Blackrock World Mining Trust PLC — Net Asset Value 2015

Jan 12, 2015

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BLACKROCK WORLD MINING TRUST PLC - Portfolio Update

PR Newswire

London, January 12

BLACKROCK WORLD MINING TRUST plcAll information is at 31 December 2014 and unaudited.Performance at month end with net income reinvested One Three One Three Five Month Months Year Years YearsNet asset value -6.5% -19.7% -26.2% -47.1% -39.9%Share price -10.8% -27.7% -30.4% -44.9% -35.8%Euromoney Global Mining Index -5.2% -10.8% -13.0% -35.5% -36.2%(Total return)Sources: BlackRock, Euromoney Global Mining Index, DatastreamAt month endNet asset value including income*: 353.61pNet asset value capital only: 339.10p*Includes net revenue of 14.51pShare price: 310.35pDiscount to NAV**: 12.2%Total assets: £732.9mNet yield***: 6.8%Net gearing: 10.8%Ordinary shares in issue: 177,287,242Ordinary shares held in treasury: 15,724,600Ongoing charges****: 1.4%** Discount to NAV including income.*** Based on final dividend of 14.00p per share in respect of the year ended 31December 2013 and interim dividend of 7.00p per share in respect of the yearended 31 December 2014.**** Calculated as a percentage of average net assets and using expenses,excluding finance costs for the year ended 31 December 2013.Sector % Total Country Analysis % Total Assets AssetsDiversified 40.8 Global 52.2Base Metals 22.9 Latin America 12.2Gold 11.7 Other Africa 7.4Silver & Diamonds 7.8 Australasia 5.8Other 3.8 Canada 4.6Industrial Minerals 3.2 South Africa 4.1Energy Minerals 3.1 Emerging Europe 3.3Aluminium 0.9 China 3.1Platinum 0.4 USA 1.8Zinc 0.2 Indonesia 0.3Net current assets 5.2 Net current assets 5.2 ----- ----- 100.0 100.0 ===== =====Ten Largest Investments % Total AssetsCompanyBHP Billiton 10.2Rio Tinto 10.2First Quantum Minerals 8.2GlencoreXstrata 7.9Lundin Mining 4.4Freeport-McMoRan 3.8Sociedad Minera Cerro Verde 3.4MMC Norilsk Nickel 3.2China Shenhua Energy 3.1Vale 3.1Commenting on the markets and the portfolio, Evy Hambro and Catherine Raw,representing the Investment Manager noted:PerformanceThe Chinese manufacturing PMI, an important indicator for commodity demand,weakened at the end of 2014 ultimately leading the commodity suite lower inDecember. During the month, base metals fell with copper, zinc, nickel andaluminium down -0.7%, -2.1%, -7.1% and -10.1% respectively. Iron ore was abright spot amidst the bulk commodities as it increased by +2.0%, whilstthermal coal and steel fell -5.4% and -5.9%. (Source: Thomson ReutersDatastream)Across the commodity complex the oil price was the weakest performer declining-22.2% (Brent) and -18.9% (WTI). Mining companies with energy components totheir business, such as BHP Billiton, Freeport McMoRan and Vedanta, wereparticularly affected during the month as a result of this commodity priceweakness. Despite the brief respite felt by the iron ore price in December, theiron ore producers continued to feel the pressure, particularly Vale andFortescue. Over the course of 2014, the iron ore price declined -46.9%.Precious metals performed relatively well during the month: gold was broadlyflat at +0.4%, whilst silver, platinum and palladium returned +1.0%, +0.1% and+0.3% respectively. The yellow metal saw some support in early December as theUS dollar strength eased and a sharp depreciation of the Russian rouble led thecentral bank to increase interest rates to 17%, leaving a sense of unease inthe market. Gold saw some safe-haven bids as uncertainty intensified, butvolumes were relatively modest and this early strength was reversed later inthe month when the release of lower than expected US inflation data putdownward pressure on the price.Following the month end, Banro Corporation released their Q4 production resultsto the market, as well as providing an update on their financing situation.Operationally, the company had its best ever quarterly production result at38,236 ounces of gold, the second quarter in a row of improvement illustratingthat the action taken earlier in the year is now delivering results. Thecompany informed the market that the previously announced financing transactionhas been delayed and that closing of the deal was on "a more extended timeline"than originally anticipated. As a result, they are progressing withalternative sources of funding but did confirm they have elected to accrue thedividend related to the gold-linked preference shares held by the Company. Asstated in the Company's November monthly announcement (released 11 December2014), the gold-linked preference shares are held at a 30% discount to theimplied gold price and the corporate bond at a 25% discount to the last tradedprice on 21 November 2014 (as per Bloomberg). As at the end of December 2014,the total exposure to Banro was 2.8% of the NAV, of which the corporate bondrepresents 1.0% and the gold-linked preference shares represent 1.8%.Strategy / OutlookThe mining sector has significantly lagged the general equity market in recentyears. However, a number of the downside risks that led to thisunderperformance have reduced (albeit not disappeared). The industry has madegood progress in refocusing its strategy: operating costs have beenaggressively targeted and investment in projects reassessed. Given the recentfalls in commodity prices, we acknowledge that this could take longer to comethrough than we would have expected six months ago.Recent commodity price moves are likely to abate some of the expectedimprovement in free cash flow within the sector and are prompting earningsdowngrades. However, 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.All data in USD terms unless otherwise stated.12 January 2015ENDSLatest 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.