BLACKROCK WORLD MINING TRUST PLC
BLACKROCK WORLD MINING TRUST plc
All information is at 31 December 2016 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
Month Months Year Years Years
Net asset value 0.0% 7.1% 89.8% -9.7% -35.3%
Share price 2.8% 11.3% 100.6% -11.9% -30.3%
Euromoney Global Mining Index 0.3% 6.4% 94.0% 6.6% -21.0%
(Total return)
Sources: BlackRock, Euromoney Global Mining Index, Datastream
At month end
Net asset value including income*: 377.77p
Net asset value capital only: 368.78p
*Includes net revenue of 8.99p
Share price: 336.50p
Discount to NAV**: 10.9%
Total assets: £751.6m
Net yield***: 5.3%
Net gearing: 12.4%
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 per share in respect of the year
ended 31 December 2016 and a final dividend of 14.00p per share 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 47.8 Global 61.7
Gold 18.9 Latin America 10.9
Copper 18.5 Australasia 7.4
Silver & Diamonds 10.0 Other Africa 6.6
Industrial Minerals 3.7 Canada 6.4
Zinc 0.7 Emerging Europe 4.6
Iron ore 0.1 South Africa 1.8
Net current assets 0.3 Tanzania 0.3
----- Net current assets 0.3
100.0 -----
===== 100.0
=====
Ten Largest Investments
% Total
Company Assets
Rio Tinto 10.1
First Quantum Minerals 9.5
BHP Billiton 8.2
Glencore 7.4
Vale 5.3
Norilsk Nickel 4.5
Lundin Mining 4.5
Sociedad Minera Cerro Verde 3.2
Newmont Mining 2.8
Newcrest Mining 2.8
Commenting on the markets, Evy Hambro and Olivia Markham, representing the
Investment Manager noted:
Performance
Data from China was largely positive during the month with November's
official industrial production rising 6.2% year-on-year, above the 6.1%
that markets had expected. Retail sales reported a 10.8% year-on-year gain,
ahead of the 10.2% increase anticipated, whilst fixed-asset investment was
in-line with market hopes, rising 8.3%. One dark spot amongst the data was
property sales growth; at 7.9% year-on-year in November, it hit its lowest
point since December 2015.
Despite this supportive economic data, the base metals came under pressure
with nickel, copper and zinc declining by 11.0%, 5.0% and 4.9%
respectively. This appeared to be driven by continued US dollar strength as
the 10-year US Treasury yield extended its climb higher, fuelled by Trump's
pledged stimulus measures.
Elsewhere, gold bullion declined by 1.4%, finishing the month at a price of
$1,157/oz. Whilst moves in the underlying gold price continued to be weak,
gold equities recovered some of the losses they experienced in November.
Within the bulk commodities, coking coal was not immune to the price
sell-off as it finished the month 28.9% lower (the coking coal price
remains 146.2% higher than it started the year). Those companies more
exposed to this came under pressure during the month.
Strategy and Outlook
After an extended down-cycle, January 2016 appears to have marked the
bottom for the mining sector. The sector has performed strongly in 2016,
primarily driven by commodity prices bouncing off the multi-year lows.
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 and the Chinese government's stimulus package has fed through
into improved economic data points such as PMI figures above 50 and robust
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 and, for the first time since
the global financial crisis, we are seeing signs of synchronous growth
throughout the world's developed economies. 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
performed strongly in 2016, 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.
All data points are in US dollar terms unless stated otherwise.
12 January 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.
BLACKROCK WORLD MINING TRUST : Portfolio Update
January 12, 2017 at 09:05 am EST
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© PRNewswire - 2017
