BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.
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
All information is at 31 August 2024 and unaudited.
| Performance at month end with net income reinvested | |||||
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | -3.3% | -10.2% | -3.4% | 7.1% | 72.4% |
| Share price | -6.6% | -10.8% | -4.9% | 10.9% | 99.5% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | -3.4% | -8.5% | 3.7% | 7.3% | 60.4% |
| * (Total return)Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream | |||||
At month end
| Net asset value (including income)1: | 549.06p |
| Net asset value (capital only): | 537.60p |
| Share price: | 526.00p |
| Discount to NAV2: | 4.2% |
| Total assets: | £1,179.1m |
| Net yield3: | 6.4% |
| Net gearing: | 8.6% |
| Ordinary shares in issue: | 191,183,036 |
| Ordinary shares held in Treasury: | 1,828,806 |
| Ongoing charges4: | 0.91% |
| Ongoing charges5: | 0.81% |
1 Includes net revenue of 11.46p
2 Discount to NAV including income.
3 Based on a third interim dividend of 5.50p per share declared on 11 October 2023 with ex-date 23 November 2023 and pay date of 18 December 2023, and a final dividend of 17.00p per share declared on 7 March 2024 with ex date 21 March and pay date 14 May 2024 in respect of the year ended 31 December 2023, and a first interim dividend of 5.50p per share declared on 10 May 2024 with ex date 30 May 2024 and pay date 24 June 2024, and second interim dividend of 5.50p per share declared on 23 August 2024 with ex date 05 September 2024 and pay date 30 September 2024 in respect of the year ending 31 December 2024.
4 The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2023.
5 The Company’s ongoing charges are calculated as a percentage of average daily gross assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2023.
| Country Analysis | Total Assets (%) |
| Global | 59.8 |
| Canada | 12.3 |
| Latin America | 7.9 |
| United States | 5.9 |
| Australasia | 5.6 |
| Other Africa | 3.8 |
| South Africa | 0.8 |
| Indonesia | 0.6 |
| Net Current Assets | 3.3 |
| —– | |
| 100.0 | |
| ===== |
| Sector Analysis | Total Assets (%) |
| Diversified | 31.8 |
| Gold | 24.3 |
| Copper | 23.8 |
| Steel | 5.2 |
| Industrial Minerals | 3.4 |
| Uranium | 2.4 |
| Iron Ore | 2.1 |
| Platinum Group Metals | 1.4 |
| Aluminium | 1.2 |
| Nickel | 1.0 |
| Zinc | 0.1 |
| Net Current Assets | 3.3 |
| —– | |
| 100.0 | |
| ===== |
| Ten largest investments | |
| Company | Total Assets % |
| Rio Tinto | 7.6 |
| Glencore | 7.0 |
| BHP: | |
| Equity | 5.3 |
| Royalty | 1.5 |
| Newmont | 6.0 |
| Agnico Eagle Mines | 5.2 |
| Anglo American | 5.1 |
| Freeport-McMoRan | 4.5 |
| Wheaton Precious Metals | 3.8 |
| Teck Resources | 3.7 |
| Barrick Gold | 3.1 |
| Asset Analysis | Total Assets (%) |
| Equity | 93.9 |
| Bonds | 1.5 |
| Preferred Stock | 0.7 |
| Convertible Bond | 0.6 |
| Net Current Assets | 3.3 |
| —– | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s Net Asset Value (NAV) declined by 3.3% in August, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which fell by 3.4% (Performance figures in GBP). It was another weak month for the mining sector, particularly relative to broader equity markets as the MSCI ACWI TR Index rose by 1.7% (GBP terms). Negative sentiment around China continued to drag on the sector. Indicators for the country’s property market, such as average house prices and floor space started, showed significant year-on-year declines. Mined commodities delivered mixed performance with the iron ore (62% fe) price flat but copper and gold prices up by 3.1% and 4.8% respectively. US dollar weakness provided a tailwind for commodities, especially gold. The miners concluded their Q2 earnings reporting season during the month which was somewhat disappointing overall. However, positive takeaways included a greater focus on M&A, stabilising operating costs and capital allocation frameworks continuing to prioritise returning capital to shareholders.
Strategy and Outlook
Constrained mined commodity supply, an evolving demand picture, strong balance sheets and valuations below historic averages make us optimistic about the outlook for the sector. Mining companies have focused on capital discipline in recent years, meaning they have opted to pay down debt, reduce costs and return capital to shareholders, rather than investing in production growth. This is limiting new supply coming online and there is unlikely to be a quick fix, given the time lags involved in investing in new mining projects.
The cost of new projects has also risen significantly and recent M&A activity in the sector suggests that, like us, strategic buyers see an opportunity in existing assets in the listed market, currently trading well below replacement costs. Other issues restricting supply include cases of governments closing mines, permitting issues and a general lack of shovel-ready projects.
Meanwhile, the demand side of the equation appears to be evolving. The commodity super-cycle (2002 – 2011) was all about China’s extraordinary demand growth. Today, China remains the most important individual economy for mining, but we are expecting this importance to gradually decline through to the end of the decade. We expect global infrastructure spending to drive the next wave of demand, with low carbon transition-related infrastructure particularly meaningful. The other area gaining attention is the implications for materials from the build out of AI-related data centres, both for the centres themselves but also for the increased power infrastructure required. All data points are in USD terms unless stated otherwise.
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
