BlackRock World Mining Trust Plc - Portfolio Update
March 25 2020 - 12:41PM
PR Newswire (US)
BLACKROCK WORLD
MINING TRUST plc (LEI - LNFFPBEUZJBOSR6PW155) |
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All information is at
29 February 2020 and unaudited. |
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The
information contained in this release was correct as at
29 February 2020. Information on the Company’s up to
date net asset values can be found on the London Stock Exchange
Website at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html |
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Performance at month
end with net income reinvested |
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One |
Three |
One |
Three |
Five |
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Month |
Months |
Year |
Years |
Years |
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Net asset value |
-9.9% |
-8.9% |
-7.0% |
-0.2% |
30.9% |
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Share price |
-10.5% |
-8.5% |
-5.8% |
1.9% |
35.6% |
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EMIX Global Mining Index
(Net)* |
-9.4% |
-8.5% |
-2.5% |
8.2% |
34.2% |
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MSCI ACWI Metals and
Mining 30% Buffer 10/40 Index (Net)* |
-9.2% |
-9.3% |
-6.8% |
-4.3% |
23.2% |
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* (Total return) |
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Sources:
BlackRock, EMIX Global Mining Index, MSCI ACWI Metals and Mining
30% Buffer 10/40 Index, Datastream |
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At month end |
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Net asset value
including income1: |
368.63p |
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Net asset value capital
only: |
357.86p |
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1 Includes
net revenue of 10.77p |
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Share price: |
319.50p |
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Discount to
NAV2: |
13.3% |
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Total assets: |
£744.7m |
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Net
yield3: |
6.9% |
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Net gearing: |
15.6% |
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Ordinary shares in
issue: |
173,605,020 |
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Ordinary shares held in
treasury: |
19,406,822 |
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Ongoing
charges4: |
0.9% |
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2 Discount to NAV including income.
3 Based on three quarterly interim dividends of 4.00p
per share declared on 20 August 2019, 2 May 2019 and 14
November 2019 and a final dividend of 10.00p per share announced on
27 February 2020 in respect of the year ended 31 December 2019.
4 Calculated as a percentage of average net assets and
using expenses, excluding finance costs, for the year ended 31
December 2019. |
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Sector |
%
Total |
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Country
Analysis |
%
Total |
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Assets |
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Assets |
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Diversified |
38.7 |
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Global |
64.4 |
Gold |
26.4 |
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Australasia |
9.9 |
Copper |
15.7 |
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Latin America |
8.3 |
Silver & Diamonds |
5.8 |
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Canada |
5.9 |
Industrial Minerals |
4.5 |
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United Kingdom |
3.3 |
Nickel |
2.7 |
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South Africa |
3.1 |
Platinum Group Metals |
2.3 |
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Russia |
1.1 |
Iron Ore |
2.0 |
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Other
Africa |
1.1 |
Diversified Mining |
0.8 |
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Sweden |
0.8 |
Coal |
0.4 |
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Indonesia |
0.7 |
Aluminium |
0.1 |
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USA |
0.7 |
Zinc |
0.1 |
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Argentina |
0.1 |
Steel |
-0.1 |
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Current assets |
0.6 |
Current assets |
0.6 |
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----- |
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----- |
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100.0 |
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100.0 |
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Ten Largest
Investments |
Company |
%
Total
Assets |
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Vale: |
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Equity |
4.6 |
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Debenture |
3.8 |
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BHP |
8.4 |
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Rio Tinto |
8.2 |
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Anglo American |
6.2 |
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Barrick Gold |
5.4 |
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Newmont
Mining |
5.3 |
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First
Quantum Minerals |
4.2 |
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Wheaton
Precious Metals |
4.1 |
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OZ Minerals Brazil: |
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Royalty |
2.5 |
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Equity |
1.3 |
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Franco-Nevada |
3.4 |
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Commenting on the markets, Evy
Hambro and Olivia Markham, representing the Investment Manager
noted: |
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Performance |
The Company’s NAV
decreased by 9.9% in February, underperforming its reference index,
the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net
return), which returned -9.2%. (Figures in GBP)
Global equity markets fell sharply in February as it became
apparent that the coronavirus was spreading globally with a likely
greater impact on economic activity. For reference, the MSCI World
Index fell 8.5%. China’s response to attempt to contain the spread
of the virus included placing a number of cities and towns on
lockdown, which meant Chinese factories could not operate.
This caused supply issues across many industries, whilst air
travel was restricted to certain high virus risk
destinations.
Mined commodity prices came under pressure, with zinc and iron ore
returning -9.1% and -12.7% respectively. Aluminium and copper were
broadly flat over the month returning -1.7% and +1.2% following
price declines last month. The gold price was flat on the month and
remains 5% higher than at the start of the year at $1,587/oz,
reaffirming its safe haven status in times of market volatility.
Similar to last month, gold equities lagged the gold price, partly
reflecting the strong performance of the mid-cap gold companies in
Q4 2019. |
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Strategy and Outlook |
We see an attractive
valuation opportunity in mining today. Mining companies have sold
off in recent weeks in anticipation of a lower level of global
economic growth in 2020. We expect any economic stimulus measures
from China to disproportionately benefit the mined commodity
sector.
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 into a
post coronavirus economic recovery 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. |
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All data points are in USD terms
unless stated otherwise. |
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25 March 2020 |
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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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