REG-BlackRock World Mining Trust Plc: Portfolio Update

BlackRock World Mining TrustAnnouncement

23/07/2024 10:15

BLACKROCK WORLD MINING TRUST PLC (LEI - LNFFPBEUZJBOSR6PW155)

All information is at 30 June 2024 and unaudited.
 

 Performance at month end with net income reinvested                                           
                                                                                               
                                                          One    Three   One    Three  Five    
                                                          Month  Months  Year   Years  Years   
 Net asset value                                          -6.4%  1.6%    -1.0%  11.3%  72.4%   
 Share price                                              -3.6%  11.1%   1.0%   12.7%  105.2%  
 MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*  -4.4%  1.1%    8.9%   13.6%  59.9%   
                                                                                               
 * (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream 
                                                                                               

At month end

 Net asset value (including income) 1 :  572.23p      
 Net asset value (capital only):         565.60p      
 Share price:                            569.00p      
 Discount to NAV 2 :                     0.6%         
 Total assets:                           £1,228.5m    
 Net yield 3 :                           5.9%         
 Net gearing:                            10.4%        
 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 6.63p.

2 Discount to NAV including income.

3 Based on a second interim dividend of 5.50p per share declared on 24 August
2023, a third interim dividend of 5.50p per share declared on 11 October 2023
and a final dividend of 17.00p per share declared on 7 March 2024 in respect
of the year ended 31 December 2023 and a first interim dividend of 5.50p per
share declared on 10 May 2024 in respect of the year ending 31 December 2024.

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              62.7          
 Canada              9.3           
 Latin America       8.6           
 Australasia         6.6           
 United States       6.5           
 Other Africa        3.7           
 Indonesia           0.5           
 South Africa        0.4           
 Net Current Assets  1.7           
                     -----         
                     100.0         
                     =====         
                                   

 

 

 Sector Analysis        Total         
                         Assets (%)   
                                      
 Diversified            33.8          
 Copper                 24.7          
 Gold                   20.1          
 Steel                  4.9           
 Industrial Minerals    3.9           
 Aluminium              3.6           
 Iron Ore               2.1           
 Platinum Group Metals  1.9           
 Uranium                1.6           
 Nickel                 1.1           
 Mining Services        0.5           
 Zinc                   0.1           
 Net Current Assets     1.7           
                        -----         
                        100.0         
                        =====         
                                      

 

 

 

 

 

 

 

 Ten largest investments                  
                                          
 Company                  Total Assets %  
                                          
 Glencore                 8.0             
 BHP:                                     
 Equity                   6.0             
 Royalty                  1.6             
 Rio Tinto                6.1             
 Anglo American           5.5             
 Freeport-McMoRan         5.0             
 Newmont                  4.7             
 Vale:                                    
 Debenture                2.5             
 Equity                   2.0             
 Agnico Eagle Mines       4.2             
 Teck Resources           3.7             
 Norsk Hydro ASA          3.6             
                                          
                                          

 

 Asset Analysis      Total Assets (%)  
 Equity              95.4              
 Bonds               1.6               
 Preferred Stock     0.8               
 Convertible Bond    0.6               
 Option              -0.1              
 Net Current Assets  1.7               
                     -----             
                     100.0             
                     =====             
                                       

 

 Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Performance  The Company’s NAV declined by 6.4% in June, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which fell by 4.4% (performance figures in GBP).  It was a difficult month for the mining sector, particularly relative to broader equity markets as the MSCI ACWI TR Index returned +1.4%. Most mined commodity prices posted declines through June, with iron ore (62% fe), copper and gold prices falling by 10.9%, 8.9% and 1.3% respectively.  Economic 
 data from China was weak, with its manufacturing PMI below 50 indicating contraction, whilst average house prices recorded the largest year-on-year decline since 2015. Meanwhile, US dollar strength provided an additional headwind for commodities, with the DXY Index rising from 104.7 to 105.9. Interest rate expectations declined modestly, with the US 5-year yield falling from 4.5% to 4.3% which supported the performance of growth sectors such as technology over value sectors like mining.  Strategy and       
 Outlook  Constrained mined commodity supply, an evolving demand picture, strong balance sheets and valuations below historic averages make us optimistic about the outlook for the sector.  Mining companies have focused on capital discipline in recent years, meaning they have opted to pay down debt, reduce costs and return capital to shareholders, rather than investing in production growth. This is limiting new supply coming online and there is unlikely to be a quick fix, given the time lags involved in      
 investing in new mining projects. The cost of new projects has also risen significantly and recent M&A activity in the sector suggests that, like us, strategic buyers see an opportunity in existing assets in the listed market, currently trading well below replacement costs. Other issues restricting supply include cases of governments closing mines, permitting issues and a general lack of shovel-ready projects.  Meanwhile, the demand side of the equation appears to be evolving. The commodity super-cycle     
 (2002 – 2011) was all about China’s extraordinary demand growth. Today, China remains the most important individual economy for mining, but we are expecting this importance to gradually decline through to the end of the decade. We expect global infrastructure spending to drive the next wave of demand, with low carbon transition-related infrastructure particularly meaningful. Offshore wind, for example, requires 5.4x more steel and 2.9x more copper per megawatt of power capacity when compared with gas       
 (source: BHP analysis, Hatch, ArcelorMittal, August 2023). The other area gaining attention is the implications for materials from the build out of AI-related data centres, both for the centres themselves but also for the increased power infrastructure required.                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 23 July 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/22397/4017749/2924040.pdf)  



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