Interim Management Statement

RNS Number : 8377P

Baker Steel Resources Trust Ltd

10 October 2011

 



BAKER STEEL RESOURCES TRUST LTD

www.bakersteelresourcestrust.com

September 2011 Quarterly Factsheet

At 30 September 2011	Price/Index Level	% Change om Quarter	% Change in Year	% Change from Inception
Net Asset Value (pence/share)	118.7	+1.5%	+14.8%	+18.7%*
Diluted Net Asset Value (pence/share)	115.6	+1.3%	+12.4%	n/a
Ordinary Share Price (pence/share)	98.5	-5.0%	+25.5%	-1.5%**
Subscription Share Price (pence/share)	17.5	-22.2%	+12.9%	n/a
MSCI World Index	280.64	-17.9%	-15.1%	-9.0%†
HSBC Global Mining Index	1143.83	-25.6%	-29.4%	-12.0%†
CRB Index	298.15	-11.8%	-10.4%	+9.1%†
Chinese Domestic Iron Ore - Hebei/Tangshan (US$/t)	230	+10.0%	+7.0%	+19.8%†
Copper (US$/t)	6998	-25.7%	-27.5%	-6.1%†
Gold (US$/oz)	1623.97	+8.2%	+14.3%	+39.1%†

Source: Bloomberg                                                       †closing 27/4/10, **Issue price 28/4/10, * NAV 30/4/10 

This document constitutes an interim management statement for the period from 1 June 2011 to 10 October 2011 (the "Period"). Financial information has been drawn up as at 30/09/2011. There have been no material changes since that date.

Review At the end of June 2011, Baker Steel Resources Trust Limited ("BSRT" or "the Company") was 99.5% invested. During the quarter the realisation of the Company's interest in First Coal Corporation ("First Coal") resulted in the percentage invested falling to 92.8% of net asset value ("NAV"). Since the period end the Company has returned to being close to fully invested following a further investment in October 2011. During the quarter NAV per share rose 1.5% with the profit on the sale of First Coal being partially offset by the fall in the share prices in the listed investments in the portfolio.  Following a mixed first half of 2011, markets for mining equities fell sharply in the third quarter with the HSBC Global Mining Index falling 25.6%. The performance of commodities themselves was mixed with iron ore and gold holding up well and base metals such as copper falling heavily. The emphasis of markets generally has been one of de-risking as investors continue to be concerned by debt levels in the western economies and the crisis of confidence in the Eurozone. For example, as the gold price has risen, the margins of gold producers have generally widened but the market's lack of appetite for risk and equities in general has resulted in gold share prices falling rather than rising, as might be expected with enhanced profitability. During the quarter the Company made one significant addition to its portfolio, investing £3.75 million in Metals Exploration plc, an AIM listed company, as part of a larger strategic stake alongside other funds managed by Baker Steel. Metals Exploration plc holds the Runruno gold project in the Philippines where a feasibility study has been completed into a mine producing approximately 100,000 ounces of gold per annum.  During the quarter, the Company made its first major realisation following the takeover of First Coal Corporation by Xstrata Coal in an all cash offer. After taking into account Canadian tax payable, the Company made a gain of C$6.75 million on its investment representing a return of 129%. Outlook One of the main avenues for realisations of the Company's investments is through IPOs on relevant stock exchanges. Several of the companies in the portfolio had been planning IPO's during the second half of 2011. These plans have been disrupted by the recent turbulent markets but they are well positioned for when market conditions normalise. The Company's strategy has been to invest in projects with sufficient quality and scale that they would be attractive to major mining companies. The balance sheets of the majors are currently very strong and this, in the meantime, remains a route for realisations as was demonstrated by the First Coal sale.

Investment Objective To seek capital growth over the long term through a focused global portfolio consisting principally of the equities, or related instruments, of natural resources companies. Investment Strategy Investing predominantly in attractively valued private companies with strong development projects and focused management and also in listed securities to exploit value inherent in market inefficiencies. Asset Allocation Unlisted Equities  £65.3 M         83.3 % Listed Equities       £  7.5 M           9.5 % Net Cash &              £  5.6 M           7.2 % Equivalents                                  Net Assets              £78.4 M Gearing:                  NIL Shares in Issue Trading:       The London Stock Exchange Ordinary:                                  66,033,061 Code:                                                  BSRT ISIN                                    GG00B6686L20 Subscription:                           13,194,622 Code:                                                BSRW ISIN                                  GG00B64WLC23 Financial Calendar Listing Date:                       28 April 2010 Year End:                           31 December Interims:                                        August Finals                                                April

Largest Investments (at 30 September 2011) Ivanhoe Nickel and Platinum Limited                                                               27.9% NAV A private company with a major copper project in the Democratic Republic of Congo and a platinum/nickel project in South Africa. Ferrous Resources Limited                                                                                 14.0% NAV A private company with five iron ore projects in Brazil, containing Joint Ore Resource Committee ("JORC") resources of 5.1 billion tonnes of iron ore. Gobi Coal & Energy Limited                                                                                13.9% NAV A private company with three coking coal projects in Mongolia with a JORC compliant resource of 322 million tonnes. Ironstone Resources Limited                                                                               6.5% NAV A private company with an iron ore/vanadium project in Canada. It has a NI-43-101 compliant resource of 203 million tonnes of iron ore.  Silver China                                                                                                              5.6% NAV A private company with a producing silver/lead/zinc mine and other development opportunities in China. Metals Exploration plc                                                                                           4.9% NAV A company listed on the AIM market of the London Stock Exchange whose main asset is the Runruno gold project in the Philippines. Bilboes Holdings (Pvt) Limited                                                                             4.9% NAV A private company which owns four previously producing gold mines in Zimbabwe. Copperbelt Minerals Limited                                                                               4.4% NAV A private company with a 68% interest in the Deziwa Copper-Cobalt Project in the Democratic Republic of Congo. Polar Silver                                                                                                               4.4% NAV A private company which holds a 50% interest in the Prognoz silver project in Russia which has JORC resources containing 293 million ounces of silver. The remainder of the Portfolio (excluding cash) comprises six holdings totaling 6.3% NAV. Further information is available on BSRT's website: www.bakersteelresourcestrust.com

Investment Manager Baker Steel Capital Managers LLP Investment Advisers AWR Lloyd Capital Ltd Rock Capital Partners Ltd Management Fees Monthly:                                1/12 of 1.75% of                                       Market Capitalisation Performance: 15% of NAV growth (if over 8% p.a. compound hurdle rate, with high watermark) Board Howard Myles (Chairman) Ed Flood Charles Hansard Clive Newall Chris Sherwell Joint Brokers RBC Capital Markets [phone] Winterflood Investment Trusts [phone] Contact: Baker Steel Capital Managers LLP 86 Jermyn Street, London SW1Y 6JD [phone] [e-mail]  Baker Steel Resources Trust Ltd is incorporated in Guernsey Registration Number: 51576 Arnold House, St Julian's Avenue,          St Peter Port, Guernsey

Important Information This document is issued and approved by Baker Steel Capital Managers LLP (authorised and regulated by the Financial Services Authority). The information contained in this document  is not intended to and does not constitute an offer, solicitation, inducement, invitation or commitment to purchase, subscribe to, provide or sell any securities, service or product or to provide any recommendations which should be relied upon for financial, securities, investment or other advice or to take any decision based on such information. Individual advice should be sought from legal, financial, personal and other advisors before making any investment or financial decision or purchasing any financial, securities or investment-related service or product. As a registered collective investment scheme, shares in Baker Steel Resources Trust Ltd are not permitted to be directly offered to the public in Guernsey but may be offered to regulated entities in Guernsey or offered to the public by entities appropriately licensed under the Protection of Investors (Bailiwick of Guernsey) Law 1987 as amended.

 

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