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REG - Baker Steel Res Tst - Net Asset Value(s)

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RNS Number : 5169K  Baker Steel Resources Trust Ltd  06 May 2022

 

 

BAKER STEEL RESOURCES TRUST LIMITED

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

 

6 May 2022

29 April 2022 Unaudited NAV Statement

Net Asset Value

Baker Steel Resources Trust Limited (the "Company") announces its unaudited
net asset value per share at 29 April 2022:

Net asset value per Ordinary Share: 91.9 pence.

The NAV per share has decreased by 5.7% against the unaudited NAV at 31 March
2022 largely due to falls in the share prices of the listed portion of the
portfolio, in particular that of Tungsten West Plc, which outweighed an
increase in the carrying value of Futura due to the conversion of a bridging
loan into an additional royalty interest.

 

The Company had a total of 106,462,502 Ordinary Shares in issue with a further
700,000 shares held in treasury as at 29 April 2022.

 

Investment Update

 

The Company's top 10 investments were as follows as a percentage of NAV:

 

                                     29 April 2022  31 December 2021
 Futura Resources Ltd                23.7%          18.1%
 Cemos Group plc                     19.6%          18.6%
 Bilboes Gold Limited                15.1%          13.1%
 Tungsten West Plc                   9.3%           14.7%
 First Tin plc                       7.3%           7.7%
 Kanga Potash                        4.7%           4.1%
 Polar Acquisition Ltd               4.3%           7.5%
 Nussir ASA                          3.9%           3.6%
 Silver X Mining Corporation         3.6%           2.8%
 Azarga Metals Corp                  1.5%           2.1%
 Listed Precious Metal Shares        2.8%           3.2%
 Other Investments                   3.8%           3.3%
 Net Cash, Equivalents and Accruals  0.4%           1.1%

 

 

 

Tungsten West PLC ("Tungsten West")

 

On 21 April 2022, Tungsten West announced that it is pausing the redevelopment
of its Hemerdon tungsten project to evaluate alternative lower cost approaches
due to significant recent inflation in key consumables in particular steel,
cement, ammonium nitrate (explosives), electricity and diesel.  Although the
tungsten price has increased modestly over the past year this has not been to
the same extent as the rise in input prices, and we have seen other tungsten
projects facing similar challenges.

 

Although clearly a setback, Tungsten West is in the fortunate position that it
hadn't yet committed to the major part of the cost of the redevelopment so is
able to adjust its plans whilst it still retains £28 million from its IPO in
October 2021 and has not drawn down on its debt facility with Orion. In
addition, it has taken delivery of 7 Tomra ore sorters which are a key capital
item and were ordered mid 2021, before recent inflationary impacts.

 

It is expected Tungsten West will now look to restart the Hemerdon mine on a
smaller scale based on lower capital and operating costs whist retaining the
optionality to move back to the larger scale operation should market
conditions warrant it. A revised development plan on this basis is expected in
the third quarter this year.

 

The reduction in the share price of Tungsten West on the AIM market of the
London Stock Exchange has reduced the NAV by approximately 8.9% from 31 March
2022, albeit the quoted share price remains at an approximate 85% premium to
the Company's cost price.

 

Futura Resources Ltd ("Futura")

During April 2022, the Company exercised its option to convert the A$2.2
million bridging loan it had provided to Futura into a further 0.5% gross
revenue royalty ("GRR") over Futura's Wilton and Fairhill coking coal projects
in Australia. The Company had this option as Futura had been unable to
complete its development financing by 31 March 2022. Futura is currently in
advanced discussions with a number of potential financiers and is hoped that
they can agree a satisfactory finance package this quarter.

The 0.5% GRR is in addition to the Company's existing 1% GRR which is valued
at A$16 million. Conversion of the bridging loan has therefore added £3.1
million (approximately 3%) to the Company's NAV.

 

First Tin PLC ("First Tin")

As discussed in the Company's 31 March 2022 NAV update, First Tin successfully
completed its IPO and listing on the London Stock Exchange on 8 April 2022,
raising £20m before expenses. As the Company's shares are subject to a
one-year lock-up the shares are being carried at a 23.4% discount to the
closing bid price on 29 April 2022, in a similar way to the holding in
Tungsten West Plc.

The proceeds of the IPO will be used primarily to complete Definitive
Feasibility Studies on First Tin's Tellerhauser tin project in Germany and its
Taronga tin project in Australia.

 

Azarga Metals Ltd ("Azarga")

During April 2022 the Company agreed to convert its US$3.5 million loan to
Azarga into equity at a   conversion price of C$0.10 per share. In exchange
for BSRT converting the loan Azarga has also agreed to grant BSRT the option
to acquire Azarga's Unkur copper silver project in far east Russia until 31
December 2023, whilst Azarga concentrates on its copper-rich VMS Marg project
in the Yukon. Azarga will use its best efforts (while recognising that
sanctions and other force majeure circumstances may hinder these efforts), to
maintain the corporate existence of its subsidiaries and its licences,
including the Unkur project, on a care and maintenance basis during the option
period.

The transaction is subject to definitive agreements and regulatory approvals
including, if necessary, Azarga shareholder approval. Upon completion the
Company will hold approximately 36% of Azarga. The effect of the transaction
is not material to the Company's NAV.

 

Silver X Resources Ltd ("Silver X")

During April 2022 the Company agreed to convert the US$4.2 million of capital
and interest due under its convertible debenture to Silver X into common
shares of Silver X at a deemed price of C$0.30 per share (approximately 48%
discount to the original conversion price). The conversion (subject to final
TSX approval) will result in the Company becoming Silver X's largest
shareholder with 13.9% of the enlarged share capital and the Company will have
the right to appoint a director. The effect of the conversion is not material
to the Company's NAV.

During 2022 Silver X has made significant progress towards becoming one of the
few listed producing silver juniors. The recent completion of the Nueva
Recuperada processing plant expansion and continued positive mine development
results have built a strong foundation for the future.

 

 

Further details of the Company and its investments are available on the
Company's website www.bakersteelresourcestrust.com
(http://bakersteelresourcestrust.com)

 

 

 

 

Enquiries:

Baker Steel Resources Trust Limited             +44 20 7389 8237

Francis Johnstone

Trevor Steel

 

Numis Securities
Limited                               +44 20
7260 1000

David Benda (corporate)

James Glass (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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