Net Asset Value(s)

RNS Number : 5183I

Baker Steel Resources Trust Ltd

04 July 2013

 



BAKER STEEL RESOURCES TRUST LIMITED

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

4 July 2013

28 June 2013 Unaudited NAV Statement

Net Asset Values

Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value per share as at 28 June 2013:

Net asset value per Ordinary Share:  69.6 pence

During the month, the NAV per share decreased by 24.8% primarily as a result in the fall in the price of Ivanplats on the Toronto Stock Exchange and write downs to Gobi Coal and Ferrous Resources.  

At 28 June 2013, the Company had a total of 66,142,533 Ordinary Shares in issue.

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

Ivanplats Limited	16.8%
Bilboes Gold Limited	13.1%
Ironstone Resources Limited	12.4%
Gobi Coal & Energy Limited	12.1%
Black Pearl Limited Partnership	12.1%
China Polymetallic Mining Limited	10.2%
Polar Silver Resources Ltd	8.5%
Ferrous Resources Limited	6.1%
Metals Exploration plc	6.1%
South American Ferro Metals Limited	1.1%
Other Investments	2.8%
Net Cash, Equivalents and Accruals	-1.3%

Investment Update

During the first 6 months of the year the NAV per share has fallen 36.2% compared to the HSBC Global Mining Index which has fallen 28.9% in Sterling terms.

At the half year and full year, the Board reviews whether general market movements in mining equities should be reflected in the carrying values of the unlisted holdings in the portfolio in the absence of relevant transactions and taking into account the specific progress and structure of each investment. In order to quantify how the share price of a particular stock might have moved during the period had it been listed, the Investment Manager maintains an index of comparable listed companies for each unlisted investment.

Following the review at 28 June 2013, the Board has decided to write down the values of its holdings in Ferrous Resources Limited and Gobi Coal Limited in line with movements in their respective indices.

It is emphasised that these write downs are not a reflection of the viability of Ferrous or Gobi's projects which remain robust, rather a reflection of the general market movement of comparable listed companies.

Ferrous Resources Limited ("Ferrous")

As mentioned in the 31 May 2013 NAV Statement, following a site visit to Ferrous' operations in Brazil it appears that Ferrous is making good progress on the ground under its new management and generating positive EBITDA from its current operations. Despite this and in the absence of any verifiable "grey market" transactions since the beginning of the year, it has been decided to write down the Company's carrying value of Ferrous by 40% in line with the movement of an index of comparable listed iron ore stocks.

The management of Ferrous is planning to be in a position by the year end to announce how it will finance its major expansion to 17 million tonnes of iron ore product. It is expected that the terms of such financing will allow the Company to review its valuation of Ferrous again.

Gobi Coal & Energy Limited ("Gobi")

In mid 2012, Gobi halted development of its Shinejinst coking coal project in Mongolia in the light of a deteriorating environment for investment in Mongolia and weakening prices for coking coal delivered at the Chinese border. Following this, the Company wrote down its carrying value of Gobi by 38.5% in 2012.

Share prices of listed coal companies and in particular Mongolian coals stocks have continued to deteriorate in the first half of 2013 with the index attributable to Gobi falling approximately 50%, of which around half might be attributed to be specific to investor sentiment towards Mongolia. In line with this, the Company has decided to reduce its carrying value of Gobi by 50%. The revised carrying value remains slightly above the Company's acquisition price.

Shinejinst remains a good quality mining project and it is hoped that the re-election of the incumbent President of Mongolia last week will lead to an improvement in the investment climate in that country and allow Gobi to move Shinejinst into production.

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") figure stated is 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 figure is set out in the Company's Prospectus dated 31 March 2010.

 

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