BlackRock World Mining Trust plc Regulatory News (BRWM)

Performance at month end with net income reinvested

One

Three

One

Three

Five

Month

Months

Year

Years

Years

Net asset value

6.9%

2.6%

2.4%

25.7%

86.2%

Share price

5.7%

-2.3%

-0.9%

26.6%

108.0%

MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*

6.9%

2.3%

9.3%

25.4%

72.3%

* (Total return)

Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream.

Net asset value (including income)1:

580.66p

Net asset value (capital only):

571.76p

Share price:

550.00p

Discount to NAV2:

5.3%

Total assets:

£1,236.9m

Net yield3:

6.1%

Net gearing:

11.9%

Ordinary shares in issue:

191,183,036

Ordinary shares held in Treasury:

1,828,806

Ongoing charges4:

0.91%

Ongoing charges5:

0.81%

Country Analysis

TotalAssets (%)

Global

62.4

Canada

11.9

Latin America

7.4

Australasia

6.5

United States

5.9

Other Africa

3.9

South Africa

0.7

Indonesia

0.6

Net Current Assets

0.7

-----

100.0

=====

Sector Analysis

TotalAssets (%)

Diversified

36.2

Copper

23.3

Gold

22.1

Steel

4.9

Iron Ore

3.3

Industrial Minerals

3.2

Uranium

2.6

Aluminium

1.3

Platinum Group Metals

1.3

Nickel

1.0

Zinc

0.1

Net Current Assets

0.7

-----

100.0

=====

Ten largest investments

Company

Total Assets %

BHP:

Equity

9.4

Royalty

1.4

Rio Tinto

7.0

Glencore

6.6

Anglo American

5.3

Newmont

5.2

Freeport-McMoRan

4.7

Agnico Eagle Mines

4.5

Vale:

Debenture

2.3

Equity

1.9

Teck Resources

3.7

Wheaton Precious Metals

3.5

5 

Asset Analysis

Total Assets (%)

Equity

96.9

Bonds

1.4

Preferred Stock

0.7

Convertible Bond

0.6

Option

-0.3

Net Current Assets

0.7

-----

100.0

=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV rose by 6.9% in September 2024, performing in line with its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return) which increased by 6.9% (performance figures in GBP).

The mining sector performed strongly in September as mined commodity prices rose across the board. For reference, global equity markets, as measured by the MSCI ACWI TR Index, returned +2.3%.

The main news for mining was China announcing a range of stimulus measures. This was welcome news following a ~18-month period in which weak economic data (particularly property-related data) has been the main drag on the sector. The People’s Bank of China said it would cut the reserve requirement ratio (the amount of cash banks need to hold in reserve), reduce interest rates for existing mortgages and lower the minimum down payment on home purchases. These monetary measures were then followed by a report that China also plans to issue ~2 trillion yuan of special sovereign bonds as part of a fresh fiscal stimulus package.

In the commodities space, iron ore (62% fe), copper and gold prices rose by 8.4%, 6.3% and 5.1% respectively. Meanwhile, energy costs came down during the month with the Brent oil price falling by 9.8%, suggesting a positive outlook for the miners’ margins.

Elsewhere, the uranium price rose by 3.0% as excitement built around nuclear. During the month, Microsoft signed a deal with Constellation Energy to restart its Three Mile Island nuclear plant in Pennsylvania to help power Microsoft’s data centres.

Strategy and Outlook

Near term, we expect performance to be driven by the China stimulus situation, which is evolving, and we are watching closely to see if it translates into a pickup in demand. Longer term, we expect mined commodity demand growth to be driven by increased global infrastructure build out, particularly related to the low carbon transition and increased power demand.

Meanwhile, the supply side of the equation is constrained. Mining companies have focused on capital discipline in recent years, meaning they have opted to pay down debt, reduce costs and return capital to shareholders, rather than investing in production growth. This is limiting new supply coming online and there is unlikely to be a quick fix, given the time lags involved in investing in new mining projects. The cost of new projects has also risen significantly and recent mergers and acquisitions activity in the sector suggests that, like us, strategic buyers see an opportunity in existing assets in the listed market, currently trading well below replacement costs. Other issues restricting supply include cases of governments closing mines, permitting issues and a general lack of shovel-ready projects.

Turning to the companies, balance sheets in the sector are very strong relative to history. Despite this, valuations are low relative to historic averages and relative to broader equity markets.

17 October 2024

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.