RCS - Baker Steel Res Tst - Edison issues review on Baker Steel RT

Baker Steel Resources TrustAnnouncement

01/08/2023 12:30

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RNS Number : 9406H  Baker Steel Resources Trust Ltd  01 August 2023

London, UK, 1 August 2023

 

Edison issues review on Baker Steel Resources Trust (BSRT)

Baker Steel Resources Trust has been affected by the challenging funding
environment for mining development projects, especially for single-project
junior mining companies. The funding environment led Tungsten West to carry
out an interim fund-raising at a depressed valuation. BSRT's key potential NAV
trigger for this year remains a possible successful funding by Futura
Resources to launch production at its two coking coal mines in Australia.
While the fund-raising has again been delayed and the demand for coking coal
may be affected by a global economic slowdown, the project's economics remain
favourable at current coking coal prices.

 

BSRT is more than a simple beta play on commodity prices, given its focus on
realising the valuation upside from project development and its investment in
projects that offer a solid safety margin in terms of an internal rate of
return based on consensus price forecasts. The majority of BSRT's current
portfolio is held either in producing assets - Cemos, Caledonia Mining
Corporation (CMCL), Silver X - where further production ramp-up/expansion
offers re-rating potential, or in projects approaching mine construction (eg
Tungsten West) and production (Futura Resources) whose valuations may benefit
from project de-risking in the case of successful progress. We believe that,
once the fund-raising/M&A environment improves, this portfolio may
experience several positive NAV catalysts from project progress, leading to a
potential asset sale/IPO and/or recurring royalty/dividend streams. Following
the expiry of the lock-up on CMCL shares, BSRT is again looking for potential
new investment opportunities.

Click here
(https://www.edisongroup.com/research/valuation-headwinds-reflected-in-june-2023-nav/32499/)
to view the full report.

 

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