BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.
All information is at 31 December 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 | 6.8% | 13.4% | 21.5% | 86.4% | 104.9% |
| Share price | 10.3% | 13.5% | 17.5% | 105.6% | 128.1% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 4.6% | 6.7% | 15.1% | 60.2% | 71.7% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 623.13p |
| Net asset value (capital only): | 595.55p |
| 1 Includes net revenue of 27.58p | |
| Share price: | 589.00p |
| Discount to NAV2: | 5.5% |
| Total assets: | £1,283.4m |
| Net yield3: | 4.0% |
| Net gearing: | 10.1% |
| Ordinary shares in issue: | 183,681,116 |
| Ordinary shares held in Treasury: | 9,330,726 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.
3 Based on a final dividend of 8.30p per share announced on 5 March 2021 in respect of the year ended 31 December 2020, a first interim dividend of 4.50p per share declared on 29 April 2021 and second and third interim dividends of 5.50p per share declared on 19 August 2021 and 18 November 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 | 69.3 | Diversified | 38.6 | |
| Latin America | 8.4 | Copper | 21.2 | |
| Australasia | 6.4 | Gold | 16.0 | |
| United States | 3.8 | Steel | 7.5 | |
| Other Africa | 2.9 | Industrial Minerals | 4.2 | |
| Canada | 2.2 | Aluminium | 3.2 | |
| South Africa | 1.9 | Platinum Group Metals | 3.1 | |
| Indonesia | 1.4 | Iron Ore | 2.8 | |
| Russia | 1.1 | Nickel | 1.4 | |
| United Kingdom | 0.8 | Zinc | 0.2 | |
| Net Current Assets | 1.8 | Net Current Assets | 1.8 | |
| —– | —– | |||
| 100.0 | 100.0 | |||
| ===== | ===== | |||
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 5.1 |
| Debenture | 3.2 |
| BHP | 7.5 |
| Glencore | 7.5 |
| Anglo American | 7.3 |
| Freeport-McMoRan | 6.1 |
| ArcelorMittal | 5.1 |
| Rio Tinto | 4.1 |
| Teck Resources | 3.5 |
| Newmont Mining | 3.4 |
| Ivanhoe: | |
| Equity | 2.5 |
| Bond | 0.7 |
| Asset Analysis | Total Assets (%) |
| Equity | 90.6 |
| Bonds | 3.7 |
| Preferred Stock | 3.7 |
| Warrants | 0.3 |
| Options | -0.1 |
| 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 +6.8% in December, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which rose by 4.6% (performance figures in GBP).
Markets ended the year on a stronger footing, with the MSCI ACWI TR Index rising by 4.0%. Early data on the latest COVID-19 variant, Omicron, suggested that whilst transmissibility was very high, symptoms were less severe than previous strains. Economic data from China improved modestly, with its manufacturing PMI rising to 50.9 from 49.9 in November. Meanwhile, China’s steel production data indicated it was bottoming following six months of government intervention to curtail production. Within the mined commodities, iron ore was the strongest performer with the 62% fe. price rising by 16.1% over the month. Elsewhere, base metal prices also performed well, with copper, aluminium and zinc prices up by 2.4%, 6.5% and 9.2% respectively.
Strategy and Outlook
We believe the outlook for mined commodity prices remains robust, whilst mining shares offer attractive value. Recovering global economic growth, accommodative monetary policy, rising government spending and increased focused on green capital investment all point towards strong demand. Meanwhile, supply is constrained following years of capital discipline from the producers and we are seeing no signs that this is set to change.
We are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer-term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects. We are also seeing inflationary data increase and commodities have traditionally been a core way for investors to both protect themselves from this but also benefit from such trends.
We believe the best risk-adjusted opportunity today is in the shares of mining companies in robust financial positions with strong balance sheets and high levels of free cash flow. Mining companies are continuing to return capital to shareholders through dividends and buybacks.
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
