Blackrock World Mining Trust NAV returned +10.4% in March

BlackRock

BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.

All information is at 31 March 2022 and unaudited.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

Performance at month end with net income reinvested

One MonthThree MonthsOne YearThree YearsFive Years
Net asset value10.4%28.1%44.5%115.4%142.7%
Share price6.3%31.4%38.4%144.5%184.1%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*8.6%22.0%31.7%77.6%94.6%

(Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1:769.58p
Net asset value (capital only):754.99p
1 Includes net revenue of 14.59p
Share price:745.00p
Discount to NAV2:3.2%
Total assets:£1,587.3m
Net yield3:5.7%
Net gearing:12.1%
Ordinary shares in issue:184,806,116
Ordinary shares held in Treasury:8,205,726
Ongoing charges4:0.9%

2 Discount to NAV including income.

3 Based on a first interim dividend of 4.50p per share declared on 29 April 2021, a second and third interim dividend of 5.50p per share declared on 19 August 2021 and 18 November 2021 respectively, and a final dividend of 27.00p per share declared on 8 March 2022, all in respect of the year ended 31 December 2021.

4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2021.

Country AnalysisTotal Assets (%)
Global73.1
Latin America7.1
Australasia6.4
United States4.9
Canada3.6
Other Africa2.8
South Africa1.3
Indonesia1.1
United Kingdom0.2
Net Current Liabilities-0.5
—–
100
=====
Sector AnalysisTotal Assets (%)
Diversified42.3
Copper20.9
Gold15
Steel7.2
Industrial Minerals4.6
Aluminium3.7
Iron Ore3
Platinum Group Metals2.5
Nickel1.1
Zinc0.2
Net Current Liabilities-0.5
—–
100
=====
CompanyTotal Assets (%)
Vale: 
Equity6.1
Debenture3.3
Glencore8.7
BHP8.3
Anglo American7.3
Freeport-McMoRan5.1
Teck Resources4.1
Rio Tinto4.1
First Quantum Minerals:
Equity3.3
Bond0.7
Newmont Mining3.6
ArcelorMittal3.1
Asset AnalysisTotal Assets (%)
Equity94.5
Preferred Stock3.1
Bonds2.8
Warrants0.1
Net Current Liabilities-0.5
—–
100
=====

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV returned +10.4% in March, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +8.6% (performance figures in GBP).

The Russia-Ukraine crisis dominated the headlines in March and led to increased concerns around inflation and global economic growth. Mined commodity prices rose almost across the board on supply uncertainty. This was most apparent in the commodities for which Russia has historically been a significant exporter, such as nickel and palladium, with the nickel price for example rising by 30.1% during the month.

Continued increases in global energy costs also put upward pressure on some of the more energy-intensive mined commodities, such as steel, aluminium and zinc. Within the precious metals space, the gold price rose by 2.0% over the month as the metal saw ‘safe-haven’ demand, with notable investor inflows into physically backed gold ETFs.

Elsewhere, economic data from China remained relatively weak as the country grappled with rising COVID-19 cases, with lockdowns in place in a number of key regions. If this weakness persists into the second half of 2022, we would expect the Chinese government to step in with positive stimulus to support the economy.

Strategy and Outlook

Supply and demand in mined commodity markets is generally very tight today and prices look well-supported in our view. On the demand side, increased global infrastructure spending is supporting demand, whilst we expect the mining sector to play a critical role in the coming years in supplying materials required for lower-carbon technologies, like wind turbines, solar panels and electric vehicles. The Russia-Ukraine crisis puts greater focus on energy independence, particularly for Europe, and will further accelerate investment into renewable energy capacity build-out in our view. On the supply side, we are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer-term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects.

Mining companies are generally in robust financial shape today with strong balance sheets and high levels of free cash flow being generated. Finally, we view mining equities as an effective way to hedge portfolios against persistent inflationary pressures whilst, despite recent outperformance, valuations continue to look attractive in our view.
All data points are in USD terms unless stated otherwise.

For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm

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