BlackRock World Mining Trust NAV outperformed benchmark in July

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

All information is at 31 July 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
Month
Three
Months
One
Year
Three
Years
Five
Years
Net asset value0.5%-17.4%-2.1%54.9%83.1%
Share price4.4%-16.7%3.7%85.6%114.2%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*0.4%-17.0%-8.8%34.1%49.7%

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

At month end

Net asset value (including income)1:587.79p
Net asset value (capital only):572.76p
1 Includes net revenue of 15.03p
Share price:598.00p
Premium to NAV2:1.7%
Total assets:£1,285.4m
Net yield3:7.3%
Net gearing:11.0%
Ordinary shares in issue:188,578,036
Ordinary shares held in Treasury:4,433,806
Ongoing charges4:0.9%

2 Premium to NAV including income.
3 Based on 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, and a first interim dividend of 5.50p per share declared on 6 May 2022 in respect of the year ending 31 December 2022.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2021.


Country Analysis
Total Assets (%) Sector AnalysisTotal Assets (%)
Global66.7Diversified37.4
Latin America8.5Copper20.5
Australasia6.9Gold13.3
United States5.6Steel7.1
Canada3.4Industrial Minerals7
Other Africa2.3Aluminium2.9
South Africa1Iron Ore2.9
Indonesia1Platinum Group Metals2.5
United Kingdom0.1Nickel1
Net Current Assets4.5Mining Services0.7
—–Zinc0.2
100Net Current Assets4.5
=====—–
100
=====

Ten largest investments

CompanyTotal Assets %
Glencore8.3
BHP7.9
Vale:
    Equity4.9
    Debenture2.8
Anglo American6.0
Freeport-McMoRan4.3
First Quantum Minerals:
    Equity2.3
    Bond1.0
Rio Tinto3.9
ArcelorMittal3.2
Teck Resources3.2
Franco-Nevada2.8
Asset AnalysisTotal Assets (%)
Equity88.2
Bonds4.1
Preferred Stock3.2
Net Current Assets4.5
—–
100.0
=====

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

Performance

The Company’s NAV rose by 0.5% in July, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +0.4% (performance figures in GBP).
Global equity markets performed positively in July, with the MSCI ACWI TR Index rising by 7.0%. Markets appeared to be supported by Q2 earnings generally being better than feared, as well as cooling inflation expectations and bond yields.

July was more mixed for the mining sector, however, with a difficult start to the month but a more positive tone towards the end. China’s manufacturing PMI moved back above 50, indicating a return to expansion. The Chinese government also announced further policy support linked to the property sector and infrastructure spending. Mined commodity performance was negative on the whole, with iron ore (62% fe.), copper and gold prices down by 4.1%, 3.9% and 2.4% respectively.

The miners reported Q2 results during the month, from which cost inflation driven by high energy costs and labour shortages was the most prominent theme. We also saw a number of production misses across the sector, with copper supply notably undershooting expectations.

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.

All data points are in USD terms unless stated otherwise.

17 August 2022

Latest information is available by typing www.blackrock.com/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.

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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