TIDMBSRT
RNS Number : 4126U
Baker Steel Resources Trust Ltd
06 April 2021
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the
provisions of The Companies (Guernsey) Law, 2008 as amended)
6 April 2021
31 March 2021 Unaudited NAV Statement
Net Asset Value
Baker Steel Resources Trust Limited (the "Company") announces
its unaudited net asset value per share at 31 March 2021:
Net asset value per Ordinary Share: 97.4 pence
The NAV per share has increased by 2.3% against the unaudited
NAV at 26 February 2021, partly due to an alteration to certain
carrying values at the 2020 year end, and an increase in the
carrying value of the convertible loan to Azarga Metals Corp
following the increase in its share price on the TSX-V
exchange.
The Company had a total of 106,462,502 Ordinary Shares in issue
with a further 700,000 shares held in treasury as at 31 March 2021
.
Amendment to Unaudited NAV for 31 December 2020
Since publication of the unaudited NAV for 31 December 2020,
additional market information has become available which, together
with a small number of audit adjustments accepted by the Company,
has led to changes to the carrying values of certain investments.
The audit is almost complete and the Company expects to publish its
audited results shortly.
In arriving at the unaudited NAV for 31 December 2020, it was
decided to apply a discount for execution risk to the value of the
cash offer made for Bilboes Gold Ltd. It has now been decided that
the offer is the best reflection of Fair Value at the year end,
regardless of whether the transaction completes or not and
therefore the discount for execution risk has been removed. This
has a resulted in a 17% increase in the valuation of Bilboes,
equivalent to a 3.7% increase in NAV.
In valuing Polar Acquisition Limited's (PAL) royalty over the
Prognoz Silver project owned by Polymetal International, the
Company applies a discount rate relevant to silver royalties in its
net present value calculation and then applies a further discount
for development risk to take account of the project's stage of
development. Overall, this came to an annual discount rate of
approximately 7%. However, in valuing its liability for the royalty
at 31 December 2020, Polymetal used a discount rate of 9% which it
applies for fair value calculation purposes across all its mining
assets. It has been decided to bring the Company's discount rate in
valuing the Prognoz royalty in line with Polymetal's, which has
resulted in the reduction of the valuation of PAL by 19.4% and a
consequent 2.8% reduction in NAV.
There have also been smaller adjustments to the carrying values
of Tungsten West and Cemos Group, to take account of an additional
interest accrual and an exchange rate error respectively.
The above changes result in the unaudited December 2020 NAV
being increased by 1.8% to 97.2 pence per share. These adjustments
have all been taken into account in the NAV at 31 March 2021
above.
Investment Update
The Company's top 12 investments were as follows as a percentage
of NAV:
31 March 2021 31 December 31 December
2020(revised) 2020(previous)
Bilboes Gold Limited 19.3% 19.5% 16.9%
Futura Resources Ltd 16.0% 16.2% 16.5%
Cemos Group plc 13.6% 14.5% 14.6%
Tungsten West Limited 13.1% 13.2% 12.6%
Polar Acquisition Ltd 8.8% 8.9% 11.2%
Anglo Saxony Mining Limited 5.2% 3.9% 4.0%
Mines & Metals Trading
Peru PLC 4.3% 4.5% 4.5%
Azarga Metals Corp 4.0% 2.7% 2.8%
Nussir ASA 3.4% 3.4% 3.5%
Sarmin Minerals Exploration 2.7% 2.7% 2.7%
Metals Exploration plc 1.7% 1.9% 1.9%
Black Pearl Limited Partnership 1.2% 1.2% 1.2%
Listed Precious Metal Shares 2.9% 3.9% 3.9%
Other Investments 2.9% 2.7% 2.8%
Net Cash, Equivalents and
Accruals 0.9% 0.8% 0.8%
Tungsten West Limited ("Tungsten West")
During March 2021 Tungsten West released the findings of its
Bankable Feasibility Study (BFS) which covers the restart of its
Hemerdon Tungsten Mine in Devon, UK. The BFS shows a GBP45m initial
capital requirement for a mine expected to produce on average GBP34
million of EBITDA per annum for over 20 years. This results in an
after tax NPV(5%) of GBP272 million based on current spot Tungsten
prices with an IRR of 33%. The ore reserve estimate in the BFS is
63.3 million tonnes at 0.18% WO(3) , such that Hemerdon has the
second largest JORC compliant tungsten ore reserve in the world
outside China.
The BFS business plan includes an aggregates business, which
processes waste rock from tungsten and tin production into several
different aggregate products. This has a double benefit of
providing both an additional and stable source of income, but also
reducing the amount of waste rock needed to be stored at site from
an environmental point of view. Sales of aggregates have already
commenced from existing waste stockpiles.
Tungsten West is in the process of appointing advisers for the
project finance debt raising and an equity raising to finance the
recommencement of mine operations. Tungsten West's objective is to
start work in the second half of this year, targeting commercial
production in approximately 18 months. A listing of Tungsten West
in 2021 is being considered.
Further details of the Company and its investments are available
on the Company's website www.bakersteelresourcestrust.com
Enquiries:
Baker Steel Resources Trust Limited +44 20 7389 8237
Francis Johnstone
Trevor Steel
Numis Securities Limited +44 20 7260 1000
David Benda (corporate)
James Glass (sales)
The Net Asset Value ("NAV") figure stated is based on unaudited
estimated valuations of the underlying investments and not
necessarily based on observable inputs. Such estimates are not
subject to any independent verification or other due diligence and
may not comply with generally accepted accounting practices or
other generally accepted valuation principles. In addition, some
estimated valuations are based on the latest available information
which may relate to some time before the date set out above.
Accordingly, no reliance should be placed on such estimated
valuations and they should only be taken as an indicative guide.
Other risk factors which may be relevant to the NAV figure are set
out in the Company's Prospectus dated 26 January 2015.
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END
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