REG-BlackRock World Mng: Portfolio Update

BlackRock World Mining TrustAnnouncement

19/12/2019 13:45

BLACKROCK WORLD MINING TRUST plc (LEI - LNFFPBEUZJBOSR6PW155)                                                           
 All information is at 30 November 2019 and unaudited.                                                                   
                                                                                                                         
 Performance at month end with net income reinvested                                                                     
                                                                                                                         
                                                      One                     Three     One           Three         Five 
                                                    Month                    Months    Year           Years        Years 
 Net asset value                                     1.3%                     -2.5%   10.9%           22.2%        39.7% 
 Share price                                         3.8%                      0.0%   11.9%           24.1%        36.0% 
 EMIX Global Mining Index (Net)*                     0.5%                     -2.6%   18.3%           29.4%        48.1% 
 (Total return)                                                                                                          
 Sources: BlackRock, EMIX Global Mining Index, Datastream                                                                
                                                                                                                         
 At month end                                                                                                            
                                                                                                                         
 Net asset value including income (1):                                                                           404.52p 
 Net asset value capital only:                                                                                   395.66p 
 (1)Includes net revenue of 8.86p                                                                                        
                                                                                                                         
 Share price:                                                                                                    349.00p 
 Discount to NAV (2):                                                                                              13.7% 
 Total assets:                                                                                                   £802.6m 
 Net yield (3):                                                                                                     6.0% 
 Net gearing:                                                                                                      14.2% 
                                                                                                                         
 Ordinary shares in issue:                                                                                   175,475,382 
 Ordinary shares held in treasury:                                                                            17,536,460 
 Ongoing charges (4):                                                                                               0.9% 
                                                                                                                         
 (2)Discount to NAV including income.  (3)Based on quarterly interim dividends of 4.00p per share declared on 14 November 2019, 20 August 2019 and 2 May 2019 in respect of the year ending 31 December 2019 and a final dividend of 9.00p per share announced on 28 February 2019 in respect of the year ended 31 December 2018.  (4)Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2018. 
                                                                                                                         
 Sector                                  % Total                   Country Analysis                              % Total 
                                          Assets                                                                  Assets 
                                                                                                                         
 Diversified                                40.7                   Global                                           66.5 
 Gold                                       23.9                   Latin America                                    10.1 
 Copper                                     19.8                   Australasia                                       8.2 
 Silver & Diamonds                           5.9                   Canada                                            6.5 
 Industrial Minerals                         5.1                   South Africa                                      3.5 
 Materials                                   3.8                   United Kingdom                                    1.2 
 Nickel                                      0.9                   Other Africa                                      1.1 
 Coal                                        0.4                   Indonesia                                         0.9 
 Zinc                                        0.2                   Sweden                                            0.9 
 Aluminium                                   0.2                   USA                                               0.8 
 Iron Ore                                    0.1                   Russia                                            0.7 
 Current liabilities                        -1.0                   Kazakhstan                                        0.5 
                                                                   Argentina                                         0.1 
                                                                   Current liabilities                              -1.0 
                                           -----                                                                   ----- 
                                           100.0                                                                   100.0 
                                           =====                                                                   ===== 

   

 Ten Largest Investments              
 Company                   % Total    
                             Assets   
 BHP                            9.9   
 Rio Tinto                      9.1   
 Vale:                                
 Equity                         5.0   
 Debenture                      3.8   
 Anglo American                 5.3   
 Barrick Gold                   5.1   
 Newmont Mining                 4.9   
 First Quantum Minerals         4.3   
 OZ Minerals Brazil:                  
 Royalty                        2.3   
 Equity                         1.8   
 Agnico Eagle Mines             3.9   
 Wheaton Precious Metals        3.7   

   

 Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 The Company’s NAV increased by 1.3% in November, outperforming its reference index, the EMIX Global Mining Index (net return), which returned 0.5%.                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 General equity market sentiment improved in November on a perceived easing of geopolitical tensions as confidence increased that the US and China were close to signing a phase 1 trade deal. US President Donald Trump stated towards the end of the month that the US and China were “in the final throes of a very important deal”. Meanwhile, China’s official PMI came in at 50.2, up from 49.3 in October and indicating modest expansion. Amidst this backdrop, global equity markets performed well, with the MSCI World 
 Index rising by 2.8%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 In the mining space, the month saw mixed performance from mined commodities. Bulk commodity prices were generally positive, with the iron ore (62% fe) price finishing up by 4.7%. Base metals were mixed, however, with the copper price rising by 1.3% but the nickel price off by -18.4%. The sharp move down for nickel followed news that the Indonesian government had delayed implementation of its ban on nickel ore exports until January 2020. Meanwhile, the precious metals were generally weak, with the gold price 
 falling by 3.2% on reduced ‘safe-haven’ demand and US dollar strength. (Figures shown in USD.)                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Outperformance over the month was driven in part by our exposure to the copper sub-sector. Our position in Ero Copper was the top performer at the stock-level, for example. The company performed well on the back of the rising copper price and after announcing stronger-than-expected results in which it raised 2019 production guidance.                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Strategy and Outlook                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 We see an attractive valuation opportunity in mining today. The mining sector is generating close to record free cash flow, whilst balance sheets are in strong shape and companies remain focused on capital discipline. Whilst US-China trade tensions are fuelling uncertainty, our base case remains that we have positive global economic growth for the next 12-18 months, albeit at a slower rate than was expected this time last year. Barring an economic recession, we expect the mining sector to re-rate as the    
 miners continue to generate robust free cash flow and return capital to shareholders through dividends and buybacks. We expect most mined commodity prices to be stable to rising through the remainder of this year. On the commodity demand side, we do not anticipate a hard-landing type event in China and we have been encouraged by stimulus measures beginning to feed through into improvements in some economic data points. On the commodity supply side, supply is tight in most mined commodity markets and, given 
 the cuts in mining sector spending since 2012 (down ~66%), we expect it to remain so.                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 All data points are in GBP terms unless stated otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 19 December 2019                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Latest information is available by typing www.blackrock.co.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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