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(Alliance News) -Â Blackrock World Mining Trust PLC on Wednesday reported a interim outperformance versus its reference index.
Net asset value per share edged down to 428.24 pence at the end of June from 433.17p at December 31.
Over the period, its NAV returned 3.4% while its reference index, the MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, slipped 0.7%.
The company's "strong relative result" compared with most other sectors was due to its exposure to highly cash generative companies such as iron ore producers, the firm said, as well as to gold miners which have continued to sell what they have produced at gradually rising prices.
"Mining companies should be well-placed to withstand the economic weakness relative to other sectors given their balance sheet strength. Strong capital discipline should also help miners weather the volatility, as well as the sector being a key beneficiary of increased infrastructure spending and a recovery in demand. Whilst huge uncertainties remain over the short-term outlook, the quality bias in the portfolio, with a focus on companies with stronger balance sheets and lower costs, should hold the company in good stead," said Blackrock World Mining.
Its total payout for the six month period was 8.00p, flat on a year ago.
Shares in Blackrock World Mining closed down 0.1% at 413.50p in London on Wednesday.
The firm added that it has made a positive adjustment of 31 basis points to its NAV as at Tuesday.
The investment company said the increase was due to the receipt of tax reclaims totalling GBP2.6 million from Her Majesty's Revenues & Customs.
Blackrock World Mining explained that until 2009, while dividends paid to the company by UK companies were not subject to UK corporation tax, dividends paid to the company by non-UK companies were subject to corporation tax. The company's investments include shares issued by both UK companies and non-UK companies.
A number of cases were brought against the UK HMRC on the grounds that the difference in treatment was illegal under European Union law.
In 2018, the UK Supreme Court ruled that dividends on non-UK portfolio shareholdings were taxable but that credit should be given for the underlying foreign tax at the foreign nominal corporate income tax rate of the source country.
Blackrock said it has now been contacted by the HMRC in regard to a corporation tax refund. It added that while the amount to be repaid has not yet been formally agreed, it expects to receive GBP2.6 million.
By Ife Taiwo; ifetaiwo@alliancenews.com and Lucy Heming;Â lucyheming@alliancenews.com
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