Last checked at 
2 Jul 2014 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)
2 July 2014
30 June 2014 Unaudited NAV Statement
Net Asset Value
Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value per share at 30 June 2014:
Net asset value per Ordinary Share: 53.0 pence
During the month, the NAV per share decreased by 9.4% predominantly due to a write down in the carrying value of Gobi Coal and Energy as well falls in the listed prices of Metals Exploration and China Polymetallic Mining. This has been exacerbated by the increase in Sterling against the US Dollar and Canadian Dollar in which the majority of the Company's investments are denominated.
At 30 June 2014, the Company had a total of 68,401,890 Ordinary Shares in issue.
The Company is fully invested with top 10 investments as follows as a percentage of NAV:
Black Pearl Limited Partnership | 15.4% | |
Ivanhoe Mines Limited | 15.1% | |
Ironstone Resources Limited | 14.0% | |
Polar Silver Resources Ltd | 13.8% | |
Bilboes Gold Limited | 11.1% | |
Metals Exploration plc | 8.8% | |
Ferrous Resources Limited | 6.9% | |
Gobi Coal & Energy Limited | 6.8% | |
China Polymetallic Mining Limited | 4.4% | |
South American Ferro Metals Limited | 1.6% | |
Other Investments | 2.4% | |
Net Cash, Equivalents and Accruals | -0.3% | |
Investment Update
Gobi Coal & Energy Limited ("Gobi")
At the half year and full year, the Board reviews whether general market movements in mining equities should impact the carrying values of the unlisted holdings in the portfolio in the absence of relevant transactions whilst taking into account the specific progress and structure of each investment. In order to quantify how the share price of a particular stock might have moved during the period had it been listed, the Investment Manager maintains an index of comparable listed companies for each unlisted investment.
At 30 June 2013, the Company reduced its carrying value of Gobi in the light of a deteriorating environment for investment in Mongolia and weakening prices for coking coal globally and more specifically coking coal delivered at the Chinese border. Although there are reasons to be optimistic about the future investment climate in Mongolia, with the Government recently revoking various protectionist laws and ministers stating that they wish to promote foreign investment, the demand for Mongolian coal at the Chinese border has remained extremely weak. As a result, listed Mongolian coal stocks have fallen by approximately 50% over the past year and the Company has decided to reduce its carrying value of Gobi in line with this.
Gobi's Shinejinst coking coal project in Mongolia remains a high quality mining asset and it is hoped that the discount to the international coking coal price that China is prepared to pay for Mongolian coal will narrow in due course and allow Gobi to move Shinejinst into full scale production.
Polar Silver Resources Limited ("Polar Silver") ZAO Argentum Loan Notes
At the end of June the Company acquired a further US$2,500,000 of convertible loans to ZAO Argentum the wholly owned subsidiary of Polar Silver. ZAO Argentum owns a 50% interest in the high grade Prognoz silver project in Russia. Prognoz has aNI 43-101 compliant Indicated Resource of 5.86 million tonnes of ore grading 773 g/t silver containing 146 million ounces of silver and Inferred Resources of 9.64 million tonnes of ore grading 473 g/t silver containing 147 million ounces of silver at Prognoz. A NI 43-101 compliant preliminary economic assessment (PEA) envisages a mine producing an average of 16 million ounces of silver per annum over the first 10 years of production, with pre-production capital costs of US$270 million and an average operating cost of US$6.61 per ounce of silver.
This acquisition was an attractive opportunity to raise the Company's effective interest in the Tier 1 Prognoz silver project from 7.5% to 10.6%.
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
Numis Securities Limited +44 20 7260 1000
David Benda (corporate)
James Glass (sales)
Bell Pottinger
Lorna Cobbett +44 20 7861 3883
Joanna Boon +44 20 7861 3867
The Net Asset Value ("NAV") figure stated is 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 figure is set out in the Company's Prospectus dated 31 March 2010.