TIDMBSRT
RNS Number : 8539U
Baker Steel Resources Trust Ltd
04 August 2022
BAKER STEEL RESOURCES TRUST LIMITED
(Incorporated in Guernsey with registered number 51576 under the
provisions of The Companies (Guernsey) Law, 2008 as amended)
4 August 2022
29 July 2022 Unaudited NAV Statement
Net Asset Value
Baker Steel Resources Trust Limited (the "Company") announces
its unaudited net asset value per share at 29 July 2022:
Net asset value per Ordinary Share: 80.2 pence.
The NAV per share has decreased by 0.2% against the unaudited
NAV at 30 June 2022 with the partial recovery of Tungsten West's
share price on the AIM market following the announcement of its
revised development plan being balanced by the reduction in the
carrying value of Bilboes Gold following the agreement to sell that
company, (see below), and a further fall in the share price of
First Tin PLC on the London Stock 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 29 July
2022.
Investment Update
The Company's top 10 investments were as follows as a percentage
of NAV:
29 July 2022 31 December 2021
Futura Resources Ltd 27.6% 18.1%
Cemos Group plc 20.3% 18.6%
Bilboes Gold Limited 14.5% 13.1%
Tungsten West Plc 8.7% 14.7%
Kanga Potash 5.5% 4.1%
First Tin plc 4.8% 7.7%
Polar Acquisition Ltd 4.4% 7.5%
Nussir ASA 3.6% 3.6%
Silver X Mining Corporation 3.1% 2.8%
Prism Diversified 1.5% 1.1%
Listed Precious Metal Shares 3.0% 3.3%
Other Investments 3.0% 3.3%
Net Cash, Equivalents and
Accruals 0.0% 1.1%
Tungsten West PLC ("Tungsten West")
On 19th July 2022 Tungsten West announced it had concluded a
re-evaluation of the options for restoring production at the
Hemerdon Mine back into production and announced its new
development plan (the "Plan"). The Plan evolved following Tungsten
West's announcement in April 2022 that it was pausing its original
plan which had been based on the 2021 Bankable Feasibility Study
(BFS) in response to the global energy price crisis and the general
inflationary environment for construction materials faced. The Plan
involves a new ramp-up schedule, crushing strategy, and operating
parameters for ore sorting, together with a re-purposing of
equipment within the processing plant, and the production of a
different specification of final tungsten concentrate product. The
outcome of the Plan is a lower cap-ex requirement and a much lower
diesel and power consumption whilst delivering profitable operating
margins.
Hemerdon will now aim to process 2.1 mtpa of ore in year one,
2.6 mtpa in year two, before ramping up to steady state production
of 3.5 mtpa throughput in year three (the BFS envisaged first year
production of 2.7 mtpa rising to steady state throughput of 3.5
mtpa). This should result in tungsten oxide in concentrate
production of 2,200t, 3,000t, 3,900t in years 1, 2, and 3
respectively.
The cap-ex estimate for the new Plan is estimated to be in a
range of GBP26m - GBP36m, compared to the BFS capex estimate of
GBP35 million. The revised estimate at the time of the April 2022
pause announcement was GBP54m. At 30 June 2022, Tungsten West had
cash on hand of GBP22.9m. Allowing for contingencies and working
capital costs Tungsten West will seek to raise debt or other
non-equity capital and is in discussions with financing partners to
provide this additional capital.
Bilboes Gold Ltd ("Bilboes")
As announced on 21 July 2022, the Company and the other
shareholders of Bilboes have signed an agreement to sell Bilboes to
NYSE, AIM and Victoria Falls Exchange listed gold producer
Caledonia Mining Corporation Plc. The Company's share of the
consideration for its 24.2% shareholding in Bilboes will be 800,000
shares in Caledonia together with a 1% net smelter royalty ("NSR")
over the future gold production from the Bilboes properties.
Completion of the transaction is subject to a number of conditions
precedent, in particular Zimbabwean Government approvals, which are
expected to be satisfied before the end of 2022.
The Company believes that the Bilboes project has a very good
prospect of becoming a successful gold mine in the near term, with
potential to expand its reserves and extend its mine life over the
medium term. It thus opted for an ongoing direct interest in the
mine through the NSR. Should the ultimate proposed production rate
of 168,000 ounces of gold per annum be achieved the NSR would
generate some US$2.6 million per annum for the Company at current
gold prices.
As a result of the proposed transaction, at 29 July 2022 Bilboes
has been valued on the basis of a development risk discounted
economic model for the NSR and in accordance with the Company's
valuation policies, at a discount to the quoted price for Caledonia
shares as there will be a 6 month lock-up following completion.
This net result is an approximate 9% reduction to the carrying
value of Bilboes from 30 June 2022.
We believe there are significant synergies to the transaction,
combining the best gold development project in Zimbabwe with
possibly the best operating and development team in the country.
The combined group presents a clear path to becoming a 250,000+
ounce gold producer which should in due course lead to a re-rating
of Caledonia's share price.
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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