Net Asset Value(s)

RNS Number : 0355P

Baker Steel Resources Trust Ltd

05 February 2019

 

BAKER STEEL RESOURCES TRUST LIMITED

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

5 February 2019

31 January 2019 Unaudited NAV Statement

Net Asset Value

Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value per share at 31 January 2019:

Net asset value per Ordinary Share:  59.7 pence

Since 31 December 2018 the NAV per share has increased by 2.4%, primarily due to the continued rise in the share price of Polymetal International Plc on the London Stock Exchange ("LSE"), the recovery in the price of Metals Exploration PLC on the AIM market of the LSE and in the price of Ivanhoe Mines Ltd on the Toronto Stock Exchange.

The Company had a total of 116,139,980 Ordinary Shares in issue with a further 700,000 shares held in treasury as at 31 January 2019.

Portfolio Update

The Company's top 10 investments are as follows as a percentage of NAV:

Polymetal International Plc	29.1%
Futura Resources Ltd	16.4%
Bilboes Gold Limited	12.6%
Cemos Group plc	9.9%
Polar Acquisition Ltd	9.1%
Sarmin Minerals Exploration	4.9%
Black Pearl Limited Partnership	3.8%
Nussir ASA	3.2%
PRISM Diversified Ltd	2.7%
Ivanhoe Mines Limited	2.6%
Other Investments	4.8%
Net Cash, Equivalents and Accruals	1.5%

Investment Update

Polymetal International PLC ("Polymetal")

On 31 January 2019, Polymetal announced that it had produced 977,000 gold equivalent ounces in the fourth quarter of 2018. Full year 2018 production totalled 1,562,000 gold equivalent ounces, up 9% on the previous year and exceeding Polymetal's original production guidance of 1,550,000 gold equivalent ounces. In addition, due to the weaker Rouble exchange rate against the US Dollar, Polymetal's All-in-Sustaining Cash Costs are expected to be towards the low end of its guidance of US$875-925 per gold equivalent ounce.

Polymetal shares have reflected this strong operating performance in the last few months, rising 5.6% during January 2019 and from its recent low around £6.00 per share in September 2018 to £8.62 per share at the end of January 2019.

Metals Exploration PLC ("Metals Ex")

On 30 January 2019, Metals Ex announced its operating results for the fourth quarter of 2018. 11,016 ounces of gold were sold from its Runruno Mine in the Philippines, compared to 10,522 ounces the previous quarter though still well below the 25,000 ounces per quarter target. During January 2019, the Investment Manager met with Metals Ex's new Chief Executive, Darren Bowden, who appeared confident that there were no fatal flaws with the mine and believed that he could turn around the operating performance at Runruno fairly rapidly.

During January 2019 the share price of Metals Ex more than trebled on the AIM market of the LSE after falling 73% during December 2018. As such at 31 January 2019 its share price was 15.5% down from the beginning of December 2018. The shares are likely to remain volatile until Metals Ex is able to complete the refinancing of its loans.

Cemos Group PLC ("Cemos")

During January 2019, Cemos reported a positive reception by its customers to the quality of cement now being produced and sold from its Phase 1 cement plant operation in Morocco. The cement plant is one month into its planned ramp up of production and sales and is now generating positive operating cashflow. At full capacity for the initial Phase 1, targeted to be achieved by the end of 2019, the operation is anticipated to generate over Euro 10m in EBITDA per annum. The Company's investment is via equity and convertible unsecured loan stock ("CULS") and currently implies a value of Euro 25.2m for CEMOS. BSRT owns around 31.2% pro-forma of CEMOS assuming full conversion of all CULS into equity.

Ivanhoe Mines Limited ("Ivanhoe")

On 30 January 2019, Ivanhoe announced the results of drill hole DD1450 at its Kamoa copper project in the Democratic Republic of Congo which intersected 13.05% copper over 22.3 metres. Although this is only one exploration drill hole it highlights the extraordinary copper grades being discovered at Kamoa which is already the fourth biggest copper discovery in the world. Ivanhoe's share price responded well to the news, rising 20% during the month on the Toronto Stock Exchange.

Futura Resources Limited ("Futura")

On 1^st February 2019, the Company announced the acquisition of a 0.75% Gross Revenue Royalty ("GRR") on the metallurgical coal assets of Futura in Queensland, Australia for A$6 million, together with the option to acquire an additional 0.25% GRR for a further A$2 million. At consensus long term average prices for metallurgical and thermal coal, the Royalties (assuming the option is exercised and therefore a 1% GRR) are anticipated to generate around A$3.5m per annum for the Company before tax once Futura's properties reach full production. Production from Wilton is expected to commence mid-2019, with first royalty payments made to the Company on a quarterly basis thereafter. Production from Fairhill is scheduled to commence in 2020 and then aggregate coal production will ramp-up to a targeted sustainable level of 2.5 million tonnes of coal per annum of saleable processed coal by 2021/2 for at least 25 years

The Company's acquisition of these royalties follows good progress by Futura towards production following the Company's A$10m investment in Futura around a year ago. It is supportive of the strategy to add additional royalties to the Company's portfolio in order to generate meaningful income which can in turn be passed on to shareholders through the returns policy. It is the second significant royalty asset to be acquired by the Company after the Net Smelter Royalty on the Prognoz silver asset held through Polar Acquisition Limited.

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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