18 Oct 2021 12:01
BlackRock World Mining Trust Plc - Portfolio UpdateBlackRock World Mining Trust Plc - Portfolio Update
PR Newswire
London, October 15
The information contained in this release was correct as at 30 September 2021. 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 30 September 2021 and unaudited.
| Performance at month end with net income reinvested | |||||
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | -8.9% | -9.2% | 26.4% | 51.3% | 96.6% |
| Share price | -7.4% | -13.0% | 35.8% | 70.0% | 123.8% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | -8.6% | -7.4% | 24.1% | 38.4% | 75.2% |
| * (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream | |||||
At month end
| Net asset value (including income)1: | 554.49p |
| Net asset value (capital only): | 524.96p |
| 1 Includes net revenue of 29.53p | |
| Share price: | 524.00p |
| Discount to NAV2: | 5.5% |
| Total assets: | £1,157.9m |
| Net yield3: | 4.3% |
| Net gearing: | 9.8% |
| Ordinary shares in issue: | 183,681,116 |
| Ordinary shares held in Treasury: | 9,330,726 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.
3 Based on a quarterly interim dividend of 4.00p per share declared on 12 November 2020 and a final dividend of 8.30p per share announced on 5 March 2021 in respect of the year ended 31 December 2020, and a first interim dividend of 4.50p per share declared on 29 April 2021 and a second interim dividend of 5.50p per share declared on 19 August 2021 in respect of the year ending 31 December 2021.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2020.
| Country Analysis | Total Assets (%) | Sector Analysis | Total Assets (%) | |
| Global | 68.0 | Diversified | 39.3 | |
| Australasia | 6.5 | Copper | 18.8 | |
| Latin America | 6.5 | Gold | 16.3 | |
| United States | 5.2 | Steel | 8.6 | |
| Other Africa | 2.7 | Iron Ore | 3.6 | |
| South Africa | 2.3 | Platinum Group Metals | 3.5 | |
| Canada | 2.2 | Aluminium | 2.7 | |
| Russia | 1.2 | Industrial Minerals | 2.3 | |
| Indonesia | 1.2 | Nickel | 1.2 | |
| United Kingdom | 0.8 | Zinc | 0.2 | |
| Net Current Assets | 3.4 | Silver & Diamonds | 0.1 | |
| ----- | Net Current Assets | 3.4 | ||
| 100.0 | ----- | |||
| ===== | 100.0 | |||
| ===== | ||||
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 5.7 |
| Debenture | 4.4 |
| Glencore | 7.8 |
| BHP | 7.2 |
| Anglo American | 7.0 |
| Freeport-McMoRan | 5.3 |
| ArcelorMittal | 4.9 |
| Rio Tinto | 4.5 |
| Newmont Mining | 3.6 |
| OZ Minerals | |
| Equity | 1.2 |
| Royalty | 1.9 |
| Barrick Gold | 2.9 |
| Asset Analysis | Total Assets (%) |
| Equity | 88.5 |
| Bonds | 4.1 |
| Preferred Stock | 3.9 |
| Warrants | 0.1 |
| Net Current Assets | 3.4 |
| ----- | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned -8.9% in September, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned -8.6% (Figures in GBP).
September was a difficult month for the mining sector on the back of falling mined commodity prices. The Chinese government continued to curb steel production as part of its efforts to tackle carbon emissions. This weighed on the demand outlook for iron ore, the price of which (62% fe.) fell by 25.2%, ending down by 46.9% from the 2021 peak in July. Meanwhile, a liquidity crisis at Chinese property giant, Evergrande, caused concern around China’s property market and the wider economy. Global power market tightness saw thermal coal prices continue to surge and put upward pressure on some of the more energy-intensive mined commodities, such as steel and aluminium, as capacity is being constrained. Elsewhere, platinum group metals (PGMs) prices were weak as a global semiconductor chip shortage constrained autos production (auto catalytic converters typically account for a significant proportion of PGM demand).
Strategy and Outlook
We believe the outlook for mined commodity prices remains robust, whilst mining shares offer attractive value. Recovering global economic growth, accommodative monetary policy, rising government spending and increased focused on green capital investment all point towards strong demand. Meanwhile, supply is constrained following years of capital discipline from the producers and we are seeing no signs that this is set to change.
We are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects. We are also seeing inflationary data increase and commodities have traditionally been a core way for investors to both protect themselves from this but also benefit from such trends.
We believe the best risk-adjusted opportunity today is in the shares of mining companies in robust financial positions with strong balance sheets and high levels of free cash flow. Mining companies are continuing to return capital to shareholders through dividends and buybacks.
All data points are in USD terms unless stated otherwise.
18 October 2021
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.
BlackRock World Mining Trust plc (BRWM)