BlackRock World Mng Portfolio Update

 
TIDMBRWM 
 
BLACKROCK WORLD MINING TRUST plc 
 
All information is at 30 September 2016 and unaudited. 
 
Performance at month end with net income reinvested 
 
                                         One         Three       One     Three       Five 
 
                                       Month        Months      Year     Years      Years 
 
Net asset value                         9.1%         13.0%     69.4%    -18.4%     -35.2% 
 
Share price                             7.6%         13.4%     58.5%    -23.9%     -34.4% 
 
Euromoney Global Mining Index           8.9%         13.0%     69.7%     -2.7%     -24.6% 
 
(Total return) 
 
Sources: BlackRock, Euromoney Global Mining Index, Datastream 
 
At month end 
 
Net asset value including income*:                                                352.86p 
 
Net asset value capital only:                                                     346.65p 
 
*Includes net revenue of 6.21p 
 
Share price:                                                                      302.25p 
 
Discount to NAV**:                                                                  14.3% 
 
Total assets:                                                                     GBP703.5m 
 
Net yield***:                                                                        6.0% 
 
Net gearing:                                                                        12.8% 
 
Ordinary shares in issue:                                                     176,455,242 
 
Ordinary shares held in treasury:                                              16,556,600 
 
Ongoing charges****:                                                                 1.2% 
 
** Discount to NAV including income. 
*** Based on an interim dividend of 4.00p in respect of the year ending 
31 December 2016 and a final dividend of 14.00p in respect of the year ended 31 
December 2015. 
**** Calculated as a percentage of average net assets and using expenses, 
excluding finance costs for the year ended 31 December 2015. 
 
Sector                        % Total         Country Analysis                     % Total 
 
                               Assets                                               Assets 
 
Diversified                      37.2         Global                                  54.8 
 
Gold                             22.2         Latin America                           14.0 
 
Copper                           18.5         Australasia                              9.3 
 
Silver & Diamonds                14.3         Other Africa                             8.0 
 
Industrial Minerals               3.9         Canada                                   7.8 
 
Nickel                            3.2         Emerging Europe                          3.4 
 
Zinc                              0.4         South Africa                             1.9 
 
Iron ore                          0.1         Indonesia                                0.3 
 
Other                             0.0         Tanzania                                 0.3 
 
Net current assets                0.2         Net current assets                       0.2 
 
                                -----                                                ----- 
 
                                100.0                                                100.0 
 
                                =====                                                ===== 
 
Ten Largest Investments 
 
                                               % Total 
Company                                         Assets 
 
Rio Tinto                                          8.6 
 
BHP Billiton                                       8.3 
 
First Quantum Minerals                             8.0 
 
Glencore                                           5.6 
 
Lundin Mining                                      4.3 
 
Fresnillo                                          4.1 
 
Teck Resources                                     3.4 
 
Newmont Mining                                     3.3 
 
Norilsk Nickel                                     3.3 
 
Sociedad Minera Cerro Verde                        3.3 
 
 
 
 
Commenting on the markets, Evy Hambro and Hannah Gray, representing the 
Investment Manager noted: 
 
 
Performance 
 
After a difficult August, the mining sector returned to trending upwards 
buoyed by rising commodity prices on the back of better-than-expected 
Chinese economic data and US dollar weakness after the US Fed confirmed 
there would be no interest rate rise. Whilst the market had been widely 
expecting no US rate hike, confirmation of this was nonetheless moderately 
supportive for commodity prices. Positive data points from China included 
new bank loans rising to Rmb949bn, up 17.1% year-on-year, and the country's 
steel production remaining robust at 68.6 million tonnes, reflecting a 2.5% 
increase. 
 
Most mined commodities were up over the month with gold, copper and nickel 
prices gaining 1.0%, 5.3% and 8.5% respectively. The nickel price was 
supported by news that the Philippine government had suspended half of the 
country's mining operations for failing to meet social and environmental 
standards. For reference, last year the country produced approximately 
465,000 tonnes of nickel, representing over 20% of the world's mined 
output. However, it was coking coal which was the star performer, rising an 
extraordinary 54.4% over the month as China's coal industry reform 
programme, which has constrained domestic output to the equivalent of 276 
days of production, forced Chinese steel producers to turn to the import 
market. 
 
Good stock selection in the gold sector helped the Company outperform this 
month, with quality names such as Fresnillo and Avanco Resources showing 
good performance. The Company continues to have a quality bias in gold 
through exposure to companies with tier 1 assets, as well as management 
teams with strong track records. 
 
During the month, the Company increased its exposure to iron ore producer 
Vale on the back of strengthening iron ore prices and the potential for 
further asset sales to be announced. The Company also topped up its coal 
producer exposure on the back of an increasing coal price and a more 
supportive longer term outlook which should lead to earnings upgrades. The 
Company reduced its debt holdings after strong performance in these bonds 
year-to-date on the back of company action and rising commodity prices 
strengthening balance sheets. 
 
Amongst the Company's unquoted investments the Company received its first 
royalty payment from Avanco Resources on 2 September. This payment was 
equivalent to 25% of the gold revenue and 2% of the copper revenue in the 
quarter ended 30 June 2016. 
 
Strategy and Outlook 
 
After an extended down-cycle, January 2016 appears to have marked the 
bottom for the mining sector. The sector has performed very strongly this 
year driven by commodity prices bouncing off the multi-year lows we saw at 
the end of 2015. Nonetheless, positioning surveys suggest investors remain 
cautious of the sector, given several years of severe underperformance, and 
the sector continues to be under-owned relative to history. Sentiment 
towards China has improved since the lows of Q3 2015 following stimulus at 
the beginning of 2016, lending support to commodities as fears over a 'hard 
landing' in the country have eased. The Chinese government's stimulus 
package early this year has fed through into improved economic data points 
such as PMI figures above 50 and increases in property prices. At the same 
time, we have seen mining companies focus on cutting costs, reducing debt 
and improving balance sheets. 
 
Looking ahead, we expect the mining sector's performance to remain somewhat 
volatile in the near-term but we see the medium to long-term outlook as 
positive. The situation in China has improved but overall global economic 
growth is likely to remain low for some time. The impact of the mining 
sector slashing capital expenditure and underinvesting over the past few 
years is beginning to be felt by global production. Finally, whilst the 
sector has performed well this year, it has only returned to July 2015 
levels and, with many of the miners trading at attractive free cash flow 
yields, valuations still at relative lows and commodity prices surprising 
to the upside, the risk of being underweight the sector remains 
significant. 
 
All data points are in US dollar terms unless stated otherwise 
 
18 October 2016 
 
ENDS 
 
Latest information is available by typing www.brwmplc.co.uk on the 
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 
(ICV terminal).  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. 
 
 
 
END 
 

(END) Dow Jones Newswires

October 18, 2016 11:34 ET (15:34 GMT)