Last checked at 18 Feb 2020 16:14
BlackRock World Mining Trust Plc - Portfolio UpdateBlackRock World Mining Trust Plc - Portfolio Update
PR Newswire
London, February 18
| BLACKROCK WORLD MINING TRUST plc (LEI - LNFFPBEUZJBOSR6PW155) | |||||||||||||||
| All information is at 31 January 2020 and unaudited. | |||||||||||||||
| Performance at month end with net income reinvested | |||||||||||||||
| One | Three | One | Three | Five | |||||||||||
| Month | Months | Year | Years | Years | |||||||||||
| Net asset value | -5.6% | 2.5% | 3.4% | 9.6% | 55.9% | ||||||||||
| Share price | -6.8% | 6.2% | 6.1% | 8.7% | 61.0% | ||||||||||
| EMIX Global Mining Index (Net)* | -5.5% | 1.4% | 8.6% | 15.8% | 57.9% | ||||||||||
| (Total return) | |||||||||||||||
| Sources: BlackRock, EMIX Global Mining Index, Datastream | |||||||||||||||
| At month end | |||||||||||||||
| Net asset value including income1: | 409.21p | ||||||||||||||
| Net asset value capital only: | 398.17p | ||||||||||||||
| 1 Includes net revenue of 11.04p | |||||||||||||||
| Share price: | 357.00p | ||||||||||||||
| Discount to NAV2: | 12.8% | ||||||||||||||
| Total assets: | £805.7m | ||||||||||||||
| Net yield3: | 5.9% | ||||||||||||||
| Net gearing: | 10.2% | ||||||||||||||
| Ordinary shares in issue: | 174,639,466 | ||||||||||||||
| Ordinary shares held in treasury: | 18,372,376 | ||||||||||||||
| Ongoing charges4: | 1.0% | ||||||||||||||
| 2 Discount to NAV including income. 3 Based on quarterly interim dividends of 4.00p per share declared on 14 November 2019, 20 August 2019 and 2 May 2019 in respect of the year ended 31 December 2019 and a final dividend of 9.00p per share announced on 28 February 2019 in respect of the year ended 31 December 2018. 4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2019. | |||||||||||||||
| Sector | % Total | Country Analysis | % Total | ||||||||||||
| Assets | Assets | ||||||||||||||
| Diversified | 39.2 | Global | 63.0 | ||||||||||||
| Gold | 24.8 | Australasia | 9.1 | ||||||||||||
| Copper | 15.6 | Latin America | 8.7 | ||||||||||||
| Silver & Diamonds | 5.8 | Canada | 8.2 | ||||||||||||
| Materials | 4.9 | United Kingdom | 2.2 | ||||||||||||
| Industrial Minerals | 4.7 | South Africa | 2.2 | ||||||||||||
| Iron Ore | 1.1 | Other Africa | 1.1 | ||||||||||||
| Nickel | 0.9 | USA | 0.8 | ||||||||||||
| Coal | 0.4 | Indonesia | 0.8 | ||||||||||||
| Aluminium | 0.2 | Sweden | 0.8 | ||||||||||||
| Zinc | 0.2 | Russia | 0.7 | ||||||||||||
| Current assets | 2.2 | Argentina | 0.1 | ||||||||||||
| ----- | Kazakhstan | 0.1 | |||||||||||||
| 100.0 | Current assets | 2.2 | |||||||||||||
| ===== | ----- | ||||||||||||||
| 100.0 | |||||||||||||||
| ===== | |||||||||||||||
| Ten Largest Investments | |||||||||||||||
| Company | % Total Assets | ||||||||||||||
| BHP | 9.1 | ||||||||||||||
| Vale: | |||||||||||||||
| Equity | 4.9 | ||||||||||||||
| Debenture | 3.9 | ||||||||||||||
| Rio Tinto | 8.5 | ||||||||||||||
| Anglo American | 5.6 | ||||||||||||||
| Newmont Mining | 4.8 | ||||||||||||||
| Barrick Gold | 4.7 | ||||||||||||||
| First Quantum Minerals | 4.0 | ||||||||||||||
| Agnico Eagle Mines | 3.9 | ||||||||||||||
| Wheaton Precious Metals | 3.8 | ||||||||||||||
| Oz Minerals Brazil: | |||||||||||||||
| Royalty | 2.2 | ||||||||||||||
| Equity | 1.3 | ||||||||||||||
| Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted: |
| Performance |
| The Company’s NAV decreased by 5.6% in January, marginally underperforming its reference index, the EMIX Global Mining Index (net return), which returned -5.5%. (Figures in GBP) |
| Global equity markets came under pressure in January, with the MSCI World Index returning -0.9%. At the beginning of the year, markets were impacted by increased tensions in the middle east after a US-led drone strike killed the Iranian General, Qasem Soleimani. As we progressed through the month, stock markets were also negatively impacted by the outbreak of the coronavirus, due to fears around the impact that the epidemic could have on the global economy. |
| Against this backdrop, mined commodity prices came under pressure, with copper, aluminium and nickel prices returning -9.7%, -4.3%, and -8.5% respectively. For precious metals, the gold price rose by 4.4% in January, finishing the month at a price of $1,589/oz, as the yellow metal performed well on the back of safe-haven buying. However, gold equities lagged the move up in the gold price, partly reflecting the strong performance of the mid-cap gold companies in Q4 2019, as well as some of the higher beta names announcing poorer results than the market expected. |
| In other news, BlackRock’s CEO, Larry Fink, wrote a letter to CEO’s, as well as another open letter to clients underlining the firm’s commitment to make sustainability the new standard for investing. One important element within Larry’s letter was that BlackRock has committed to exit investments in thermal coal producers in an effort to strengthen the firm’s commitment to sustainability. For the Company, thermal coal appears in the investment universe. As a team, we have not had pure-play thermal coal exposure for some time, due to the environmental risks that we deem to be material. |
| Strategy and Outlook |
| We see an attractive valuation opportunity in mining today. The mining sector is generating close to record free cash flow, whilst balance sheets are in strong shape and companies remain focused on capital discipline. Our base case remains that we have positive global economic growth for the next 12-18 months, albeit at a slower rate than was expected this time last year. Barring an economic recession, we expect the mining sector to re-rate as the miners continue to generate robust free cash flow and return capital to shareholders through dividends and buybacks. |
| We expect most mined commodity prices to be stable to rising through 2020. On the commodity demand side, we do not anticipate a hard-landing type event in China and we have been encouraged by stimulus measures beginning to feed through into improvements in some economic data points. On the commodity supply side, supply is tight in most mined commodity markets and, given the cuts in mining sector spending since 2012 (down ~66%), we expect it to remain so. |
| All data points are in USD terms unless stated otherwise. |
| 18 February 2020 |
| Latest information is available by typing www.blackrock.co.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. |