Last checked at 16 Nov 2020 12:14
BlackRock World Mining Trust Plc - Portfolio UpdateBlackRock World Mining Trust Plc - Portfolio Update
PR Newswire
London, November 13
The information contained in this release was correct as at 31 October 2020. 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 October 2020 and unaudited.
| Performance at month end with net income reinvested | |||||
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | -1.7% | 0.0% | 18.5% | 23.2% | 137.6% |
| Share price | -0.4% | 0.0% | 26.9% | 24.4% | 137.7% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | -1.5% | -1.9% | 10.9% | 13.2% | 121.5% |
| * (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream | |||||
At month end
| Net asset value (including income)1: | 448.50p |
| Net asset value (capital only): | 438.66p |
| 1 Includes net revenue of 9.84p | |
| Share price: | 400.00p |
| Discount to NAV2: | 10.8% |
| Total assets: | 871.2m |
| Net yield3: | 5.5% |
| Net gearing: | 12.3% |
| Ordinary shares in issue: | 173,550,814 |
| Ordinary shares held in Treasury: | 19,461,028 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.3 Based on a quarterly interim dividend of 4.00p per share declared on 14 November 2019 and a final dividend of 10.00p per share announced on 27 February 2020 in respect of the year ended 31 December 2019 and two quarterly interim dividends of 4.00p per share declared on 30 April 2020 and 19 August 2020 in respect of the year ending 31 December 2020.4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2019.
| Country Analysis | Total Assets (%) | Sector Analysis | Total Assets (%) | |
| Global | 65.2 | Gold | 34.7 | |
| Australasia | 9.0 | Diversified | 31.1 | |
| Latin America | 7.6 | Copper | 19.4 | |
| Canada | 5.3 | Platinum Group Metals | 2.7 | |
| South Africa | 3.9 | Nickel | 2.3 | |
| United Kingdom | 2.5 | Iron | 1.9 | |
| United States | 1.4 | Steel | 1.9 | |
| Other Africa | 1.4 | Industrial Minerals | 1.7 | |
| Russia | 1.3 | Iron Ore | 1.6 | |
| Indonesia | 1.3 | Materials | 1.0 | |
| Argentina | 0.1 | Zinc | 0.4 | |
| Net Current Assets | 1.0 | Silver & Diamonds | 0.2 | |
| ----- | Aluminium | 0.1 | ||
| 100.0 | Net Current Assets | 1.0 | ||
| ===== | ----- | |||
| 100.0 | ||||
| ===== |
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 5.4 |
| Debenture | 3.7 |
| BHP | 7.1 |
| Rio Tinto | 6.6 |
| Newmont Mining | 6.4 |
| Anglo American | 6.3 |
| Barrick Gold | 6.1 |
| Wheaton Precious Metals | 4.8 |
| Freeport-McMoRan Copper & Gold | 4.4 |
| OZ Minerals: | |
| Royalty | 2.1 |
| Equity | 1.7 |
| First Quantum Minerals: | |
| Equity | 1.6 |
| Debt | 1.9 |
| Asset Analysis | Total Assets (%) |
| Equity | 93.0 |
| Bonds | 4.2 |
| Preferred Stock | 1.9 |
| Option | -0.1 |
| Net Current Assets | 1.0 |
| ----- | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned -1.7% in October, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned -1.5% (Figures in GBP).
Global equity markets lost ground in October, amid rising COVID-19 infection rates and the announcements of further lockdowns, particularly across Europe. In addition, the lead up to the US election created volatility within the market, as a result of the divergence in views between the two opposing parties, and the inability to get a stimulus package passed in the US in the run up to the election. For reference, the MSCI AC World Index fell by 2.5%.
Economic data from China pointed to a continued strong recovery. China’s Q3 GDP growth came in at +4.9%, having been at -6.8% back in Q1. Elsewhere, South Korea and Japan followed China in announcing aims to achieve carbon neutrality, with both countries targeting 2050. Investment in lower carbon technologies from these countries could be a strong source of new demand for mined commodities over the coming years.
The mining sector outperformed broader equity markets but still posted negative returns. Mined commodity price performance was mixed with, for example, the copper price up by 0.6% and gold and iron ore (62% fe.) prices down by 1.0% and 1.7% respectively (albeit gold and iron ore prices remaining at elevated levels). Turning to the companies, Q3 2020 results were generally solid and it was encouraging to see the miners remaining focused on capital discipline.
Strategy and Outlook
We expect continued volatility as the COVID-19 pandemic evolves and believe broader equity markets could be vulnerable to a pullback in the near-term. However, with balance sheets in strong shape, we believe the miners are relatively well positioned to weather economic weakness. Mined commodity prices are mostly up on a year-to-date basis, whilst costs are relatively stable, meaning we should see strong earnings growth from the miners this year. Should inflation start to rise as a result of the unprecedented monetary and fiscal policy we are seeing today, then we would expect this to put upward pressure on commodity prices. We expect mined commodity demand to be supported by increased infrastructure spending in China and the US, as well as coordinated green spending initiatives in Europe. The capital discipline story remains intact, with mining companies focused on shareholder returns through dividends and buybacks.
All data points are in USD terms unless stated otherwise.
16 November 2020
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.