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.