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 30 September 2024 and unaudited.
| Performance at month end with net income reinvested | |||||
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | 6.9% | 2.6% | 2.4% | 25.7% | 86.2% |
| Share price | 5.7% | -2.3% | -0.9% | 26.6% | 108.0% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 6.9% | 2.3% | 9.3% | 25.4% | 72.3% |
| * (Total return)Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream. | |||||
At month end
| Net asset value (including income)1: | 580.66p |
| Net asset value (capital only): | 571.76p |
| Share price: | 550.00p |
| Discount to NAV2: | 5.3% |
| Total assets: | £1,236.9m |
| Net yield3: | 6.1% |
| Net gearing: | 11.9% |
| 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 8.90p.
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 2024 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 5 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 | 62.4 |
| Canada | 11.9 |
| Latin America | 7.4 |
| Australasia | 6.5 |
| United States | 5.9 |
| Other Africa | 3.9 |
| South Africa | 0.7 |
| Indonesia | 0.6 |
| Net Current Assets | 0.7 |
| —– | |
| 100.0 | |
| ===== | |
| Sector Analysis | Total Assets (%) |
| Diversified | 36.2 |
| Copper | 23.3 |
| Gold | 22.1 |
| Steel | 4.9 |
| Iron Ore | 3.3 |
| Industrial Minerals | 3.2 |
| Uranium | 2.6 |
| Aluminium | 1.3 |
| Platinum Group Metals | 1.3 |
| Nickel | 1.0 |
| Zinc | 0.1 |
| Net Current Assets | 0.7 |
| —– | |
| 100.0 | |
| ===== | |
| Ten largest investments | |
| Company | Total Assets % |
| BHP: | |
| Equity | 9.4 |
| Royalty | 1.4 |
| Rio Tinto | 7.0 |
| Glencore | 6.6 |
| Anglo American | 5.3 |
| Newmont | 5.2 |
| Freeport-McMoRan | 4.7 |
| Agnico Eagle Mines | 4.5 |
| Vale: | |
| Debenture | 2.3 |
| Equity | 1.9 |
| Teck Resources | 3.7 |
| Wheaton Precious Metals | 3.5 |
| 5 | |
| Asset Analysis | Total Assets (%) |
| Equity | 96.9 |
| Bonds | 1.4 |
| Preferred Stock | 0.7 |
| Convertible Bond | 0.6 |
| Option | -0.3 |
| 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 rose by 6.9% in September 2024, performing in line with its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return) which increased by 6.9% (performance figures in GBP).
The mining sector performed strongly in September as mined commodity prices rose across the board. For reference, global equity markets, as measured by the MSCI ACWI TR Index, returned +2.3%.
The main news for mining was China announcing a range of stimulus measures. This was welcome news following a ~18-month period in which weak economic data (particularly property-related data) has been the main drag on the sector. The People’s Bank of China said it would cut the reserve requirement ratio (the amount of cash banks need to hold in reserve), reduce interest rates for existing mortgages and lower the minimum down payment on home purchases. These monetary measures were then followed by a report that China also plans to issue ~2 trillion yuan of special sovereign bonds as part of a fresh fiscal stimulus package.
In the commodities space, iron ore (62% fe), copper and gold prices rose by 8.4%, 6.3% and 5.1% respectively. Meanwhile, energy costs came down during the month with the Brent oil price falling by 9.8%, suggesting a positive outlook for the miners’ margins.
Elsewhere, the uranium price rose by 3.0% as excitement built around nuclear. During the month, Microsoft signed a deal with Constellation Energy to restart its Three Mile Island nuclear plant in Pennsylvania to help power Microsoft’s data centres.
Strategy and Outlook
Near term, we expect performance to be driven by the China stimulus situation, which is evolving, and we are watching closely to see if it translates into a pickup in demand. Longer term, we expect mined commodity demand growth to be driven by increased global infrastructure build out, particularly related to the low carbon transition and increased power demand.
Meanwhile, the supply side of the equation is constrained. 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 mergers and acquisitions 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.
Turning to the companies, balance sheets in the sector are very strong relative to history. Despite this, valuations are low relative to historic averages and relative to broader equity markets.
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
