Net Asset Value(s)

RNS Number : 8631E

Baker Steel Resources Trust Ltd

04 March 2020

 

BAKER STEEL RESOURCES TRUST LIMITED

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

4 March 2020

28 February 2020 Unaudited NAV Statement

Net Asset Value

Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value per share at 28 February 2020:

Net asset value per Ordinary Share:  73.5 pence

The NAV per share increased by 0.3% against the NAV at 31 January 2020, with the weakness of Sterling against the US Dollar outweighing falls in the share prices of Polymetal and Metals Exploration on the London Stock Exchange as stock markets fell on concerns of a slowdown in global economic growth due to the spread of the Covid-19 virus.

It is too early to tell how significant or for how long the effects of the Covid-19 virus will be on both global output and investor sentiment towards metals and mining. This could result in companies slowing down development in particular for base metals and steel mineral projects if commodity prices weaken further, although there could also be significant beneficiaries of government stimulus programmes towards infrastructure. The risk of disruption from Covid-19 should be viewed in the perspective that the Company invests in projects based on long term estimates for commodity prices. Our policy of investing through structures such as convertible loans mitigates the risk of increasing timetables as it continues to accrue coupons during any delay.

The Company had a total of 106,462,502 Ordinary Shares in issue with a further 700,000 shares held in treasury as at 28 February   2020 .

Portfolio Update

The Company's top 12 investments at 28 February 2020 were as follows as a percentage of NAV:

Bilboes Gold Limited	16.6%
Futura Resources Ltd	16.5%
Polar Acquisition Ltd	11.8%
Cemos Group plc	10.1%
Tungsten West Limited	8.1%
Anglo Saxony Mining Limited	4.6%
Mines & Metals Trading Peru PLC	4.6%
Polymetal International Plc	4.2%
Nussir ASA	4.1%
Sarmin Minerals Exploration	3.8%
Black Pearl Limited Partnership	3.5%
PRISM Diversified Ltd	2.9%
Other Investments	7.5%
Net Cash, Equivalents and Accruals	1.7%

Investment Update

Futura Resources Ltd ("Futura")

During the month the Company exercised its A$2 million option to acquire a further 0.25% Gross Revenue Royalty ("GRR") over Futura's Wilton and Fairhill coking coal properties in Queensland, Australia, taking the Company's GRR interest in the two properties to 1%. Futura is currently awaiting final operating licence approval for the two properties with Wilton planned to start production in the second quarter 2020 and Fairhill the following quarter.

Once the two projects are in full production the Company's 1% GRR is expected to generate approximately A$3 million per annum at long term coking coal prices before tax.

Metals Exploration PLC ("Metals Ex")

On 19 February 2020 Metals Exploration announced it had produced 18,941 ounces of gold in the 4^th quarter 2019, its best quarterly production since the commencement of its Runruno gold mine in the Philippines, as a result of maintaining the gold recoveries in excess of 70% achieved in the previous quarter.

This together with the increased gold price resulted in positive operating cashflow of US$5.5 million during the quarter and US$0.8 million cashflow after capital costs. This turnaround in operations is positive albeit the mine is yet to reach its original target of 25,000 ounces gold per annum. Key to the future of Metals Ex will be how well it is able to negotiate the restructuring of its US$125.8 million mezzanine and senior debt with its two major shareholders following their acquisition of the senior debt from the banks in January 2020.

Metals Ex represented 1.6% of NAV at 28 February 2020.

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

Numis Securities Limited  [phone]

David Benda (corporate)

James Glass (sales)

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 are set out in the Company's Prospectus dated 26 January 2015.

 

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