BlackRock World Mng Portfolio Update

 
TIDMBRWM 
 
BLACKROCK WORLD MINING TRUST plc  (LEI - LNFFPBEUZJBOSR6PW155) 
 
All information is at 31 October 2017 and unaudited. 
 
Performance at month end with net income reinvested 
 
                                         One         Three       One     Three       Five 
 
                                       Month        Months      Year     Years      Years 
 
Net asset value                         3.4%          3.4%     16.3%     31.4%     -19.7% 
 
Share price                             5.4%          4.7%     21.7%     33.2%     -13.4% 
 
Euromoney Global Mining Index           2.1%          2.3%     11.3%     29.3%      -8.6% 
 
(Total return) 
 
Sources: BlackRock, Euromoney Global Mining Index, Datastream 
 
At month end 
 
Net asset value including income1:                                                422.63p 
 
Net asset value capital only:                                                     414.79p 
 
1 Includes net revenue of 7.84p 
 
Share price:                                                                      382.50p 
 
Discount to NAV2:                                                                    9.5% 
 
Total assets:                                                                     GBP836.1m 
 
Net yield3:                                                                          3.9% 
 
Net gearing:                                                                        12.8% 
 
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                      46.8         Global                                  63.5 
 
Copper                           21.5         Latin America                           11.9 
 
Gold                             16.7         Australasia                             11.3 
 
Industrial Minerals               7.0         Other Africa                             6.8 
 
Silver & Diamonds                 6.7         Canada                                   4.2 
 
Zinc                              1.4         USA                                      0.9 
 
Aluminium                         0.2         South Africa                             0.7 
 
Iron Ore                          0.1         Russia                                   0.5 
 
Net current liabilities          (0.4)        Kazakhstan                               0.4 
 
                                -----         India                                    0.2 
 
                                100.0         Net current liabilities                 (0.4) 
 
                                =====                                                ----- 
 
                                                                                     100.0 
 
                                                                                     ===== 
 
Ten Largest Investments 
 
Company                                        % Total 
                                                Assets 
 
BHP                                                9.8 
 
Rio Tinto                                          9.5 
 
Glencore                                           8.8 
 
First Quantum Minerals                             8.3 
 
Vale                                               6.5 
 
Sociedad Minera Cerro Verde                        3.9 
 
Lundin Mining                                      3.4 
 
Newmont Mining                                     3.1 
 
South32                                            3.0 
 
Teck Resources                                     2.6 
 
 
 
 
Commenting on the markets, Evy Hambro and Olivia Markham, representing the 
Investment Manager noted: 
 
Performance 
 
The Company's NAV increased by 3.4% in October, whilst its benchmark, the 
Euromoney Global Mining Index, returned +2.8% (performance in GBP terms). 
 
For the mining sector, mined commodity performance was generally positive. 
Base metals performed strongly during the month, with nickel, zinc, copper 
and aluminium increasing by 17.7%, 3.6%, 6.0% and 3.0% respectively.  On 
the other hand, bulk commodities came under moderate pressure with the 
price of iron ore falling modestly by 1.1%. 
 
The 19th National Congress of the Communist Party of China took place 
during the month. Key takeaways for us included the fact that the outlook 
for China's economy remains robust and the Leadership have a clear plan; 
tackling pollution remains a key priority and supply side reforms are 
likely to continue. 
 
Elsewhere in the mining space, LME week, the largest annual meeting of 
mined commodity producers and consumers, also took place at the end of the 
month.  Electric vehicles and battery materials emerged as the key theme, 
with lithium, cobalt and nickel being the main metals of focus.  This 
positive sentiment saw a rally in the volume of nickel traded in both 
London and Shanghai, with the price of nickel gaining 17.7% over the month. 
 
Strategy and Outlook 
 
Over the past 18 months we have seen a 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 2014 
levels and still a very long way below the peak in 2011. Mined commodity 
prices still look elevated in some cases but, importantly, mining shares 
are still pricing in commodity prices well below current spot prices. 
 
We recognize 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 have 
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 spill-over 
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. 
 
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 November 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

November 14, 2017 08:53 ET (13:53 GMT)