Blackrock World Mining Trust PLC — Net Asset Value 2014

Feb 14, 2014

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BLACKROCK WORLD MINING TRUST PLC - Portfolio Update

PR Newswire

London, February 14

BLACKROCK WORLD MINING TRUST plcAll information is at 31 January 2014 and unaudited.Performance at month end with net income reinvested One Three One Three Five Month Months Year Years YearsNet asset value (undiluted) -2.3% -7.9% -26.6% -41.5% 68.8%Net asset value (diluted) -2.3% -7.9% -26.6% -41.5% 68.8%Share price 0.9% -0.7% -19.6% -32.8% 98.6%Euromoney Global Mining Index -1.7% -8.2% -26.3% -42.6% 40.5%(Total return)Sources: BlackRock, Euromoney Global Mining Index, DatastreamAt month endNet asset value Including Income Capital OnlyUndiluted/diluted: 488.17p* 471.50p*Includes net revenue of 16.67pShare price: 469.00pDiscount to NAV**: 3.9%Total assets: £967.9mNet yield***: 4.5%Gearing: 11.8%Ordinary shares in issue: 177,287,242Ordinary shares held in Treasury: 15,724,600** Discount to NAV including income.*** Based on 2012 final dividend of 14.00p and interim dividend of 7.00p pershare in respect of the year ended 31 December 2013.Sector % Total Country Analysis % Total Assets AssetsDiversified 42.6 Global 47.0Base Metals 21.8 Other Africa 27.3Industrial Minerals 16.3 Latin America 11.9Gold 7.8 South Africa 4.0Silver & Diamonds 6.7 Australasia 3.5Other 2.1 Canada 3.2Platinum 1.8 Emerging Europe 1.3Energy Minerals 0.9 USA 1.0 China 0.8 ----- ----- 100.0 100.0 ===== =====Ten Largest Investments % Total AssetsCompanyRio Tinto 10.9GlencoreXstrata 10.4BHP Billiton 10.4First Quantum Minerals 8.2London Mining Marampa Contract 6.9Freeport-McMoRan 5.7Vale 3.5Fresnillo 2.3Sociedad Minera Cerro Verde 2.3Iluka Resources 2.1Commenting on the markets, Evy Hambro, representing the Investment Managernoted:PerformanceJanuary witnessed mixed economic signals. In the first half of the month, theWorld Bank announced an upgraded global growth forecast. They predict the worldeconomy will expand by 3.2% this year (up 0.2% from the previous projectionthey announced last June). This was a positive for mining equities as itsuggested commodity demand looks set to strengthen. However, weaker thanexpected China PMI data and softer non-farm payroll numbers from the US weighedon the market during the month. This, coupled with the beginning, andincreasing, of tapering by the Fed led to lacklustre investor sentiment andultimately the most prominent story in January: the emerging market currencysell-offs. The Argentine Peso, the Turkish Lira and the South African Rand sawcurrency depreciation against the US$ of -18.7%, -5.1% and -5.6% respectively(Source: Thomson Reuters Datastream).Another headwind, albeit seasonal, for commodity prices was the softening ofChinese demand owing to the onset of the Chinese New Year holiday slowdown.Copper and iron ore prices fell by 3.8% and 8.6% respectively (Source: Bloomberg).The sector entered the period of production announcements prior to the Februaryfinancial announcements. The general theme has been mining companies deliveringon production forecasts and, in a number of instances, companies surprised themarket with higher than anticipated production. Production figures from themajors were particularly robust.Strikes commenced in South Africa in January as members of the Association ofMineworkers and Construction Union (AMCU) walked out from platinum miningoperations. Reports suggest that the union has demanded that monthly wages bemore than doubled (Source: Reuters).During the month, Freeport-McMoRan Copper and Gold announced their fourthquarter production results. The results were unable to provide any clarity onthe potential for a change in Indonesian export tariffs for metals andminerals. The company is currently a significant exporter of copper and goldfrom Indonesia and does not pay any export tariffs following an agreement madewith the government in the 1990s. The introduction of a reported 25% exporttariff would have a significant impact on earnings; the company is in ongoingdiscussions with the government to resolve this issue.Gold equities were buoyed by a gold price rise of 2.9% over the month. Demandfor the yellow metal rose as investors sought to protect themselves againstemerging market currency risk. Gold Exchange Traded Fund flows appeared tostabilise with outflows of ~27 tonnes over the month compared to ~81 tonnes inDecember 2013 (Source: Scotiabank). Large-cap gold producers performedstrongly, with those with operations in South Africa benefiting from a weakenedRand.Strategy / OutlookThe mining sector has significantly lagged general equity markets in recentyears. However, a number of the downside risks for this sector have reduced(albeit not disappeared). The industry has made good progress in refocusing itsstrategy: operating costs have been aggressively targeted and investment inprojects reassessed. Many commodities are trading close to or below theirmarginal cost of production, implying that price downside should be limited, inthe absence of a collapse in demand.The global economic backdrop is showing signs of synchronous growth and thishas typically been supportive of commodity prices. The companies are trading onan undemanding valuation, as well as being at a dividend yield premium to thebroader equity market, and with capital expenditure rolling off, management areguiding investors towards rising free cashflows.All data in USD terms unless otherwise stated.14 February 2014ENDSLatest information is available by typing www.brwmplc.co.uk on the internet,"BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICVterminal). Neither the contents of the Manager's website nor the contents ofany website accessible from hyperlinks on the Manager's website (or any otherwebsite) is incorporated into, or forms part of, this announcement.