Last checked at 26 Apr 2021 11:15
BlackRock World Mining Trust Plc - Portfolio UpdateBlackRock World Mining Trust Plc - Portfolio Update
PR Newswire
London, April 23
The information contained in this release was correct as at 31 March 2021. Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at:
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK WORLD MINING TRUST PLC (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 31 March 2021 and unaudited.
| Performance at month end with net income reinvested | |||||
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | 1.0% | 7.7% | 92.1% | 59.1% | 185.0% |
| Share price | -0.8% | 11.5% | 122.1% | 83.8% | 238.0% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 3.6% | 6.7% | 74.1% | 41.7% | 139.3% |
| * (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream | |||||
At month end
| Net asset value (including income)1: | 566.62p |
| Net asset value (capital only): | 554.15p |
| 1 Includes net revenue of 12.47p | |
| Share price: | 574.00p |
| Premium to NAV2: | 1.3% |
| Total assets: | £1,145.8m |
| Net yield3: | 3.5% |
| Net gearing: | 12.9% |
| Ordinary shares in issue: | 178,095,814 |
| Ordinary shares held in Treasury: | 14,916,028 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.3 Based on quarterly interim dividends of 4.00p per share declared on 12 November, 19 August and 30 April 2020 and a final dividend of 8.30p per share announced on 5 March 2021 in respect of the year ending 31 December 2021.4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2020.
| Country Analysis | Total Assets (%) | Sector Analysis | Total Assets (%) | |
| Global | 66.3 | Diversified | 40.5 | |
| Australasia | 8.1 | Copper | 20.1 | |
| Latin America | 7.0 | Gold | 19.2 | |
| South Africa | 6.1 | Iron Ore | 5.7 | |
| Canada | 4.0 | Platinum Group Metals | 5.6 | |
| Other Africa | 2.5 | Steel | 4.3 | |
| United States | 2.0 | Industrial Minerals | 2.1 | |
| Indonesia | 1.5 | Nickel | 1.5 | |
| United Kingdom | 1.0 | Silver & Diamonds | 0.2 | |
| Russia | 0.9 | Zinc | 0.2 | |
| Net Current Assets | 0.6 | Net Current Assets | 0.6 | |
| ----- | ----- | |||
| 100.0 | 100.0 | |||
| ===== | ===== |
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 6.3 |
| Debenture | 4.2 |
| BHP | 8.4 |
| Anglo American | 7.7 |
| Rio Tinto | 7.6 |
| Freeport-McMoRan | 6.0 |
| Glencore | 4.2 |
| Newmont Mining | 4.1 |
| OZ Minerals: | |
| Royalty | 1.9 |
| Equity | 1.4 |
| Barrick Gold | 3.2 |
| First Quantum Minerals | |
| Equity | 1.6 |
| Royalty | 1.5 |
| Asset Analysis | Total Assets (%) |
| Equity | 93.1 |
| Bonds | 3.5 |
| Preferred Stock | 2.8 |
| Net Current Assets | 0.6 |
| ----- | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned 1.0% in March, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +3.6% (Figures in GBP).
After a strong February, the mining sector modestly underperformed broader equity markets in March as the reflation trade eased.
Economic data from China remained resilient, with its manufacturing PMI at 51.3, for example, indicating a 13th consecutive month of expansion. However, copper and iron ore (62% fe.) prices were challenged, falling by 3.9% and 5.4% respectively, albeit remaining at strong levels.
The Chinese government announced cuts to steel production in Tangshan, a major steel-producing region in China, during the month as part of its efforts to curb carbon emissions and pollution; this put upward pressure on steel prices and downward pressure on iron ore.
Meanwhile, Chinese nickel and stainless-steel producer, Tsingshan Holding Group, announced plans to produce nickel matte (an intermediate product that can be used to make battery-grade nickel for electric vehicle batteries) which prompted concerns around potential oversupply of nickel and contributed to its price falling by 13.5%.
Strategy and Outlook
We are optimistic on COVID-19 vaccine rollouts supporting global economic growth and, in turn, commodity demand. Meanwhile, our analysis shows that the mining sector has performed particularly strongly during periods with significant increases in inflation expectations which we believe we could see this year.
Increased fiscal stimulus globally aimed at kick-starting economies in the COVID-19 crisis is being geared towards infrastructure spending which should support mined commodity demand. Meanwhile, we see the mining sector playing a crucial role in supplying the materials required for low carbon technologies e.g. wind turbines and solar panels.
Capital expenditure has been slashed by the miners since the peak in 2013 which is constraining new commodity supply and supporting prices. Whilst capital expenditure has risen since 2016, it is still a long way below the peak and we are encouraged by rhetoric from management teams around continued capital discipline.
Mining companies have focused on paying down debt in recent years and balance sheets are exceptionally strong today as a result. Given ongoing discipline, capital is being returned to shareholders in the form of dividends and buybacks. Meanwhile, we see potential for dividend upside given that prices for mined commodities have surprised to the upside e.g. iron ore.
All data points are in USD terms unless stated otherwise.
26 April 2021
Latest information is available by typing www.blackrock.com/uk/brwm on the internet. Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.