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BLACKROCK WORLD MINING TRUST PLC - Portfolio Update

Date : 10/16/2012 @ 4:30PM
Source : PR Newswire (US)
Stock : Blackrock Wld (BRWM)
Quote : 449.0  -17.6 (-3.77%) @ 9:05PM
Blackrock World share price Chart

BLACKROCK WORLD MINING TRUST PLC - Portfolio Update

Blackrock World (LSE:BRWM)
Historical Stock Chart

2 Years : From Sep 2012 to Sep 2014

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BLACKROCK WORLD MINING TRUST PLC - Portfolio Update
BLACKROCK WORLD MINING TRUST plc
All information is at 30 September 2012 and unaudited.

Performance at month end with net income reinvested

                                 One    Three     One     Three     Five
                               Month   Months     Year    Years    Years
Net asset value (undiluted)     7.0%     2.3%    -1.8%    18.7%    -9.9%
Net asset value (diluted)       7.0%     2.3%    -1.8%    18.7%    -3.9%
Share price                     8.6%     3.3%    -0.7%    22.7%    -4.1%
HSBC Global Mining Index*       7.1%     5.6%    -3.5%     8.2%     1.8%
*Total return

Sources: BlackRock, HSBC Global Mining Index, Datastream


At month end
Net asset value           Including Income            Capital Only
Undiluted/diluted:                 661.11p*                650.74p

*Includes net revenue of 10.37p

Share price:                       579.00p
Discount to NAV**:                   12.4%
Total assets:                   £1,253.81m
Net yield***:                         3.6%
Gearing:                              7.0%

Ordinary shares in issue:          177,287,242
Ordinary shares held in Treasury:   15,724,600

** Discount to NAV including Income. *** Based on final dividend of 14.00p per share in respect of the year ended 31 December 2011 and interim dividend of 7.00p per share in respect of the year ended 31 December 2012.

Sector                   % Total    Country Analysis          % Total
                          Assets                               Assets

Diversified                 34.0    Global                       39.0
Base Metals                 18.9    Latin America                21.2
Industrial Minerals         16.2    Other Africa                 16.0
Gold                         9.9    Australasia                   7.6
Silver & Diamonds            9.9    South Africa                  4.5
Platinum                     2.4    Emerging Europe               0.9
Energy Minerals              0.6    Republic of Congo             0.8
Net current assets           8.1    Democratic Republic of Congo  0.6
                           -----    Canada                        0.6
                           100.0    USA                           0.4
                           =====    Indonesia                     0.3
                                    Net current assets            8.1
                                                                -----
                                                                100.0
                                                                =====

Ten Largest Investments                      % Total
                                              Assets

Company
BHP Billiton                                     8.9
Rio Tinto                                        8.8
Glencore Finance (Europe) 5% 31/12/14            5.9
London Mining Contract                           5.4
Minas Buenaventura                               4.3
Fresnillo                                        4.3
First Quantum Minerals                           4.3
Industrias Penoles                               4.1
Freeport McMoRan                                 3.9
Soc Min Cerro Verde                              3.5

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

Performance

Both commodity and equity markets rose strongly in September fuelled by news that Europe, the US and Japan would be prepared to enact additional monetary policy to support their economies. Early in the month Mario Draghi announced that the EU would purchase sovereign debt indefinitely. This was closely followed by the FED announcing a third round of quantitative easing (QE3) focused on mortgage backed securities and finally Japan announced that they would also be increasing their asset purchases.

News that governments were taking decisive action to address the slowing global economy reassured markets, providing the stimulus for risk appetite to rise. Fears of inflation (often a consequence of quantitative easing) and improving sentiment towards risk assets provided a boost to both mining commodities and equities.

The details of QE3 were a strong catalyst for gold, other precious metals and the producers of these commodities to move higher. The Fed committed to continue its asset purchase programme until such time as the outlook for the labour market 'substantially improves,' whilst keeping interest rates at current low levels until mid-2015. This environment is expected to be highly accommodative for gold and other precious metals as investors seek out assets with inflation hedge qualities and those that have historically performed well in negative real interest rate environments. In September precious metals were amongst the strongest performers, with silver rising +13.5%, closely followed by platinum +10.0% and gold +6.0% (Datastream).

Across the industrial commodities, nickel and lead were the strongest performers returning +15.9% and +15.8% respectively. Copper posted more modest gains of +8.0% during the month. We continue to favour the red metal as supply side challenges have prevented the industry from increasing production to balance the market. A report released by the International Copper Study Group covering the first half of 2012 indicated that the copper market was already in deficit by 473,000t. While this may in part be driven by a build in inventories, it has been a key factor in keeping the copper price at current levels, as the market remains fundamentally tight.

The iron ore price has declined by approximately 40% over the past few months surprising many investors in the mining sector. After falling to below $90/t (Source: Bloomberg landed in China) in early September, the industrial commodity quickly rebounded to above US$100/t as cost support entered the market on the back of supply cuts.

Strategy/Outlook

The recent announcements of central bank stimulus, most notably in the US with the implementation of QE3, are likely to be supportive of commodity demand. In addition, reiteration by the Chinese government of their intentions to commit US$425bn towards infrastructure investment is likely to support demand from the world's largest consumer of most mined commodities. Meanwhile, the greater clarity that a successful leadership transition in China could bring may also prove beneficial. Importantly, Chinese GDP estimates for 2012 remain above government targets. These factors are likely to provide a supportive environment for commodities in the near term, and greater clarity is anticipated post the transition in political leadership in China towards the end of 2012/early 2013.

In the medium to longer term the supply side continues to be challenged by both short term factors, such as weather events, and longer term ones, such as labour shortages and grade declines. These structural issues are supportive of prices where demand remains robust.

Mining company valuations are currently trading below historical averages and the potential for strong returns over the medium term are good. We remain focused on companies with balance sheet strength and high asset quality as we believe these factors will be key differentiators. In addition, mining managements have shown themselves to be willing to share balance sheet strength with investors through dividends and buybacks, a trend they would do well to continue.


16 October 2012

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.

Copyright r 16 PR Newswire



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