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

Baker Steel Resources TrustAnnouncement

04/08/2022 07:15

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RNS Number : 8539U  Baker Steel Resources Trust Ltd  04 August 2022

 

BAKER STEEL RESOURCES TRUST LIMITED

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

 

4 August 2022

29 July 2022 Unaudited NAV Statement

Net Asset Value

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

Net asset value per Ordinary Share: 80.2 pence.

The NAV per share has decreased by 0.2% against the unaudited NAV at 30 June
2022 with the partial recovery of Tungsten West's share price on the AIM
market following the announcement of its revised development plan being
balanced by the reduction in the carrying value of Bilboes Gold following the
agreement to sell that company, (see below), and a further fall in the share
price of First Tin PLC on the London Stock Exchange

 

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 July 2022.

 

Investment Update

 

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

 

                                     29 July 2022  31 December 2021
 Futura Resources Ltd                27.6%         18.1%
 Cemos Group plc                     20.3%         18.6%
 Bilboes Gold Limited                14.5%         13.1%
 Tungsten West Plc                   8.7%          14.7%
 Kanga Potash                        5.5%          4.1%
 First Tin plc                       4.8%          7.7%
 Polar Acquisition Ltd               4.4%          7.5%
 Nussir ASA                          3.6%          3.6%
 Silver X Mining Corporation         3.1%          2.8%
 Prism Diversified                   1.5%          1.1%
 Listed Precious Metal Shares        3.0%          3.3%
 Other Investments                   3.0%          3.3%
 Net Cash, Equivalents and Accruals  0.0%          1.1%

 

 

 

Tungsten West PLC ("Tungsten West")

 

On 19th July 2022 Tungsten West announced it had concluded a re-evaluation of
the options for restoring production at the Hemerdon Mine back into production
and announced its new development plan (the "Plan"). The Plan evolved
following Tungsten West's announcement in April 2022 that it was pausing its
original plan which had been based on the 2021 Bankable Feasibility Study
(BFS) in response to the global energy price crisis and the general
inflationary environment for construction materials faced. The Plan involves a
new ramp-up schedule, crushing strategy, and operating parameters for ore
sorting, together with a re-purposing of equipment within the processing
plant, and the production of a different specification of final tungsten
concentrate product. The outcome of the Plan is a lower cap-ex requirement and
a much lower diesel and power consumption whilst delivering profitable
operating margins.

 

Hemerdon will now aim to process 2.1 mtpa of ore in year one, 2.6 mtpa in year
two, before ramping up to steady state production of 3.5 mtpa throughput in
year three (the BFS envisaged first year production of 2.7 mtpa rising to
steady state throughput of 3.5 mtpa). This should result in tungsten oxide in
concentrate production of 2,200t, 3,000t, 3,900t in years 1, 2, and 3
respectively.

 

The cap-ex estimate for the new Plan is estimated to be in a range of £26m -
£36m, compared to the BFS capex estimate of £35 million. The revised
estimate at the time of the April 2022 pause announcement was £54m. At 30
June 2022, Tungsten West had cash on hand of £22.9m. Allowing for
contingencies and working capital costs Tungsten West will seek to raise debt
or other non-equity capital and is in discussions with financing partners to
provide this additional capital.

 

 

Bilboes Gold Ltd ("Bilboes")

 

As announced on 21 July 2022, the Company and the other shareholders of
Bilboes have signed an agreement to sell Bilboes to NYSE, AIM and Victoria
Falls Exchange listed gold producer Caledonia Mining Corporation Plc. The
Company's share of the consideration for its 24.2% shareholding in Bilboes
will be 800,000 shares in Caledonia together with a 1% net smelter royalty
("NSR") over the future gold production from the Bilboes properties.
Completion of the transaction is subject to a number of conditions precedent,
in particular Zimbabwean Government approvals, which are expected to be
satisfied before the end of 2022.

 

The Company believes that the Bilboes project has a very good prospect of
becoming a successful gold mine in the near term, with potential to expand its
reserves and extend its mine life over the medium term. It thus opted for an
ongoing direct interest in the mine through the NSR. Should the ultimate
proposed production rate of 168,000 ounces of gold per annum be achieved the
NSR would generate some US$2.6 million per annum for the Company at current
gold prices.

 

As a result of the proposed transaction, at 29 July 2022 Bilboes has been
valued on the basis of a development risk discounted economic model for the
NSR and in accordance with the Company's valuation policies, at a discount to
the quoted price for Caledonia shares as there will be a 6 month lock-up
following completion. This net result is an approximate 9% reduction to the
carrying value of Bilboes from 30 June 2022.

 

We believe there are significant synergies to the transaction, combining the
best gold development project in Zimbabwe with possibly the best operating and
development team in the country. The combined group presents a clear path to
becoming a 250,000+ ounce gold producer which should in due course lead to a
re-rating of Caledonia's share price.

 

Further details of the Company and its investments are available on the
Company's website www.bakersteelresourcestrust.com (about%3Ablank)

 

 

 

 

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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