Last checked at 
4 Jan 2013 07:00
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the provisions of The Companies (Guernsey) Law, 2008 as amended)
04 January 2013
31 December 2012 Unaudited NAV Statement
Net Asset Values
Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value and diluted net asset value per share as at 31 December 2012:
Net asset value per Ordinary Share: 109.1 pence
Diluted net asset value per Ordinary Share: 107.6 pence
During the month, the undiluted NAV per share decreased by 1.1%, with a write down in the carrying value of Gobi Coal & Energy Limited and Ironstone Resources Limited largely balanced by increases in the values of Bilboes Gold Limited and the market values of the listed investments in the portfolio, in particular Ivanplats Limited.
The Company has a total of 66,142,533 Ordinary Shares and 13,085,150 Subscription Shares in issue. Holders of Subscription Shares have the right to subscribe for Ordinary Shares at 100 pence in cash on one further occasion on 2 April 2013.
The Company is fully invested with top 10 investments as follows as a percentage of NAV:
Ivanplats Limited | 37.7% |
Gobi Coal & Energy Limited | 14.5% |
China Polymetallic Mining Limited | 9.0% |
Bilboes Gold | 8.4% |
Ironstone Resources Limited | 7.5% |
Black Pearl | 6.8% |
Ferrous Resources Limited | 6.1% |
Polar Silver | 5.1% |
Metals Exploration plc | 3.5% |
Copper Minerals Limited | 2.2% |
Other Investments | 3.6% |
Net Cash, Equivalents and Accruals | -4.4% |
Investment Update
Gobi Coal & Energy Limited ("Gobi")
In considering the carrying value of each of the Company's investments at the year end, where there has been no significant corporate transaction during the year, amongst other factors the Company's Board takes into account how the prices of listed comparable companies have performed during the year. In July 2012, the Company decided to reduce its carrying value of Gobi by approximately 23% and at the year end has decided to reduce it by a further 20%. It is not considered that there is a permanent reduction in value of Gobi's projects, however the current poor trading conditions for Mongolian coal companies and the prices they are currently able to achieve for their product on the Chinese border has had a particular adverse impact on their market valuations. It should be noted that despite this 38% reduction in the Company's carrying value of Gobi during the year, the investment continues to be valued at almost double its acquisition cost in Sterling terms.
Bilboes Gold Limited ("Bilboes")
As stated in the November 2012 NAV statement, following its drilling campaign during the year, Bilboes defined a JORC compliant resource at its Isabella/McCays/Bubi complex containing 3,964,000 ounces of gold. Agreement in principle has been reached for a new investor to subscribe US$10 million in new equity to fund a definitive feasibility study into a mine producing 100,000 to 200,000 ounces per annum from open pit.
It was also mentioned in the November 2012 NAV statement that Bilboes had signed a facility agreement with The Industrial Development Corporation of South Africa for the provision of a US$7 million loan to redevelop the previously producing oxide heap leach operations at the Isabella/McCays/Bubi complex. All conditions precedent to drawdown were satisfied during December and the first drawdown took place during December 2012. The mines are scheduled to be producing at a rate of approximately 12,000 ounces per annum by the end of 2013, at an operating cost of around US$750 per ounce which should provide useful cashflow for the further development of Bilboes.
The subscription by the new investor is due to take place at an approximate 50% premium to the Company's carrying value at the end of November 2012. Due to the progress made by Bilboes during the year and the subscription expected to close imminently, the carrying value at the end of December 2012 has been increased to the subscription price. At the placing price, Bilboes' enterprise value will be approximately US$8 per ounce of JORC compliant resource.
Ironstone Resources Limited ("Ironstone")
Following promising results from its metallurgical testwork during 2012, Ironstone is currently in the process of raising cash to fund the next stage of testwork at an approximate 7% discount to the Company's carrying value at the end of November 2012. This discount has been reflected at the year end carrying value.
Further details of the Company and its investments are available on the Company's website www.bakersteelresourcestrust.com
Enquiries:
Baker Steel Resources Trust Limited +44 20 7389 8237
Francis JohnstoneTrevor Steel
RBC Capital Markets +44 20 7653 4000
Martin Eales
Winterflood Investment Trusts +44 20 3100 0250
James Moseley
Pelham Bell Pottinger
Lorna Spears +44 20 7861 3883
Joanna Boon +44 20 7861 3867
The Net Asset Value ("NAV") figures stated are based on unaudited estimated valuations of the underlying investments and not necessarily based on observable inputs. Such estimates are not subject to any independent verification or other due diligence and may not comply with generally accepted accounting practices or other generally accepted valuation principles. In addition, some estimated valuations are based on the latest available information which may relate to some time before the date set out above.
Accordingly, no reliance should be placed on such estimated valuations and they should only be taken as an indicative guide. Other risk factors which may be relevant to the NAV figures are set out in the Company's Prospectus dated 31 March 2010.