REG - Baker Steel Res.Tst. - Investment Update and 30 May 2025 NAV

Baker Steel Resources TrustAnnouncement

06/06/2025 07:00

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RNS Number : 6788L  Baker Steel Resources Trust Ltd  06 June 2025

BAKER STEEL RESOURCES TRUST LIMITED

(Incorporated in Guernsey with registered number 51576 under the provisions of
The Companies (Guernsey) Law, 2008 as amended)

 

6 June 2025

Investment Update and 30 May 2025 Unaudited NAV

 

May Highlights

·      NAV per share increased by 2.8%

 

·      Blue Moon's Nussir and Tungsten West's Hemerdon project added to
EU list of Critical Raw Materials projects

 

·      Strong progress at Blue Moon's 3 main projects

 

·      Development and economic plan to restart mining operations at the
Hemerdon Mine announced by Tungsten West

 

·      Financing and option agreement at Futura Resources

 

Net Asset Value

Baker Steel Resources Trust Limited (the "Company") announces its unaudited
net asset value per share as at 30 May 2025.

Net asset value per Ordinary Share: 92.2 pence. Total NAV £98.2 million.

The NAV per share at 30 May 2025 increased by 2.8% from the last published NAV
at 30 April 2025, largely due to the increases in the listed share prices of
Caledonia Mining Corporation Plc and Metals Exploration Plc following the
continued strength in the gold price.

 

The Company had a total of 106,462,502 Ordinary Shares in issue with a further
700,000 shares held in treasury as at 30 May 2025.

 

Investment Update

 

The Company's top 10 investments were as follows:

 

                                     30 May 2025  30 May 2025  31 December 2024  31 December 2024

                                     £m           %            £m                %
 Futura Resources Ltd                31.4         32.0%        31.9              33.4%
 Cemos Group plc                     30.0         30.6%        30.0              31.4%
 Blue Moon Metals Inc                8.1          8.2%         6.9               7.2%
 Bilboes Royalty                     7.8          8.0%         8.4               8.8%
 Caledonia Mining Corporation Plc    4.7          4.7%         3.2               3.4%
 Metals Exploration Plc              4.2          4.2%         3.3               3.5%
 Tungsten West Plc                   3.6          3.7%         3.2               3.3%
 First Tin PLC                       2.7          2.8%         2.6               2.8%
 Silver X Mining Corporation         2.1          2.1%         2.1               2.3%
 Kanga Investments Ltd               1.3          1.3%         1.4               1.6%
 Other Investments                   1.7          1.9%         1.9               2.0%
 Net Cash, Equivalents and Accruals  0.6          0.6%         0.3               0.3%
 Total                               98.2         100%         95.5              100%

 

 

European Union Strategic Projects List

 

On 4 June 2025, the European Union added 13 Strategic Projects located outside
the EU to add to the 47 Strategic Projects in the EU adopted on 25 March 2025.
The Nussir Copper Project in Norway (owned by Blue Moon Metals Inc) and the
Tungsten West's Hemerdon Project in Devon, UK were two of the 13 projects
selected. The list is aimed at diversifying the EU's sources of supply and
increasing economic security. All 60 Strategic Projects will contribute to the
competitiveness of the EU's industry and in particular, sectors such as
electro mobility, renewable energy, defence and aerospace. Those projects are
the first results of the implementation of the EU Critical Raw Materials Act
(https://url.avanan.click/v2/___https:/single-market-economy.ec.europa.eu/sectors/raw-materials/areas-specific-interest/critical-raw-materials/critical-raw-materials-act_en___.YXAxZTpzaG9yZWNhcDphOm86YjQ0OTIwNWMxYmEwNTc3M2EzOWM4ZDkwNWM5MmE2Y2M6NjowYWQ5OmI3N2M2ZjY1NTk0ZGY5YTY4Yjc1ZGE1OWI3Y2E5OGM0MmQ2ZmVjNWNiZThhZWZjNWQ1M2ExYTg2OGZhNDViYjY6cDpGOk4)
("CRMA") which entered into force in May 2024.

 

The selected Strategic Projects were assessed by independent experts to ensure
that they meet the criteria established in the Critical Raw Materials Act,
notably regarding environmental, social and governance standards as well as
technical feasibility.The projects on the list will benefit from coordinated
support by the EU Commission, better access to public and private financing
through various funding programs, and political support for the advancement of
the project, among other benefits.

 

 

Blue Moon Metals Inc ("Blue Moon")

 

Following its acquisition of Nussir from the Company and others at the end of
February 2025, Blue Moon has moved forward rapidly on all three of its
projects.

 

At Nussir, Blue Moon completed the acquisition of Repparfjord Eiendom AS in
March 2025. This provided the Nussir Project with the majority of the required
infrastructure for the project to be built including a port area with
associated ship loading equipment and infrastructure.

 

In May 2025, Blue Moon announced the mobilisation of local mining contractor
Leonhard Nilsen & Sønner AS in preparation for underground development of
the exploration decline at Nussir and confirmation of underground mining
parameters. The work to be completed over the next year is expected to provide
key inputs for engineering studies that the Company anticipates will lead to a
final investment decision for the entire Project in 2026, including mine,
process plant and tailings infrastructure.

 

In March 2025, Blue Moon announced the results of a Preliminary Economic
Assessment ("PEA") of its volcanogenic massive sulphide ("VMS") deposit,
located in Mariposa County California (the "BM Project"). This envisaged a
mine producing an average 7.2 million lbs copper, 62.3 million lbs zinc,
22,566 ounces of gold and 681,764 ounces of silver per annum in concentrate.
 Based on an initial capital cost of US$144.5 million, the base case
economic model estimates a post tax NPV (8%) of US$244 million and an IRR of
38%.

 

Since then, Blue Moon has received approval from the Bureau of Land Management
("BLM") for the construction of a portal and tunnel to enable underground
mineral exploration activities at the BM Project. This approval represents a
significant permitting milestone for development of the Project, as the
initial portal and decline will provide access for infill and exploration
drilling, allow for examination of geology, rock mechanics, and underground
mining conditions, and be utilized once the mine moves into production as the
main haulage route. The BLM's approval allows for immediate commencement of
the underground exploration programme. The decline is expected to start
construction in Q3-2025 and support a feasibility study which is expected to
be completed in 24 months.

 

Finally in April 2025, Blue Moon announced a maiden mineral resource estimate
("MRE") on its third project, the Sulitjelma VMS deposit (the "Sulitjelma
Project") located in Nordland, Norway. The MRE includes 17 million tonnes
grading 1.06% Cu and 0.21% Zn in the inferred category over three deposits,
supporting the project's potential for further growth. Blue Moon plans to
advance the project through additional exploration and technical studies to
further evaluate its economic viability.

 

The Company holds approximately 11.2% of Blue Moon (which is 8.2% of the
Company's NAV) which is listed on the TSX.V exchange (TSXV:MOON). The
Company's shares are subject to a phased lock up under the rules of the TSX.V
and in accordance with the Company's valuation policy are held at an average
18% discount to the listed price.

 

 

Tungsten West Plc ("Tungsten West")

 

On 30 May 2025, Tungsten West announced that it had concluded its development
and economic plan to restart mining operations at the Hemerdon Mine in Devon,
UK (the "Plan"), and released the associated summary economics, resources and
reserves ahead of the completion of a full updated feasibility study.

The Plan sets out a base case with 11-year life of mine, 4 years of subsequent
stockpile reclaim and an additional 12 years of on-going premium aggregate
sales although there remains the potential to extend the operational life of
mine, potentially to over 40 years.

The total financing requirement for restarting mining operations at Hemerdon
is estimated by Tungsten West at US$93 million, benefitting from approximately
US$300 million of previously invested capital, including significant open pit
pre-stripping. The economics model estimates an NPV (7.5%) of US$190 million
with an IRR of 29.3%.

 

The Hemerdon Mine is fully permitted and once in production would supply
approximately 20% of global supply of primary tungsten from outside of China.
Tungsten West states that it is in discussions with several parties regarding
the financing of the Project, and the company expects to complete its
fundraising by the end of 2025 with production-commencing operations
approximately 12 months from funding.

 

In February 2025 China, which accounts for some 80% of the global supply of
tungsten announced restrictions to the export of 5 critical minerals including
tungsten.  This is starting to feed through to prices with the price of
tungsten up over 20% in 2025.

 

Tungsten West's addition to the EU Strategic Projects list will undoubtedly be
a significant help in Tungsten West's efforts to finance the restart of the
Hemerdon Mine.

 

 

Futura Resources Limited ("Futura")

 

As announced on 9 May 2025, Futura and International Resources Holdings RSC
LTD ("IRH") completed an agreement for a US$15m loan to Futura. Separately,
the Company and other Futura shareholders, representing in excess of 50.1% of
the fully diluted share capital of Futura, have signed option agreements
giving IRH the right to acquire their respective shares at A$3.15 per Futura
share within 9 months, which would value Futura at an Enterprise Value (EV) of
some A$250 million. The A$3.15 price per share compares with the Company's
current carrying value of A$2.21 per share and its acquisition price
of A$1 per share. This transaction does not affect the Company's 1.5% Gross
Revenue Royalty over production from Futura's mines.

 

The coking coal market remains subdued due primarily to on-going economic
weakness in China which is the world's largest steel producer. Coking coal
prices declined during 2024, from around US$320 per tonne at the end of
2023, to around US$200 per tonne at December 2024, slightly below long-term
consensus prices of US$200-225 per tonne. Since then, coking coal prices
have deteriorated further to lows of around US$170/tonne. This has put
considerable financial strain on the entire metallurgical coal industry to
which Futura is not immune, particularly during its ramp up stage. Futura
has, therefore, sought additional working capital whilst Fairhill moves
towards full production.

 

The Company will review the valuation of Futura at 30 June 2025 taking into
account the status of the potential offer from IRH as well as the market
valuations of comparable coking coal companies, consistent with our approach
to our unlisted holdings.

 

 

Further details of the Company and its investments are available on the Baker
Steel Capital Managers website www.bakersteelcap.com
(https://url.avanan.click/v2/___http:/www.bakersteelcap.com___.YXAxZTpzaG9yZWNhcDphOm86MjdlZGQ1NzE1MDA2OWIwMWI0NzUxYWYwYjc5OWUzNTk6NjpiYzEwOjkzMDBjNGMzNDY1MGVhOGQwZjg2Yjk0OWEzY2U2ODYwZDI0MDYxY2Y3MmU3MDM0OWJkOTAyZWZhZWViMDM0NTI6cDpUOk4)

 

 

 

 

Enquiries:

Baker Steel Resources Trust Limited             +44 20 7389 8237

Francis Johnstone

Trevor Steel

 

Shore Capital
                       +44 020 7408 4050

Henry Willcocks (Corporate Broking)

Gillian Martin, Daphne Zhang (Corporate)

Adam Gill (Sales)

 

 

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 are set out in the Company's Prospectus dated 26
January 2015.

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