BlackRock World Mng Portfolio Update
February 18 2020 - 10:14AM
UK Regulatory
TIDMBRWM
BLACKROCK WORLD MINING TRUST plc (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 31 January 2020 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
Month Months Year Years Years
Net asset value -5.6% 2.5% 3.4% 9.6% 55.9%
Share price -6.8% 6.2% 6.1% 8.7% 61.0%
EMIX Global Mining Index (Net)* -5.5% 1.4% 8.6% 15.8% 57.9%
(Total return)
Sources: BlackRock, EMIX Global Mining Index, Datastream
At month end
Net asset value including income1: 409.21p
Net asset value capital only: 398.17p
1 Includes net revenue of 11.04p
Share price: 357.00p
Discount to NAV2: 12.8%
Total assets: GBP805.7m
Net yield3: 5.9%
Net gearing: 10.2%
Ordinary shares in issue: 174,639,466
Ordinary shares held in treasury: 18,372,376
Ongoing charges4: 1.0%
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 ended
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 2019.
Sector % Total Country Analysis % Total
Assets Assets
Diversified 39.2 Global 63.0
Gold 24.8 Australasia 9.1
Copper 15.6 Latin America 8.7
Silver & Diamonds 5.8 Canada 8.2
Materials 4.9 United Kingdom 2.2
Industrial Minerals 4.7 South Africa 2.2
Iron Ore 1.1 Other Africa 1.1
Nickel 0.9 USA 0.8
Coal 0.4 Indonesia 0.8
Aluminium 0.2 Sweden 0.8
Zinc 0.2 Russia 0.7
Current assets 2.2 Argentina 0.1
----- Kazakhstan 0.1
100.0 Current assets 2.2
===== -----
100.0
=====
Ten Largest Investments
% Total
Company Assets
BHP 9.1
Vale:
Equity 4.9
Debenture 3.9
Rio Tinto 8.5
Anglo American 5.6
Newmont Mining 4.8
Barrick Gold 4.7
First Quantum Minerals 4.0
Agnico Eagle Mines 3.9
Wheaton Precious Metals 3.8
Oz Minerals Brazil:
Royalty 2.2
Equity 1.3
Commenting on the markets, Evy Hambro and Olivia Markham, representing the
Investment Manager noted:
Performance
The Company's NAV decreased by 5.6% in January, marginally underperforming its
reference index, the EMIX Global Mining Index (net return), which returned
-5.5%. (Figures in GBP)
Global equity markets came under pressure in January, with the MSCI World Index
returning -0.9%. At the beginning of the year, markets were impacted by
increased tensions in the middle east after a US-led drone strike killed the
Iranian General, Qasem Soleimani. As we progressed through the month, stock
markets were also negatively impacted by the outbreak of the coronavirus, due
to fears around the impact that the epidemic could have on the global economy.
Against this backdrop, mined commodity prices came under pressure, with copper,
aluminium and nickel prices returning -9.7%, -4.3%, and -8.5% respectively. For
precious metals, the gold price rose by 4.4% in January, finishing the month at
a price of $1,589/oz, as the yellow metal performed well on the back of
safe-haven buying. However, gold equities lagged the move up in the gold price,
partly reflecting the strong performance of the mid-cap gold companies in Q4
2019, as well as some of the higher beta names announcing poorer results than
the market expected.
In other news, BlackRock's CEO, Larry Fink, wrote a letter to CEO's, as well as
another open letter to clients underlining the firm's commitment to make
sustainability the new standard for investing. One important element within
Larry's letter was that BlackRock has committed to exit investments in thermal
coal producers in an effort to strengthen the firm's commitment to
sustainability. For the Company, thermal coal appears in the investment
universe. As a team, we have not had pure-play thermal coal exposure for some
time, due to the environmental risks that we deem to be material.
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. 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 2020. 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 USD terms unless stated otherwise.
18 February 2020
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.
END
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February 18, 2020 11:14 ET (16:14 GMT)
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