BlackRock World Mng Portfolio Update

 
TIDMBRWM 
 
BLACKROCK WORLD MINING TRUST plc  (LEI - LNFFPBEUZJBOSR6PW155) 
 
All information is at 30 June 2018 and unaudited. 
 
Performance at month end with net income reinvested 
 
                                         One         Three       One     Three       Five 
 
                                       Month        Months      Year     Years      Years 
 
Net asset value                        -2.5%          8.6%     24.3%     66.4%      20.7% 
 
Share price                            -4.0%          5.1%     20.8%     61.0%      20.5% 
 
EMIX Global Mining Index (Gross)       -1.2%          8.5%     22.9%     64.6%      37.1% 
 
EMIX Global Mining Index (Net)*        -1.2%          8.4%     22.3%     62.2%      33.6% 
 
(Total return) 
 
Sources: BlackRock, EMIX Global Mining Index, Datastream 
 
* The Company's performance benchmark (the EMIX Global Mining Total Return 
Index) may be calculated on either a Gross or a Net return basis.  Net return 
(NR) indices calculate the reinvestment of dividends net of withholding taxes 
using the tax rates applicable to non-resident institutional investors, and 
hence give a lower total return than indices where calculations are on a Gross 
basis.  As the Company is subject to the same withholding tax rates for the 
countries in which it invests, the NR basis is felt to be the most accurate, 
appropriate, consistent and fair comparison for the Company.  Historically the 
benchmark data for the Company has always been stated on a Gross basis, and 
therefore for transparency both sets of benchmark data are provided in the 
table above.  Going forward it is the Board's intention to monitor the 
Company's performance with reference to the NR version of the benchmark. 
 
At month end 
 
Net asset value including income1:                                                445.77p 
 
Net asset value capital only:                                                     439.60p 
 
1 Includes net revenue of 5.40p 
 
Share price:                                                                      386.50p 
 
Discount to NAV2:                                                                   13.3% 
 
Total assets:                                                                     GBP897.5m 
 
Net yield3:                                                                          4.0% 
 
Net gearing:                                                                        14.1% 
 
Ordinary shares in issue:                                                     176,455,242 
 
Ordinary shares held in treasury:                                              16,556,600 
 
Ongoing charges4:                                                                   1.00% 
 
2 Discount to NAV including income. 
3 Based on a quarterly interim dividend of 3.00p per share declared on 25 April 
2018 in respect of the year ending 31 December 2018 and quarterly interim 
dividends of 3.00p per share declared on 10 August 2017 and 10 November 2017 
and a final dividend of 6.60p per share in respect of the year ended 31 
December 2017. 
4 Calculated as a percentage of average net assets and using expenses, 
excluding finance costs, for the year ended 31 December 2017. 
 
Sector                         % Total        Country Analysis                      % Total 
 
                                Assets                                               Assets 
 
Diversified                       48.4        Global                                   62.4 
 
Copper                            20.1        Latin America                            10.7 
 
Gold                              14.0        Australasia                              10.7 
 
Silver & Diamonds                  8.0        Canada                                    6.7 
 
Industrial Minerals                7.2        Other Africa                              6.3 
 
Zinc                               0.9        South Africa                              0.7 
 
Steel                              0.4        USA                                       0.6 
 
Aluminium                          0.3        Kazakhstan                                0.4 
 
Iron Ore                           0.1        Russia                                    0.4 
 
Net current assets                 0.6        Peru                                      0.2 
 
                                 -----        Argentina                                 0.2 
 
                                100.0         Mexico                                    0.1 
 
                                              Net current assets                        0.6 
 
                                 =====                                                ----- 
 
                                                                                      100.0 
 
                                                                                      ===== 
 
Ten Largest Investments 
 
                                               % Total 
Company                                         Assets 
 
Rio Tinto                                         10.7 
 
BHP Billiton                                      10.0 
 
Glencore                                           8.1 
 
Vale                                               7.9 
 
First Quantum Minerals                             7.5 
 
Teck Resources                                     5.7 
 
Sociedad Minera Cerro Verde                        3.2 
 
Mountain Province Diamonds                         2.8 
 
Avanco Resources - Royalty Contract                2.3 
 
Oz Minerals                                        2.2 
 
 
 
 
Commenting on the markets, Evy Hambro and Olivia Markham, representing the 
Investment Manager noted: 
 
Performance 
 
The Company's NAV decreased by 2.5% in June, underperforming its benchmark, 
the EMIX Global Mining Index (net return), which returned -1.2%. 
 
June was a difficult month for the mining sector, which took it into 
negative territory overall for 2018. The month saw more noise around 
potential trade wars as President Donald Trump approved tariffs worth $50bn 
on China, leading Beijing to counter with $50bn of tariffs of its own. 
Concerns heightened around the potential for this to derail the global 
economic growth story and mined commodities suffered as a result. However, 
whilst the market focused on the risks surrounding rising protectionism, 
global economic data remained healthy, with global manufacturing PMI 
increasing to 53.0. 
 
The US dollar strengthened over the month, providing another headwind for 
commodity prices and precious metals in particular. Gold, silver and 
platinum prices were off -4.1%, -2.2% and -6.2% respectively. The base 
metals were also weak, with zinc, copper and nickel down -6.2%, -3.2% and 
-2.2% respectively. The bulk commodities were relatively stable, however, 
with the iron ore (62% fe) price up +2.3% over the month to $67/tonne. 
(Commodity returns in USD) 
 
During the month, underperformance was mainly stock specific. Our position 
in Vale, which has been a strong source of relative returns over the past 
18 months, was a notable detractor on the back of deteriorating sentiment 
towards Brazil and emerging markets in general. 
 
Among the Company's smaller positions, Arizona Mining received a bid from 
South32 during the month, at a 50% premium to last close. In addition, the 
bid for Avanco Resources from Oz Minerals was declared unconditional during 
the month, with Oz Minerals to commence compulsory acquisition. 
 
Strategy and Outlook 
 
After two strong years, investors that have not been exposed to mining may 
now be questioning if they have missed the opportunity. We are, however, 
still a long way below the peak in 2011 and the sector continues to trade 
at a valuation discount to broader equity markets. Meanwhile, free cash 
flow in the sector is close to the highest it has ever been. That said, we 
believe most mined commodities look reasonably fairly priced and so our 
base case is that they remain range-bound at current levels. Crucially, 
however, mining equities are still pricing in commodity prices well below 
current spot prices and, as such, we are constructive on the shares but 
fairly neutral on the commodities themselves. Many still distrust the 
miners, expecting them to make the same mistakes of the past in terms of 
poor capital discipline. Our view though is that the pain of the recent 
down-cycle is still too fresh in the minds of management teams for this to 
become a widespread issue in the near-term. We have begun to see moderate 
increases in sustaining capex announced but we believe for the most part 
these have been necessary increases rather than indicative of a widespread 
return to poor capital discipline. 
 
All data points are in GBP terms unless stated otherwise. 
 
17 July 2018 
 
ENDS 
 
Latest information is available by typing www.blackrock.co.uk/brwm on the 
internet. 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

July 17, 2018 12:09 ET (16:09 GMT)