BlackRock
BlackRock World Mining Trust plc

BlackRock World Mining Investment Trust (LON:BRWM) aims to provide a diversified investment in mining and metal assets worldwide, actively managed with the objective of maximising total returns. While the policy is to invest principally in quoted securities, the Company’s investment policy includes investing in royalties derived from the production of metals and minerals as well as physical metals. Up to 10% of gross assets may be held in physical metals and up to 20% may be invested in unquoted investments.

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Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The Company aims to provide a diversified investment in mining and metal assets worldwide, actively managed with the objective of maximising total returns. While the policy is to invest principally in quoted securities, the Company’s investment policy includes investing in royalties derived from the production of metals and minerals as well as physical metals. Up to 10% of gross assets may be held in physical metals and up to 20% may be invested in unquoted investments.

Investors looking for a specialist mining Trust to provide long-term diversification of income and capital, geared to the changing dynamics of the global economy. These companies can be volatile, so some tolerance for market uncertainty is important.

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BlackRock BRWM excited by structural demand growth for a range of mined commodities

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

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

All information is at 30 September 2023 and unaudited.

Performance at month end with net income reinvested
One Three One Three Five
Month Months Year Years Years
Net asset value 0.8% -0.9% 6.0% 55.1% 85.7%
Share price 1.5% -0.4% 10.3% 73.5% 117.3%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* 1.4% 1.9% 10.4% 42.4% 58.8%
* (Total return)Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream.

At month end

Net asset value (including income)1: 601.47p
Net asset value (capital only): 584.28p
Share price: 591.00p
Discount to NAV2: 1.7%
Total assets: £1,306.4m
Net yield3: 6.8%
Net gearing: 12.3%
Ordinary shares in issue: 191,183,036
Ordinary shares held in Treasury: 1,828,806
Ongoing charges4: 0.95%
Ongoing charges5: 0.84%

Includes net revenue of 17.19p.

2 Discount to NAV including income.

3 Based on a third interim dividend of 5.50p per share declared on 16 November 2022 and a final dividend of 23.50p per share declared on 2 March 2023 in respect of year ended 31 December 2022, and a first interim dividend of 5.50p per share declared on 18 April and a second interim dividend of 5.50p per share declared on 24 August with ex-date 7 September and pay date of 6 October 2023 in respect of the year ending 31 December 2023.

4 The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2022.

The Company’s ongoing charges are calculated as a percentage of average daily gross assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2022.

Country Analysis Total
Assets (%)
   
Global 63.8
Australasia 10.5
Latin America 8.1
United States 6.5
Canada 5.5
Other Africa 3.1
Indonesia 0.8
South Africa 0.2
Asia 0.2
Net Current Assets 1.3
  —–
  100.0
  =====

Sector Analysis Total
Assets (%)
   
Diversified 34.5
Copper 23.7
Gold 14.0
Industrial Minerals 7.3
Steel 6.9
Aluminium 3.2
Iron Ore 2.3
Uranium 2.2
Platinum Group Metals 1.8
Nickel 1.6
Mining Services 1.1
Zinc 0.1
Net Current Assets 1.3
  —–
  100.0
  =====

Ten largest investments
Company Total Assets %
BHP:  
    Equity 8.1
    Royalty 1.5
Glencore 8.0
Vale:  
    Equity 4.5
    Debenture 2.5
Rio Tinto 5.8
Freeport-McMoRan 4.6
First Quantum Minerals:  
    Equity 2.9
    Bond 0.8
Newcrest Mining 3.2
Teck Resources 3.0
Ivanhoe 2.6
ArcelorMittal 2.6

Asset Analysis Total Assets (%)
Equity 95.8
Bonds 2.3
Convertible Bonds 0.6
Net Current Assets 1.3
  —–
  100.0
  =====

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

Performance

The Company’s NAV rose by 0.8% in September, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which rose by 1.4% (performance figures in GBP).

The mining sector held up relatively well versus broader equity markets, with the MSCI ACWI TR Index falling by 4.5%. It was a challenging month for global markets, as investors responded to the prospect of higher for longer interest rates. Meanwhile, larger-cap technology stocks appeared to lose the momentum witnessed so far this year.

Macroeconomic data from China was generally sluggish, but property sales and industrial activity showed modest improvements. For reference, China’s manufacturing PMI fell to 50.6 from 51.0 in August. Mined commodities were mixed, with the copper price falling -2.3% and the iron ore price (62% fe) rising +1.7%. Precious metals were down across the board, with gold, silver and platinum prices falling -4.4%, -8.5% and -5.8% respectively.

Strategy and Outlook

China has re-opened but with less impact than had been expected early this year. Uncertainty persists around China’s commodity demand, but we are seeing the Chinese administration announce financial support incrementally.

Longer term, we are excited by the structural demand growth for a range of mined commodities that will result from the low carbon transition. Meanwhile, commodity supply is likely to be constrained by the capital discipline of recent years, whilst inventories for many mined commodities are at historic lows. Mining companies have low levels of debt, continue to return capital to shareholders, but appear to be entering a higher capital expenditure phase.

In 2023 we have seen Brown to Green emerge as a key theme, where mining companies are focusing on reducing the greenhouse gas emissions intensity associated with their production. We expect to see a re-rating for the mining companies able to best navigate this and are playing this in the portfolio.

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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BlackRock

BlackRock World Mining Trust declares interim dividend of 5.50p

BlackRock World Mining Trust plc (LON:BRWM) has announced that the third quarterly interim dividend in respect of the quarter ended 30 September 2023 of 5.50p per ordinary share has been declared by the Directors, payable on 22 December 2023to holders of ordinary shares on the register at the close of business on 24 November 2023 (ex-dividend date is 23 November 2023).

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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BlackRock

BlackRock World Mining Trust appoints Charles Goodyear as a non-executive director

BlackRock World Mining Trust plc (LON:BRWM) has announced the appointment of Charles (Chip) Goodyear as a non-executive director of BlackRock World Mining Trust plc (the Company) with effect from today and it is intended that he succeed as Chairman of the Board immediately following the next Annual General Meeting to be held in May 2024.

On 1 October 2007, Mr Goodyear retired as chief executive officer and executive director for BHP Billiton (now BHP) the world’s largest diversified resources company, having joined the group as chief financial officer in 1999. In 2009, he served as CEO-designate of Temasek Holdings, an investment company wholly owned by the Singapore Minister for Finance. He also served on Temasek’s board. He is a former executive vice president and chief financial officer of Freeport-McMoRan and began his career at Kidder, Peabody where he participated in M & A and financing activities for natural resources companies.

Mr Goodyear is currently the President of Goodyear Capital Corporation and Goodyear Investment Company. He is a director of several private companies and chairman of the BHP Foundation. He is also a trustee of the National World War II Museum. He remains active in the global commodity and financial community and has been a member of the International Council on Mining and Metals and the National Petroleum Council. 

Mr Goodyear will also serve as a member of the Company’s Audit Committee (until his election as the Board Chair) and Management Engagement Committee. He currently does not have any interest in the ordinary shares of the Company.

There is no other information required to be disclosed under Listing Rule 9.6.13R in respect of Mr Goodyear.

Mr Goodyear commented:

“The BlackRock World Mining Trust has been the premier publicly traded mineral and mining asset investment vehicle for decades. I look forward to joining the Board of the Trust at a time when the energy transition and the Trust’s extensive experience and knowledge in natural resources provides the platform for the next era of investment opportunities in this industry.”

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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BlackRock

BlackRock World Mining Trust NAV rose by 5.2% in July

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

All information is at 31 July 2023 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 Three One Three Five
Month Months Year Years Years
Net asset value 5.2% 1.6% 16.5% 67.5% 87.7%
Share price 4.8% -3.0% 11.5% 83.3% 118.4%
MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* 6.6% 1.4% 17.1% 48.3% 60.2%
* (Total return)Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

At month end

Net asset value (including income)1: 644.46p
Net asset value (capital only): 634.91p
Share price: 628.00p
Discount to NAV2: 2.6%
Total assets: £1,380.5m
Net yield3: 6.4%
Net gearing: 9.7%
Ordinary shares in issue: 191,183,036
Ordinary shares held in Treasury: 1,828,806
Ongoing charges4: 0.95%
Ongoing charges5: 0.84%

Includes net revenue of 9.55p

2 Discount to NAV including income.

3 Based on a second and third interim dividend of 5.50p per share declared on 23 August 2022 and 16 November 2022 respectively, a final dividend of 23.50p per share recommended on 2 March 2023 in respect of year ended 31 December 2022, and a first interim dividend of 5.50p per share declared on 18 April 2023 in respect of the year ending 31 December 2023.

4 The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2022.

The Company’s ongoing charges are calculated as a percentage of average daily gross assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2022.

Country Analysis Total
Assets (%)
   
Global 64.0
Australasia 9.9
Latin America 8.9
United States 6.4
Canada 4.4
Other Africa 3.0
Indonesia 0.8
South Africa 0.3
United Kingdom 0.2
Net Current Assets 2.1
  —–
  100.0
  =====
 

Sector Analysis Total
Assets (%)
   
Diversified 34.1
Copper 24.2
Gold 14.6
Industrial Minerals 7.3
Steel 6.4
Aluminium 3.1
Platinum Group Metals 2.5
Iron Ore 2.1
Nickel 1.3
Uranium 1.1
Mining Services 1.1
Zinc 0.1
Net Current Assets 2.1
  —–
  100.0
  =====
 

Ten largest investments
Company Total Assets %
BHP:  
    Equity 8.4
    Royalty 1.4
Vale:  
    Equity 5.7
    Debenture 2.3
Glencore 7.9
Freeport-McMoRan 4.0
First Quantum Minerals:  
    Equity 3.3
    Bond 0.7
Rio Tinto 3.6
Teck Resources 3.5
Ivanhoe Electric 3.2
Wheaton Precious Metals 2.9
Newmont Mining 2.9
   
 

Asset Analysis Total Assets (%)
Equity 95.8
Bonds 2.1
Net Current Assets 2.1
  —–
  100.0
  =====

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

Performance

The Company’s NAV rose by 5.2% in July, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which rose by 6.6% (performance figures in GBP).

The mining sector outperformed global equity markets, with the MSCI ACWI TR Index rising by 3.7%. There was renewed optimism surrounding China’s stimulus measures coming through, with the expectation that it will be more specific and targeted than we saw at the end of 2015.

Mined commodities reacted positively with price increases almost across the board. The copper price, for example, was up +5.7%. Meanwhile, precious metals prices performed strongly, with gold and silver prices rising +2.7% and +9.0% respectively. However, the iron ore (62% fe.) price fell -2.2% on concerns around potential steel production caps. Lastly, Q2 production results were reported during the month, which highlighted issues in supply growth for copper in particular.

Strategy and Outlook

We do not expect the mining sector to be immune to deteriorating global economic growth. However, whilst recession looms for developed markets, the most important economy for mining, China, is moving in the opposite direction, re-opening following a year of lockdowns and a strict zero-Covid policy.

Meanwhile, mined commodity markets are generally tight, with inventories for many commodities at historic lows. At the same time, mined supply is being constrained by the underinvestment of recent years and continued capital discipline. Mining companies are in an excellent financial position, in our view, with high levels of free cash flow, rock-solid balance sheets and a continued focus on returning capital to shareholders.

Last year, we saw greater appreciation of the role mining companies will need to play in supplying the materials required for lower carbon technologies like wind turbines, solar panels and electric vehicles. In 2023, we are seeing Brown to Green emerge as a key theme, where mining companies are focusing on reducing the greenhouse gas emissions intensity associated with their production. We expect to see a re-rating for the mining companies able to best navigate this and are playing this in the portfolio.

All data points are in USD terms unless stated otherwise.

23 August 2023

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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BlackRock

BlackRock World Mining Trust: Gold, an important ballast and source of diversification

Can the market’s gold fever continue?

The gold price has been rising, fuelled by a weaker Dollar and rising geopolitical tensions. Olivia Markham, manager on the BlackRock World Mining Trust (LON:BRWM), explores the recent gold price trends and what it means for gold mining companies.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The gold price tipped over $2000 an ounce on 4 April 2023, matching its highest level ever.[1]Gold has only reached these levels a handful of times, often when the global economy has appeared on the verge of collapse. This time, the world does not appear as fragile, so what explains the recent run for the gold price? And can it be sustained?

Until October of last year, the strong US Dollar had acted as a brake on gold prices. The Federal Reserve was the first of the developed markets to raise rates, which supported the US currency. It also saw some tailwinds from investors’ search for safe haven assets as recession loomed. However, as other central banks caught up and a hard landing appeared less likely, the Dollar started to show weakness.2

The gold price is always influenced by a range of inter-connecting factors, but for the past six months, the weakness of the Dollar has pushed the price higher. Historically, gold has tended to be strong when the Dollar is lower. One key reason is that gold is priced in U.S. dollars in international markets. When the value of the dollar weakens, it takes more dollars to buy the same amount of gold, so the price of gold in dollars tends to rise, though the relationship is imperfect. In particular, weaker inflation data meant investors started to assume that a Federal Reserve pivot – where the US central bank starts to cut rates – may be closer than initially expected. Gold doesn’t pay an income, so the opportunity cost of holding it rises at times when interest rates are higher. The gold price is also benefiting from its safe haven status. The market has been concerned about the US government debt ceiling. While the Democrats and Republicans have come to an agreement, the increasing polarisation in US politics is a cause for concern.

Geopolitical tensions also appear to be having an impact. Central banks around the world have stepped up their purchases of gold, with significant demand from countries such as China, Singapore and Turkey in 2023 for the year to date and in 2022.3[2]Central banks may be seeking to diversify their holdings of US Dollars and US government bonds Treasuries as geopolitical tensions rise.  

Looking forward

Many of the factors that have driven the gold price in 2023 remain in place. Inflation has remained relatively high, meaning interest rates adjusted for inflation (real interest rate) have remained lower.4 This is because, when real interest rates are low, investments in bonds and fixed-income securities become less appealing, increasing demand for gold. This has helped support the gold price in spite of rising US rates. This provides us with comfort that even with potential further interest rises on the horizon in the near term, gold could fare reasonably well.

Equally, the US dollar has continued to show a very tight correlation with the gold price and its weakness appears to have momentum. Any pivot from the Federal Reserve is likely to extend the Dollar’s fall and could be good for the gold price.

Demand for gold has five main parts – investment, industrial, central banks, technology and jewellery.5 The World Gold Council shows aggregate gold demand was up 18% in 2022, the highest level since 2011.6 Of these, investment demand continued to be strong, providing resilience.7 Central banks are continuing to buy gold as a store of value and to diversify their foreign exchange reserves.8 Meanwhile, we may also see a further a boost in jewellery and technology demand from China’s reopening. 

Gold equities and the gold price

Investing in gold mining companies can be a ‘leveraged’ way to play the gold price: they tend to rise more than the gold price when it is rising, and fall more when it is dropping. We still believe these companies stand up on their own merits, striving to raise returns on their mining projects.

The biggest risk to gold equity performance is persistent cost inflation which may pressure profit margins and squeeze companies’ ability to generate free cashflow. The main measure of mining costs is the American Institute of Steel Construction index. This showed record high costs for the gold mining industry in 2022, but showed some respite for miners in the fourth quarter as costs started falling.9[3]

Nevertheless, stockpicking is essential. Across our portfolio, we aim to keep a balance of different sized companies, with different business models. We maintain a quality bias at all times, holding positions in companies that have strong business and asset fundamentals so they can weather this current elevated inflationary environment.

Ultimately, gold miners are an often overlooked part of the BlackRock World Mining portfolio, but provide an important ballast, and a source of diversification.

For more information on how to access the opportunities presented by the mining sector, please visit

[1] Bullion by post, 20 June 2023 – https://www.bullionbypost.co.uk/gold-price/40-year-gold-price-history-dollars-ounce/

2  Financial Times, 18 April 2023 – https://www.ft.com/content/c11dca60-fbaa-41f8-bae8-ee287bae9540

3World Gold Council, Gold demand trends Q1, 5 May 2023 – https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-q1-2023/Central-banks

4 Investopedia, 23 June 2023 – https://www.investopedia.com/terms/r/realinterestrate.asp

5 World Gold Council, 23 June 2023 – https://www.gold.org/goldhub/data/gold-demand-by-country

6 World Gold Council, 20 June 2023 – https://www.gold.org/goldhub/data#central-banks

7  GoldHub, 31 January 2023 -https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2022

8 GoldHub, 5 May 2023 – https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-q1-2023/Central-banks

9 GoldHub, 13 April 2023 – https://www.gold.org/goldhub/gold-focus/2023/04/gold-miners-costs-reached-record-high-2022-dropped-final-quarter-year

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BlackRock

BlackRock World Mining Trust declares first quarterly interim dividend

BlackRock World Mining Trust plc (LON:BRWM) has announced that the first quarterly interim dividend in respect of the quarter ended 31 March 2023 of 5.50p per ordinary share has been declared by the Directors, payable on 31 May 2023 to holders of ordinary shares on the register at the close of business on 5 May 2023 (ex-dividend date is 4 May 2023).

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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Data policy – All information should be used for indicative purposes only. You should independently check data before making any investment decision and or seek professional advice. DirectorsTalk cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used.