-zero operational Greenhouse Gas footprint by end FY22

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(1) Period 15 June 2020 to 30 June 2021. See slide 2 for details.

Deliverin stron financial outcomes g g

Statutory accounts[1] Attributable to[2] :

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Total Revenue Revenue Revenue
$145.2M $29.3M $115.9M
Underlying EBITDA [3] Underlying EBITDA Underlying EBITDA
$135.5M $24.4M $111.1M
NPAT NPAT NPAT
$94.3M $20.4M $73.9M
Dividends per share [4]
DPS [4] DPS
17.83¢
3.86¢ 13.97¢
(100% of NPAT)
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• (1) Refers to results for period 15 June 2020 to 30 June 2021.

• (2) See notes on slide 7.

• (3) See notes on slide 2 – Non-IFRS Measures.

• (4) Pre-demerger dividends per share shown based on the share count for the period immediately following demerger and is included in total dividends on this same basis.

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Financial results

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FY21 re ortin eriod p g p

Deterra Royalties Limited (DRL) was incorporated 15 June 2020 and successfully demerged from Iluka Resources on 2 November 2020

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Royalty revenue begins
DRL Incorporated (15 Jun) to accrue to DRR [3] DRL Pays Dividend to Iluka (30 Oct)
DRL demerged from Iluka (2 Nov)
DRL Acquires DRML [1] from Iluka (30 Jun)
Costs begin to accrue to DRR (1 Nov)
1 Jun 2020 1 Jul 2020 1 Oct 2020 1 Nov 2020 30 Jun 2021
FY21 reporting period
Pre-demerger Period Post-demerger Period
ILU beneficial ownership DRR beneficial ownership
Royalty Revenues [2]
Operating Expenses [2]
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• (1) Deterra Royalties (MAC) Limited, the entity which holds the MAC Royalty, the Doral royalty interests, the Sheffield royalty interest and the Cable Sands royalty interest.

• (2) Under the terms of the demerger separation agreements, Iluka Resources was entitled to DRL earnings to 30 September 2020 and responsible for costs to 31 October 2020. (3) DRR is defined as shareholders of Deterra Royalties Limited (DRL) following the implementation of the demerger on 2 November 2020.

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Minin Area C Ro alt erformance g y y p

The MAC Royalty performed strongly in a backdrop of a robust iron ore price environment

MAC quarterly receipts and implied sales price AUD million, A$/tonne (FOB, Australia)

Revenue breakdown

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AUD million AUD million, A$/tonne (FOB, Australia)
FY21 MAC Revenue royalty FY21 Capacity payment
1
Other royalties Demerger-related adjustment
253.7
214.3
0.8 [4.8]
2.0 156.4 155.0 2.0
143.1
133.2 132.7
116.5
1.0 52.8
36.3
23.7 20.3 21.3 25.6 24.1 24.4
$145.2
million
Jun Dec Mar Jun Sep Dec Mar Jun
2019 2019 2020 2020 2020 2020 2021 2021
137.6 Revenue royalty Capacity payment Implied sales price (A$/dmt)
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• (1) On 30 June 2020, Deterra Royalties Limited (DRL) acquired Deterra Royalties (MAC) Limited (DRML). The acquisition has been treated as an asset acquisition and the June 2020 quarter royalty receivable that was accrued for ahead of the transaction amounted to $21.7M. The adjustments include $1M increase for the receipt of a capacity payment and $3.8M for higher revenue royalties than forecast at 30 June 2020.

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Robust financial erformance p

Offering a lower risk, higher margin exposure to the resources sector, with a focus on shareholder returns

Simple and transparent business model, providing investors strong visibility on earnings, cash flows and dividends without full exposure to some of the key operating risks of mining businesses

Illustrative FY21 statement of profit or loss AUD million

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Total Costs [1] $10.1 million
Net tax [2] impact $40.9 million
Total Revenue
MAC $139.6 million
$145.2M
$94.3 million
FY21 NPAT
Other $0.8 million
Demerger adjustment
$4.8 million
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• (1) Costs accrued from November 2020 and includes $4.6M of one-off demerger-related expenses.

• (2) Valuation gain on acquired receivable ($6,512,000) offset by Income tax expense from acquired receivable ($6,512,000) on acquisition of Deterra Royalties (MAC) Limited by Deterra Royalties Limited.

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Deliverin stron shareholder returns g g

Building a track record of disciplined capital management and shareholder returns

• 100% NPAT • Dividend policy of 100% of NPAT[1] Payout • Franked to maximum extent possible

• Conservative capital structure

• Low Debt • Allows opportunistic investment

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Low Cost
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• Lean team and cost base

• Highly scalable corporate structure

• FY21 final dividend of 11.52 cents per share (fully franked) • Record date: 3 September 2021 • Payment date: 22 September 2021

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H1 FY21 attributable to ILU
Demonstrated 100% payout ratio H1 FY21 attributable to DRR
AUD million H2 FY21 attributable to DRR
94.3
11.52c/share
60.9
100% franked
2.45c/share
12.9
100% franked
20.4
NPAT Pre-Demerger Post-Demerger Post-Demerger
(Iluka) FY21 Interim FY21 Final
Dividends paid or declared
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(1) Deterra’s approach to dividends and dividend policy will be determined by the Deterra Board at its discretion and may change over time.

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Strategy and outlook

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Our core asset – the Minin Area C Ro alt … g y y

Low-risk exposure to a large, low-cost iron ore mining complex that is set to grow its volumes by approximately 2.4 times

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Low-cost operations with long life Significant near-term growth Resource upside in a low-risk
through South Flank expansion jurisdiction
Iron ore total cash cost curve
(2025F) [1]
Mining Area C production Mining Area C
Mining
(Financial years, Mwmt) [2] (MAC) royalty area [3] Area C
1st 2nd 3rd 4th
quartile quartile quartile quartile
2.4x
145.0
55.1 57.3 60.6 55.8 60.6 61.6
Other MAC South Flank
2016 2017 2018 2019 2020 2021
Future
Capacity
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• (1) Source: Wood Mackenzie. Total cash costs are defined as direct cash cost associated with mining, processing and transport of marketable products, including G&A costs directly related to mine production, royalties, levies and other indirect taxes.

• (2) BHP reported MAC production volumes on a wet basis. Source: BHP Operational Review for the year ended 30 June 2021 (20 July 2021) and similar prior Operational Reviews, available at www.asx.com.au; BHP delivers first production from South Flank (20 May 2021), available at www.BHP.com.

• (3) Source: BHP, overlay of illustrative MAC royalty area. Location and mineralisation outline are for illustrative purposes only.

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… is levera ed to South Flank rowth g g

Deterra’sMAC Royalty revenue is determined by BHP’s realised iron ore prices, sales volumes and foreign exchange rates

Revenue royalty payment of 1.232% of realised AUD FOB revenue from sale of MAC product:

• 2021 average realised pricing: A$200/dmt

• June 2021 Qtr pricing: A$254/dmt

• 2021 MAC sales: 55.9 million dry metric tonnes

• Forecast capacity on completion of South Flank expansion: 145 million wet metric tonnes[2]

• The sensitivity table adjacent illustrates a range of potential MAC royalty receipts under various iron ore and production assumptions.

• assumes constant AUD:USD exchange rate of 0.75

Capacity payment of A$1 million per 1 million dry metric tonne (dmt) increase in annual production at MAC[3]

MAC Royalty annual receipts – Illustrative production and price sensitivity[1] (AUD million)

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Realised Iron Ore Price:
A$/dmt (FOB)
( US$/dmt (FOB) )
80 107 133 160 187 213 240 267
(60) (80) (100) (120) (140) (160) (180) (200)
60 59 79 99 118 138 158 177 197
80 79 105 131 158 184 210 237 263
100 99 131 164 197 230 263 296 329
120 118 158 197 237 276 315 355 394
140 138 184 230 276 322 368 414 460
(Mdmt)
MAC Sales
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• (1) Excludes one-off capacity payments.

• (2) MAC sales volumes are reported on a dry basis and will vary from BHP reported production due to product moisture factors and the timing of sales and inventory movements in any reporting period. Source BHP delivers first production from South Flank (20 May 2021), available at www.BHP.com.

• (3) The threshold production for future capacity payments is now 59 Mdmt.

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Targeted growth strategy focused on value-accretive investment

Deterra’s screening process and investment criteria prioritise opportunities where it has a competitive advantage

Primary royalties

• Creating new royalties for: • Project capital

• Balance sheet repair

• • M&A finance support

Secondary royalties

Acquire existing royalties to:

• Improve liquidity

• Daylight value

• Diversify risk

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How we prioritise opportunities
Investment criteria
Size Commodity Geography Stage
ESG Value
Broad mandate Developed mining
driven by ability to (“Sweet spot” of add value ••• BulksBase metalsBattery metals jurisdictions, incl: ••• AustraliaN. AmericaS. America •• ProductionNear production ESG risk and opportunity return in excess of Ability to generate asset-specific
A$100 – A$300M) • Europe cost of capital
Other opportunities considered on merit on a case by case basis
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Growth strategy focused on increasing earnings and diversification through value-accretive investments over time.

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Ca ital structure and fundin for rowth p g g

The high-quality MAC cash flows and conservative capital management provides Deterra with strong capacity to fund growth

Net cash position at 30 June 2021 Working capital facility of $40M

Retain strong balance sheet

Maintain conservative balance Substantial sheet in line with royalty peers funding Funding decisions will depend on capacity the specifics of each investment

Focus on 100% NPAT dividend payout ratio shareholder Funding model may evolve to returns match nature of investment

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New
Other New
Cornerstone MAC Royalty Royalties Royalty Investments
Revenue
5 x small Potential
Royalty revenue = 1.232% of A$
royalty new
revenue from MAC Royalty Area [1] assets asset
Deterra Royalties
Access to
Capital
Scalable Structure: Low overheads and debt
Shareholder Returns
Shareholder distribution target 100% NPAT
payout ratio, franked to the maximum extent
possible
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(1) Deterra Royalties also received capacity payments under the MAC Royalty Agreement.

15

Committed to sustainable shareholder returns

Our sustainability roadmap outlines our commitment to transparent reporting of our ESG performance and objectives

Targeting net-zero operational GHG footprint by the end of FY22

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Six ke drivers of success y

Maximise returns

Grow value responsibly

Cash generative assets with strong embedded 1 production growth

Increase scale and diversification through 4 complementary value-accretive acquisitions

2 Low cost, scalable corporate structure and high earnings margins

• 5 Disciplined capital allocation

Focus on providing franked dividends (100% 3 NPAT)[1]

Strong balance sheet and significant debt 6 capacity

Deliver attractive and sustainable shareholder returns

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(1) Deterra’s approach to dividends and dividend policy will be determined by the Deterra Board at its discretion and may change over time.

For more information:

Investor and Media enquiries

Rob Ward

Corporate Development and Investor Relations Mobile: + 61 (0) 431 596 831 Email: robert.ward@deterraroyalties.com

Brendan Ryan Chief Financial Officer

Email: investor.relations@deterraroyalties.com

Deterra Royalties Limited ACN 641 743 348

Level 5, 216 St Georges Terrace Perth WA 6000 Telephone: +61 (0)8 6277 8880

www.deterraroyalties.com

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Appendix

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Portfolio of ro alties y

Project	Counterparty	Location	Commodity	Status	Royalty Key Terms
Mining Area C (MAC) BHP Billiton Minerals Pty Ltd; Itochu Minerals & Energy of Australia Pty Ltd; Mitsui Iron Ore Corporation Pty Ltd Pilbara, WA Iron Ore Producing 1.232% of MAC product revenue $1 million per 1Mdmt increase in capacity
Yoongarillup / Yalyalup Project (under two royalty agreements) Doral Mineral Sands Pty Ltd South West, WA Mineral Sands Producing/ Development 2% of revenue from sales of Minerals
Eneabba Project Sheffield Resources Limited Mid West, WA Mineral Sands Exploration 1.5% of gross revenue from sales of Minerals
Wonnerup Project Cable Sands (W.A.) Pty Ltd South West, WA Mineral Sands Producing $0.70 per tonne of Valuable Heavy Mineral
St Ives Gold Project St Ives Gold Mining Company Pty Ltd Eastern Goldfields, WA Minerals No known activity 3% of gross revenue (subject to conditions)

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Underlying EBITDA and earnings adjustments

Earnings and earnings adjustments1	Pre-demerger period	Post-demerger period	Total period2
	$’000	$’000	$’000
Net Profit After Tax	20,393	73,867	94,260
add back income tax expense	8,757	32,118	40,875
add back income tax expense on acquired receivable	6,512	-	6,512
Profit before tax	35,662	105,985	141,647
less Valuationgain on acquired receivable	(6,512)	-	(6,512)
add back Net finance costs and FXgains		231	231
Operating profit before finance cost	29,150	106,216	135,366
Adjustments to Underlying earnings
add back one-off demerger expenses		4,637	4,637
less demerger-related adjustments relating topriorperiod revenue	(4,848)	-	(4,848)
Total adjustments	(4,848)	4,637	(211)
Underlying EBIT	24,302	110,853	135,155
add back Depreciation and Amortisation	116	249	365
Underlying EBITDA	24,418	111,102	135,520
Adjusted Revenue	24,418	115,943	140,361
UnderlyingEBITDA margin (%)	100%	96%	97%

(1) See notes on slide 2 – Non-IFRS Measures.

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(2) Refers to results for period 15 June 2020 to 30 June 2021.

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MAC Ro alt overview y y

MAC Royalty is Deterra’s cornerstone asset and consists of annual production-related Capacity Payments and ongoing quarterly revenue payments

Illustrative MAC value chain and royalty payment mechanisms:

Mine Mine production stockpiles Rail logistics

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Capacity Payments : One-off A $1 million per one million dry metric tonne increase in annual Deterra mine production (year end 30 Royalties June)

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Current demonstrated capacity level is set at 59Mdmt

Reported quarterly Product moisture MAC production and inventory volumes in movements wet metric tonnes

Modelling considerations:

Port stockpiles

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Product moisture and inventory movements

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Customer
Ocean freight sales
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Revenue Payments: Ongoing 1.232% of Australian dollar denominated quarterly FOB revenue from the MAC Royalty Area

Product sales to customers priced with reference to FOB net-back 62% Iron Ore Fines CFR adjustment to price, Qingdao index including freight cost (per dry tonne)

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