BlackRock World Mining Trust Plc - Portfolio Update

Performance at month end with net income reinvested

One

Three

One

Three

Five

Month

Months

Year

Years

Years

Net asset value

-3.3%

-10.2%

-3.4%

7.1%

72.4%

Share price

-6.6%

-10.8%

-4.9%

  10.9%

99.5%

MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)*

-3.4%

-8.5%

3.7%

7.3%

60.4%

* (Total return)

Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream

Net asset value (including income)1:

549.06p

Net asset value (capital only):

537.60p

Share price:

526.00p

Discount to NAV2:

4.2%

Total assets:

£1,179.1m

Net yield3:

6.4%

Net gearing:

8.6%

Ordinary shares in issue:

191,183,036

Ordinary shares held in Treasury:

1,828,806

Ongoing charges4:

0.91%

Ongoing charges5:

0.81%

Country Analysis

Total
Assets (%)

Global

59.8

Canada

12.3

Latin America

7.9

United States

5.9

Australasia

5.6

Other Africa

3.8

South Africa

0.8

Indonesia

0.6

Net Current Assets

3.3

-----

100.0

=====

Sector Analysis

Total
Assets (%)

Diversified

31.8

Gold

24.3

Copper

23.8

Steel

5.2

Industrial Minerals

3.4

Uranium

2.4

Iron Ore

2.1

Platinum Group Metals

1.4

Aluminium

1.2

Nickel

1.0

Zinc

0.1

Net Current Assets

3.3

-----

100.0

=====

Ten largest investments

Company

Total Assets %

Rio Tinto

7.6

Glencore

7.0

BHP:

    Equity

5.3

    Royalty

1.5

Newmont

6.0

Agnico Eagle Mines

5.2

Anglo American

5.1

Freeport-McMoRan

4.5

Wheaton Precious Metals

3.8

Teck Resources

3.7

Barrick Gold

3.1

Asset Analysis

Total Assets (%)

Equity

93.9

Bonds

1.5

Preferred Stock

0.7

Convertible Bond

0.6

Net Current Assets

3.3

-----

100.0

=====

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

 Performance

The Company’s Net Asset Value (NAV) declined by 3.3% in August, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which fell by 3.4% (Performance figures in GBP). It was another weak month for the mining sector, particularly relative to broader equity markets as the MSCI ACWI TR Index rose by 1.7% (GBP terms). Negative sentiment around China continued to drag on the sector. Indicators for the country’s property market, such as average house prices and floor space started, showed significant year-on-year declines. Mined commodities delivered mixed performance with the iron ore (62% fe) price flat but copper and gold prices up by 3.1% and 4.8% respectively. US dollar weakness provided a tailwind for commodities, especially gold. The miners concluded their Q2 earnings reporting season during the month which was somewhat disappointing overall. However, positive takeaways included a greater focus on M&A, stabilising operating costs and capital allocation frameworks continuing to prioritise returning capital to shareholders.

Strategy and Outlook

Constrained mined commodity supply, an evolving demand picture, strong balance sheets and valuations below historic averages make us optimistic about the outlook for the sector. Mining companies have focused on capital discipline in recent years, meaning they have opted to pay down debt, reduce costs and return capital to shareholders, rather than investing in production growth. This is limiting new supply coming online and there is unlikely to be a quick fix, given the time lags involved in investing in new mining projects.

The cost of new projects has also risen significantly and recent M&A activity in the sector suggests that, like us, strategic buyers see an opportunity in existing assets in the listed market, currently trading well below replacement costs. Other issues restricting supply include cases of governments closing mines, permitting issues and a general lack of shovel-ready projects.

Meanwhile, the demand side of the equation appears to be evolving. The commodity super-cycle (2002 – 2011) was all about China’s extraordinary demand growth. Today, China remains the most important individual economy for mining, but we are expecting this importance to gradually decline through to the end of the decade. We expect global infrastructure spending to drive the next wave of demand, with low carbon transition-related infrastructure particularly meaningful. The other area gaining attention is the implications for materials from the build out of AI-related data centres, both for the centres themselves but also for the increased power infrastructure required.

All data points are in USD terms unless stated otherwise.

30 September 2024

Latest information is available by typing www.blackrock.com/uk/brwm on the internet. Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.