Blackrock World Mining Trust NAV returned +8.9% in April, outperforming its reference index

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

All information is at 30 April 2021 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 value8.9%17.4%77.1%65.1%168.0%
Share price10.1%20.9%109.0%97.4%224.6%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*8.7%19.0%59.8%47.2%122.4%

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

At month end

Net asset value (including income)1:616.94p
Net asset value (capital only):602.58p
1 Includes net revenue of 14.36p
Share price:632.00p
Premium to NAV2:2.4%
Total assets:£1,241.4m
Net yield3:3.3%
Net gearing:10.2%
Ordinary shares in issue:179,125,814
Ordinary shares held in Treasury:13,886,028
Ongoing charges4:0.9%

2 Premium to NAV including income.
3 Based on two quarterly interim dividends of 4.00p per share declared on 12 November and 19 August 2020 and a final dividend of 8.30p per share announced on 5 March 2021 in respect of the year ended 31 December 2020, and an interim dividend of 4.50p per share declared on 29 April 2021 in respect of the year ending 31 December 2021.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2020.

Country AnalysisTotal
Assets (%)
Sector AnalysisTotal
Assets (%)
Global66.0Diversified40.1
Australasia7.2Copper20.9
Latin America6.9Gold18.7
South Africa5.8Platinum Group Metals5.3
Canada4.2Iron Ore5.0
Other Africa2.7Steel4.3
United States2.2Industrial Minerals2.0
Indonesia1.3Nickel1.3
United Kingdom1.0Silver & Diamonds0.2
Russia0.8Zinc0.2
Net Current Assets1.9Aluminium0.1
Net Current Assets1.9
—–
100.0—–
=====100.0
=====

Ten largest investments

CompanyTotal Assets %
Vale:
    Equity6.8
    Debenture3.8
BHP8.1
Rio Tinto7.7
Anglo American7.7
Freeport-McMoRan6.3
Glencore4.0
Newmont Mining3.9
Barrick Gold3.2
OZ Minerals:
    Royalty1.7
    Equity1.4
First Quantum Minerals
    Equity1.8
    Royalty1.3
Asset AnalysisTotal Assets (%)
Equity92.3
Bonds3.1
Preferred Stock2.6
Warrants0.1
Net Current Assets1.9
—–
100.0
=====

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

Performance

The Company’s NAV returned +8.9% in April, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +8.7% (Figures in GBP).

April was a strong month for the mining sector both in absolute terms and relative to broader equity markets, with the MSCI ACWI TR Index rising by 4.2%. Mined commodity prices were buoyant, with copper and iron ore (62% fe.) soaring +11.9% and +13.6% respectively. For reference, both copper and iron ore have hit fresh all-time highs.

Rising optimism around the post COVID-19 global economic recovery and robust economic activity in China supported prices, with China’s manufacturing PMI at 51.9 and its steel production at record levels. Meanwhile, US President Joe Biden proposed a $2 trillion infrastructure plan which also contributed positively to expectations around the US’s commodity demand.

Strategy and Outlook

We are optimistic on COVID-19 vaccine rollouts supporting global economic growth and, in turn, commodity demand. Meanwhile, our analysis shows that the mining sector has performed particularly strongly during periods with significant increases in inflation expectations which we believe we could see this year.

Increased fiscal stimulus globally aimed at kick-starting economies in the COVID-19 crisis is being geared towards infrastructure spending which should support mined commodity demand. Meanwhile, we see the mining sector playing a crucial role in supplying the materials required for low carbon technologies e.g. wind turbines and solar panels.

Capital expenditure has been slashed by the miners since the peak in 2013, which is constraining new commodity supply and supporting prices. Whilst capital expenditure has risen since 2016, it is still a long way below the peak and we are encouraged by rhetoric from management teams around continued capital discipline.

Mining companies have focused on paying down debt in recent years and balance sheets are exceptionally strong today as a result. Given ongoing discipline, capital is being returned to shareholders in the form of dividends and buybacks. Meanwhile, we see potential for dividend upside given that prices for mined commodities have surprised to the upside e.g. iron ore.

All data points are in USD terms unless stated otherwise.

24 May 2021

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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