Net Asset Value(s)

RNS Number : 9339I

Baker Steel Resources Trust Ltd

07 April 2020

 

BAKER STEEL RESOURCES TRUST LIMITED

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

7 April 2020

31 March 2020 Unaudited NAV Statement

Net Asset Value ("NAV")

Baker Steel Resources Trust Limited (the "Company") announces its unaudited net asset value per share at 31 March 2020:

Net asset value per Ordinary Share:  67.3 pence

The NAV per share decreased by 8.4% against the NAV at 28 February 2020, largely as a result of the decision to review the valuation of the unlisted investments following the recent volatility in world markets associated with the Covid-19 virus pandemic.

The Company had a total of 106,462,502 Ordinary Shares in issue with a further 700,000 shares held in treasury as at 31 March   2020 .

Portfolio Update

The Company's top 12 investments at 31 March 2020 were as follows as a percentage of NAV:

Bilboes Gold Limited	18.7%
Futura Resources Ltd	16.4%
Polar Acquisition Ltd	10.4%
Tungsten West Limited	9.8%
Cemos Group plc	8.7%
Mines & Metals Trading Peru PLC	5.7%
Polymetal International Plc	4.7%
Nussir ASA	4.1%
Black Pearl Limited Partnership	3.9%
Anglo Saxony Mining Limited	3.8%
Sarmin Minerals Exploration	3.2%
PRISM Diversified Ltd	2.1%
Other Investments	7.6%
Net Cash, Equivalents and Accruals	1.1%

Investment Update

Full Year Adjustments to Carrying Values

The Company normally reviews the valuation of its unlisted holdings at the half-year and full year-ends.  However due to the recent market volatility and extraordinary situation brought about by the COVID-19 pandemic, the Board considered it prudent to undertake a similar review at the end of the first quarter. This review is not as comprehensive as undertaken at the year-end but uses the same methodology. It takes into account general market movements in mining equities, as well as specific factors, and an assessment of whether these should impact the carrying values of the Company's unlisted holdings. In order to quantify how the share price of a particular unlisted 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. In addition, the Investment Manager updates its royalty models for the royalty interests the Company owns in Futura Resources and Polar Acquisition Limited ("PAL") to take account of the latest estimated production profiles of the underlying projects and commodity prices. The net present values produced by these royalty models are then discounted for development risk to arrive at a valuation.

This review has led to an 8.4% reduction in the NAV of the portfolio with gold companies such as Bilboes and Polymetal faring best and those investee companies with metals and minerals required for industry having been impacted the most. Although it is unclear how long the worldwide lockdown from COVID-19 will continue, the mining industry and metals should recover thereafter to provide the materials for expected government stimuli through infrastructure programmes. The next planned review of the unlisted investments will be at 30 June 2020.

Nussir ASA ("Nussir")

During March 2020, Nussir completed a positive definitive feasibility study ("DFS") into its Nussir/Ulveryggen copper project in northern Norway.  The DFS was based on a mine producing approximately 15,000 tonnes of copper per annum with a maximum pre-production cash requirement of US$86.7 million. At a long term copper price of US$6,500 per tonne the economic model gave a net present value using a 6% discount rate ("NPV(6%)") of US$132.6 million with an internal rate of return ("IRR") of 23%. An upside case on the basis that the Inferred Resources are converted into the Indicated category gave an NPV(6%) of US$189.8 million. Nussir is fully licenced and will now examine its options as to the best way to fund the mine development and realise the value of the project as well as investigating the potential to develop the mine using electric mining and haulage equipment.

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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