BLACKROCK WORLD MINING TRUST plc
All information is at 31 December 2009 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
Month Months Year Years Years
Net asset value* (undiluted) 2.7% 13.9% 100.4% 32.2% 186.5%
Net asset value* (diluted) 2.7% 13.9% 100.4% 35.7% 188.1%
Share price* 3.7% 11.1% 122.0% 28.5% 170.4%
HSBC Global Mining Index 3.0% 14.9% 83.2% 63.8% 216.2%
Sources: BlackRock, HSBC Global Mining Index, Datastream
* Net asset value and share price performance includes the warrant
reinvestment, assuming the 2004 and 2006 bonus warrant entitlement per share
was sold and the proceeds reinvested on the first day of trading.
At month end
Net asset value Including Income Capital only
Undiluted/Diluted: 661.77p# 657.13p
# Includes net revenue of 4.64p
Share price: 550.00p
Discount to NAV**: 16.3%
Total assets: £1,218.3m
Net yield: 1.00%
Gearing: 3.4%
Ordinary shares in issue: 177,762,242
Ordinary shares held in Treasury: 15,249,600
** Discount to NAV based on capital only.
Sector % Total Country Analysis % Total
Assets Assets
Diversified 48.0 Latin America 26.9
Base Metals 19.1 Global 24.2
Gold 12.2 South Africa 10.4
Platinum 7.7 Australasia 9.8
Silver and Diamonds 6.5 Other Africa 8.2
Industrial Minerals 5.4 Canada 7.0
Other 0.8 USA 4.0
Net current assets 0.3 India 3.7
Indonesia 3.3
Emerging Asia 1.3
Europe 0.9
Net current assets 0.3
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100.0 100.0
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Ten Largest Equity Investments (in alphabetical order)
Company
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Freeport McMoRan
Fresnillo
Glencore Finance (Europe) 5% 31/12/14
Impala Platinum
Minas Buenaventura
Rio Tinto
Teck Resources
Vale
Commenting on the markets, Evy Hambro, representing the Investment Manager
noted:
Performance
We continued to see strong global equity performance during the month of
December, as investor confidence returned to the market after the announcement
that Abu Dhabi would rescue Dubai from default. Most markets were buoyed by
this news and it helped round out what was a positive year for most asset
classes.
In 2009, commodity prices rebounded rapidly following the global economic
crisis, with prices for copper, lead and zinc all gaining over 100% during the
year. Copper prices reached a 15 month high in the last week of December
following the announcement of more positive US market data, new investor flows
and uncertainty over copper production in Chile. Concern has been growing as
workers at Chile's Chuquicamata copper mine (the second biggest in the world)
have recently been threatening to strike over pay disputes, with the state
owned company Codelco announcing that the repercussions of any action could be
a loss of around 1,800 tonnes daily to the market. There is potential for these
issues to continue should the workers' demands not be satisfied as we enter
into a period of political uncertainty in the country (with presidential
elections occurring in early 2010). These combined factors could lead to
further disruptions to copper supply and add uncertainty to an already tight
market.
Iron ore was another strong performer over the month, as it reached an all time
high in mid December. High levels of demand continue to come from China as
their economy grows and as they look to secure future supplies of the
industrial commodity. This has led to the spot price of iron ore trading at a
74.7% premium to benchmark levels. Increased export tariffs on Indian iron ore,
infrastructure bottlenecks and Chinese mine closures (as a result of the credit
crisis) have contributed to driving the price up to $117/tonne (including
freight). Commodity analysts have been speculating that in order for mines to
reopen, the price will have to rise to $120-130 a tonne.
Strategy/Outlook
With demand in the emerging markets appearing reasonably robust for the coming
year, there remain two key questions for 2010. The first is: what will happen
to developed market demand? This appears to be recovering, with most economists
predicting a flat to slightly positive year and many noting the relative
success of schemes such as "cash for clunkers" in drawing down inventory
levels. Indeed, there are even signs that the much maligned US construction
sector may be starting to see more positive developments. The second question
is: will supply become more important and perhaps lead to further market
tightness? The credit crisis and the subsequent collapse in global demand led
many mining companies to postpone/cancel their production growth plans. With
the global economy appearing more stable, the impact of these cancellations and
cuts may start to bite. It takes many years to develop new mine supply and,
should demand meaningfully recover, it is questionable as to whether the supply
will be able to react in the case of some commodities.
Latest information is available by typing www.blackrock.co.uk/its on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal).
18 January 2010