REG-BlackRock World Mining Trust Plc: Portfolio Update

BlackRock World Mining TrustAnnouncement

23/08/2023 11:00

The information contained in this release was correct as at 31 July 2023.
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 31 July 2023 and unaudited.
 

 Performance at month end with net income reinvested                                           
                                                                                               
                                                          One    Three   One    Three  Five    
                                                          Month  Months  Year   Years  Years   
 Net asset value                                          5.2%   1.6%    16.5%  67.5%  87.7%   
 Share price                                              4.8%   -3.0%   11.5%  83.3%  118.4%  
 MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*  6.6%   1.4%    17.1%  48.3%  60.2%   
                                                                                               
 * (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream 
                                                                                               

At month end

 Net asset value (including income) 1 :  644.46p      
 Net asset value (capital only):         634.91p      
 Share price:                            628.00p      
 Discount to NAV 2 :                     2.6%         
 Total assets:                           £1,380.5m    
 Net yield 3 :                           6.4%         
 Net gearing:                            9.7%         
 Ordinary shares in issue:               191,183,036  
 Ordinary shares held in Treasury:       1,828,806    
 Ongoing charges 4 :                     0.95%        
 Ongoing charges 5 :                     0.84%        
                                                      

 

1 Includes net revenue of 9.55p

2 Discount to NAV including income.

3 Based on a second and third interim dividend of 5.50p per share declared on
23 August 2022 and 16 November 2022 respectively, a final dividend of 23.50p
per share recommended on 2 March 2023 in respect of year ended 31 December
2022, and a first interim dividend of 5.50p per share declared on 18 April
2023 in respect of the year ending 31 December 2023.

4 The Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating
expenses, excluding finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation and certain other non-recurring
items for the year ended 31 December 2022.

5 The Company’s ongoing charges are calculated as a percentage of average
daily gross assets and using the management fee and all other operating
expenses, excluding finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation and certain other non-recurring
items for the year ended 31 December 2022.


 

 Country Analysis    Total         
                      Assets (%)   
                                   
 Global              64.0          
 Australasia         9.9           
 Latin America       8.9           
 United States       6.4           
 Canada              4.4           
 Other Africa        3.0           
 Indonesia           0.8           
 South Africa        0.3           
 United Kingdom      0.2           
 Net Current Assets  2.1           
                     -----         
                     100.0         
                     =====         
                                   

 

 

 Sector Analysis        Total         
                         Assets (%)   
                                      
 Diversified            34.1          
 Copper                 24.2          
 Gold                   14.6          
 Industrial Minerals    7.3           
 Steel                  6.4           
 Aluminium              3.1           
 Platinum Group Metals  2.5           
 Iron Ore               2.1           
 Nickel                 1.3           
 Uranium                1.1           
 Mining Services        1.1           
 Zinc                   0.1           
 Net Current Assets     2.1           
                        -----         
                        100.0         
                        =====         
                                      

 

  

 

 Ten largest investments                  
                                          
 Company                  Total Assets %  
                                          
 BHP:                                     
 Equity                   8.4             
 Royalty                  1.4             
 Vale:                                    
 Equity                   5.7             
 Debenture                2.3             
 Glencore                 7.9             
 Freeport-McMoRan         4.0             
 First Quantum Minerals:                  
 Equity                   3.3             
 Bond                     0.7             
 Rio Tinto                3.6             
 Teck Resources           3.5             
 Ivanhoe Electric         3.2             
 Wheaton Precious Metals  2.9             
 Newmont Mining           2.9             
                                          
                                          

 

 Asset Analysis      Total Assets (%)  
 Equity              95.8              
 Bonds               2.1               
 Net Current Assets  2.1               
                     -----             
                     100.0             
                     =====             
                                       
                                       

 

 Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 The Company’s NAV rose by 5.2% in July, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which rose by 6.6% (performance figures in GBP).  The mining sector outperformed global equity markets, with the MSCI ACWI TR Index rising by 3.7%. There was renewed optimism surrounding China’s stimulus measures coming through, with the expectation that it will be more specific and targeted than we saw at the end of 2015.  Mined commodities reacted positively    
 with price increases almost across the board. The copper price, for example, was up +5.7%. Meanwhile, precious metals prices performed strongly, with gold and silver prices rising +2.7% and +9.0% respectively. However, the iron ore (62% fe.) price fell -2.2% on concerns around potential steel production caps. Lastly, Q2 production results were reported during the month, which highlighted issues in supply growth for copper in particular.                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Strategy and Outlook                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 We do not expect the mining sector to be immune to deteriorating global economic growth. However, whilst recession looms for developed markets, the most important economy for mining, China, is moving in the opposite direction, re-opening following a year of lockdowns and a strict zero-Covid policy.  Meanwhile, mined commodity markets are generally tight, with inventories for many commodities at historic lows. At the same time, mined supply is being constrained by the underinvestment of recent years and     
 continued capital discipline. Mining companies are in an excellent financial position, in our view, with high levels of free cash flow, rock-solid balance sheets and a continued focus on returning capital to shareholders.  Last year, we saw greater appreciation of the role mining companies will need to play in supplying the materials required for lower carbon technologies like wind turbines, solar panels and electric vehicles. In 2023, we are seeing Brown to Green emerge as a key theme, where mining        
 companies are focusing on reducing the greenhouse gas emissions intensity associated with their production. We expect to see a re-rating for the mining companies able to best navigate this and are playing this in the portfolio.  All data points are in USD terms unless stated otherwise.                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 23 August 2023  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.                                                                                                                                                                                                        

 



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