BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.
All information is at 31 May 2021 and unaudited.
For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
Performance at month end with net income reinvested
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | 4.9% | 15.4% | 67.9% | 63.2% | 213.9% |
| Share price | 3.2% | 12.7% | 97.2% | 91.0% | 272.3% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 4.5% | 17.7% | 56.1% | 48.6% | 167.3% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream.
At month end
| Net asset value (including income)1: | 642.82p |
| Net asset value (capital only): | 632.25p |
| 1 Includes net revenue of 10.57p | |
| Share price: | 648.00p |
| Premium to NAV2: | 0.8% |
| Total assets: | £1,311.8m |
| Net yield3: | 3.2% |
| Net gearing: | 10.5% |
| Ordinary shares in issue: | 183,300,814 |
| Ordinary shares held in Treasury: | 9,711,028 |
| 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 | 67.2 | Diversified | 38.9 | |
| Australasia | 6.7 | Copper | 20.8 | |
| Latin America | 6.1 | Gold | 19.7 | |
| South Africa | 5.1 | Steel | 7.2 | |
| United States | 4.2 | Iron Ore | 4.8 | |
| Canada | 3.7 | Platinum Group Metals | 4.6 | |
| Other Africa | 2.8 | Industrial Minerals | 1.8 | |
| Russia | 1.4 | Nickel | 1.1 | |
| Indonesia | 1.1 | Silver & Diamonds | 0.2 | |
| United Kingdom | 1.0 | Zinc | 0.2 | |
| Net Current Assets | 0.7 | Net Current Assets | 0.7 | |
| —– | —– | |||
| 100.0 | 100.0 | |||
| ===== | ===== |
Ten largest investments
| Company | Total Assets % |
| Vale: | |
| Equity | 6.7 |
| Debenture | 4.1 |
| Anglo American | 7.4 |
| BHP | 6.8 |
| Freeport-McMoRan | 6.6 |
| Rio Tinto | 6.6 |
| Glencore | 5.0 |
| Newmont Mining | 4.2 |
| First Quantum Minerals | |
| Equity | 2.7 |
| Royalty | 1.2 |
| Barrick Gold | 3.4 |
| Labrador Iron | 3.0 |
| Asset Analysis | Total Assets (%) |
| Equity | 92.8 |
| Preferred Stock | 3.5 |
| Bonds | 2.9 |
| Warrants | 0.1 |
| Net Current Assets | 0.7 |
| —– | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned +4.9% in May, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +4.5% (Figures in GBP).
The mining sector continued to outperform broader equity markets in May, with the MSCI ACWI TR Index returning just +1.6%. Mined commodity prices performed well, with copper and iron ore (62% fe) prices reaching fresh all-time highs.
A combination of strong economic activity in China, with its manufacturing PMI at 52.0, and stronger demand in the US and Europe helped boost prices. The period also saw robust performance from precious metals, with gold rising by 7.7%, as a weakening US dollar and rising inflation expectations acted as tailwinds.
Turning to the companies, the team attended the Bank of America Global Metals, Mining & Steel 2021 Conference during the month and were encouraged by the general rhetoric around continued capital discipline and the focus of companies to reduce scope 1 and scope 2 emissions.
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 buybacks. 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.
23 June 2021
For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
