Net Asset Value(s)

RNS Number : 8701N

Baker Steel Resources Trust Ltd

04 October 2012

 



BAKER STEEL RESOURCES TRUST LIMITED

(Incorporated in Guernsey with registered number 51576 under the provisions of The Companies (Guernsey) Law, 2008 as amended)

4 October 2012

28 September 2012 Unaudited NAV Statement

Net Asset Values

Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value and diluted net asset value per share as at 28 September 2012:

Net asset value per Ordinary Share: 102.6 pence

Diluted net asset value per Ordinary Share: 102.2 pence

During the month, the undiluted NAV per share fell by 3.3%, primarily due to a fall in the value of the US dollar, in which the majority of the portfolio is denominated and a fall in the market prices of certain listed shares in the portfolio.

The Company has a total of 66,140,610 Ordinary Shares and 13,087,073 Subscription Shares in issue. Holders of Subscription Shares have the right to subscribe for Ordinary Shares at 100 pence in cash on one further occasion being 2 April 2013.

The Company is fully invested with top 10 investments as follows as a percentage of NAV:

Ivanplats Limited	31.3%
Gobi Coal & Energy Limited	19.4%
Ironstone Resources Limited	8.9%
China Polymetallic Mining Limited	8.2%
Black Pearl	7.0%
Ferrous Resources Limited	6.5%
Bilboes Gold	5.9%
Polar Silver	5.4%
Metals Exploration plc	4.1%
South American Ferro Metals Limited	2.5%
Other Investments	4.5%
Net Cash, Equivalents and Accruals	-3.7%

Investment Update

Ivanplats Limited ("Ivanplats")

On 11 September 2012, Ivanplats filed a preliminary prospectus with the British Columbia Securities Commission in anticipation of raising approximately C$300 million from an IPO on the Toronto Stock Exchange. A range of C$4.50-C$5.40 per share has been indicated by Ivanplats' brokers compared to the Company's carrying value of US$3.50 per share. Final pricing is expected during the week commencing 15 November 2012 with the IPO anticipated to close the following week.

On 11 September 2012, Ivanplats also completed a reclassification of all outstanding common shares as Class B common shares and created a new class of common shares, Common Shares, to be offered and listed in the IPO.  The reclassification preserves existing shareholders' rights but imposes a restriction on transfer that inhibits liquidity until such time as the Class B common shares are converted to Common Shares. Such conversion occurs automatically 39 months after the IPO. Existing shareholders who sign a conversion lock-up agreement will have their Class B common shares converted into Common Shares but these will be subject to a lock-up of 180 days followed by quarterly releases of 8-9% over the following 33 months. It is the Company's intention to sign a conversion lock-up agreement. As a result, the Company will consider whether it is appropriate to value its Ivanplats shares at a discount to the listed price in calculating its NAV following the listing of Ivanplats.

The Company's carrying value of Ivanplats has been left unchanged as at 28 September 2012. Based on the indicated range, the Net Asset Value of the Company will rise between approximately 9% and 17% before any discount that might be applied by the Board as outlined above.

The preliminary prospectus is the first occasion when details of Ivanplats' projects have been made public. Its 95% owned Kamoa copper project in the Democratic Republic of Congo ("DRC") has NI 43-101 compliant Mineral Resources of 348 million tonnes at a grade of 2.64% copper in the indicated category and 462 million tonnes at a grade of 2.72% copper in the inferred category at a cut-off grade of 1% copper. The total 21.7 million tonnes of contained copper already makes it the largest copper project in the world with a grade of over 2.5% and with the potential to expand this considerably.

Ivanplats' 90% owned Platreef platinum group metal/nickel copper project in South Africa has NI 43-101 compliant Mineral Resources of 175 million tonnes at a grade of 4.60 g/t 3E (platinum, palladium and gold) containing 25.9 million ounces 3E and in addition the ore grades 0.41% nickel  and 0.20% copper which will generate useful by-product revenue. The key to the mineralisation is that the aforementioned Resource occurs over an average thickness of 16.8 metres compared to the two main reefs mined in South Africa, the Merensky Reef and UG2 Reef which tend to be around 1 metre in thickness. This indicates that the Platreef project will be amenable to bulk mining methods and be highly mechanised compared to the extremely labour-intensive mining methods which need to be used on existing mines and bring with them higher costs and risk of labour unrest.

Interestingly the above Mineral Resources at the Platreef project were estimated as at 31 March 2011. Since that date, over 200,000 metres of drilling has been undertaken at Platreef as a result of the US$280m investment by Itochu Corporation in May 2011 in a transaction which valued the project at US$3.5 billion. A significant resource update is expected before the end of 2012 to reflect this drilling campaign.

In late 2011, Ivanplats acquired a 68% interest in the Kipushi zinc/copper mine in DRC which was in production between 1924 and 1993. Ivanplats has not yet performed sufficient work to estimate a compliant resource but of significant interest is the so called "Big Zinc Zone", which had been previously estimated at 4.7 million tonnes grading 38.6% Zinc. 

Further details of the Company and its investments are available on the Company's website www.bakersteelresourcestrust.com 

Enquiries:

Baker Steel Resources Trust Limited     [phone]

Francis Johnstone
Trevor Steel

RBC Capital Markets                                       [phone]

Martin Eales

Winterflood Investment Trusts                           [phone]

James Moseley

Pelham Bell Pottinger

Lorna Spears                                                    [phone]

Joanna Boon                                                    [phone]

The Net Asset Value ("NAV") figures stated are based on unaudited estimated valuations of the underlying investments and not necessarily based on observable inputs. Such estimates are not subject to any independent verification or other due diligence and may not comply with generally accepted accounting practices or other generally accepted valuation principles. In addition, some estimated valuations are based on the latest available information which may relate to some time before the date set out above.

Accordingly, no reliance should be placed on such estimated valuations and they should only be taken as an indicative guide. Other risk factors which may be relevant to the NAV figures are set out in the Company's Prospectus dated 31 March 2010.

 

END

 

 

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