REG-BlackRock World Mining Trust Plc: Portfolio Update

BlackRock World Mining TrustAnnouncement

25/03/2024 11:15

BLACKROCK WORLD MINING TRUST PLC (LEI - LNFFPBEUZJBOSR6PW155)

All information is at 29 February 2024 and unaudited.
 

 Performance at month end with net income reinvested                                           
                                                                                               
                                                          One    Three   One     Three  Five   
                                                          Month  Months  Year    Years  Years  
 Net asset value                                          -5.9%  -7.9%   -19.6%  9.4%   67.1%  
 Share price                                              -9.3%  -10.1%  -24.9%  -1.0%  84.3%  
 MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*  -3.1%  -3.4%   -8.0%   15.7%  56.8%  
                                                                                               
 * (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream 
                                                                                               

At month end

 Net asset value (including income) 1 :  528.63p      
 Net asset value (capital only):         509.81p      
 Share price:                            492.50p      
 Discount to NAV 2 :                     6.8%         
 Total assets:                           £1,161.6m    
 Net yield 3 :                           8.1%         
 Net gearing:                            10.6%        
 Ordinary shares in issue:               191,183,036  
 Ordinary shares held in Treasury:       1,828,806    
 Ongoing charges 4 :                     0.91%        
 Ongoing charges 5 :                     0.81%        
                                                      

 

1 Includes net revenue of 18.82p.

2 Discount to NAV including income.

3 Based on a final dividend of 23.50p per share declared on 2 March 2023 in
respect of the year ended 31 December 2022, a first interim dividend of 5.50p
per share declared on 18 April 2023, a second interim dividend of 5.50p per
share declared on 24 August 2023, and a third interim dividend of 5.50p per
share declared on 11 October 2023 in respect of the year ended 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 2023.

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 2023.


 

 Country Analysis    Total         
                      Assets (%)   
                                   
 Global              61.8          
 United States       9.0           
 Latin America       7.3           
 Canada              7.1           
 Australasia         6.9           
 Other Africa        3.6           
 Indonesia           0.5           
 South Africa        0.1           
 Net Current Assets  3.7           
                     -----         
                     100.0         
                     =====         
                                   

 

 

 Sector Analysis        Total         
                         Assets (%)   
                                      
 Diversified            36.2          
 Copper                 22.9          
 Gold                   13.0          
 Steel                  9.9           
 Industrial Minerals    4.4           
 Aluminium              2.9           
 Iron Ore               2.6           
 Uranium                1.9           
 Platinum Group Metals  1.0           
 Nickel                 0.8           
 Mining Services        0.6           
 Zinc                   0.1           
 Net Current Assets     3.7           
                        -----         
                        100.0         
                        =====         
                                      

 

 

 

 

 

 

 

 Ten largest investments                  
                                          
 Company                  Total Assets %  
                                          
 BHP:                                     
 Equity                   8.0             
 Royalty                  1.6             
 Vale:                                    
 Equity                   5.9             
 Debenture                3.1             
 Rio Tinto                7.4             
 Glencore                 6.9             
 Freeport-McMoRan         4.0             
 Nucor Corp               4.0             
 Barrick Gold             2.9             
 Wheaton Precious Metals  2.7             
 Jetti Resources          2.4             
 Teck Resources           2.3             
                                          
                                          

 

 Asset Analysis      Total Assets (%)  
 Equity              93.2              
 Bonds               2.4               
 Convertible Bonds   0.7               
 Net Current Assets  3.7               
                     -----             
                     100.0             
                     =====             
                                       
                                       

 

 Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Performance  The Company’s NAV fell by 5.9% in February, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which declined by 3.1% (performance figures in GBP).  February was a challenging month for the mining sector, particularly relative to broader equity markets, as the MSCI All Country World Index returned +4.2%. Most mined commodities experienced price declines, appearing to reflect lower consumption levels in China as domestic activity slowed     
 during the Chinese New Year holiday period. Ongoing property sector weakness in the country also contributed to the decline. China’s manufacturing PMI remained below 50 and fell marginally month-on-month from 49.2 to 49.1. For reference, prices for iron ore (62% fe) and zinc fell by 11.7% and 5.4% respectively, although nickel bucked the trend, rising by 10.3%.  Meanwhile, the gold price remained stable, but the other precious metals came under pressure, with silver and platinum prices falling by 2.1% and  
 4.0% respectively. The mining sector's reporting season demonstrated that companies are generally adhering to their capital allocation frameworks. Operating cost inflation appears to have peaked; however, some capital costs remain persistently high. Lastly, delays to copper production growth were a notable theme which increased our conviction in supply-side tightness for the metal over the next few years.  Strategy and Outlook  China has re-opened but with less impact than had been expected. Uncertainty    
 persists around China’s commodity demand, but we are seeing the Chinese administration announce financial support incrementally.  Longer term, we are excited by the structural demand growth for a range of mined commodities that will result from the low carbon transition. Meanwhile, commodity supply is likely to be constrained by the capital discipline of recent years, whilst inventories for many mined commodities are at historic lows. Mining companies have low levels of debt, continue to return capital to  
 shareholders but appear to be entering a higher capital expenditure phase.  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.                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 25 March 2024  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.                                                                                                                                                                                                         

 

 Release (https://mb.cision.com/Main/22397/3951461/2693009.pdf)  



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