BlackRock World Mng Portfolio Update

 
TIDMBRWM 
 
BLACKROCK WORLD MINING TRUST plc  (LEI - LNFFPBEUZJBOSR6PW155) 
 
All information is at 31 August 2017 and unaudited. 
 
Performance at month end with net income reinvested 
 
                                         One         Three       One     Three       Five 
 
                                       Month        Months      Year     Years      Years 
 
Net asset value                         8.3%         18.8%     41.9%      7.1%      -8.1% 
 
Share price                             6.4%         17.3%     44.1%      0.1%      -3.8% 
 
Euromoney Global Mining Index           8.9%         20.1%     37.9%     17.3%       5.9% 
 
(Total return) 
 
Sources: BlackRock, Euromoney Global Mining Index, Datastream 
 
At month end 
 
Net asset value including income1:                                                442.72p 
 
Net asset value capital only:                                                     437.80p 
 
1 Includes net revenue of 4.92p 
 
Share price:                                                                      388.50p 
 
Discount to NAV2:                                                                   12.2% 
 
Total assets:                                                                     GBP895.0m 
 
Net yield3:                                                                          3.9% 
 
Net gearing:                                                                        15.0% 
 
Ordinary shares in issue:                                                     176,455,242 
 
Ordinary shares held in treasury:                                              16,556,600 
 
Ongoing charges4:                                                                   1.10% 
 
2 Discount to NAV including income. 
3 Based on quarterly interim dividends of 3.00p per share declared on 
4 May 2017 and 10 August 2017 in respect of the year ending 31 December 2017 
and a final dividend of 9.00p per share in respect of the year ended 
31 December 2016. 
4 Calculated as a percentage of average net assets and using expenses, 
excluding finance costs, for the year ended 31 December 2016. 
 
Sector                        % Total         Country Analysis                     % Total 
 
                               Assets                                               Assets 
 
Diversified                      49.4         Global                                  65.8 
 
Copper                           19.6         Latin America                           11.1 
 
Gold                             17.3         Australasia                             10.7 
 
Silver & Diamonds                 7.1         Other Africa                             6.4 
 
Industrial Minerals               4.9         Canada                                   4.2 
 
Iron Ore                          1.1         South Africa                             0.8 
 
Zinc                              0.8         Russia                                   0.5 
 
Aluminium                         0.2         Kazakhstan                               0.4 
 
Net current liabilities          (0.4)        USA                                      0.2 
 
                                -----         India                                    0.2 
 
                                100.0         Emerging Europe                          0.1 
 
                                =====         Net current liabilities                 (0.4) 
 
                                                                                     ----- 
 
                                                                                     100.0 
 
                                                                                     ===== 
 
Ten Largest Investments 
 
                                               % Total 
Company                                         Assets 
 
BHP                                               10.6 
 
Rio Tinto                                          9.4 
 
First Quantum Minerals                             8.2 
 
Glencore                                           8.1 
 
Vale                                               7.0 
 
Teck Resources                                     4.4 
 
Lundin Mining                                      4.0 
 
Sociedad Minera Cerro Verde                        3.2 
 
Newmont Mining                                     3.2 
 
South32                                            2.6 
 
 
 
 
Commenting on the markets, Evy Hambro and Olivia Markham, representing the 
Investment Manager noted: 
 
Performance 
 
Macroeconomic data points were mixed during the period with a confluence of 
factors keeping equity markets broadly flat (as displayed by a 0.1% 
increase in the MSCI World Index). China's Purchasing Manager's Index (PMI) 
recorded a reading of 51.7, up from 51.4 in July, whilst elsewhere, it was 
announced that US domestic inflation increased at its slowest pace since 
2015, boosting expectations that the Federal Reserve will delay increasing 
interest rates. These supportive factors were offset by rising political 
tensions around North Korea's nuclear program and negative investor 
sentiment around the upcoming European Central Bank meeting and speed of 
tapering of bond purchases. For the mining sector, performance was positive 
for the base metals during the month, with nickel, zinc, copper and 
aluminium increasing by 15.5%, 12.8%, 6.7% and 10.7% respectively.  Iron 
ore also saw positive performance, increasing by 4.5% during the month. 
 
The mining sector finished H1 2017 reporting during the month, and the 
strong results announced evidenced a remarkable turnaround in the financial 
health of mining companies since the start of 2016.  Within 18 months, the 
mining sector has gone from the market believing it was on the brink of 
bankruptcy, back to strong profits, robust free cash flow and rising 
dividends having returned +99% over that period, as measured by the 
Euromoney Global Mining Index.  The key themes that emerged from the H1 
reporting season were rising free cash flow, deleveraging and returning 
capital to shareholders, all fuelled by the significant improvement we have 
seen in mined commodity prices and costs of production. 
 
Strategy and Outlook 
 
The latest round of reporting highlights the remarkable turnaround in the 
financial health of the mining sector. For some time, we have been 
confident that January 2016 marked the bottom of the mining cycle as, back 
then, the market was concerned about a 'hard-landing' in China as well as 
mining companies' stretched balance sheets. Today, balance sheets are in 
much better shape and given current commodity prices, we are optimistic 
about a continued recovery in share prices. The mining sector has among the 
highest free cash flow yield out of any global sector and given the 
improvement in balance sheets, we expect lower earnings volatility relative 
to the previous three years to help drive a re-rating. 
 
Whilst the mining sector has performed strongly, we are only back at July 
2014 levels and still a very long way below the peak in 2011. Mined 
commodity prices have surged above analyst expectations, with copper and 
iron ore at 3-year highs and zinc at a 10-year high for example, sparking 
fears of a pull back. However, importantly, mining shares are still pricing 
in commodity prices well below current spot prices. 
 
We recognise that China remains the key risk for investors in the mining 
sector but believe that the Chinese administration has shown itself willing 
and able to step in with support to avoid a 'hard-landing' type event. 
Reform measures put in place by the government across a range of 
industries, including steel, coal and aluminium, to tackle pollution and 
excess capacity have been more effective than many expected and improved 
the profitability across a number of sectors, which we see as a key benefit 
in the longer-term. China should also benefit from a spillover effect from 
the wider improvements we have seen in global economic growth in recent 
months. Concerns mounted in Q2 2017 of this year that tighter credit 
conditions in the country could lead to a slowdown. However, economic data 
has continued to defy the sceptics and exceed expectations with, for 
example, China's steel PMI data coming in at a 16-month high. 
 
Meanwhile, commodity prices should also be supported by constraints on the 
supply side resulting from the underinvestment we have seen in the mining 
sector in recent years, with global mining sector capex down 66% since the 
peak in 2012. The key question for investors today is whether the mining 
companies can maintain the same level of capital discipline or will they 
slip back into bad habits? For now, we feel the pain of the recent 
down-cycle is still too fresh and rhetoric from management teams gives us 
optimism that the sector's focus remains on shareholder returns. 
 
All data points are in US dollar terms unless stated otherwise. 
 
14 September 2017 
 
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

September 14, 2017 07:34 ET (11:34 GMT)