BlackRock World Mining Trust Plc - Portfolio Update
16 October 2019 - 1:04AM
PR Newswire (US)
BLACKROCK WORLD
MINING TRUST plc (LEI - LNFFPBEUZJBOSR6PW155) |
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All information is at
30 September 2019 and unaudited. |
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Performance at month
end with net income reinvested |
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One |
Three |
One |
Three |
Five |
|
|
Month |
Months |
Year |
Years |
Years |
|
Net asset value |
-1.0% |
-5.0% |
2.2% |
32.8% |
21.9% |
|
Share price |
1.4% |
-3.6% |
3.5% |
36.2% |
11.9% |
|
EMIX Global Mining Index
(Net)* |
-1.4% |
-4.1% |
12.6% |
38.8% |
41.0% |
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(Total return) |
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Sources: BlackRock, EMIX Global Mining Index, Datastream |
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At month end |
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|
|
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Net asset value
including income1: |
414.80p |
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Net asset value capital
only: |
403.32p |
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1 Includes
net revenue of 11.48p |
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|
|
|
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Share price: |
358.00p |
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Discount to
NAV2: |
13.7% |
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Total assets: |
£848.3m |
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Net
yield3: |
5.6% |
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Net gearing: |
13.1% |
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|
|
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Ordinary shares in
issue: |
176,222,207 |
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Ordinary shares held in
treasury: |
16,789,635 |
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Ongoing
charges4: |
0.9% |
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2 Discount to NAV including income.
3 Based on quarterly interim dividends of 4.00p per
share declared on 20 August 2019 and 2 May 2019 in
respect of the year ending 31 December 2019 and a
quarterly interim dividend of 3.00p per share declared on 8
November 2018 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. |
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|
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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 |
38.6 |
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Global |
63.2 |
Gold |
23.8 |
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Australasia |
10.3 |
Copper |
18.1 |
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Latin America |
10.2 |
Silver & Diamonds |
6.0 |
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Canada |
6.2 |
Industrial Minerals |
5.9 |
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Other Africa |
1.7 |
Materials |
2.3 |
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South Africa |
1.4 |
Nickel |
1.2 |
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United
Kingdom |
1.2 |
Coal |
1.0 |
|
Indonesia |
1.1 |
Zinc |
0.3 |
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Russia |
0.7 |
Aluminium |
0.1 |
|
USA |
0.7 |
Iron Ore |
0.1 |
|
Kazakhstan |
0.6 |
Current assets |
2.6 |
|
Argentina |
0.1 |
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|
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Current assets |
2.6 |
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----- |
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----- |
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100.0 |
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|
100.0 |
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===== |
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===== |
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Ten Largest
Investments |
Company |
%
Total
Assets |
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BHP |
9.4 |
|
Vale: |
|
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Equity |
4.9 |
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Debenture |
3.9 |
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Rio Tinto |
8.7 |
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Barrick
Gold |
5.2 |
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Newmont Mining |
4.4 |
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First Quantum
Minerals |
4.1 |
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Anglo American |
4.0 |
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Oz Minerals Brazil: |
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Royalty |
2.3 |
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Equity |
1.7 |
|
Agnico Eagle Mines |
3.5 |
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Wheaton Precious
Metals |
3.5 |
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Commenting on the markets, Evy
Hambro and Olivia Markham, representing the Investment Manager
noted: |
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Performance |
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The Company’s NAV fell by 1.0% in
September, outperforming its reference benchmark, the EMIX Global
Mining Index (net return), which declined by 1.4%. |
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September saw more indications of a
deteriorating global economic growth outlook. US manufacturing
activity contracted for the second consecutive month, for example,
whilst China’s official manufacturing PMI came in at 49.8,
indicating a fifth consecutive month of contraction. The US Federal
Reserve (the Fed) cut interest rates for the second time this year
in response to weaker economic data, lowering the target range to
1.75-2.00%, as had widely been expected. China’s central bank also
announced a fresh round of stimulus, cutting the reserve
requirement ratio to the lowest level since 2007. Meanwhile,
political news was mixed, with uncertainty increased by drone
attacks on Saudi Arabia’s oil fields and news emerging of an
impeachment enquiry into US President Donald Trump. However,
geopolitical concerns were eased somewhat by confirmation that
US-China trade talks would resume in early October. Against this
backdrop, broader equity markets posted positive returns, with the
MSCI World Index rising by 2.1% in USD terms. |
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In the mined commodity space, the
precious metals gave back some of their strong year-to-date gains,
with gold and silver prices falling by 3.6% and 7.2% respectively
in September. Whilst the US interest rate cut was positive for
gold, it had been expected and language from the Fed was perceived
as more hawkish than expected. Elsewhere, the base metals were
mixed, with the copper price rising by 0.7% but aluminium and
nickel prices falling by 1.3% and 4.4% respectively. Meanwhile,
bulk commodities were strong, with the iron ore (62% fe) price up
by 9.3% on stronger Chinese imports. (Figures in USD terms.) |
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Strategy and Outlook |
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We see an attractive valuation
opportunity in mining today. The mining sector is generating close
to record free cash flow today, 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 to 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. |
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All data points are in GBP terms
unless stated otherwise. |
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15 October 2019 |
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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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