Blackrock World Mining Trust PLC — Net Asset Value 2015

Mar 16, 2015

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BLACKROCK WORLD MINING TRUST PLC - Portfolio Update

PR Newswire

London, March 16

BLACKROCK WORLD MINING TRUST plcAll information is at 28 February 2015 and unaudited.Performance at month end with net income reinvested One Three One Three Five Month Months Year Years YearsNet asset value 7.3% -2.7% -24.5% -51.2% -38.0%Share price 6.3% -8.2% -33.7% -51.9% -33.7%Euromoney Global Mining Index 6.6% 1.0% -9.5% -38.8% -32.1%(Total return)Sources: BlackRock, Euromoney Global Mining Index, DatastreamAt month endNet asset value including income*: 367.99pNet asset value capital only: 352.89p*Includes net revenue of 15.10pShare price: 319.60pDiscount to NAV**: 13.1%Total assets: £726.7mNet yield***: 6.6%Net gearing: 8.4%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 ended31 December 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 42.3 Global 54.8Base Metals 21.4 Latin America 12.3Gold 13.0 Other Africa 7.9Silver & Diamonds 8.3 Australasia 7.8Other 4.5 Canada 4.5Industrial Minerals 3.7 Emerging Europe 3.2Energy Minerals 2.3 South Africa 3.1Aluminium 1.8 China 2.3Zinc 0.3 USA 1.3Net current assets 2.4 Indonesia 0.4 Net current assets 2.4 ----- ----- 100.0 100.0 ===== =====Ten Largest Investments % Total AssetsCompanyBHP Billiton 11.1Rio Tinto 11.0Glencore 8.1First Quantum Minerals 8.0Lundin Mining 4.2Fresnillo 3.1Sociedad Minera Cerro Verde 3.0Freeport-McMoRan 2.9MMC Norilsk Nickel 2.8Vale 2.8Commenting on the markets, Evy Hambro, representing the Investment Managernoted:PerformanceThe mining sector entered its financial reporting season during the month. Ingeneral, the majors exceeded expectations in terms of earnings and cash flowgeneration. Capital expenditure cuts remained a key theme, whilst the new themeof cost benefits, related to lower oil prices and currency depreciations in manykey operating regions, came to the fore. Rio Tinto and BHP Billiton pleased themarket with dividend increases of 12% and 5% respectively, in spite ofsignificant falls in the prices of their main commodities over recent months.Rio Tinto also delivered on its promise of a buyback, announcing a $2bn sharebuyback programme during the month.After a difficult January, the copper price rebounded in February, finishing up+6.9%. During the month, BHP Billiton announced an electrical failure at itsOlympic Dam operations, which the company estimated would result in a 60 to 70kilo tonne reduction in its copper production, with the majority of the lossanticipated in the first half of 2015. However, seasonal demand weakness owingto the Chinese New Year holiday slowdown contributed to general weakness acrossthe other base metals, with aluminium, zinc and nickel down -2.8%, -3.4% and-7.1% respectively.Banro Corporation announced on 27 February 2015 details of a US$100 millionfinancing which included the forward sale of 44,496 ounces of gold from theirTwangiza operation deliverable over the next three years and a life-of minegold streaming transaction relating to their Namoya mine. Banro have advisedthat the use of proceeds from this financing will include the payment of theupcoming interest due on the company's 10% senior secured notes and payment ofthe accrued dividends on the company's gold-linked preference shares.As at 27 February, the Company held the gold-linked preference shares at a 30%discount to the implied gold price used in their valuation and the 10% seniorsecured notes at a 25% discount to their last traded price (please refer to the10 December 2014 NAV announcement, released on 11 December 2014, for furtherdetails). On 2 March, following Banro's news release and on a recommendationfrom BlackRock's pricing committee, the Board concluded that it was appropriateto reduce the discount on the gold-linked preference shares to 15% and thediscount on the 10% senior secured notes to 10%. This gives a valuation for theCompany's investment in Banro's gold-linked preference shares and 10% seniorsecured notes of £14.09m and £7.34m respectively (previous valuation £11.55mand £6.08m), a cumulative impact to the NAV of approximately 2.14 pence. As at2 March 2015, the Company's total exposure to Banro Corporation stood at 3.3%of the NAV, of which the gold-linked preference shares represent 2.2% and thesenior secured notes represent 1.1%.Strategy / OutlookIn 2014, good company strategy was outweighed by weakening commodity demand andfalling commodity prices and the sector ultimately trended lower. Lookingahead, the outlook for commodity prices remains subdued, given expectations offurther US dollar strength and a modest demand outlook. This pressure willcontinue to force tough decisions and mining companies are likely to remain inausterity mode. Recent commodity price falls suggest further cuts to analystearnings will be required. As the year progresses, we would expect anacceleration of closures of high-cost capacity in oversupplied markets. Thisbodes well for the longer term and limits the industry's ability to respond tothe next upturn in demand which will ultimately see prices go higher.While the sector continues to face headwinds, it is important to remember thatwe are another year further into the underinvestment phase and closer to thedeficit markets that we foresee. We expect an inflection point to be reachedonce price (and consequently return) expectations start to recover as a resultof the supply curtailment, which should accelerate with the current commodityprice weakness.All data in USD terms unless otherwise stated.16 March 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.