BlackRock World Mining Trust Plc - Portfolio Update
PR Newswire
London, August 20
The information contained in this release was correct as at 31 July 2021. 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.
BLACKROCK WORLD MINING TRUST PLC (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 31 July 2021 and unaudited.
| Performance at month end with net income reinvested | |||||
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | 3.8% | 4.4% | 46.9% | 64.6% | 128.3% |
| Share price | 1.2% | -2.0% | 58.4% | 88.7% | 170.6% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 4.1% | 4.5% | 38.9% | 50.0% | 99.9% |
| * (Total return) Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream | |||||
At month end
| Net asset value (including income)1: | 639.62p |
| Net asset value (capital only): | 625.48p |
| 1 Includes net revenue of 14.14p | |
| Share price: | 615.00p |
| Discount to NAV2: | 3.8% |
| Total assets: | £1,175.3m |
| Net yield3: | 3.4% |
| Net gearing: | 9.6% |
| Ordinary shares in issue: | 183,750,814 |
| Ordinary shares held in Treasury: | 9,261,028 |
| Ongoing charges4: | 0.9% |
2 Premium to NAV including income.
3 Based on two quarterly interim dividends of 4.00p per share declared on 12 November and 19 August 2020 and a final dividend of 8.30p per share announced on 5 March 2021 in respect of the year ended 31 December 2020, and an interim dividend of 4.50p per share declared on 29 April 2021 in respect of the year ending 31 December 2021.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2020.
| Country Analysis | Total Assets (%) | Sector Analysis | Total Assets (%) | |
| Global | 68.3 | Diversified | 40.6 | |
| Australasia | 6.8 | Copper | 18.0 | |
| Latin America | 5.3 | Gold | 16.8 | |
| South Africa | 4.5 | Steel | 8.7 | |
| United States | 4.1 | Iron Ore | 5.1 | |
| Canada | 3.2 | Platinum Group Metals | 4.3 | |
| Other Africa | 2.7 | Industrial Minerals | 2.2 | |
| Russia | 1.2 | Nickel | 1.2 | |
| Indonesia | 1.2 | Aluminium | 1.1 | |
| United Kingdom | 0.9 | Silver & Diamonds | 0.1 | |
| Net Current Assets | 1.8 | Zinc | 0.1 | |
| ----- | Net Current Assets | 1.8 | ||
| 100.0 | ----- | |||
| ===== | 100.0 | |||
| ===== | ||||
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 6.7 |
| Debenture | 4.4 |
| BHP | 7.4 |
| Anglo American | 7.2 |
| Rio Tinto | 6.6 |
| Glencore | 6.1 |
| Freeport-McMoRan | 5.8 |
| ArcelorMittal | 4.9 |
| Newmont Mining | 3.5 |
| Labrador Iron Ore | 3.2 |
| First Quantum Minerals | |
| Equity | 2.2 |
| Fixed Income | 0.9 |
| Asset Analysis | Total Assets (%) |
| Equity | 91.6 |
| Preferred Stock | 3.9 |
| Bonds | 2.5 |
| Warrants | 0.2 |
| Net Current Assets | 1.8 |
| ----- | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company's NAV returned +3.8% in July, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +4.1% (Figures in GBP).
The mining sector saw a recovery in July, outperforming broader equity markets, with the MSCI ACWI TR Index returning just +0.6%. Mined commodity performance was varied, with copper rising by 3.7% and iron ore (62% fe) falling by 14.2%, hit by the sector's sell-off. Economic data from China remained resilient, with its manufacturing PMI at 50.3, and credit tightening came to an end.
The period also saw a sell-off across precious metals, with the exception of gold which rose by 3.3%. Q2 financial reporting showed some minor cost inflation, still modest relative to margins. It was also a strong earnings season for Anglo American and Rio Tinto, amidst dividend hikes and share buy backs.
Strategy and Outlook
We are optimistic on COVID-19 vaccine rollouts supporting global economic growth and, in turn, commodity demand. Meanwhile, our analysis shows that the mining sector has performed particularly strongly during periods with significant increases in inflation expectations which we believe we could see this year.
Increased fiscal stimulus globally aimed at kick-starting economies in the COVID-19 crisis is being geared towards infrastructure spending which should support mined commodity demand. Meanwhile, we see the mining sector playing a crucial role in supplying the materials required for low carbon technologies e.g. wind turbines and solar panels.
Capital expenditure has been slashed by the miners since the peak in 2013, which is constraining new commodity supply and supporting prices. Whilst capital expenditure has risen since 2016, it is still a long way below the peak, and we are encouraged by rhetoric from management teams around continued capital discipline.
Mining companies have focused on paying down debt in recent years and balance sheets are exceptionally strong today as a result. Given ongoing discipline, capital is being returned to shareholders in the form of dividends and buy backs. Meanwhile, we see potential for dividend upside given that prices for mined commodities have surprised to the upside e.g. iron ore.
All data points are in USD terms unless stated otherwise.
20 August 2021
Latest information is available by typing www.blackrock.com/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.
